RES units without priority to be given 50% battery subsidies

The energy ministry is working on offering an alternative form of support, through subsidies for battery installations, to RES projects linked with PPAs for industrial consumers should these projects miss out on priority status for appraisals of their connection-term applications.

RES units placed in Group B, in terms of priority, and not granted priority status for appraisals of their connection-term applications will, as a form of compensation, receive subsidies covering 50 percent of battery installations, the energy ministry has decided.

These batteries will be permitted to absorb energy from the grid, in addition to their respective RES units, thereby decreasing their investment cost.

The energy ministry has decided to grant priority status for connection-term applications concerning Group B RES projects whose output is intended to contribute to energy needs entailed in power utility PPC’s existing PPAs with metal processing company Viohalco and cement producer Titan.

RES projects planned to secure lower energy costs for farmers will also be granted priority status for their connection-terms procedures. A related legislative revision is expected to soon be submitted to Parliament.

 

Extra subsidized standalone batteries at 500-700 MW

Battery-based RES facilities (both standalone units and behind-the-meter projects) will total 3,100 MW, greatly contributing to the country’s energy-storage targets, according to a draft of the revised National Energy and Climate Plan.

The energy-storage support package will result in a portfolio of standalone batteries with an overall capacity of as much as 1,500 to 1,700 MW, deputy energy minister Alexandra Sdoukou told a recent event staged by SEF, the Hellenic Association of Photovoltaic Companies (HELAPCO).

These levels represent an additional capacity of between 500 and 700 MW in standalone batteries eligible for subsidy support as a result of a reduction in investment support to be offered, it has been estimated.

Energy-storage projects representing roughly 700 MW have qualified for subsidy support through two auctions.

As for the portfolio’s allocation, the energy ministry is considering dividing it into two-hour and four-hour batteries, in place of an initial plan that had envisaged 700 MW of two-hour batteries and 300 MW of four-hour batteries.

PVs through support program reach 2,000, 8,700 to follow

Some 2,000 roof-mounted solar panels representing a capacity of 12 MW have been installed through the government’s subsidy support program, dubbed PV Stegi, and are operating, while a further 8,700 such systems, totaling 60 MW, are expected to follow in the coming months, once their investors have signed agreements with RES market operator DAPEEP, energypress sources have informed.

It is estimated that these projects will absorb roughly 50 percent of the subsidy support program’s budget of 230 million euros.

Though these figures do highlight the market’s interest in the support program, they also illustrate that the program, launched nearly ten months ago, has moved along at a slower-than-expected pace.

Delays in the provision of subsidies to applicants are the main reason behind this slowness. progress. Interested parties are being forced to provide initial amounts of own capital for their roof-mounted solar panel installations and to then wait, for unspecified periods of time, to receive the subsidy support they are entitled to.

Self-production is flourishing in Greece and, according to latest projections made by SEF, the Hellenic Association of Photovoltaic Companies (HELAPCO), is set to surpass last year’s record-breaking performance of 250 MW, which resulted in a capacity increase for the sector of over 100 percent. More PV systems were installed last year, alone, than in all previous years, combined.

SEF has projected PV installations this year will reach approximately 300 MW, of which 60 MW will be developed through the PV Stegi subsidy support program.

 

Ministry determined to ensure PPAs for industrial consumers

The energy ministry appears determined to ensure renewable-energy PPAs for industry and intends to incorporate all required measures into an overall plan being developed for the liberalization of grid space.

However, the ministry has a conundrum to resolve as it must combine increased grid-injection restrictions for RES units obtaining connection terms from now on with the need to keep prices low for PPAs involving RES producers and industry.

These increased grid-injection restrictions for RES units come as a challenge for renewable-energy PPAs already established, among them agreements between power utility PPC with metal processing company Viohalco and cement producer Titan.

Besides modifying RES output, these restrictions also affect data used by parties involved in PPAs to reach agreements on electricity purchase prices.

To offset negative impact, the ministry is considering to subsidize behind-the-meter battery additions to projects. This would enable RES producers to meet the energy needs of industries at latter dates should PV production exceed upper limits.

A subsidy-support solution would require the European Commission’s approval as it is considered a form of state aid.

