wholesale electricity prices

Electricity suppliers dread new round of unpaid receivables

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A rising wave of overdue electricity bills, highlighted by a sharp rise in the number of applications lodged by consumers for installment-based payments, is generating anxiety in the energy market as consumers face steep energy cost increases and suppliers battle against tightened cashflows while fearing a reemergence of unpaid receivables.

Consumers are now feeling the accumulative effect of an energy crisis that has lasted seven months and deteriorated since Russia’s recent invasion of Ukraine.

Consumer applications for installment-based payments have risen by more than 200 percent since September, 2021, generating fears of a new round of unpaid receivables, which would have a wider impact on the energy market’s stability.

The extent of the problem will become clearer in April when electricity bills are issued for consumption in March, a month during which wholesale electricity prices have skyrocketed to levels of approximately 300 euros per MWh as Russia’s war on Ukraine rages.

Many energy consumers who have so far managed to remain punctual with their payments could struggle to meet risen energy costs, energy company officials have informed energypress.

Prior to the energy crisis, the country’s annual electricity consumption of 55 TWh cost a total of nearly 3 billion euros, based on an average wholesale electricity price of 50 euros per MWh, several times below the current level of roughly 300 euros per MWh. If sustained throughout 2022, this price level would result in a national electricity bill of nearly 14 billion euros for the year.

EU exploring ways to counter skyrocketing natural gas prices

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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.

Escalating war increases threat of gas shortages, prices surging

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The escalating war in Ukraine following last week’s invasion by Russian forces has increased fears of natural gas shortages in the European market, which has led to a new price surge, adding to the price ascent prompted by the preceding energy crisis.

Markets are now jittery over concerns that the ongoing bombardments in Ukraine could damage gas pipelines running across the country. The prospect of a Russian retaliation to stricter sanctions threatened by the west is another concern pressuring markets.

Greece is in a somewhat sheltered position as the country imports Russian gas quantities via the Turkstream pipeline, crossing the Black Sea, but, given the overall developments, Athens cannot remain complacent.

The country’s crisis management committee will be meeting again today to discuss measures should the adverse conditions created by Russia’s war in Ukraine deteriorate further.

Greek authorities are expected to try and maintain reserves at the country’s LNG terminal on the islet Revythoussa, just off Athens, as close as possible to full capacity, and use pipeline gas to the fullest extent.

The country’s gas needs for March have been fully covered by four LNG shipment orders – two by Elpedison, and one each by Mytilineos and DEPA – expected at the Revythoussa terminal. Additional orders could be placed if needed. LNG orders have yet to be placed for April.

Natural gas prices surged yesterday, ending the day at 121 euros per MWh. At such a level, retail electricity prices could reach close to 300 euros per MWh. Today’s retail electricity price is 254.94 euros per MWh.

Europe now appears determined to reduce its dependency on Russian gas, covering between 40 and 45 percent of the continent’s needs. The issue has become a top priority on the EU agenda, but the road towards achieving this objective remains unclear.

European social unrest feared as crisis is expected to deepen

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Since its outbreak seven months ago, the energy crisis, adding to the economic hardship prompted by the pandemic, has now been pushed to even further extremes by Russia’s war on Ukraine, as higher energy prices over the long term appear likely.

The Russian invasion of Ukraine – following months of increasing gas prices paid by European consumers for Russian gas supplied by Gazprom – is driving energy prices even higher and, by extension, generating further inflationary pressure to limit the purchasing power of Europeans, a catalyst for social unrest.

Under the current market conditions, energy debt will surely rise around Europe, including Greece, as consumers struggle to meet extremely higher energy costs. Also, many energy companies will struggle to stay in business.

Social unrest and a new round of Euroscepticism can be expected once consumers fully realize that higher energy costs are not just ephemeral.

Just one year ago, wholesale electricity prices in Europe averaged between 50 and 60 euros per MWh. In Greece, annual electricity consumption totaling 50 to 55 TWh was worth approximately 3 billion euros.

