No major tariff changes seen for May, support maintained

Next month’s retail electricity tariffs, due to be announced tomorrow by the country’s suppliers, are expected to remain largely unchanged compared to the previous month as a result of low prices at the TTF index and relative stability at the energy exchange.

By law, introduced last summer, all suppliers are required to announce their nominal tariffs for each forthcoming month by the 20th of each preceding month.

If the forecasts for May price levels are confirmed, nominal tariffs – not including subsidies – offered by suppliers will range between 0.105 and 0.1995 euros per KWh.

If the energy ministry decides to subsidize electricity bills for yet another month, as it has done throughout the energy crisis, then households can expect finalized retail prices to range between 0.09 and 0.1845 euros per KWh.

Though energy prices have deescalated considerably since the start of the energy crisis, authorities are expected to keep offering support to consumers until the end of the year.

The energy ministry has just launched an online platform, e-katanalotis, on which electricity users may check tariffs offered by suppliers.

Natural gas price increases seen as inevitable following oil-price rally

A rise in natural gas prices appears inevitable as a result of the sharp increase in oil prices prompted by a drastic cutback in oil production decided on by the eight-member OPEC+ group.

Dutch TTF gas futures rose by as much as 30 percent over the past ten days before easing.

TTF gas futures for May are priced at 45 euros per MWh, but rise for ensuing months. July futures are currently at 46.3 euros per MWh, August futures are at 47.1 euros per MWh, September futures are at 48.6 euros per MWh, October futures are at 52 euros per MWh and November futures are at 57.9 euros per MWh.

In comments to energypress, local energy company officials shared concerns of a new round of gas price increases, noting conditions are currently fluid but will clear up over the next few weeks.

The impact of the rise in oil prices is already being felt at retail level in the US, while Europe is also bracing for an ascent as the price of crude shapes the price of natural gas by a coefficient of at least 50 percent, according to IEA.

If applied to its full extent, as of May 23, the OPEC+ decision to slash oil production could have greater impact on natural gas prices than Russia’s war in Ukraine, leading analysts, including Tom Kloza, global head of energy analysis at OPIS (Oil Price Information Service), have noted.


Suppliers spared of €10/MWh cost on electricity producers

Electricity suppliers will no longer be factoring into their tariffs a special surcharge of 10 euros per MWh on natural gas used for generation purposes following a recent revision to this extraordinary measure.

The country’s power retailers are currently working on their tariffs for April, due to be announced on Monday, based on a recent law requiring suppliers to announce price levels for every forthcoming month by the 20th of each preceding month.

Though the aforementioned flat-rate surcharge no longer applies, electricity producers have not been entirely spared of special contributions. An amendment that came into effect this month now requires electricity producers to contribute to the state a monthly surcharge that is equivalent to 5 percent of the TTF natural gas index.

The now-terminated special surcharge of 10 euros per MWh on natural gas used by producers for generation purposes is estimated to have increased retail electricity bills by 18 to 20 euros per MWh.

Though the eventual cost – for consumers – of the new TTF-based surcharge remains unknown, it will definitely be lower than costs resulting from the flat-rate formula. Lower TTF levels will mean lower related costs for electricity producers, which, by extension, will enable suppliers to offer reduced retail prices.

Suppliers are expected to announce reduced tariffs for April on the 20th of this month as wholesale electricity prices and the TTF index have been on  downward trajectories.

Independent suppliers are forecast to offer tariffs of around 0.20 euros per kWh, a reduction of 0.02 to 0.03 euros per kWh compared to levels for March. Power utility PPC may lower its prices below 0.20 euros per kWh, according to unconfirmed reports.

These lower prices will essentially not offer reduced prices for consumers, but the government’s subsidy support policy, keeping retail power prices at levels of between 14 to 16 cents per KWh, will cost the administration less.


Electricity prices deescalating for third successive month

Wholesale electricity prices appear set to deescalate for a third successive month, prompting market officials to interpret the trend as a definite sign of price normalization, since January.

Even so, some market officials warn the market remains volatile and could still be significantly impacted by various unfavorable events.

Price levels in the first half of March were below those of the equivalent period in February.

Average wholesale electricity prices at the energy exchange over the past couple of days were below 100 euros per MWh, at 89.74 and 97.42 euros per MWh, respectively.