 

Electricity producers’ payment upper limit now lifted

Remuneration upper limits imposed on all electricity producers as one of a number of emergency measures implemented by authorities during the energy crisis have just been lifted, effective as of January 1, a move representing a significant step in the wholesale electricity market’s return to normality.

In the retail electricity market, subsidies offered to all consumers during the energy crisis were also lifted with the arrival of the new year.

The government introduced remuneration upper limits for electricity producers on July 7, 2022, at the height of the energy crisis, as a tool for recovering windfall profits, which were injected into the Energy Transition Fund to finance electricity subsidies offered by the state to all consumers.

A preceding remuneration system for electricity producers, introduced as part of the target model, has now been reinstated in place of the upper limits. A marginal price model, it sets payment levels for electricity producers based on the highest-price production unit brought into play every day.

Under the emergency measure imposing remuneration upper limits, all electricity producers, regardless of technology, were subjected to payment restrictions that took into account respective operating costs.

RES facilities faced a remuneration upper limit of 85 euros per MWh, while hydropower units were subjected to a payment limit of 112 euros per MWh. The remuneration upper-limit for natural gas-fueled power stations was revised monthly so that wildly fluctuating factors such as emission right costs and natural gas prices could be factored in.

The next and final step for the wholesale electricity market’s complete return to normality entails lifting an extraordinary levy imposed on natural gas used for electricity production. The energy ministry has noted it intends to proceed with this step early in 2024. However, a legislative revision by the ministry will be needed.

 

Business PV installation subsidies nearing launch

A much-heralded 160 million-euro support program to subsidize business-sector solar energy panel installations, with or without batteries for energy storage, is now nearing its launch.

Government officials behind the support package are aiming for an energy consumption reduction, from the grid, of at least 35 percent by program participants, as well as carbon emission reductions, by these participants, of at least 30 percent.

The support program’s guidelines are soon expected to be announced so that interested parties can prepare applications. This announcement will be followed by a ministerial decision to activate the program and get the application process underway.

Over 3,000 businesses of all sizes around the country are expected to benefit from this support program.

Judging by current indications, respective pools of 60 million euros each are planned to be made available to small and medium-sized enterprises, while a 40 million-euro sum is expected to be reserved for large-sized enterprises.

Selection criteria for applicants will include proportion of energy costs compared to total operating costs, as well as the amount of financing support requested compared to potential energy-bill cost reduction promised by PV and energy storage installations.

 

 

EDA Attiki bid for gas heating installation subsidies rejected

Gas distributor EDA Attiki’s request for the inclusion of subsidies supporting heating installation systems by residential consumers in the company’s new five-year development plan covering 2023 to 2027 has been rejected by RΑΑΕΥ, the Regulatory Authority for Waste, Energy and Water.

The gas company’s proposal has not been accepted so that energy market distortions through subsidy support for specific heating systems could be prevented, the authority noted.

Though a subsidy support measure had been approved by RAAEY for the gas distributor’s previous five-year development plan covering 2022 to 2026, the authority had noted a limited amount would only apply for 2022.

A total of 92,463 new connection agreements are expected to be established through EDA Attiki’s latest five-year development program, budgeted at 140.95 million euros.

Besides new connection agreements, this budget includes investments in medium and low-pressure network reinforcements, upgrade projects, low-pressure network development, and replacement of conventional meters with smart metering systems.

 

 

Electrical heating subsidies platform nearing launch

A platform accepting subsidy applications for electrical heating should be launched before the year is out or, at the very latest, in early January, energy minister Thodoris Skylakakis has told an OT (Oikonomikos Tahydromos) Forum.

The subsidy support, intended to offer energy-cost relief to lower-income households relying on electrical appliances for heating, will range between 50 and 480 euros for the winter season, depending on income and property criteria, and will be offered within the first three months of the new year, the minister informed.

The subsidy will be directly factored into electricity bills as a discount on electricity costs.

Its criteria for eligible parties are expected to be much like those of subsidies offered for other heating fuels – oil, natural gas, LPG, firewood and pellets.