Yesterday, in response to Russia’s invasion of Ukraine, natural gas prices climbed as high as 144 euros per MWh, before settling at 120 euros per MWh. Natural gas prices of such levels result in wholesale electricity prices of between 250 and 300 euros per MWh, roughly five times higher than a year ago.

Should such price levels remain, Greece’s annual electricity cost of 3 billion euros, until the start of 2021, will become a sweet memory of the past. The country’s additional electricity cost could end up being worth as much as 11 billion euros, if wholesale electricity prices remain at levels of between 200 and 250 euros per MWh.

Factoring in the additional money needed by consumers for heating costs – petrol and natural gas – only exacerbates the problem.

Gov’t officials fear further energy price escalation

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Government officials, battling for months to deal with exorbitant energy price levels resulting from the energy crisis, now dread the thought of a further price rise in wholesale electricity to levels of as high as 400 euros per MWh should the Ukraine problem develop into a bigger conflict.

Responding to a halt in the licensing procedure for Nord Stream 2, a subsea gas pipeline directly linking Russia with Germany, Russian officials have warned of higher natural gas prices that could lead to wholesale electricity price levels of as much as 400 euros per MWh, more than double the already-high 188.39 euros per MWh at present.

Despite these concerns, local officials remain less troubled about a possible energy shortage, heartened by the milder weather conditions, high water reservoir levels at dams, as well as the increased production capacity of RES units this time of the year, which, in a worse-case scenario involving a Russian gas supply interruption via the Turk Stream pipeline, should help the grid maintain sufficiency levels.

Top-ranked government officials, including aides of the Prime Minister Kyriakos Mitsotakis, energy minister Kostas Skrekas, RAE (Regulatory Authority for Energy) president Thanasis Dagoumas, power utility PPC’s chief executive Giorgos Stassis, and gas utility DEPA’s chief executive Konstantinos Xifaras, held a meeting yesterday to examine the pressured energy market’s developments, emergency plans, as well as the financial leeway available for a continuation of energy subsidy support for beleaguered consumers.

 

Wholesale electricity €83/MWh higher without RES output

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Wholesale electricity prices would have reached as much as 83 euros per MWh higher than the lofty levels of recent months had there not been any RES contribution to the country’s energy mix, a study conducted by the Aristotle University of Thessaloniki has shown.

Energy minister Kostas Skrekas made reference to the findings of this study during a recent informal meeting of EU energy ministers in France, to highlight the important role played by RES units in energy price de-escalation.

December’s wholesale electricity price average in Greece would have reached levels of 315 euros per MWh, well over the actual average of 235 euros per MWh, the minister noted, basing his point on the university study’s findings.

An intraday market record high of 415.94 euros registered on December 22 would have reached 451.11 euros per MWh without RES contributions to the country’s energy mix, the study noted.

Electricity subsidy trim for consumers, businesses in February

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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

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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.

French power pricing proposal tops EU energy ministers talks

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French Minister of the Ecological Transition Barbara Pompili is expected to reiterate her proposal for a detachment of electricity pricing from natural gas prices, an initiative supported by the Greek government, at a meeting of EU energy ministers tomorrow in France.

The meeting, in Amiens, northern France, is being staged following the release of a latest European Commission report projecting natural gas and electricity prices will remain elevated over the next two to three years.

Though tomorrow’s meeting is the first day of an informal two-day session, the electricity pricing issue will be tabled as the French government, which has just assumed the EU’s rotating presidency, has prioritized revisions for the wholesale electricity market, the intention being to achieve retail prices that reflect the energy mix’s average cost.

According to sources, French officials believe conditions have ripened for an agreement on needed revisions which, according to a statement published on the French EU presidency’s website, will aim to protect consumers from extremely volatile and record-high natural gas and electricity prices, will also striving to achieve EU climate objectives.

 

 

Electricity subsidies for first 300 KWh likely to remain

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The government appears likely to keep unchanged an electricity subsidy criterion subsidizing the first 300 KWh of electricity used by households over four-month periods, despite initial indications of more restricted subsidy support following European Commission pressure.

