Electricity market players greet support package with relief

The country’s electricity suppliers have welcomed energy-crisis support measures announced by the government late last week with relief as well as some uncertainty, especially concerning an existing wholesale price clause included in electricity bills and whether it will continue to apply or be suspended.

The support package has been embraced by the sector as it promises to offer electricity suppliers cash-flow relief, especially non-vertically integrated companies or energy companies generating limited quantities, through production-cost protection measures and lower electricity purchase costs for energy retailers.

Energy company fears of a rise in unpaid receivables as a result of increased difficulties faced by consumers to service electricity bills have also been appeased by a new round of subsidies included in the government support package.

The energy crisis of the past ten months has resulted in a domino effect spreading debt throughout the entire electricity market, including amounts owed to operators, as energy company have struggled to deliver regulated fees.

Retail, wholesale measures for crisis’ new support package

The government’s latest energy-crisis support measures, whose fundamentals were announced yesterday by Prime Minister Kyriakos Mitsotakis, will take immediate effect, beginning with subsidies for consumption in May and June. Details are expected to be announced by government officials early today.

These subsidies, according to sources, will be combined with a price cap in the wholesale electricity market as of July, as negotiations with the European Commission are ongoing and Brussels approval is needed, as was the case with Spain and Portugal.

The new subsidies are expected to absorb approximately 50 percent of electricity cost increases for households, while, combined with July’s anticipated price cap in the wholesale market, the support package will absorb between 70 and 80 percent of energy cost increases for households, businesses and farmers, according to government calculations.

The support package for households will, as has been the case over the past few months, continue subsidizing up to 300 kilowatt hours per month, but subsidy levels will fall from 72 euros a month in April to a monthly level of between 55 and 60 euros, which, in terms of energy-cost increase absorption, works out to the same percentage as the average electricity price ended lower in April compared to the previous month.

Based on this reasoning, May and June subsidies for businesses will also be slightly lower than the level of 130 euros per MWh offered in April.

The new support package will also subsidize monthly consumption exceeding 300 KWh at a rate of 10 cents per KWh for all households, not just principle residencies, as was the case with previous packages.

The wholesale electricity market price cap to be implemented is expected to keep the average price at a level of approximately 100 euros per MWh.


Gov’t planning more extensive energy-crisis support measures

Consumers are feeling increasingly disgruntled by exorbitant energy costs, turning into a political problem for the government, which is now aiming to intervene with measures that could offer protection and reasonable energy prices for as many households as possible.

The government has yet to decide on the details of its updated energy-crisis support plan for consumers but intends to implement measures absorbing nearly 80 percent of tariff increases resulting from a wholesale price adjustment clause included in electricity bills.

Government officials are still considering a number of approaches that could offer consumers energy-cost relief. These include a wholesale electricity market price cap, an increase in the current level of subsidies offered in the retail electricity market, or a combination of measures.

The breadth of the consumer protection measures, their financing, swiftness of implementation, obstacles and tools to be used to overcome these obstacles are key factors of the national plan.

Under the country’s current electricity subsidies program, limiting subsidies to monthly electricity consumption of up to 300 KWh, average-income households consuming big energy amounts and low-income households using electricity for heating have been left feeling exposed.

Over 1.5 million households around the country are believed to be unable to cope with current energy costs.

The cost of energy-crisis support measures offered so far is estimated at more than five billion euros, over a year. CO2 emission revenues, excess RES earnings injected into the Energy Transition Fund, the public service compensation account surplus, and the Recovery and Resilience Facility (RRF) have all been used to finance the support.

An additional one billion euros could be provided through the budget, along with any revenues that may result from a 90 percent tax on windfall profits in electricity production.

The government, it is believed, is preparing to offer a new, widespread solution budgeted at five billion euros over a one-year period. Its cost could be divided over the 2022 and 2023 budgets.

Government decisions are anticipated next week. Expectations for a European solution at the next summit of EU leaders, scheduled for May 30 and 31, are low.

