Fossil fuel subsidies exceed amount for renewables in 2019, EC report shows

Greece spent one percent of GDP on fossil fuel subsidies in 2019, exceeding the 0.9 percent level allotted for renewable energy subsidies, a European Commission report published yesterday has shown.

However, fossil fuel subsidies in Greece are on a downward trajectory whereas subsidies for the RES sector and energy efficiency are steadily rising, the report added.

Of 1.6 billion euros made available for fossil fuel subsidies in 2019, the biggest percentage concerned diesel and petroleum products, the remainder going to the natural gas and lignite sectors.

Energy source subsidies in the EU totaled 176 billion euros in 2019, up 8 percent from 2015, the report noted.

Subsidies for energy efficiency increased during this period by 43 percent to 5 billion euros while subsidies for energy production increased by just 4 percent to 3 billion euros, primarily for renewables, the Brussels report showed.

 

 

 

Saving at Home energy efficiency subsidy applications from mid-November

The latest edition of the Saving at Home program subsidizing energy efficiency upgrades of existing homes is expected to open for applications in mid-November.

The application period is planned to remain open to interested parties for one month. Unlike previous editions, for which applications were accepted on a first-come, first-served basis, the new program’s prioritization will be based on a series of social and financial criteria.

Also, the energy ministry is considering to increase a project budget maximum for applicants to 200 euros per square meter from 180 euros per square meter as a result of recent price increases in building materials and equipment.

The latest Saving at Home edition is expected to provide energy sufficiency upgrade subsidies for a further 50,000 households throughout the country.

Applicants will need to own the properties to be upgraded and use them as their main homes. Applications will be limited to one person.

The energy efficiency upgrade subsidies will range from 40 to 75 percent of each project’s cost, depending on personal and family income criteria.

Criteria benefitting disabled persons, families with many children and single-parent families, as well as climate-related criteria for respective areas, have also been introduced for the new Saving at Home program.

Three-part energy crisis plan to begin with €500m in subsidies

A government plan aiming to soften the effects of the energy crisis, which could last well into 2022, will be comprised of three stages, beginning with a 500 million-euro support package including double the amount of previously announced subsidies for electricity, as well as natural gas and heating subsidies.

The plan, whose details are expected to be announced later today, will then continue with a second support package for low-income households around Christmas time.

The third part of the plan, whose details will be announced at a latter date, is expected to entail the establishment of a mechanism absorbing extraordinary energy costs.

For its three-part plan, the government presumes the energy crisis, caused by an unfavorable combination of international factors, will last well into 2022. Some analysts believe the crisis could persist throughout next year.

Consumers throughout Europe are facing exorbitant electricity and natural gas costs that have increased multifold over the past few months.

 

 

Power bill subsidies increased, gas cost support also expected

The energy ministry is preparing to increase an electricity-cost subsidy package to between 280 and 300 million euros, from a 200 million-euro sum announced last month by Prime Minister Kyriakos Mitsotakis at the Thessaloniki International Fair, as a result of the continuing surge in energy costs, which, if not combated, could have political ramifications.

The ministry’s response comes following the announcement of September’s increase in the wholesale electricity price average, the latest in a series of monthly rises. Wholesale electricity prices averaged 134.73 euros per MWh in September, up from 121.72 euros per MWh in August and 101.86 euros per MWh in July, all well over the January average of 52.52 euros per MWh.

Finalized decisions on the subsidy support package have yet to be taken but officials have already agreed to draw the amount to be provided to consumers from the Energy Transition Fund.

The expected subsidy increase for electricity consumption would result in support worth between 40 and 45 euros per MWh, instead of 30 euros per MWh, effectively resulting in a monthly electricity bill reduction of 14 to 15 euros for consumers.

The government is also looking to subsidize natural gas bills through an additional support package expected to be worth roughly 150 million euros. Retail natural gas prices have risen by approximately 500 percent since the beginning of the year.

Interest rate subsidies for competitive RES projects

RES projects deemed competitive, based on tariff levels, will be entitled to loan interest rate subsidies as compensation covering the gap between rates offered in the Greek market and far lower European rates, deputy finance minister Theodoros Skylakakis has informed.

The deputy minister offered the update at a presentation yesterday of the National Bank of Greece’s “Ethniki 2.0” plan through which the bank will offer an extensive range of financing services to investors, small, medium and large enterprises opting to utilize various investment benefits offered by the country’s recovery fund, dubbed Greece 2.0.

The subsidy support covering the interest rate gap will be made available for new projects to be developed following the launch of Greece 2.0 support programs, the deputy minister clarified.

Skylakakis stressed that only competitive RES projects will be eligible for these subsidies, the logic behind the support being to cover the financing cost disadvantage faced by RES investors in Greece compared to investors of this domain in other parts of Europe.