Income upper limits of 16,000 euros and 24,000 euros per annum apply for singles and married couples or single-parent families, respectively, for subsidies concerning these other heating fuels.

Eligible parties must also meet property criteria. Property values must not exceed 200,000 euros for singles and 300,000 euros for married couples and single-parent families.

Belated green tariff discounts from hesitant suppliers

Electricity suppliers who chose not to announce discounts for their new green tariffs on December 1, the date by which suppliers were requested to present the basic details of their respective formulas to be applied for the new tariff ahead of its January 1 launch, are now preparing to belatedly proceed with discounts on these new tariffs by December 31.

The suppliers who incorporated discounts into their new green tariff formulas in their December 1 announcements are already objecting to the decisions reached by rival suppliers to also announce discounts, belatedly. The energy ministry has yet to decide whether it will permit these delayed discounts.

Green tariffs with discounts are expected to drop below initial estimates and reach between 14 and 15 cents per KWh for most consumers, assuming low-level wholesale electricity prices at the energy exchange remain subdued.

Wholesale electricity prices averaged 110.9 euros per MWh for the first 12 days of December, unchanged from the end of November.

Besides the intensifying competition for green tariffs, competition among suppliers is also growing for fixed tariffs, dubbed blue tariffs. Consumers will also be able to choose variable tariffs, dubbed yellow tariffs.

This competition is expected to lead to tariff levels below those of subsidized tariffs, which were introduced as an emergency measure for all low-voltage consumers during the energy crisis and are set to be terminated under the new system being introduced January 1.

The new green tariffs being introduced at the start of the new year will be implemented automatically, for all consumers, unless they formally object and choose either variable or fixed tariffs.

Business PV and battery support program details soon

The energy ministry is finalizing the details of a support program for business-sector solar panel and battery installations, which are expected to be officially announced soon, most likely within the next few days, and definitely within the current month, energypress sources have informed.

The ministry had made an initial announcement on this PV support program for businesses months ago, but has yet to deliver its details.

Businesses will need to incorporate batteries into their PV installations in order to be eligible for the support program, the sources informed. Subsidies will be offered for both PVs and batteries through this support program, but the subsidy rate for batteries will be considerably greater, the sources added.

In the lead-up, ministry officials had intended to also offer subsidies to PVs without batteries, but this prospect is now off the table.

The support program, budgeted at 160 million euros, a sum to stem from the Recovery and Resilience Facility (RRF), will be implemented by TAIPED, the Greek privatization fund.

 

Suppliers want more flexible formula for new variable tariff

A new variable tariff formula that suppliers will need to adopt as a means of improving price-comparison clarity for consumers and stimulating competition will be launched as planned, January 1, when energy crisis measures will be withdrawn, ending subsidies for consumers, energy minister Thodoris Skylakakis confirmed at a meeting yesterday with top officials of ESPEN, the Greek Energy Suppliers Association.

The single variable tariff formula, which all suppliers will need to include in their overall package of tariff offers to consumers, is being introduced with a large proportion of consumers in mind and will allow price comparability of companies’ offers, promoting competition, the minister stressed.

Suppliers called for greater flexibility to the single variable tariff formula so that they could make monthly adjustments, based on prevailing wholesale electricity prices.

All pending retail electricity market issues were tabled during the meeting. These include planned reimbursements for electricity suppliers who have been forced to cover an estimated 800 million euros, overall, in subsidies offered by the state during the energy crisis as support for small and medium-sized enterprises; stricter market rules preventing consumers with unpaid bills from switching suppliers; as well as the imposition of a time limit, for users, on the country’s universal electricity supply service, offered as a last-resort solution by the top five suppliers, based on market share, to black-listed household and business consumers who have been shunned by suppliers over payment failures.

NECP investments of €192bn until 2030 promise GDP surge

The revised National Energy and Climate Plan, boosted to include more ambitious targets for 2030, anticipates investments worth 192 billion euros – primarily in transport – which promise to provide unprecedented momentum for the Greek economy.

Of this 192 billion-euro total, an amount of approximately 100 billion euros is expected to be injected into the electromobility sector, for which an NECP target figure of 460,000 electric vehicles has been set by 2030.