Earlier this month, wholesale electricity price levels ranged between 106 and 160 euros per MWh, compared to between 137 and 168 euros per MWh in the first half of February.

Wholesale electricity prices averaged 191.79 euros per MWh in January and dropped to an average of 156.24 euros per MWh in February, levels well below December’s average of 276.89 euros per MWh.

The natural gas market’s TTF index has followed a similar course. It ranged between 85 and 140 euros per MWh in December, fell to levels of between 65 and 68 euros per MWh in January, and has dropped to levels as low as 42 euros per MWh in recent days. The TTF has since edged up to levels of between 49 and 52 euros per MWh over the past three days.

Electricity retailers are expected to announce lower prices for April in a few days’ time. By law, power suppliers in Greece are required to announce their prices for each forthcoming month by the 20th of every preceding month.



Revisions aim to reduce energy cost for most consumers

The energy ministry is moving ahead with three revisions intended to lighten the burden of electricity bills for most consumers. Two of the changes were included in a draft bill submitted to Parliament late last Friday night, while a third revision has been attached to a RES-sector draft bill forwarded for consultation.

These measures include a new formula changing the way a special levy imposed on electricity producers is calculated. It is planned to now be calculated as 5 percent of the average TTF gas index price, an initiative that should lessen the levy’s cost for electricity companies and, by extension, the cost of electricity for consumers.

This special levy on electricity producers was introduced in November at a fixed rate of 10 euros per MWh.

Also, several low and medium-voltage consumer categories – including industrial consumers and farmers – will be exempted from a public service compensation (YKO) charge included in electricity bills.

In addition, a legislative revision is planned to pave the way for power purchase agreements (PPAs), offering industrial consumers renewable energy supply agreements over long-term periods.

DEPA cancels 2 LNG orders submitted to TotalEnergies

A sharp reduction in domestic natural gas consumption has prompted gas utility DEPA to cancel two LNG orders submitted to TotalEnergies a few months ago as part of the country’s overall effort to bolster energy security ahead of this winter period, energypress sources have informed.

The cancellation will not come without repercussions as DEPA, based on the agreement’s terms, will be required to pay TotalEnergies compensation of approximately 10 million euros for each cancelled order. This sum may be covered by the Energy Transition Fund, as foreseen by law.

DEPA’s cancellations concern two LNG orders submitted in September, each for 10 TWh quantities. These orders were secured at particularly competitive prices as other indices besides the TTF were also factored into the pricing formula to lower the price level. At the time, the TTF was as much as 90 euros per MWh higher than other platforms also used for such transactions in the European market.

The two DEPA orders were planned for delivery between November, 2022 and March, 2023 as cover in the event of a disruption of Russian gas supply to Greece. But the orders have ended up proving excessive given the prevailing conditions.

Levy on gas-fueled power hurts producer competitiveness

An extraordinary levy of 10 euros per MWh imposed, as of November 1, on the country’s natural gas-fueled power stations has proven detrimental to their level of competitiveness, greatly contributing to the adverse market conditions they face.

The situation has further deteriorated for electricity producers during the first weeks of the new year, as reflected by the level of wholesale electricity prices in Greece, the highest among neighboring EU member states, despite a considerable TTF index drop in natural gas prices.

This extraordinary levy of 10 euros per MWh on natural gas purchased by gas-fueled electricity producers was introduced when gas prices at the TTF index ranged between 120 and 130 euros per MW, representing approximately 8 percent of the TTF. However, as a result of the sharp decline in natural gas prices to levels of between 55 and 60 euros per MWh, this levy has now risen to represent roughly 14 percent of the TTF.

The increased electricity production cost has led to a rise in electricity imports, even if hailing from older, higher-emitting facilities.

In the first twenty days of January, electricity imports ranged between 20 and 40 percent of Greece’s energy mix, well over the 2022 average of just 8 percent.

During this twenty-day period, the cost of wholesale electricity in Greece, averaging 239.98 euros per MWh, was the highest in the EU.

February power tariffs to be lowered, conditions favorable

Sliding electricity prices on the energy exchange, since mid-January, and the continuing drop in natural gas prices at the TTF index are creating favorable conditions for lower retail electricity prices.

A first retail market sign of these improved conditions is expected tomorrow, when suppliers post their February prices based on a recently introduced market rule requiring them to announce their prices for each forthcoming month by the 20th of the previous month.