 

State subsidies for electricity bills, additional discounts concealed

Power utility PPC and the country’s independent suppliers are set to include state electricity subsidies into electricity bills in ten days’ time, while, from October 1, they plan to follow up with additional discounts to ease the burden of increased energy costs for consumers.

Electricity suppliers are now finalizing adjustments to their information systems for the inclusion of these state subsidies, worth 9 euros per electricity bill and retroactively effective as of September 1.

However, all suppliers are keeping under wraps the details of their additional discounts to be offered.

Market sources expect suppliers to offer discounts with the intention of retaining customers and also capturing greater retail electricity market shares.

Meanwhile, the energy ministry is expected, any day now, to submit a draft bill to parliament for the establishment of an Energy Transition Fund, its purpose being to gather amounts from CO2 emission right auctions for distribution as electricity-bill subsidies.

As a first step, the Energy Transition Fund is expected to collect between 180 and 200 million euros to support households and businesses in the low-voltage category, all facing additional pressure as a result of the sharp increase in energy costs.

 

 

Suppliers question sufficiency of €150m subsidies to tackle energy costs

Electricity suppliers have questioned the sufficiency of a 150 million-euro amount to be made available by the government through a new Energy Transition Fund as support for households and businesses to combat increased energy costs.

The doubts were raised during an energy ministry meeting yesterday involving the country’s electricity suppliers, facing pricing-policy pressure – especially the non-vertically integrated – as a result of elevated wholesale electricity prices that have been driven considerably higher by a combination of factors in international markets.

According to Greek energy exchange data, the day-ahead market price average for today is 172.27 euros per MWh, while the day’s maximum price level in this wholesale market exceeds 200 euros per MWh.

The subsidy plan’s calculations are based on wholesale electricity prices ranging between 117 and 120 euros per MWh.

Energy markets throughout Europe are being severely impacted by the price surge. In the UK, for example, wholesale electricity prices have risen as high as 400 euros per MWh following colder weather and higher energy demand.

Independent players set to offer discounts, awaiting PPC clarity

Independent suppliers are set to offer discounts and tariff reductions to consumers, their effort focusing on consumption levels ranging between 300 and 600 kWh, not covered by state subsidies, according to latest updates.

Independent suppliers are awaiting the outcome of a meeting today involving energy minister Kostas Skrekas, during which state-controlled power utility PPC’s discount strategy will be clarified, before they take specific decisions, including for the consumption category of up to 300 kWh, applying to the majority of households.

Besides an across-the-board discount of 30 percent for all consumers, including the category up to 300 kWh, PPC has also promised an additional discount of between 3 and 4 percent for the 301-600 kWh category.

It still remains unclear how much the price gap between PPC and independent consumers offering lower tariff prices could be narrowed by this move.

Independent suppliers know well that they will need to keep offering lower tariffs than PPC, the dominant player, to remain competitive.

The government plans to adopt an Energy Transition Fund to offer electricity subsidies to households and small and medium-sized enterprises, heating fuel subsidies, and a range of other initiatives as a tool to contain the surge in wholesale energy costs, prompted by a combination of factors in international markets.

 

Government looking to expand eligibility for electricity subsidies

Taking into account the rising energy costs and potential repercussions on society, the government is seeking to make revisions that would make more households eligible for subsidized electricity through the Social Residential Tariff (KOT) program.

The administration is looking to loosen KOT-related income and property criteria for the entry of several hundred thousand more households to the program.

The government also aims to increase the KOT subsidy program’s discount rates for electricity, currently ranging between 45 and 60 percent, depending on income levels, property assets and electricity consumption levels.

Under the current criteria, 450,000 households are eligible for electricity subsidies through the KOT program.

Additional funds are believed to be available to make the subsidies available to a greater number of households, but the finances may not suffice to cover the full extent of the expansion sought by the government.

Green PPAs exchange platform, industrial subsidies in making

A Market Reform Plan being prepared by the government, to be submitted to the European Commission, includes provisions for the establishment of an energy exchange transaction platform concerning power purchase agreements (PPAs) between RES producers, as well as green aggregators, with suppliers and major-scale consumers.

The green PPAs, when concerning energy-intensive industrial enterprises, will receive state support, while a subsidy package for this category of agreements is also in the making, according to the plan.

Funds stemming from the recovery fund, the green fund as well as the RES special account will be used to fund the subsidy package, according to the government plan.

The aim of the effort is to ensure, in advance, the sale of prospective energy to be produced by new RES units, the intention being to  facilitate bank financing for their development given the fact that they will no longer be entitled to fixed tariffs, through auctions, over 20-year periods, as has been the case until now.