This leaves a further 92 billion euros, still an enormous amount, for investments in other sectors. Energy-related modernization of household equipment and appliances, as well as building energy-efficiency upgrades, are seen capturing the biggest share, with nearly 50 billion euros in investments forecast over the next seven years.

Replacement of outdated household equipment with new, more efficient systems is expected to mobilize close to 42.4 billion euros, according to the revised NECP. A further 6 billion euros in spending is expected for energy-efficiency upgrades to buildings.

The numbers are staggering and highlight a prospective boom in construction and related sectors, as long as households are ensured substantial aid and financing.

Subsidy programs supporting home energy-efficiency upgrades and electric vehicle purchases will need to be doubled, even tripled, annually, compared to previous years, as pointed out in the revised NECP, if abounding theories contending that the green transition is costly and financially harmful are to be proven wrong.

The percentage of GDP for spending on all types of energy-related products and services is seen rising from 19.4 percent in 2021 to 21.6 percent in 2030, before sliding to 17 percent.

Investments in all forms of cleaner electricity production, from solar farms to onshore and offshore wind farms, are ranked third. The revised NECP anticipates investments totaling 11.9 billion euros until 2030 in this domain.

Grid development is ranked fourth with anticipated investments of 6.5 billion euros by 2030, followed by much smaller amounts for energy-efficiency improvements in industry, natural gas and oil systems and other alternative fuel-related expenditure.

Electrical heating allowance details presented next week

The energy ministry plans to present, next week, an overall package of measures for the retail electricity market, including a new framework for an electrical heating allowance supporting low-income consumers that will replace the existing system of universal subsidies offered for all electricity bills.

According to energypress sources, the plan’s structure will greatly resemble existing cost-support plans for other heating fuels, including diesel, natural gas, wood and pellet heating. This essentially means that both income and asset criteria will be taken into account.

Single people with an income of up to 16,000 euros per annum and married couples with an income of up to 24,000 euros per annum will be entitled to the electrical heating allowance. The income criterion will be increased by 5,000 euros per child for families with children.

Also, a property ownership limit of 200,000 euros is expected to apply for single people and 300,000 euros for married couples and single-parent families.

As is the case with existing heating fuel support, allowance limits for electrical heating costs will most likely range from 100 to 800 euros per year.

The allowance for electrical heating and allowance for other heating fuels will be mutually exclusive. Eligible parties will only be able to apply for one of the two allowances.

 

Early-November notification for business PV subsidies

A 160 million-euro support program subsidizing solar energy panel installations by enterprises is nearing its launch, with the energy ministry set to publish its terms and conditions early next month, ahead of the program’s official announcement.

The support program will only be made available for zero feed-in systems – solar panel units not injecting their production into the grid.

Electricity produced by this category of units will either be instantly self-consumed or stored in incorporated batteries for latter use.

The energy ministry had initially considered restricting this subsidy program to enterprises installing solar systems with batteries, but ended up deciding to also make it available for businesses not incorporating batteries to their panels as some enterprises may not require storage options due to extended operating hours that would enable them to instantly self-consume all energy output.

Subsidy amounts will be smaller for solar panel installations without batteries as a result of their lower investment cost.

Standalone battery investment support halved for 2nd auction

State investment support to be offered at a second of three auctions supporting standalone batteries, a date for which remains pending, has been halved to 100,000 euros per MW, compared to the inaugural auction’s level of 200,000 euros per MW, reliable sources have informed.

RAAEY, the Regulatory Authority for Waste, Energy and Water, has yet to announce the second auction as the energy ministry still needs to sign a ministerial decision specifying the revised state support level.

Should the pending ministerial decision be issued early next week and the authority immediately follows up by announcing the next auction, its bidding deadline can be expected to be set for late November. This effectively means the list of successful bidders will not be finalized until early next year, once RAAEY has reviewed all bids.

The reduction of state investment support for standalone batteries is intended to facilitate an expanded portfolio of projects linked to the support program. According to an initial plan, standalone battery investment support is planned to be offered for a total capacity of 1,000 MW, over three auctions.

Standalone batteries totaling 400 MW secured investment support at the first auction, while an initial plan to offer support for a further 300 MW through the second auction is expected to remain unchanged.