Suppliers are expected to drop their nominal price levels for next month as low as 0.20 to 0.25 euros per KWh, not including anticipated state subsidies.

According to sources, power utility PPC, the dominant market player, is not prepared to drop its retail electricity price so low for next month, but it will offer a significant cut on its January offer.

Once retail electricity prices for February are out, the energy ministry will set subsidies so that finalized retail prices drop to a level of 0.09 euros per KWh.

The day-ahead market’s average price for electricity has set a new low, falling, today, to 58.44 euros per MWh, from 204.40 euros per MWh just days ago. It should be noted that suppliers take into account a broader time period when calculating their prices for each forthcoming month.

The TTF gas index has also plunged in recent weeks to levels of between 55 and 60 euros per MWh, well below levels of 150 euros per MWh in December.


Nominal electricity tariffs to be cut by over 50% for February

Electricity suppliers are expected to announce nominal tariff reductions of more than 50 percent for February this Friday, the 20th of the month and, under recently introduced market rules, the monthly deadline date for tariff announcements concerning each forthcoming month.

This anticipated electricity price reduction for next month has been shaped by favorable conditions at the TTF gas index, now down to levels of between 63 and 65 euros per MWh.

Nominal electricity tariffs – before subsidies are factored in – for the current month range between 0.358 and 0.489 euros per KWh, but are expected to plunge to levels of between 0.20 and 0.22 euros per KWh for February.

Electricity subsidies funded by the Energy Transition Fund brought down this month’s nominal rates for finalized electricity retail rates of between 0.03 and 0.15 euros per KWh.

In Greece, TTF gas index reductions do not directly impact the electricity market as power suppliers base their price levels on gas prices of the previous month.

The country’s electricity prices are greatly shaped by natural gas prices as natural gas typically represents approximately 40 percent of the Greek energy mix.

Gas prices down after EU price cap agreement, big test in spring

Natural gas prices are on a downward trajectory, confirming projections that an EU gas price cap agreement, reached earlier this week, would help contain international prices.

Yesterday, wholesale gas prices dropped to below 100 euros per MWh for the first time in months, ending the day at 97.752 euros per MWh. During trading today, the price level has dropped as low as 96.325 euros per MWh.

Though the gas price cap appears to be having a calming affect on international gas prices for now, the mechanism is expected to face a tougher test in spring, when gas demand will be greater as EU member states move to refill storage facilities following winter.

EU energy ministers agreed to trigger a cap if prices exceed 180 euros per MWh for three days at the Dutch TTF index, which serves as the European benchmark.


EU gas price cap agreement sends firm message to markets

The EU’s gas price cap agreement yesterday, achieved following months of deliberation, comes as a major European step that offers energy-cost protection to households and businesses, while also sending a strong message to markets that natural gas purchases will not be made at any price.

EU energy ministers agreed to trigger a cap if natural gas prices exceed 180 euros per MWh for three days at the Dutch TTF index, which serves as the European benchmark. The cap could serve as a crucial tool against any future price surge, as was the case last summer.

Gas price levels are not expected to fall immediately. Even so, the TTF index did drop to 107 euros per MWh yesterday, following the EU’s gas price cap agreement.

It is impossible to predict whether the price cap will prove effective enough to contain gas prices below 100 euros per MWh on a permanent basis and level out wild price fluctuations swinging over 30 euros per MWh in a single day.

Also, it remains to be seen how individual market players will respond if demand increases and gas prices escalate to levels near 180 euros per MWh in the months ahead. If they please, buyers and sellers could establish bilateral agreements above the price cap level, essentially nullifying it.



Higher retail electricity prices expected for January

Retail electricity prices for January, set to be announced tomorrow by suppliers, are expected to rise, pushed higher by increased wholesale prices, sources have informed.

Wholesale electricity prices have averaged approximately 300 euros per MWh on the day-ahead market since the beginning of December, up roughly 45 percent compared to June’s average of 205.86 euros per MWh for the equivalent 19-day period.

Even though electricity prices have plunged 50 percent on the energy exchange over the past six days, to 200 euros per MWh from nearly 400 euros per MWh on December 14, suppliers cannot risk subduing prices to December levels. The jittery mood at the Dutch TTF index has not left Greece’s energy exchange unaffected.