Electricity, gas subsidies same for May, totaling nearly €600m

Electricity and gas subsidies covering household, professional and business consumption in May will most likely remain unchanged compared to the previous month, resulting in a support package worth a total of nearly 600 million euros.

The government is expected to officially announce its subsidy package for May within the next few days.

Wholesale electricity price levels have changed only slightly between March and April. The price level was over 242 euros per MWh from the beginning of April until yesterday, slightly below the level of 272.68 euros per MWh at the end of March.

Assuming energy subsidies will remain unchanged for consumption in May, households consuming up to 300 KWh in electricity can expect subsidy support, for the month, worth approximately 72 euros.

Professionals should receive subsidies worth 130 euros per MWh, while small and medium-sized businesses can expect subsidy support worth 230 euros per MWh for supply up to 25kVA.

Household natural gas subsidies should reach 40 euros per MWh.


April subsidies package offers a number of surprises

The government’s latest electricity subsidy package, concerning consumption in April, feature a number of surprises, including an 80 percent month-to-month subsidy increase for households, as well as doubled support for businesses.

Electricity subsidies for households in April have been increased to 72 euros, covering monthly consumption up to 300 kWh, from 40 euros in March.

This subsidy amount, combined with a 30 percent discount offered by electricity suppliers, will ultimately reduce the price of a KWh to approximately 15 cents, from a level of 39 cents.

Enterprises, including professionals, farmers, shops, and industries, stand to receive monthly subsidies of 130 euros per MWh, double the 65 euros per MWh offered in March.

Small and medium-sized enterprises will also receive an additional 100 euros per MWh, taking the total subsidy amount to 230 euros per MWh in an effort made by the government to help them remain afloat amid the adverse energy-crisis conditions.

This bonus-subsidy measure for April, worth an estimated 35 million euros, promises to offer energy-cost support for 1.16 million enterprises, including restaurants, shops, kiosks, hair salons, offices and bakeries.

Retroactive electricity subsidies will also be offered to students and consumers who rent homes and are responsible for electricity bills not under their names.

Auto fuel subsidies, grants in support package worth €1.1bn

A latest energy-crisis support package, worth a total of 1.1 billion euros, will offer consumers auto fuel subsidies of at least 15 to 20 cents per liter for up to 60 liters of fuel per month, an extraordinary allowance for lower-income individuals to average up to 300 euros, as well as 60-euro electricity subsidies for March.

An income-limit criterion of 30,000 euros will need to be met for auto fuel subsidies, while the income criterion for the extraordinary allowance is expected to be set at a lower level.

As has been the case with electricity subsidies until now, consumers will not need to meet any criteria to become eligible for this part of the support package.

Individuals seeking auto fuel subsidies will need to submit applications to a finance ministry-linked online platform so that authorities can check on vehicle ownership and income levels of applicants.

The full details of the package are expected to be announced by government officials early today.

At least half of the support package’s 1.1-billion euro sum will be covered by Energy Transition Fund money, while the rest will stem from the state budget.

April power subsidies, auto fuel discounts set to be announced

Government officials appear close to finalizing the details of a double energy-cost package providing subsidy support, in April, to households and businesses for significantly higher electricity tariffs as well as aid to motorists for hefty auto fuel price increases.

Finance minister Christos Staikouras and energy minister Kostas Skrekas are expected to announce the details of this latest support package tomorrow. It will include electricity subsidies for households and businesses in April, as well as auto fuel and diesel discounts, to be funded by additional tax revenues generated by liquid fuels.

According to sources, April’s electricity subsidies for households will be 40 percent higher, compared to March. These subsidies will cover electricity consumption, for the month, up to 300 MWh, and will be restricted to primary residences. Monthly subsidies per household could exceed 55 euros.

Businesses, professionals and farmers stand to receive even greater electricity subsidy support, totaling over 65 euros per MWh for all levels of consumption, sources informed.

Continued energy subsidies a tough equation, fewer funds, higher prices

Government officials face a growing challenge in their effort to continue subsidizing electricity and natural gas for household and business consumers as funds backing this support are decreasing at a time when energy prices have continued rising.

