Friday , February 3 2023
Home / News / Economy / €1.9bn power subsidy for Sept: Who are the beneficiaries and the winners

€1.9bn power subsidy for Sept: Who are the beneficiaries and the winners

Greece will subsidize power bills of households and businesses with 1.9 billion euros in September,  Energy Minister Kostas Skrekas announced on Tuesday. For households, the subsidy is 63.9 cents per KWh, meaning that consumers will pay 15-16 cents of the average price at 0,80 euros.

The subsidies will be incorporated into electricity bills, will be given to consumers without annual economic criteria and affects subscribers to all of the energy providers, the minister stressed.

The subsidies in September will come at 639 euros per megawatt hour (MWh) for households to absorb 94% of the rise in their electricity bills, Skrekas said.

The aid will be reach 604 euros per MWh for small and medium-sized enterprises and 639 euros per MWh for farmers, while industries will get 342 euros per MWh, he said.

“We are determined to continue the policy of protecting consumers, which is made possible thanks to the prudent and effective economic policy,” the minister  added.

The new subsidies benefit 6 million household, 1,259,000 small and medium enterprises and hundreds of thousands of farmers, media report.

Subsidies to household and business consumers per megawatt (MW) are much higher than those provided on electricity bills in August, to partially offset the 65% rise in prices announced over the weekend by energy producers.

It is noted that part of the the state subsidy will be covered by the new mechanism for recovering excess revenues from electricity suppliers. In the first 41 days of the mechanism operation, the government reportedly collected 1 billion, 21 million euros which were directed to the Energy Transition Fund to strengthen the subsidies to consumers.

According to reports, one million of the 1.9 million subsidy in total will come from the taxed excess revenues, while the   900,000 euros from the state cash registers.

Already 45% of  have arrears to the energy companies and the chairman technicians at the Public Power Company (PPC) said on Tuesday that they have 285,000 order to cut electricity to consumers.

Tuesday’s exchange price in Greece will be 616.38 euros per MW, with a maximum of 794.95 euros/MW, state news agency amna reported..

Domestic demand is met primarily by natural gas (46.2%), followed by lignite (22.7%), renewable sources (15.4%), hydropower (5.6%), and imports (3.9%).

In comparison, Tuesday’s price per MW is over 600 euros in Austria, Belgium, Bulgaria, Croatia, the Czech Republic, France, Germany, Great Britain, Hungary, Italy, Holland, Romania, Serbia, Slovakia, Slovenia, and Switzerland, where the highest price is registered (624 euros/MW). In addition, the price of natural gas on Holland’s stock exchange shot up by 18% on Monday compared to Sunday, and is now over 290 euros/MW.

PS So what’s the deal with the subsidy and why some Greeks are whining? Because:

1. energy suppliers get back what they paid in taxes for their excess revenues due to high energy prices since August 2021.

2. consumers partly re-finance their subsidy with the taxes they have paid and as the subsidy is only an issue of accounting booking on paper. At the end of the day, these taxes end up in the energy supplying companies.

3. Guess who is the winner in this vicious cycle.

Check Also

2023 Eleusis European Capital of Culture opening weekend Feb. 4-5 program

The “2023 Eleusis European Capital of Culture” program kicks off with a weekend of special …

2 comments

  1. “3. Guess who is the winner in this vicious cycle.”

    Mostly the companies who extract natural gas. It costs them no more at all to produce the gas but they can sell it at a vastly inflated price so the difference goes straight on their bottom line. These are mostly (exclusively?) foreign companies so Greece has no ability to subject them to windfall taxes.

    Electricity companies who generate significant amounts from renewable sources will also benefit. All electricity is sold at the same price whatever its source. Again it doesn’t cost any more to generate electricity with a wind turbine today than it did a year ago so the increase in price goes straight on the bottom line.

    The citizens fund these increased profits however the government act. If the government does nothing we pay through our bills. If the government implements subsidies we pay the subsidies through our taxes. It may affect the exact amount an individual pays but overall we still pay.

    There is only one solution and that is to be self sufficient by whatever means. France generates 78 % of its electricity from nuclear sources and 19 % from renewables leaving only 3 % from fossil fuels. The price rise there has been capped at 4 % so far.

  2. These are the Average Day Ahead Market Prices (Electricity) 23/08/2022 per MWh for selected European countries;-

    In Euros

    UK 636.23
    Greece / Bulgaria / Romania 616.38
    Turkey 190.06
    Germany 600.72
    Denmark 605.13
    Sweden 391.03
    Norway 324.02
    Poland 387.92
    Spain 182.93