January’s electricity prices to be delivered tomorrow by the country’s suppliers – based on a recently introduced rule requiring them to announce their respective price levels for each forthcoming month by the 20th of the preceding month – are expected to range between 0.35 euros per KWh and 0.41 euros per KWh. Supplier prices in December ranged between 0.27 euros per KWh and 0.38 euros per KWh.

Finalized prices for consumers will be lowered by state subsidies offered by the government for electricity. The government is expected to engineer, through subsidies, price levels for households and businesses to between 0.15 euros per KWh and 0.17 euros per KWh.

EU headed for new impasse on gas price cap agreement

The EU’s energy ministers appear headed towards another deadlock for a gas price cap agreement at an upcoming council meeting on December 13, which will prove a disappointment for Europeans as prices surge again.

Several EU member states seem to be resisting any sort of compromise for the establishment of a gas price cap level ahead of next week’s meeting of energy ministers, a measure now more urgent than ever before as winter temperatures begin to fall.

Gas prices surged yesterday at the Dutch energy exchange, a European benchmark, reaching 160 euros per MWh before easing to 140 euros per MWh and ending the day at 138 euros per MWh.

Though the prospect of high-priced natural gas is alarming, a price cap agreement does not appear to be a priority for a group of EU member states, led by Germany. Berlin, according to sources, wants the issue deferred until a summit of EU leaders, scheduled for next Thursday, two days after the meeting of EU energy ministers.

This, of course, would be a setback as it was at the previous summit, in October, that EU leaders referred the issue to the Energy Council, asking its members to work on details of an agreement reached by the 27 EU leaders.

Germany, joined by the Netherlands, Austria, Denmark, Estonia and Luxembourg, appears to be insisting on gas price cap at the level initially proposed by the European Commission, 275 euros per MWh, well above the 220-euro proposal forwarded by the Czech Republic, currently holding the EU’s rotating presidency.

Soaring gas prices in Europe, up 60% in 3 weeks, ‘unjustified’

Wholesale gas prices have surged by 60 percent over the past few weeks – widely regarded as unjustified – under the pretext of falling temperatures and increased demand, despite no supply issues as gas storage facilities around Europe are virtually full.

January derivatives on the Dutch exchange (TTF) exceeded 160 euros per MWh yesterday, reaching as high as 165 euros per MWh, the highest level since October 13, following levels as low as 105 euros per MWh during the first ten days of November.

This surge, supposedly resulting from an increase in demand, strongly suggests speculators and traders are having a field day as gas storage facilities around Europe are about 95 percent full and offer supply security.

Meanwhile, the EU’s 27 member states remain divided over the details of a possible gas price cap and are continuing their negotiations without an agreement in sight.

“In essence, the energy market is once again hostage to speculation. The volume of virtual trading in January derivatives is bought and resold ten, twenty times, or even more, creating unjustified revaluations,” Dimitris Kardomateas, former Director General of Strategy & Development at gas grid operator DESFA, told energypress. “Prices at the US Henry Hub are 22-23 euros per MWh, while, in Europe, they are now at 140-150 euros per MWh,” he added.


New European LNG benchmark to be shaped by EU-27 prices

Europe’s new LNG benchmark will be determined by LNG price-level data presented by the EU’s 27 member states, the objective being to offer a broader, better-balanced and more reliable pricing formula than the existing one, shaped by the Dutch TTF index, sources have informed energypress.

ACER, Europe’s Agency for the Cooperation of Energy Regulators, will present a preliminary plan for this new market correction mechanism at a meeting in Brussels today to be attended by the EU’s permanent representative committee, Coreper, involving all EU member states.

The new European LNG benchmark, promising a more accurate reflection of international prices for LNG, the dominant global energy source at present, will not affect existing agreements, officials have pointed out.

EU officials are striving for an imminent launch of this new LNG pricing tool, the aim being to have it introduced by early 2023. Last month, the European Commission noted it wants the new LNG benchmark to be ready by March 23.

On a wider scale, although the European Commission hopes EU member states can resolve differences for a common solution to the energy crisis, there have been no indications of possible consensus. On the contrary, the North-South divide remains and expectations for a common European approach to the issue this winter are extremely low.