Any extra capacity that would exceed the initial plan for a total of 1,000 MW is expected to be made available at the third auction, intended to cater to projects situated at ex-lignite areas.

 

Flexibility in terms to unblock subsidies for roof-mounted PVs

Authorities are preparing more flexible terms that would free funds available through a subsidy program for roof-mounted photovoltaics, currently encountering blockages when the specifications of equipment installed are different to systems noted in subsidy applications.

Revisions to the pvstegi platform, accepting applications, are now being planned in order to offer applicants some degree of flexibility. The changes will enable small reductions in capacities of PV systems installed compared to capacities of PV systems specified in applications.

At present, the pvstegi platform, operated by distribution network operator DEDDIE/HEDNO, does not allow for any deviations. Subsidy procedures are immediately blocked if any discrepancies are identified.

Minor capacity deviations that may result from the time subsidy applications are submitted to the time photovoltaic systems have been installed are understandable as investors could end up opting for slightly different equipment, such as solar panels or batteries with different capacities, during stretched out time periods between application and installation, market officials pointed out.

A first wave of successful applicants is expected to soon receive subsidy amounts through the roof-mounted PVs program. Approximately 10,000 applications have been submitted to date. PV systems need to incorporate batteries to be eligible for subsidies.

Action to tackle electricity bill evasion, theft, costing plenty

The energy ministry appears determined to deal with the wider cost and market repercussions caused by strategic electricity bill evaders and electricity theft as it prepares a plan aimed at keeping electricity price levels under control once universal subsidy support for consumers is lifted at the end of the year and indexation clauses are reintroduced by suppliers.

Energy minister Thodoris Skylakakis, a former deputy at the finance ministry, knows well that electricity bill evasion can be likened to tax evasion, as consumers who manage to avoid paying electricity bills, by taking advantage of lax domestic regulations to switch suppliers and leave behind unsettled bills, are ultimately doing so at the cost of punctual consumers, who end up shouldering consequent costs.

Even if a fraction of unpaid receivables owed to electricity suppliers were to be covered, this would help suppliers subdue their tariff levels, market officials pointed out.

Taking all this in mind, the energy ministry is expected to announce tough measures in October, clamping down on serial electricity bill evaders as well as electricity thieves.

Meanwhile, the ministry will also seek to offer reinforced energy-cost support to low-income households as of 2024, when universal energy-crisis aid, in the form of subsidies, will cease to exist and indexation clauses are reactivated by suppliers. Income levels and geographical location are expected to be factored into calculations for support to eligible households.

The ministry’s action plan countering electricity bill evaders, estimated at 30,000, will involve implementing a debt-flagging system similar to one used in the banking sector.

Electricity theft, the other key front that needs to be addressed, cost consumers a total of 789 million euros in 2022, according to recent data.

Electricity subsidies overhaul to introduce income criteria

A new electricity subsidies model being prepared by the energy ministry for launch in January will offer consumers subsidies on a selective basis, taking into account criteria such as income, electricity usage levels, property ownership and, possibly, geographical location of consumers, as opposed to the current system, offering universal support.

The European Commission is pressuring for an end to universal electricity subsidies and wants a new model that would ensure energy-cost support is offered to households in real need.

The government had mildly modified its electricity subsidies model earlier this year, in February, restricting subsidies to monthly consumption of up to 500 KWh, after subsidizing all consumption in the preceding 18 months.

The new, overhauled subsidies model being shaped by the energy ministry for Greece’s electricity market is expected to share similar traits to the income-based formula offering heating fuel subsidies, which also includes geographical location and number of persons per household as factors.

If geographical location of consumers is incorporated into the new subsidy model for electricity subsidies, different subsidy rates will be applied for different regions.

Roof-mounted PV subsidy issues subduing investor interest

A subsidy program for roof-mounted solar panels, made available over the past few months and so far attracting a few thousand residential consumers, has lacked funding and been implemented in unappealing fashion, market officials have noted.

Though not negligible, the subsidy program’s first wave of applicants has not been as big as had been expected, lack of immediate funding availability being the main weakness, officials have asserted.