Other key aspects of the latest electricity subsidy program for consumers, facing an unprecedented price surge, have not been finalized.

It remains unclear if electricity subsidies will be restricted to first homes without covering any supplementary home ownership, including holiday homes.

Officials at the energy and finance ministries are believed to be examining a new mechanism that would automatically calculate electricity subsidy amounts for consumers based on wholesale electricity price levels.

Natural gas prices have dipped in recent days, deescalating from a record level of 180 euros per MWh on December 21 to 80 euros per MWh, which is still 340 percent higher than the price level of 18 euros per MWh a year ago.

Likewise, wholesale electricity prices have eased to 182.46 euros per MWh, today, well below levels of around 300 to 400 euros per MWh registered just weeks ago, but still 220 percent above last January’s average of 56 euros per MWh.

Subsidies over €1.5bn in ’22, to avoid inflationary pressure

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The government’s electricity bill subsidies in 2022 will exceed a total value of 1.5 billion euros and, besides households and small businesses, also include medium and high-voltage consumers, according to sources.

Government officials, including energy minister Kostas Skrekas, the energy ministry’s secretary-general Alexandra Sdoukou, deputy finance minister Theodoros Skylakakis, RES market operator DAPEEP’s chief executive Giannis Giarentis and Regulatory Authority of Energy (RAE) chief executive Athanasios Dagoumas, have just held a meeting in search of measures offering protection to consumers against exorbitant energy prices, expected to remain elevated in the first few months of the year.

Final details on the new subsidy package for electricity bills are expected to be set within the coming days before it is announced during the first week of January by the energy and finance ministries.

The plan is expected to include a mechanism automatically calculating subsidies for retail electricity, over a one or two-month period, when wholesale electricity prices exceed a certain level.

Besides offering consumers some energy-crisis relief, the support package’s aim will be to help enterprises avoid increasing prices of products and services, which would prompt inflationary pressure, should energy prices not de-escalate in the coming months.

 

French forced withdrawal of nuclear plants at worst time

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France’s withdrawal of four nuclear power stations in recent days, following the discovery of faults at some units and suspicions of issues at others, comes at a critical time for the European energy market, already deep in crisis, and could have a knock-on effect throughout Europe, as was the case during a previous round of problems at French facilities in the winter of 2016-17.

France is a backbone of Europe’s energy market as the country usually exports electricity to neighboring countries, helping steady price fluctuations. However, the country is currently without nearly one quarter of its electricity generation capacity, meaning it will need to forget about electricity exports for a while and import instead.

According to French grid operator RTE, the country imported 11.8 GW from Germany and Belgium yesterday, while demand is expected to peak today.

French Ecological Transition Minister Barbara Pompili has urged energy company EDF to work around the clock to repair the damages, cracks on reactor pipes, for a swift return of its nuclear power stations,

Energy market conditions in Europe are currently completely different to what they were in 2016-17, when France was forced to temporarily shut down nuclear power units over technical issues. At the time, the wholesale electricity price in Greece was 114 euros per MWh, while, at present, it is over 300 euros per MWh.

Greece registers Europe’s lowest wholesale electricity price today

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Greece has registered Europe’s lowest day-ahead market price today, helped by greater RES contributions that have lowered the wholesale electricity price by 57.44 euros per MWh in a day, to 197.24 euros per MWh.

Elsewhere in Europe, wholesale price levels for today are upwards of 250 euros per MWh, while in some countries, the level greatly exceeds 300 euros per MWh, headed by France, where the wholesale price is 329.27 euros per MWh.

Renewable energy units represent 31.13 percent of the energy mix in Greece today, offering a total capacity of 61.5 GWh, just below the level of natural gas, the top contributor, with a 35.62 percent share of the energy mix, or 70.4 GWh.