Heating cost comparisons for November still unclear

Heating energy cost comparisons for November regarding natural gas and heating oil remain unclear. Should gas utility DEPA reduce its subsidies, as is anticipated following a sharp recent drop in international gas prices, heating oil would become marginally cheaper, even if heating oil subsidies at refineries are disrupted, as long as the Brent index does not continue rising.

The retail price of natural gas in Greece is currently at 11 to 12 cents per KWh, a level that would exceed 20 cents per KWh without DEPA’s subsidy of 9 cents per KWh. Subsidies of such extent are currently unnecessary as a result of the recent plunge in natural gas prices, dropping to 99 cents per MWh (TTF) yesterday.

This major drop in gas prices will inevitably prompt a reduction in gas subsidies. It is still unclear if energy minister Kostas Skrekas will make any related announcements today or hold back for a latter date.

Heating oil prices have been subdued at a level of 1.35 euros per liter, or 12 to 13 cents per KWh, as a result of two separate subsidies, a state subsidy, to be provided until at least the end of the year, worth 25 cents per liter, and an additional subsidy of 7.5 cents per liter, being offered by refineries until the end of October, according to their announcements. It remains unclear if refineries will continue subsidizing heating oil beyond October.

Brussels seeks to prevent internal EU bidding for LNG

A European Commission proposal for joint European gas orders, one of the most crucial aspects of Brussels’ energy-crisis package to be discussed at tomorrow’s EU summit, aims, besides boosting Europe’s bargaining power, to prevent EU member states from bidding against each other, an unwanted prospect that would increase prices, ultimately favoring stronger members.

The Brussels proposals also include a measure that would discourage speculation in derivatives through the establishment of a temporary intraday price-increase mechanism. It would protect market players from huge price fluctuations within the same day by setting limits. TTF fluctuations above and below limits set will be prohibited, according to this proposal.

The details of how these two proposals could actually work remain to be seen.

“The LNG market is in danger of becoming a jungle. Things will be tight in coming years and a first-come, first-served logic could prevail. In practice, this means bigger countries will manage to buy faster and cheaper than smaller ones, so a brake is needed,” Pantelis Kapros, Professor of Energy Economics at the National Technical University of Athens, told energypress.

Unrestricted competition between countries would drive up prices, undesired by all, as an oligopoly exists in LNG supply, the professor added.

November electricity prices, out tomorrow, down 15-20%

The country’s electricity suppliers, now finalizing their pricing policies for next month, are expected to announce, tomorrow, reduced tariffs for November, down by 15 to 20 percent compared to the current month’s levels, sources have informed.

Based on new law, suppliers are required to announce their electricity prices for the forthcoming month by the 20th of each preceding month.

Supplier tariffs, sources informed, should range between 0.45 to 0.50 euros per MWh, which, if confirmed, will result in a reduction of between 15 and 20 percent, compared to October’s prices.

The government’s level of subsidy support for electricity bills next month has yet to be announced. Given the current de-escalation in electricity prices, the government may choose to only rely on the Energy Transition Fund for next month’s subsidies and not use any budget money for this purpose, sources said.

Market analysts are projecting further electricity price reductions until the end of the year as a result of a drop in TTF natural gas prices. The Dutch index has fallen by 66 percent since an August 26 peak of 349.90 euros per MWh, reaching 116.45 euros per MWh yesterday.

The EU’s overachievement of gas storage levels, now averaging 91 percent of capacity, as well as an abundance of LNG supply to Europe, are key factors that have driven down the TTF.


Four-part energy crisis plan, gas price cap as last resort

European Commission president Ursula von der Leyen is tomorrow expected to announce an EU energy-crisis plan based on four axes, as well as a possible price cap on natural gas as a last resort and only for a short period of time, sources have informed.

The leaders of the EU’s 27 member states will go into an EU summit, scheduled this Thursday, for decisions amid a very ambiguous setting.

The European Commission president’s proposal will incorporate, as one of the four axes, the EU’s bargaining power as one collective buying unit for lower-cost natural gas purchases, according to sources.

The plan also includes a solidarity mechanism for emergency gas supply, by fellow member states able to provide cover, at fair price levels, to member states short of sufficiency levels during the forthcoming winter.

The third part of the proposal will, according to the sources, focus on the details of a plan aiming to reduce natural gas demand in the EU by 15 percent this winter.

