2024-07-17 07:27:21
The government is preparing to intervene in electricity prices, with announcements to be made tomorrow, Wednesday, July 17, at 11 am, by the Ministry of the Environment.
In particular, according to government sources, at the meeting chaired by the Prime Minister, Kyriakos Mitsotakis, a first discussion was held on the issue of electricity and the data on the increase in wholesale prices for July and August were presented.
All indications are that an extraordinary levy on producers will be announced. A second scenario, which is less likely, is to apply a tax on natural gas imports.
What remains to be seen is whether the sums that will be collected will create a reserve for the provision of subsidies – which will be decided in a second year if high prices persist – or whether financial support will be launched immediately in the accounts. The first version is considered more valid, first of all because a relative de-escalation of the wholesale in the second half of July will limit the price increases in the invoices with variable charges. Therefore, there is a reasonable “time window” for any consumer support decisions.
It is recalled that the main cause of the jump in wholesale prices are problems in the interconnections of the “energy corridor” Hungary-Romania-Bulgaria, which, due to cross-border trade, drag the Greek electricity market upwards. As insider.gr wrote earlier, the government is studying a two-pillar plan. The first part concerns the re-imposition of extraordinary taxation of electricity producers, for the quarter July – September.
The second pillar concerns the utilization of the amounts that will be recovered for the granting of subsidies to consumers. Naturally, the granting period will cover one quarter – that is, the same as the extraordinary levy – given that a significant drop in wholesale prices is expected from autumn. Also, the fact that the funds will come from the production companies means that the financial aid will be fiscally neutral.
Commission approval
At the moment, it has not been known the scheme being studied for the implementation of the subsidies, which, as mentioned above, will be qualified (as well as the extraordinary contribution to producers) in the event that it is established that the “signals” of the market show a prolongation of high wholesale prices. In any case, however, the aid will concern products with variable charges. Also, a condition for the government’s plan to be implemented is to get the “green light” from the Commission. In this context, the aim of the Greek side is to request its urgent approval from Brussels.
Regarding the extraordinary levy on electricity producers, as insider.gr wrote on Monday, the government estimates that the large fluctuations observed within the same 24 hours in the electricity market create conditions for “skyrocketing profits” for the companies.
Apart from the high average prices for the whole 24 hours, which for example today stands at 191.13 euros per Megawatt hour, another characteristic of the ongoing mini energy crisis is the very large ups and downs of the market during the day . It is indicative that today at noon, the hourly Market Clearing Price is set at 60.05 euros per Megawatt hour, to jump to 600 euros per Megawatt hour in the afternoon.
It is recalled that an extraordinary levy on electricity production companies was imposed for the first time during the energy crisis, and more specifically for the period October 2021-June 2022. The total amount recovered at that time was 373.55 million euros. Another formula under consideration is for the extraordinary levy to take the form of a ceiling on the maximum compensation of power generation units (with a different “ceiling” per technology), so that revenues that exceed these limits are recovered.
Source: insider.gr