The country’s hydropower generation is also significantly up today, capturing a 16.5 percent share of the energy mix, or 32.6 GWh, well over usual recent levels of less than 10 percent, as a result of heavy rainfall over the past few days that filled hydropower reservoirs.

The price gap between Greece and other European markets has prompted an increase in electricity exports today to a level of 31.2 GWh. Imports were restricted to 3.2 percent of the energy mix, or 6.3 GWh.

Suppliers, covering December subsidies, face greater pressure

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Increasing wholesale electricity prices, appearing likely to rise to levels of between 330 and 340 euros per MWh in in January, according to energy exchange indications, threaten to place increased pressure on both consumers and electricity suppliers.

Suppliers are reaching cash-flow limits as they have been forced to temporarily cover December’s electricity-bill subsidies offered by the government to consumers before they are compensated in June next year.

The government has so far covered subsidies offered to households for the months of September, October and November this year, leaving December’s subsidy cost for suppliers, until they are compensated midway through 2022.

Given December’s increased electricity consumption, suppliers estimate they will need to temporarily cover between 40 and 45 percent of the government’s four-month subsidy program cost for consumers.

This increased pressure is seen as a major threat for energy market stability if some of the suppliers, already struggling with narrower profit margins in the energy crisis, are unable to cope with yet another burden.

Given the persistence of higher energy prices, the government is believed to preparing further subsidy support, under revised terms, for household consumers in the first quarter of 2022.

CO2, natural gas prices soaring, no end in sight for energy crisis

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CO2 emission right prices climbed to a new record level yesterday, peaking at over 90 euros per ton before retreating to approximately 80 euros per ton, while, similarly, natural gas prices once again rose to over 100 euros per MWh after having eased to levels of up to 85 euros per MWh late in November.

These latest price trends dispel any projections of an imminent end in the energy crisis as both CO2 emission right prices and natural gas prices are pivotal factors in the determination of wholesale electricity prices.

The energy crisis appears set to remain for at least this winter, which will hurt economies and increase inflation rates, reemerging as a serious concern in the EU after many years.

Wholesale electricity prices remain well over 200 euros per MWh throughout Europe.

In Greece, today’s wholesale electricity price is 231.83 euros per MWh, with the December average for the country currently at 226.99 euros per MWh, slightly below the November average.

The highest price in Europe for today was registered in Switzerland, at 270.25 euros per MWh, followed by Italy at 256.32 euros per MWh, France at 247.19 euros per MWh, Serbia at 246.45 euros per MWh, and Croatia and Slovenia, both registering 244.25 euros per MWh.

 

Wholesale power price average up to €233/MWh in November

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Wholesale electricity prices averaged 233.80 euros per MWh in November, up 18 percent compared to the previous month’s average of 198.32 euros per MWh, energy exchange data has shown, a rise expected to trigger a new round of price rises in the retail electricity market.

Wholesale electricity prices have remained high so far this month, but a slight de-escalation has been experienced compared to November’s levels.

The average day-ahead market price average for today is 216.18 euros per MWh, slightly below the average of 226 euros per MWh for the first six days of the month.

Elsewhere in Europe, even higher prices have been registered, reaching levels of nearly 300 euros per MWh in some parts of the continent.

The Greek government’s decision to offer subsidies worth 39 euros per month promises to offer some relief for household consumers.

Responding to wholesale electricity price rises registered in October, the energy ministry decided to increase its subsidy offer to cover wholesale price levels as high 220 euros per MWh.

The government has not ruled out the possibility of further increasing its subsidy package, if deemed necessary.

In addition, the administration is also working on a mechanism that will be designed to intervene automatically to increase subsidy levels, taking into account wholesale electricity price levels and the RES special account surplus.

 

North rejects wholesale price as reflection of energy mix cost

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A French-led proposal aligning members of Europe’s south and calling for wholesale electricity prices to reflect the energy-mix cost, from now on, has been rejected by a nine-member bloc of the north, including Germany, which insists energy exchange markets are functioning well.