According to sources, the government is looking to extend its subsidy package for households and businesses to also cover April.

Wholesale electricity prices have continued their ascent during the first ten days of March, well above levels in February, while reduced CO2 emission right prices are restricting cash injections into the Energy Transition Fund, funding the subsidies.

The wholesale electricity price average for the first ten days of March is 322 euros per MWh, well over February’s average of 211.71 euros per MWh. During this period, CO2 emission right prices have dropped to 60 euros per ton from 80 euros per ton.

Prime Minister Kyriakos Mitsotakis has called for a price ceiling to be imposed on the Dutch TTF gas exchange.

Energy markets are forecast to remain volatile as a result of Russia’s invasion of Ukraine.

Price ceiling on electricity not possible, ‘funds lacking’

The prospect of imposing a price ceiling on electricity is not being examined by the government as the funds that would be required by such a measure are lacking, energy ministry officials have indicated following yesterday’s presentation of latest plans and proposals by the European Commission.

European Commissioner for Energy Kadri Simson noted that regulating the price of retail electricity is one of the options available to EU member states to help protect consumers from surging energy prices.

However, an electricity price ceiling is not being considered by the Greek government for the domestic market as the latest EU measures do not include related funding support, sources have informed energypress.

The European Commission’s latest proposals cannot resolve the enormous energy crisis problem if not accompanied by funds that could be utilized by governments, or measures preventing the deterioration of fiscal standings, Greek government officials noted responded.

The repercussions of the energy crisis have required drastic measures. In France, for example, where electricity prices have been regulated, a decision was reached to recapitalize state-controlled power utility EDF, a move costing 2.5 million euros, of which 2 million was provided by the French State.

The European Commission also proposed the utilization of emission-related revenues as a tool to fund electricity subsidies. This approach has already been adopted in Greece but it remains unclear how long emission-related revenues can keep covering the country’s energy subsidy needs.

According to sources, emission-related funds for Greece’s electricity subsidy program will last until April, meaning officials will then need to resort to budget money.

The European Commission also proposes taxation of extraordinary profits earned by electricity producers as a result of high natural gas prices. This measure has essentially already been adopted in Greece as power utility PPC is offering further discounts to customers, essentially returning profits to customers.


Subsidy returns to power, gas suppliers currently trapped

A sum estimated at one billion euros, which should, by now, have been transferred by the Greek State to energy suppliers as compensation for subsidies they have offered to households and businesses on its behalf, remains trapped in the coffers of DAPEEP, the RES market operator, as a result of rule ambiguities and errors, sources have claimed in comments to energypress.

This amount, planned to cover subsidy-related payments made by electricity and natural gas suppliers for January, February as well as March, is stuck at DAPEEP as three ministerial decisions issued last month, which define the framework for electricity and gas bill subsidies offered to household consumers, businesses and farmers, as well as subsidy clearance procedures enabling payments to suppliers, contain ambiguities and mistakes, the sources told energypress following its related report on payment delays faced by energy suppliers.

As a result of these ministerial decisions, DAPEEP has been called upon to check whether subsidy amounts covered by suppliers from their own funds on behalf of the Greek State are correct, the sources said.

In essence, the operator has been asked to cross-examine whether consumers who were subsidized were eligible for the support, restricted to primary residence only, and whether other eligible parties ended up not receiving subsidies.

DAPEEP is not in a position to perform this task alone as the RES market operator needs to cross-examine its figures with those of DEDDIE/HEDNO, the distribution network operator, and IPTO, the power grid operator, for which it does not have access, the sources explained.

PPC hedging gains, €700-800m, used for consumer support

State-controlled power utility PPC, expected to announce its 2021 financial results this month, will either post a minor profit or no profit at all as the company’s entire gain from energy-mix hedging, estimated at between 700 and 800 million euros, has been put to use for customer discounts and subsidies to help consumers cope with the energy crisis, Prime Minister Kyriakos Mitsotakis has noted in parliamentary debate.

PPC, strictly adhering to its business plan, is expected to post modest profit and robust operating profit for one or two years before offering dividends from 2024 onwards, a strategy that serves the interests of shareholders as well as customers.