The fourth part of the European Commission proposal is believed to focus on the establishment of a new European gas benchmark as the TTF, the current benchmark, is shaped by pipeline gas supply and does not take into account the market’s increased LNG penetration.

DEPA’s TotalEnergies LNG deal a break away from Russia, TTF

A gas supply agreement reached between DEPA Commercial and France’s TotalEnergies, securing, for the former, French LNG quantities totaling 10 TWh, nearly one-third of annual Russian gas supply, based on references prices not linked to the Dutch TTF hub, up to 90 euros per MWh more expensive than other hubs, paves the way for further agreements not connected to the TTF and Russian supply.

According to sources, DEPA Commercial is currently working on a strategic long-term LNG supply agreement with another major international player, once again using a pricing formula linked to a hub other than the TTF.

These moves are ensuring energy sufficiency for DEPA Commercial’s customers as well as the country, at competitive prices.

DEPA Commercial’s 10-TWh LNG agreement with TotalEnergies, which, according to sources, will result in supply from November until March next year, is equivalent to five months of Russian gas consumption in the Greek market.

The TotalEnergies amount should be enough to cover the country’s needs during this five-month period if Russia completely disrupts gas supply to Europe. In 2021, Greece’s gas imports from Russia totaled 35.37 TWh.

The Greek energy ministry’s leadership and DEPA Commercial officials are preparing for a trip to Azerbaijan, postponed three weeks ago, to seek an agreement for further gas quantities, at prices that are more competitive than the current Azerbaijani supply deal, DEPA Commercial’s most expensive.



European gas index may link TTF with US, Japan, S. Korea

The European Commission is moving towards establishing a new European benchmark for natural gas that would link the Dutch TTF index, currently providing reference prices for Europe, with the American hub Henry, as well as other indices, including the Japanese and South Korean systems.

Brussels is looking to broaden the scope of the European bloc’s reference pricing system so that it could reflect Europe’s gas imports market with greater accuracy and objectivity.

A new European benchmark will need to also factor in LNG quantities being traded and could be linked with the Japanese and South Korean indices, European sources noted.

European Commission officials explained it would be more appropriate and realistic to establish a new benchmark linked to real supply and demand conditions, rather than relying on the TTF, no longer reflecting the continent’s balance between supply and demand.


European resolve for crisis solution containing gas prices

The growing resolve of European officials to find solutions that could contain gas prices is already producing results, as highlighted by a significant price reduction of just over 30 percent over the past week.

Germany appears to have changed stance by joining EU member states of the south in their call for a cap on natural gas, now being examined by the European Commission following a delay of many months.

Germany’s public admission that a single European solution is needed to counter the energy crisis, an acknowledgment coming after the country previously blocked proposals forwarded by Europe’s south, has swiftly impacted energy markets.

Yesterday’s news of a new Russian gas supply disruption through Nord Stream I, under the pretext of maintenance requirements, did not prompt a further increase in gas prices, as would be expected, but, instead, resulted in a price reduction. The TTF index fell yesterday to 239 euros per MWh, down from a record level of 346 euros per MWh on August 26, a 31 percent drop over the one-week period.

This reduction has filtered through to today’s wholesale electricity prices around Europe. They fell to 635 euros per MWh in France, 571 euros per MWh in Germany, 661 euros per MWh in Italy, and 582 euros per MWh in Greece and Bulgaria. The price level for Greece is approximately 100 euros lower compared to yesterday.


Electricity suppliers revise tariffs upwards for August

Electricity suppliers have just announced tariff revisions, upwards, for August following the government’s implementation of a five-euro price cap on fixed charges.

These tariffs will apply as of today. Deducting the state’s support, worth 33.7 cents per KWh, the revised tariffs announced by suppliers range between 14.9 and 28 cents per KWh, the majority of suppliers offering tariffs between 23 and 26 cents per KWh.

The government’s decision to impose a price cap on fixed charges – after electricity suppliers opted to increase their fixed charges to keep their tariffs, the competitive aspect of electricity bills, as low as possible – as well as the related legislative revision procedure led to a one-week delay, enabling electricity suppliers who had not made accurate forecasts for August’s international prices to reexamine and reset their levels.

Some suppliers have increased their tariffs for August by 4 to 10 cents, compared to previous levels, set on July 25.