France joined forces with Greece, Italy, Romania and Spain at a council meeting of European energy ministers yesterday, during which Barbara Pompili, France’s Minister of Ecological Transition, tabled the proposal from the south.

Despite the energy crisis of recent months, which has driven up energy cost levels to unprecedented levels and placed consumers, including industry, under great pressure, Europe’s north, better equipped to handle adverse market conditions as a result of more diverse energy mixes and numerous grid interconnections, has remained adamant that markets remain rational.

Austria, Denmark, Estonia, Finland, Germany, Ireland, Latvia, Luxembourg and the Netherlands all refused to discuss the French-led proposal at yesterday’s council meeting, noting that natural gas must continue to shape wholesale electricity prices.

Europe’s south wants wholesale price to reflect energy mix cost

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Greece will align with a French proposal for wholesale electricity prices as a reflection of energy-mix cost, not energy exchange levels, a stance to be adopted by countries of Europe’s south, at a council meeting of European energy ministers today.

France will join forces with Greece, Italy, Romania and Spain, Barbara Pompili, Minister of Ecological Transition, has informed ahead of today’s session, for their presentation of a joint proposal to the EU 27 for wholesale electricity market reforms.

The proposal’s objective will be to offer consumers better protection against excessive price increases as well as stability through the energy transition period.

It remains unclear how the French-led proposal will be received by other EU member state representatives.

Europe’s north, better equipped to handle adverse market conditions as a result of more diverse energy mixes and numerous grid interconnections, enabling greater flexibility, has been less affected by the energy crisis and, subsequently, is not under pressure to seek market reforms.

However, governments around the continent are feeling growing pressure as wholesale price levels appear to be establishing themselves at higher levels, impacting inflation rates around Europe, latest Eurostat figures for November have shown.

In Greece, wholesale electricity prices have held steady at record-breaking levels above 260 euros per MWh over the past few days.

French price containment proposal at EU council meeting

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A French proposal to be tabled at a council meeting of European energy ministers this Thursday is expected to call for RES and nuclear energy windfall profits to be directly returned to the market, without passing through any operator, as is the case in Greece with RES market operator DAPEEP, to help subdue elevated wholesale electricity prices.

Energy authorities of Europe’s south, including Greek energy minister Kostas Skrekas, will be up against the firm belief of ACER, Europe’s Agency for the Cooperation of Energy Regulators, and Europe’s north that the single electricity market is functioning properly and does not require reforms, despite the exorbitant wholesale market price levels.

The prolonged crisis and, until now, apparent ineffectiveness of EU tools to remedy the situation do not appear to have convinced Europe’s north and the European Commission of the need for any revisions.

Europe’s north sees no need for change as it is backed by the security of multiple grid interconnections, a rich energy mix, storage facilities, and better functioning energy exchange markets, and, as a result, has aligned with the views of ACER.

A latest report by this agency on wholesale electricity prices, to be discussed at Thursday’s meeting, sees no abuse of dominant positions or room for improved market functioning.

Bulgaria power imports lower wholesale price, down 12.28%

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Wholesale electricity prices in the Greek energy exchange’s day-ahead market have plunged by 12.28 percent, driven down by electricity imports from Bulgaria, following a continual price surge over five consecutive days.

Even so, Greece’s wholesale electricity prices levels are the third highest in Europe. Day-ahead market transactions in today’s day-ahead market will average 250.22 euros per MWh, down from 285.24 euros per MWh a day earlier.

Significant price reductions were also registered throughout Europe, suggesting that a de-escalation process could now be underway following alarm in markets prompted by a sharp drop in temperatures in central and western Europe, as well as windless conditions that restricted wind energy production.

Winds have now lifted, offering increased wind energy contributions to the EU energy mix, which has led to big price reductions in day-ahead markets. Wholesale electricity prices in Belgium and Germany fell by 10 and 22 percent, respectively, and dropped nearly 9 percent in France and by more than 12 percent in Italy.