The energy crisis over the past several months has greatly impacted energy companies across Europe. PPC has remained robust courtesy of its favorable hedging activity, enabling the company to return  resulting benefits to customers.

In many parts of Europe, energy companies have opted to return profit to consumers, either directly or indirectly, an energy-crisis support.

In Greece, RES special account surplus amounts, partially generated by the return of windfall profits in the RES, hydropower and lignite sectors, are being transferred to the Energy Transition Fund as support for electricity and natural gas bill subsidies for consumers.

March power, gas subsidies unchanged, suppliers owed

The level of state subsidies to be offered to household and business consumers for electricity and natural gas in March will remain unchanged compared to February, a support measure worth 350 million euros for the month, sources have informed.

Energy suppliers have already been informed of the decision, reached by the energy ministry.

As a result, household consumers will receive electricity subsidies worth 39 euros per month for consumption up to 300 kWh, only for primary places of residence.

Low-income households eligible for social residential tariffs (KOT) stand to receive electricity subsidies worth 51 euros per month.

Monthly subsidies for non-household consumers, including businesses, farmers and professionals, will remain at the level of 65 euros.

As for natural gas, household consumers stand to receive state subsidies of 20 euros per MWh plus that much more from the gas company DEPA Commercial. Businesses will receive 20 euros per MWh.

According to sources, energy suppliers have yet to be compensated by DAPEEP, the RES market operator, for subsidies offered in January and February, on behalf of the Greek State. Subsidies offered by the Greek State over the two-month period were worth a total of 700 million euros.

DAPEEP sources have ascertained that the sum owed by the operator to energy suppliers will be covered either late this week or early next week.

This delay has increased the cashflow strain felt be energy suppliers, now facing even greater pressure following last week’s invasion of Ukraine by Russia, a development that has sparked a further rise in energy prices.

New subsidy sources needed, energy prices seen persisting

Energy prices are forecast to remain elevated and turbulent for at least another year or so, until early 2023, according to a number of market reports, including one by the European Commission, which means that the government faces the challenge of finding new support fund sources for consumers and businesses, scrambling to meet exorbitant energy prices brought about by the energy crisis.

Until now, the government has relied on Energy Transition Fund money generated by carbon emission right auctions to offer consumers subsidies, but will need to resort to the state budget should this money eventually run out.

Finance minister Christos Staikouras made this need clear in an interview with Greek media outlet Real. “The finance ministry may now possibly need to make available funds from the state budget, not the Energy Transition Fund, for adverse scenarios in the second half of 2022, in order to subsidize households and businesses,” the minister noted.

Suppliers cover subsidies, awaiting €525m payment

Electricity suppliers have had to cover a total of 575 million euros in subsidies offered by the government to consumers for January and February, while, according to sources, the energy ministry has promised to provide this amount to suppliers by the end of the month.

This delay has further increased the pressure on suppliers, forced to deal with significantly higher operating costs as they are spending bigger amounts for wholesale electricity purchases, severely impacting liquidity. Wholesale electricity prices have quadrupled compared to a year ago.

Repeating previous requests, electricity suppliers have once again urged the energy ministry to deliver the relevant subsidy amounts, which will stem from the Energy Transition Fund.

The pricing policies of suppliers have varied, largely based on assumptions, as the government has delayed offering details on its latest electricity subsidy package. A universal package for all low-voltage consumption was terminated as of January.

A study conducted by RAE, the Regulatory Authority for Energy, following an energy ministry request, has shown overall market confusion as well as inconsistencies in the level of subsidies offered by suppliers to consumers. Some subsidies were lower than what they should have been and others higher.

Many consumers have criticized the energy ministry for poor management of the support measures.

Subsidy discrepancies found among electricity suppliers

An inspection by RAE, the Regulatory Authority for Energy, of electricity subsidies received by approximately four million consumers has found an inconsistency in the levels offered by suppliers, based on January’s subsidy rates offered by the state.

Some suppliers have offered consumers subsidies in excess of amounts they were entitled to while other suppliers have passed on smaller amounts, the RAE check has determined.