The support program has been designed to partially subsidize the cost of PV panels and almost fully subsidize the cost of accompanying battery installations.

However, subsidies are not offered to applicants until after the installation of PV and battery systems. The absence of early payments has made such projects prohibitive for many interested parties.

In addition, companies installing such PV and battery systems have hesitated to assume the cost of PV and battery projects on behalf of customers before being reimbursed with subsidy payments at latter dates as the extent of  subsidy delays has remained unclear.

Higher borrowing costs have also been detrimental, all of which has contributed to subduing the sector’s growth.

Levy on gas for power output to be terminated at end of year

The energy ministry plans to terminate an extraordinary levy that was imposed on natural gas used for electricity generation at the beginning of 2024, along with the termination of other measures implemented in the wholesale and electricity markets during the energy crisis.

A joint ministerial decision issued last spring for subsidy distribution of amounts collected through the extraordinary levy is also set to expire on December 31, 2023.

The joint ministerial decision, which had been signed by then-energy minister Kostas Skrekas and former deputy finance minister Theodoros Skylakakis, now in charge of the country’s energy portfolio, facilitated the collection of funds through the levy on gas used for electricity production in order to contribute to electricity-bill subsidies offered through the Energy Transition Fund.

The formula of the levy on gas used for electricity production, introduced in November, 2022, was revised in May this year and set at 5 percent of the TTF index, replacing a previous fixed charge of 10 euro per MWh.

Though this revision did reduce the cost of the levy imposed on gas used for electricity production, it has continued distorting the domestic wholesale market, market officials have contended.

As a result, the levy has undermined the competitiveness of domestic gas-fueled power plants compared to counterpart units in neighboring countries, thus limiting their operating hours.

The TTF index, a key benchmark for natural gas prices in the European market, ended August at an average of 34.83 euros per MWh for contracts requiring delivery in September.

 

Roof PV applications now over 14,000, 60% with batteries

Completed applications for small-scale, roof-mounted PVs with capacities of up to 10 kW have reached 14,230, of which 8,752 include plans for batteries, making them eligible for a related subsidy support program.

The public’s strong interest for roof-mounted PV installations highlights its growing interest in net-metering solutions as a means of energy-cost reduction.

An increasing number of applicants are revising their RES production licenses in order to incorporate batteries into their installations and, thereby, become eligible for subsidy support.

The 14,230 applications submitted so far represent a total capacity of approximately 100 MW, while roughly one-third of 238 million euros in subsidies that have been made available for roof-mounted PVs has been absorbed.

Also, between 7 and 8 percent of RES units that have applied for grid capacity are now connected to the grid.

Some investors have hesitated to submit applications to pvstegi, the platform established for roof-mounted PV subsidies, over uncertainty regarding the disbursement of subsidies.

Specifically, one term stipulates that subsidies would not be disbursed if any irregularities, such as building permit violations, were to be identified. This condition is typically in place to ensure that PV systems are installed in compliance with local building and zoning regulations.

Fully subsidized municipal PVs to aid low-income households

The energy ministry is set to finalize a support program  designed to fully subsidize municipalities for PV installations that will be used to supply low-cost electricity to low-income households via municipal energy communities.

PV systems to be installed around the country through this initiative promise to offer a total capacity of 1,000 MW and play a key role in combating energy poverty, sources informed energypress.

A wider support package for low-income households being prepared by the government is expected to represent a key part of Prime Minister Kyriakos Mitsotakis’ speech at the upcoming Thessaloniki International Fair, taking place September 9 to 17.

Mitsotakis was scheduled to present his government’s four-year plan this coming weekend, but the visit will now be rescheduled, most likely for within the next week, as a result of attention needed to the consequences of a fierce storm that has battered many parts of Greece over the past couple of days.

The PV support program for municipalities, budgeted at 120 million euros, will be implemented by TAIPED, Greece’s privatization fund. Municipalities will need to have established energy communities to be eligible.

Some 30,000 low-income households are expected to benefit from the program’s first stage.

Small-business subsidy returns solution sought for electricity suppliers

The energy ministry and ESPEN, the Greek Energy Suppliers Association, have held talks in search of a solution that would reimburse electricity suppliers for electricity subsidies they have provided, on behalf of the Greek State, to small businesses supplied up to 35 kVA, as well as all bakeries, regardless of supply capacity.

