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.