The plan is expected to result in lower-priced green energy for industrial consumers and also facilitate the development of new RES investments.

Municipal solar parks to help low-income household energy needs

Municipalities and prefectures will be offered 100 million euros in subsidies, through the recovery fund, for the development of solar energy farms whose resulting earnings will be used exclusively to cover the energy needs of approximately 30,000 low-income household around the country, energy minister Kostas Skrekas has announced in an interview with Greek daily Kathimerini.

These solar parks will offer a total capacity of 120 MW, the minister noted.

The minister also noted, in the interview, that a further 40 million euros from the recovery fund will be used to subsidize the replacement of 2,000 conventional taxis with electric-powered models.

Taxi owners will be entitled to 22,500 euros in subsidies for each vehicle replaced, the minister said, while adding that a variety of criteria, including car age, will be taken into account.

Support is also planned for energy communities, according to the minister.

“Energy communities are important when they serve their purpose and not merely promote capital-intensive investment. That is why we will support energy communities that will benefit those in need,” Skrekas explained.

Responding to a question regarding widespread resistance of local communities against wind energy installations and criticism faced by the ministry for being too cooperative with investor plans in this domain, the minister remarked: “We don’t license everything. Investor proposals currently exceed 100 GW, but we, through the National Energy and Climate Plan (NECP), estimate that, realistically, approximately 10 GW will be installed – in other words, one in ten.”

Revisions to a revised, and stricter, RES spatial plan will be completed by the end of the year, the minister told.

Energy storage subsidy program in 1Q next year

A competitive procedure to offer 200 million euros in subsidies for energy storage projects is planned to take place in the first quarter of 2022, energy minister Kostas Skrekas has told the 6th Delphi Economic Forum, making clear the ministry’s determination to utilize as swiftly as possible funds being made available for energy storage through the national recovery plan, dubbed Greece 2.0.

In the lead-up, the energy ministry intends to invite investors interested in participating in the procedure to submit investment plans in autumn.

The procedure will be based on a related framework, describing the conditions and terms, to require the European Commission’s approval.

The subsidy program will financially support energy storage installations to offer capacity totaling hundreds of MW, the minister told the forum.

The Greece 2.0 national recovery plan, to carry funds expected to be worth a total of 450 million euros, will also be used to support the development of pumped storage stations.

Investors have expressed tremendous interest in the development of energy storage units. RAE, the Regulatory Authority for Energy, has received a large number of production license applications for various RES technology units.

Since 2019, RAE has received a total of 98 applications for energy storage units, pumped storage facilities and hybrid stations, representing a total of 8,213 MW, which, along with a prospective pumped storage station set for development by Terna Energy in Amfilohia, northwestern Greece, will reach 8,893 MW.

To date, RAE has granted licenses for the majority of these applications, while 34, representing 4,519 MW, still need to be processed.

 

Recovery plan eyes €270m for e-car part facilities, rechargers

National recovery plan features will aim to lay the foundations for an electric vehicle industry in Greece through 200 million euros in subsidies for the establishment of production facilities making batteries and parts for electric vehicles, sources have informed.

The national plan, to be fed by the European Commission’s Recovery and Resilience Plan, once approved in Brussels, is designed to create jobs where they are needed most, including in parts of west Macedonia, in Greece’s north, and Megalopoli, in the Peloponnese, whose lignite-dependent economies require restructuring as a result of the country’s decarbonization strategy.

The national recovery plan will also seek to offer a further 70 million euros in subsidies for the installation of approximately 8,500 recharging posts for electric vehicles, both regular and fast chargers, much higher in cost. Regular recharging units cost between 3,000 and 5,000 euros while fast chargers cost about 20,000 euros each.

Given the aforementioned subsidy plans, Greece’s electromobility effort could enjoy financial backing totaling more than 300 million euros, as, besides the 270 million euros being anticipated through the national recovery plan, an amount of between 30 and 40 million euros has already been secured through other financing programs.

The government plan aims for one in three vehicles circulating in Greece by 2030 to be electric.

 

Subsidy program for Athens gas heating system installations just launched

A latest subsidy program supporting natural gas heating system installations, the third to be offered, this time focused on households in the wider Athens area, has just been launched by distributor EDA Attiki.

No income criteria have been attached to this latest subsidy program, promising applicants cost savings of between 300 and 3,000 euros for conversions of existing heating systems to natural gas.

The subsidy program will remain open until applications have fully covered its budget of 2.85 million euros.

A strong response to the offer is expected. Applications will be processed on a first-come, first-served basis.

Subsidy amounts will be directly paid by EDA Attiki to the tradesmen selected by successful applicants for their gas heating system installations, once all supporting documents have been provided.