The total amount owed by the Greek State to electricity suppliers is estimated to have reached 800 million euros and has been pending for many months, despite the fact that this outstanding sum has been fully recognized, including legally.

Under the current reimbursement procedure, the Greek State only reimburses electricity suppliers for customers who have submitted formal declarations to RES market operator DAPEEP, managing the Energy Transition Fund that covers subsidies, once these formal declarations have been checked.

However, most customers tend to neglect filling in and forwarding these required formal declaration forms, hindering the reimbursement procedure.

An initial Brussels-approved subsidy support program for small businesses ran from February to November last year and has since been extended on a monthly basis.

Support program for business-sector PVs set for September launch

The energy ministry plans to launch a photovotaics support program for businesses by the end of September, promising enterprises energy-cost savings through self-produced energy.

Subsidy support for PV installations in the business sector will be reserved for systems incorporating zero feed-in batteries, which do not enable injections of renewable energy output into the grid.

This effectively means business-sector PVs will be able to be installed anywhere around the country, regardless of grid capacity availability.

The list of successful applicants, to vie for support funds totaling 160 million euros, should be finalized towards the end of November, or, in a worst-case scenario, no later than December, energypress sources informed.

The support program, to be funded by the Resilience and Recovery Fund, will be administered by TAIPED, the Greek privatization fund.

Electricity subsidies total €9.2bn over past 2 years

Electricity consumers in Greece have received over 9.2 billion euros in subsidies over the past two years, the EU’s sixth highest amount, as a percentage of GDP, a support effort that has been instrumental in Greece’s battle to mitigate the impact of rising electricity prices on its population, the energy ministry has informed.

Greece has steadily recorded variable-tariff electricity price levels below the European average, especially since the summer of 2022, when the energy crisis began to take full force, and, subsequently, has ranked as one of Europe’s lowest-cost countries for retail energy, the energy ministry added, referring to regular data published by HEPI, Europe’s Household Energy Price Index.

The government’s electricity subsidies policy has continued to produce tangible results for consumers in Greece, protecting society and the economy, the ministry noted.

A subsidy-funding mechanism withholding windfall earnings of power producers in the wholesale market, and the suspension of indexation clauses in electricity bills, have both been extended until December 31 in order to assess the situation in international energy markets over the coming months and decide accordingly on the necessity of emergency measures, the ministry noted.

During this period, the ministry will also establish a suitable framework enabling suppliers to better inform consumers on products, while also promoting transparency and price-comparing ability, it added.

Higher gas prices to push up September electricity tariffs

Significantly higher natural gas prices in international markets over the past few days will lead to wholesale electricity price increases of between 10 and 15 percent next month, compared to August, in Greece’s day-ahead market, market officials anticipate.

The country’s electricity retailers will be announcing their nominal tariffs for September on the 20th of this month, a monthly procedure required by market rules.

It is estimated that most electricity suppliers will use better-than-expected revenues in August to subdue their tariff increases for September.

Even so, if the price-rise projection is confirmed, then electricity retailers can be expected to announce residential tariffs starting from 10 cents per KWh, including punctuality discounts, and reaching as high as 19 cents per KWh.

Power utility PPC’s pricing policy for next month will be pivotal in shaping the decisions of rival suppliers given the influence the energy company maintains over the market as a result of its dominant market share.

Also, the price levels set by PPC for September will hold significant sway in the government’s determination of whether to provide subsidies and, if so, the extent of such financial support.

PPC prices up 25% since freeze of indexation clause a year ago

Though a suspension of electricity-bill indexation clauses that came into effect last August has offered consumers far greater transparency on charges, tariffs offered by power utility PPC, the dominant retail player, have since risen by 25 percent, if not taking into account subsidies offered as energy-crisis support.

The power utility’s tariffs averaged 34.69 cents per KWh over the past twelve months, but would have averaged 27.77 cents per KWh during the period had the indexation clauses remained active, a survey conducted by energypress has shown.