The plunge in Bulgaria reached 22 percent to 217.25 euros per MWh. This sharp drop in the neighboring market has helped reduce the overall cost of Greece’s energy mix as a result of lower-cost electricity imports from Bulgaria.

For today’s trading, electricity imports constitute 13.42 percent of Greece’s energy mix, renewable energy accounts for 28.31 percent, and natural gas-fueled generation represents 47.24 percent of the mix.

 

 

Colder weather a first test for European energy system

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Falling temperatures in Europe, particularly at central and western regions, have increased electricity and natural gas demand for household heating needs, representing a crash test for the European energy system, interlinked and influencing market conditions from one country to another.

Wholesale electricity price levels have risen to record levels in France and Germany, currently experiencing sub-zero Celsius temperatures.

Besides the sudden drop in temperatures, windless conditions are depriving the Netherlands, Denmark and Germany of wind-based generation, down by at least 15 to 20 GW today, according to market data.

Subsequently, the energy mix of these countries and the EU as a whole has increased in cost as the mix is now dominated by natural gas, on a record-breaking price surge in recent months.

This has prompted wholesale electricity price increases throughout Europe. In Greece, day-ahead market prices for today are at 281.03 euros per MWh, a new record for the country following a rise for a fourth consecutive day.

German wholesale electricity prices have also struck a new record level today, reaching 273.89 euros per MWh, up 13.9 percent in a day. Dutch wholesale electricity prices rose 15.5 percent in a day to reach 254.01 euros per MWh. In France, the average wholesale electricity price for today is 295.82 euros per MWh. The highest price level in Europe was recorded in Serbia, reaching 310.63 euros per MWh.

Meteorologists have forecast a heavy winter. Greek officials are awaiting energy price levels for the rest of November before they decide on whether to increase current electricity subsidy levels.

 

 

 

Electricity prices could be driven further 13% higher in December

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Latest complications in the licensing procedure for the Nord Stream 2 gas pipeline running directly from Russia to Germany through the North Sea, as well as the EU’s deteriorated ties ties with Belarus, key transit territory for Russian gas entering the EU via Poland, appear set to push electricity price levels even higher in coming weeks.

Wholesale electricity in Greece averaged a price of 221 euros per MWh in the first half of November, up from 198 euros per MWh for October, overall.

If current conditions do not improve, suppliers estimate that retail electricity prices will reach nearly 300 euros per MWh in December, up 13 percent from the current November level of 265 euros per MWh.

Market players are being pushed to the edge. Some suppliers are waging survival battles, others are seeking to appease unsettled customers through campaigns offering energy-efficiency tips, while others are seeing their market strategies overrun by the continual flow of unfavorable developments.

Greek government officials are also jittery, realizing that household electricity subsidies of 39 euros per month offered for November and December for the first 300 KWh of consumption will not be enough.

 

 

Gas spot market absence ‘key to higher wholesale electricity prices’

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Greek gas market peculiarities and the non-existence of a spot market for natural gas were attributed as key reasons behind wholesale electricity market price differences between Greece and markets abroad, local electricity producers told RAE, the Regulatory Authority for Energy, following the authority’s request for explanations.

RAE held talks with representatives of power utility PPC, Mytilineos, Elpedison and Heron on the issue of wholesale electricity price levels.

The Greek gas market operates on a month-ahead model without the possibility for supply through spot markets, all four electricity companies told RAE.

At present, roughly half of the country’s electricity is generated by natural gas-fired power stations.

All eyes on today’s EU Council meeting as energy prices continue to soar

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All eyes will be on an extraordinary Council meeting of EU energy ministers in Luxembourg today as energy crisis concerns around Europe have intensified, fueled by the EU’s inability, to date, to join forces for a common solution.

Should the ministers fail to take unified action, certain EU member states could start resorting to unilateral initiatives expressing a form of energy nationalism.

In Greece, the government’s disappointment over the lack of EU action so far has become apparent.