Though these discrepancies are expected to be corrected by suppliers in ensuing electricity bills, they do highlight a market in distress and unprepared for the government’s termination of a universal subsidy program as of January, limiting subsidy support to primary places of residence in cases of multiple property ownership.

Suppliers are criticizing the energy ministry for sloppiness in its planning of the subsidy support measures as well as payment delays impacting their cash flow and ability to function.

Energy minister Kostas Skrekas is tomorrow expected to announce the details of the government’s energy subsidies package for February. The RAE inspection has highlighted the need for clearer instructions to suppliers.

State energy subsidies for February are expected to be lower than those offered for January, given a slight decrease in the average wholesale electricity price last month, down to 227.30 euros per MWh from 235.38 euros per MWh in December.

RAE has received over 3,000 complaints by consumers in recent times concerning issues such as overcharging, lack of billing transparency, and wholesale price-related clauses in bills.

Electricity market pressured, new unpaid receivable fears

Electricity suppliers fear the emergence of a new wave of unpaid receivables over the next couple of months as an increasing number of consumers, pressured by sharply higher energy prices, are applying for installment-based payback arrangements and delaying payments.

A clearer picture on the energy crisis’ impact on the unpaid receivables figures of suppliers will emerge by the end of February, when payment records for consumption over the four-month period covering October to January will have been established.

Government compensation payments to suppliers for electricity subsidies offered to consumers, in an effort to ease the cost burden, have been slow, which, combined with delayed payments of electricity bills by consumers, has led to a cash-flow squeeze for suppliers.

Many consumers in both the household and business categories, whose energy costs this January roughly doubled compared to a year ago, are only partially covering electricity bill amounts. Energy costs for bakeries, specifically, have increased more than fivefold compared to a year earlier.

Household electricity subsidies cut by €10/MWh for February

Electricity subsidies for consumption in February will be reduced by 10 euros per MWh, compared to the previous month, following a drop in January’s average wholesale electricity price to 227.30 euros per MWh from 235.38 euros in December, high-ranking government officials have decided, according to energypress sources.

Natural gas subsidies to be offered for February will be maintained at 20 euros per MWh for households, while subsidies for business and industrial consumers will be trimmed to 20 euros per MWh from 30 euros per MWh in January, the sources informed.

An official announcement for February’s energy subsidies to be offered by the government could be made today.

In cases of multiple property ownership, electricity subsidies will only apply for one property, the primary residence.

For households, the first 150 KWh of monthly electricity consumption will be subsidized 15o euros per MWh. Monthly consumption between 151 and 300 KWh will be subsidized at a rate of 110 euros per MWh.

All business-related electricity consumption (farming, businesses, industry) will be subsidized at a flat rate of 65 euros per MWh, unchanged from the January offer.

Natural gas subsidies will remain unchanged at 20 euros per MWh for all consumers and will cover all consumption.


Second EV subsidies plan, offering bigger amounts, imminent

A second round of subsidies for electric vehicle purchases, offering as much as 8,000 euros per vehicle, is expected to be announced imminently by energy minister Kostas Skrekas, possibly even during the day, ahead of an anticipated launch in April.

According to sources, the second package will offer EV subsidies worth 30 percent more than those making up the first round.

A 6,000-euro upper limit had been set for the first package, but this level is now expected to be increased to 8,000 euros.

The second EV subsidy package is expected to total between 30 and 40 million euros, which, according to sources, will stem from the Energy Transition Fund as well as leftover funds from the first package.

Electric bicycles and tricycles are once again expected to be included in the new EV subsidy package, to be made available for both individuals and companies.

The subsidy support package is also believed to include incentives, worth as much as 2,000 euros per applicant, for the withdrawal of older vehicles.

Energy ministry officials have expressed satisfaction over the public’s response to the first EV subsidy package. A total of 18,000 applications were submitted, generating turnover of 70 million euros in the market, according to the energy ministry’s secretary-general Alexandra Sdoukou.