These increases reflect the unrest of suppliers as TTF gas prices continue on an upward trajectory, steadily over 200 euros per MWh. Wholesale electricity prices are now back over 400 euros per MWh, reaching 422.02 euros per MWh today.

Combined-cycle natural gas-fueled power stations will be remunerated at a rate of 422.39 euros per MWh in August, up from 292 euros per MWh in July. Open-cycle natural gas-fueled power stations will be remunerated at a rate of 594.76 euros per MWh in August, up from 408.47 euros per MWh in July. The month-to-month remuneration change for lignite-based production is minimal.



Low expectations for crisis solutions at two-day summit

Expectations of energy-crisis solutions being found at a two-day summit of EU leaders, beginning today, are subdued as a result of the European Commission’s persistence for no intervention of Europe’s common energy market, contrasting interests between member states of the north and south, as well as disagreement over an embargo on Russian oil.

Greek Prime Minister Kyriakos Mitsotakis is expected to reiterate his call for a detachment of natural gas prices from electricity prices as the only viable European solution that could strike the problem at root level.

However, the Greek leader’s proposal is not expected to be adopted, government officials admitted, warning that the energy crisis could completely spin out of control if the EU-27 do not reach an agreement by next winter.

Athens acknowledges that even if its plan for a wholesale market cap is effective, it will only result in a partial solution if Russia’s war on Ukraine continues and energy prices remain elevated.

The Greek leader, at the EU summit, will reiterate his call for emergency measures including a cap on TTF prices, which, for months now, have been distorted, not reflecting market reality.

LNG order costs fall as much as 40% below TTF prices

The cost of LNG orders placed in recent days has fallen 10 to 40 percent below levels at the Dutch TTF exchange, driven lower by fine weather around Europe and subdued demand in Asia as a result of lockdown restrictions imposed over the past two months by authorities in China, insisting on a zero-Covid policy.

LNG price levels are also lower at the TTF exchange, easing to levels between 93.5 and 94 euros per MWh, the lowest since February.

Market pressure has also eased as a decision by Ukraine to disrupt a pipeline supplying Russian gas to Europe has had less negative impact than initially feared.

Ukraine’s decision, believed to have been taken to pressure the West for stricter sanctions against Russia, prompted Russia’s Gazprom to find a bypass solution through alternative routes to the EU.

These developments could lead to a significant reduction in wholesale electricity prices as a result of less price pressure faced by electricity producers.

The duration of China’s lockdown will greatly shape LNG market developments. For the time being, LNG orders that had been intended for China are being redirected to Europe.

Though supply to Asia has fallen considerably from high levels recorded just months ago, LNG demand typically increases in China, Japan and South Korea during summer.


Government in frantic search of €3-4bn for crisis measures

The government is frantically searching for solutions that would secure between 3 to 4 billion euros to compensate energy companies for planned price ceilings on wholesale energy prices.

Energy market conditions are adverse across the board. Consumers are struggling to meet costlier energy-bill payments, energy market companies and authorities fear an increase in unpaid receivables and its wider effects, while the government, seeing its approval rating fall by between half and one percentage point a month, is hoping for a European solution to the energy crisis, now exacerbated by Russia’s war on Ukraine.

A European solution to the energy crisis does not seem anywhere near. French president Emmanuel Macron is currently stranded by the French elections, while German chancellor Olaf Scholz appears undecided. For the time being, at least, the Greek government will need to seek a solution through the national budget.

Russian president Vladimir Putin is under no pressure to end his war on Ukraine and stop his energy-sector blackmailing of the EU as long as European energy payments for Russian gas, oil and coal, totaling 600 million dollars a day, keep flowing into Russia.

At this stage, Greek Prime Minister Kyriakos Mitsotakis’ proposal for a price ceiling at the TTF gas exchange appears to be the only promising solution, as this would strike at the root of the problem prompting exorbitant electricity prices around Europe.

Europe on edge, tested by Putin’s ruble payment demand

Tension in Europe has risen with signs of disorientation emerging over Russian president Vladimir Putin’s demand for ruble-currency payments to cover Russian natural gas supply.

German chancellor Olaf Scholz, according to Moscow, initially agreed on this payment term for Russian gas supply, but this was swiftly denied by the chancellery.