Wholesale electricity prices have continued to rise, reaching 218.06 euros per MWh today and forecast to hit even higher levels of between 230 and 240 euros per MWh in November. Adding the balancing cost, at 7 euros, as well as other charges, the overall wholesale price of electricity could reach 285 euros per MWh, resulting in a retail price of 300 euros per MWh.

At the current rate, the government’s support package until December, worth a total of 470 million euros, is beginning to appear insufficient to cover the energy crisis’ consequences.

The additional monthly cost for the economy, households and enterprises in Greece has been estimated at one billion euros.

Electricity suppliers pressured by wholesale price surge

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Electricity supply companies are facing severe cash-flow pressure as wholesale prices continue their surge and record-breaking streak, reaching 171.38 euros per MW at the energy exchange today.

Consequently, suppliers require greater capital amounts to purchase electricity quantities needed by their customers, not expected to pay for consumption until two months later.

According to market sources, the resulting extraordinary amount is currently costing electricity suppliers 60 euros per customer. Suppliers dread more wholesale electricity prices rises, which would further affect their ability to buy electricity before collecting related sums from customers at latter dates.

This cash-flow problem is greater for suppliers who are not vertically integrated and, as a result, have no other revenue sources. Even so, sector officials contend that vertically integrated players are also feeling the strain.

Suppliers are also on edge as a result of a lack of clarity on the government’s subsidy support plan for consumers, budgeted at 200 million euros.

Greece tops August wholesale electricity price list in Europe

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Greece’s wholesale electricity market was rated Europe’s most expensive in August, the country’s day-ahead market averaging a level of 121.72 euros per MWh for the month, according to Energylive data.

Romania followed with an average of 112. 7 euros per MWh, while Italy was ranked third with a day-ahead market average of 112.4 euros per MWh in August. They were followed by: Bulgaria (111.55 euros per MWh); Serbia (109.65 euros per MWh); Hungary (109.02 euros per MWh); and Portugal (105.99 euros per MWh). France recorded Europe’s lowest day-ahead market average in August, 77.3 euros per MWh.

The elevated wholesale electricity market levels closing off August, following various factors that prompted a surge throughout the summer, confirm that de-escalation remains beyond reach at present.

Analysts and market officials, at European and national levels, have warned wholesale electricity price levels will be extremely high in autumn and winter.

Yesterday’s energy exchange day-ahead market prices for today average 123.43 euros per MWh, a 5.52 percent drop compared to the previous day.

August day-ahead market prices in Greece peaked at 142.00 euros per MWh, while the lowest level recorded for the month was 100.56 euros per MWh.

 

 

Factors pushing up gas prices, economic activity threatened

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A combination of market conditions and structural matters has unbalanced natural gas markets throughout Europe, driving prices higher, which is severely impacting electricity prices.

Recovering economies following pandemic-induced flatness, combined with a policy applied by Russia, Europe’s main supplier, to significantly restrict gas outflow to the continent, has created energy crisis conditions.

In mid-August, Russian gas outflow through the Yamal pipeline, running across Russia, Belarus, Poland and Germany, has not exceeded 20 million cubic meters per day, following levels of as much as 49 million cubic meters per day just weeks earlier, still well under usual levels averaging 81 million cubic meters per day.

According to analysts, this reduction has been attributed to Gazprom’s preference to supply Russian gas through the Nord Stream 2 pipeline, bypassing Ukraine and Poland.

LNG supply to Europe has also fallen in recent times as Asian countries appear more willing to pay higher prices.

In addition, prices are also being impacted by EU climate-change policies designed to limit the use of fossil fuels, lignite as well carbon emissions, all of which has greatly increased demand for natural gas, not only in Europe, but Asia and the US, too, pushing up prices to levels of 48 euros per MWh in recent days.

Natural gas shortages have driven wholesale electricity prices higher. In Germany, for example, wholesale electricity prices have risen by 60 percent over the past year. In Spain, the government has reduced energy consumption taxes in an attempt to subdue the wave of price rises.

The situation in the energy market is extremely worrying as it affects economic activity and is placing millions of households at risk of finding themselves in energy poverty.