Subsidy applications for electric bicycles dominated the government’s first EV subsidy package with a 69 percent share, while 22 percent of applications concerned motorbikes and nearly 10 percent were for cars, Sdoukou has informed.

The prospect of a VAT reduction, from 24 to 6 percent, for EVs is being examined, the official has noted.


Energy Transition Fund in 2022 estimated between €1.5-2m

The country’s Energy Transition Fund is estimated to reach a value worth between 1.5 and 2 billion euros in 2022, its funds stemming from CO2 emission right auction revenues, RES special account cuts, as well as the green fund.

These three sources will also be used to fund electricity subsidy support planned for February. Consumers are expected to receive a similar total amount to 395 million euros worth of subsidies offered in January. Details to the government’s electricity subsidy package for February are now being finalized.

Electricity subsidies for the household category are likely to be lower in February, compared to January, as the average wholesale electricity price in January fell to 227.30 euros per MWh from 235.38 euros in December.

It remains unclear if the government will take into account power outages experienced during and after last week’s snowstorm by thousands of households, in some cases over many days, for its subsidy support package covering February.

Electricity subsidy trim for consumers, businesses in February

Subsidies offered by the Greek State for household and business electricity bills will be trimmed for the month of February as a result of a slight de-escalation in wholesale electricity prices, authorities have decided.

According to sources, wholesale electricity prices are forecast to average approximately 225 euros per MWh in February, slightly below the average of 235 euros per MWh in December.

Household electricity subsidies for February will once again be inversely related to consumption level, the upper limit for subsidies unchanged at 300 kWh per month. Consumption above this level will not be subsidized.

In January, the first 150 kWh of household consumption was offered 160 euros in subsidies, while consumption between 151 and 300 kWh was subsidized with 120-euro amounts.

As was the case in January, household electricity subsidies in February will be limited to primary residences.

For a second consecutive month, businesses will be offered electricity subsidies at a universal rate, slightly below January’s level of 65 euros per MWh.

Wholesale power up to nearly €300/MWh, subsidies prepared

The wholesale electricity price has risen for a fourth consecutive day, reaching nearly 300 euros per MWh, the highest level recorded this month.

Today’s day-ahead market price is at 293.79 euros per MWh, a 42 percent increase compared to the price registered on January 22, when prices last dipped, falling to 206.46 euros per MWh.

The energy mix covering demand today is dominated by natural gas-fueled generation, representing 40.1 percent, while renewable energy sources and hydropower, both capable of containing prices, are limited to 19.97 percent and 6.52 percent of the energy mix, respectively. Lignite-fired power stations are contributing to today’s energy mix with an elevated 14.77 percent share, while electricity imports are also high, representing 14.34 percent of the mix.

According to market analysts, low wind levels have severely restricted wind energy output during nighttime hours, which prompted the need for electricity imports to cover domestic electricity demand.

Wholesale electricity prices are expected to fall to levels below the December average level of 235 euros per MWh, according to projections.

The government is currently analyzing market data to calculate the level of electricity subsidies to be offered for February. No major changes, compared to the current month’s subsidy package, are expected.

Businesses are expected to receive uniform subsidy support in February. Criteria shaped by the energy ministry have yet to be approved by the European Commission.

PM announces €400m in energy subsidies for January

The government will continue offering energy-crisis support to households, farmers and businesses in January with subsidies totaling 400 million euros, Prime Minister Kyriakos Mitsotakis has announced.

This latest subsidy package, now also being made available for businesses, following support for households and farmers from September through December, will cover a considerable part of more recent energy cost increases, the Prime Minister noted, adding that his administration will be keeping a close watch on the energy crisis’ developments until energy prices deescalate.

Following up on the Prime Minister’s announcement, energy minister Kostas Skrekas specified that the subsidies will be available for approximately four million households, regardless of income levels, but will exclude secondary homes or holiday homes in cases of multiple property ownership.

Electricity subsidies will average 42 euros per household, for a month, while the support for lower-income households will average 54 euros, the energy minister noted.

Household natural gas consumption will be subsidized 20 euros per MWh, the minister added.