Italian prime minister Mario Draghi abruptly rejected Putin’s ruble-based payment plan for Russian gas supply, while Polish prime minister Mateusz Morawiecki has called on Europe to impose an embargo on Moscow and follow his country’s example by stopping all Russian energy imports until the end of the year.

Europe is on high alert. Reliance on Russian energy reaches as high as 80 percent in Austria. Germany’s dependence on Russian energy is also high, at 55 percent.

Both countries have taken steps for gas rationing over the payment stand-off with Russia, fearing, like all of Europe, a halt in energy deliveries from Russia because of the dispute over payments.

Robert Habeck, Germany’s federal minister for economic affairs and climate action, has called on citizens to use electricity as moderately as possible.

Should Putin take the dreaded step and cut energy supply to Europe, distribution of existing natural gas reserves, as well as supply from non-Russian sources, will need to be prioritized, with preference for hospitals, power stations and crucial industries, needed to avoid economic collapse.

If European governments are forced to announce a state of emergency, an electricity rationing plan will need to be implemented for all households. The UK was forced to adopt such an extreme measure, for fuel, during the oil crisis in 1973.

In Greece, a halt in Russian natural gas supply would stop economic activity in just a few days. The country’s daily gas consumption reaches approximately 200,000 MWh, of which 115,000 MWh is supplied by Russia.

Additional LNG shipments in April; the mooring of an FSRU at the Revythoussa islet LNG terminal, just off Athens, for a capacity increase; full-capacity generation at the country’s lignite-fired power stations; as well as an agreement with Italy to ensure storage capacity at the neighboring country’s gas storage facilities, for strategic reserves, are all necessary steps ahead of next winter.

It remains to be seen if Russia’s war on Ukraine will carry on into summer and require extreme measures, or end soon, to the relief of all.

The TTF gas exchange ended trade yesterday at 118 euros per MWh. Wholesale electricity prices in Greece today are at 222.38 euros per MWh.

In comments offered during yesterday’s opening day of the two-day Power & Gas Forum staged by energypress, Pantelis Kapros, Professor of Energy Economics at the National Technical University of Athens, estimated that natural gas prices, even if the war were to end now, will average between 50 and 70 euros per MWh this year.




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.

EU exploring ways to counter skyrocketing natural gas prices

The EU is preparing drastic energy policy changes in response to the economic impact prompted by Russia’s war on Ukraine. Europe’s determination for change is highlighted by a series of initiatives that have already surfaced, including the Repower EU package, announced this week, aiming to severely limit Europe’s reliance on Russian gas and limit gas consumption in general; proposals for price ceilings; and other measures, all of which will be discussed at an informal summit in Paris today.

Until now, measures called for by Europe’s south as means of tackling exorbitant energy prices pushed higher by the energy crisis of previous months, have been largely overlooked by the continent’s north.

However, more attention to these calls is now being paid by the north as the crisis drags on, exacerbated by Russia’s invasion of Ukraine, which has pushed energy prices through the roof and begun to also trouble consumers in the north.

A proposal forwarded by Greek Prime Minister Kyriakos Mitsotakis, who has called for price ceilings at the Dutch TTF exchange, as a response to record-high gas prices, is one of the subjects expected to be discussed at today’s meeting in France.

The Greek leader yesterday reminded of the wholesale gas price level just over a year ago, in February, 2021, at 30 euros per MWh, which, in Greek market terms, translates to wholesale electricity prices of 90 euros per MWh, about a quarter of the current level, at 349.80 euros per MWh.

DEPA discounts for consumers on a month-by-month basis

Gas company DEPA plans to offer discounts to household consumers on a month-by-month basis, depending on its ability to maneuver, international market prices and market needs, energypress sources have informed.

DEPA also plans to offer a certain level of gas discounts to industrial producers in the medium voltage category.

The gas company has just reached a pricing-formula deal with Russia’s Gazprom for supply in 2022 whose price is 80 percent indexed with the Dutch TTF gas hub, the other 20 percent oil-indexed, deemed.

The Gazprom deal, deemed as a fair agreement by analysts, offers DEPA some leeway for discounts  over the coming months.

Based on current market conditions, DEPA’s agreement with Gazprom results in a wholesale gas price of 77.40 euros per MWh, 12.60 euros less than yesterday’s gas futures prices for February.