Last August’s suspension of electricity-bill indexation clauses has resulted in higher-priced electricity tariffs at PPC for seven months, compared to the equivalent months a year earlier.

Also, modest reductions were recorded in February, April, May and July, while a more substantial year-to-year reduction of approximately 5 cents per KWh was recorded in August, 2022, when indexation clauses were first suspended.

The energy ministry recently decided to extend the suspension of electricity-bill indexation clauses until December. The suspension was originally due to end September 30.

 

Heating fuel, gasoline subsidies to go, focus on credit rating

Generous and widespread energy-crisis support measures previously offered by the government to consumers in the form of subsidies for gasoline and heating fuel appear unlikely to be repeated as all moves now being made by the administration and its economic team are wary of the next round of assessments to be delivered by credit rating agencies on the Greek economy come September.

Prime Minister Kyriakos Mitsotakis will be very well aware of this prospect when he launches September’s Thessaloniki International Trade Fair with a keynote speech at the event’s opening.

No matter how much gasoline prices may rise, subsidies should not be expected. “We have exhausted our limits. We are awaiting the investment rating,” Deputy Minister of Development and Investment Nikos Papathanasis noted yesterday, making as clear as possible that widespread support measures are a thing of the past.

The same goes for heating fuel allowances. Last winter, a relatively mild one, they totaled 300 million euros and reached 1.3 million households. The government’s economic team is now examining the prospect of toughening up criteria for this support measure. The range of beneficiaries and heating allowance amount to be offered will depend on the fiscal leeway available in the autumn.

Standard & Poor’s credit rating for Greece stands at BB+ with positive outlook. Moody’s credit rating for Greece was last set at Ba3 with positive outlook. Fitch’s credit rating for Greece was last reported at BB+ with stable outlook. DBRS’s credit rating for Greece is BB (high).

Municipal PVs to offer low-cost power to households in need

A 120 million-euro support program to fully subsidize municipalities for PV installations intended to supply low-cost electricity to low-income households now appears set to be carried out, two years after first being announced.

The initiative, legislated a year ago, is expected to offer low-cost, even zero-cost electricity to approximately 30,000 low-income households.

According to sources, the energy ministry is now preparing the support program’s terms and conditions.

Municipalities will need to have either established energy communities or be members of energy communities, which will assume net-metering activities for low-income households.

In addition, municipalities will be permitted to install PVs at vacant spaces within their boundaries, or roof-mounted PV systems at buildings under their control, including public buildings and schools.

A tender for this subsidy program could be announced in early autumn, while Prime Minister Kyriakos Mitsotakis may announce further details during his speech at the upcoming annual Thessaloniki International Fair, scheduled to take place September 9 to 17 this year.

Energy minister Theodoros Skylakakis recently announced a government decision to offer energy-cost support to low-income households. The support program for municipalities could be incorporated into this government initiative.

Emergency measures extended by 3 months over price fears

Unsettling energy price forecasts have prompted the energy ministry to extend the country’s emergency measures by a further three months, meaning they will now remain valid until December 31, to protect consumers against any new upward price trajectory.

The energy ministry reached a decision last Friday to extend the emergency measures – namely a price cap imposed on the wholesale electricity market and a suspension of indexation clauses usually included in electricity bills. Both measures, introduced a year ago, were due to expire on October 1.

The energy ministry wants the financial support of the Energy Transition Fund, in order to provide electricity subsidies to consumers should the energy crisis flare up again.

Such Energy Transition Fund support would not be possible if the existing price cap in the wholesale electricity market were to be lifted, as any price levels over the cap would remain in the market and not be diverted into the Energy Transition Fund to cover electricity subsidy needs.

Since its introduction last July, the price cap on the wholesale electricity market has so far raised over 3.3 billion euros for electricity bill subsidies, the energy ministry pointed out in its announcement of the decision to extend the country’s emergency measures.

Highlighting concerns of possible energy price rises ahead, German electricity forward contracts for the fourth quarter of 2023 and the first quarter of 2024 have been set at 123 and 146 euros per MWh, respectively.

As for France, one of Europe’s other major energy markets, forward contracts for Q3 2023 and Q1 2024 were set at 155 and 218 euros per MWh, respectively.