New support measures for high energy prices in the pipeline

Under the weight of price increases, the government is feverishly preparing a new plan – a breath of fresh air for households and businesses.

The burden of household and professional low voltage consumers but also of businesses and workshops of medium voltage from the large increases in electricity prices is considered by many as unprecedented!

Executives of electricity companies estimate that for the period July-December alone, the aforementioned categories of consumers paid 2.3 billion euros more for the electricity they consume.

The extraordinary meeting

In this context, a meeting was held today under the Prime Minister Kyriakos Mitsotakis at the Maximos Mansion to assess the situation in the international energy market and take additional support measures for households and businesses for January 2022.

The meeting was attended by the Minister of Environment and Energy, Costas Skrekas, the Ministers of State George Gerapetritis and Akis Skertsos, the Deputy Minister of Finance Theodoros Skylakakis, the Deputy Minister to the Prime Minister and the Government Spokesman Of Energy and Mineral Raw Materials Alexandra Sdoukou, the general secretary of Fiscal Policy Thanos Petralias and the head of the Economic Office of the Prime Minister Alexis Patelis.

During the meeting, the effects of current prices on households, households and businesses and the level of inflation were examined and the available alternatives for the more targeted and effective adjustment of the state aid package to all those affected.

Decisions will be made and announced next week.

Scorching prices – What the data show

The data are revealing. According to these, the accounts for home customers of all suppliers were “inflated” by 880 million euros, for the low voltage professionals the total charge intention is estimated at 825 million euros and for medium companies  trend increases are estimated at 600 million euros.

The additional cost is shocking as, according to market data that OT.gr is aware of, throughout 2020 households and businesses consuming 45 million megawatt hours (excluding the heavy industry of high voltage) paid electricity bills totaling 3.9 billion euros. And with prices significantly lower than the exorbitant ones that have been registered in the last six months.

The increases in electricity are expected to continue in 2022. Safe forecasts show that for the first quarter of the new year the price rise will continue.

The rally in gas prices will also include those in electricity, given that this particular fuel is dominant in electricity generation.

Plan

According to information, this is a grant package of 1.5 billion euros, and may even reach up to 2 billion euros. According to sources, with the new system of strengthening the electricity bills, the horizontal subsidies in all households cease. This policy provoked the objections of the European Commission with the vice-president Margaret Vestager raising the issue of illegal state aid. For this reason, after all, there is a close cooperation of the Minister of Energy Costas Skrekas with the Danish Commissioner in order for the new package of measures to be approved by the Commission.

Thus the financial staff of the government is said to have concluded as follows:

1. The introduction of an automatic subsidy mechanism for specific categories of consumers.

This mechanism will be activated depending on the course of the price of the wholesale electricity market and will strengthen the electricity bills by an amount, which will depend on the limit of Megawatt hours price increases.

The aid will be given on a monthly or bi-monthly basis

2. The subsidy of households with specific criteria.

Specific income, property and possibly consumption criteria will be defined. Only these household consumers will be given the aid. Of course, how the aid will be given to eligible home consumers in whose name the power supply is not located tends to be a puzzle.

3. The strengthening of energy-intensive medium-sized enterprises and some high-voltage industries.

The automatic grant mechanism includes medium-voltage and some high-voltage energy consuming companies.

According to information, a part of electricity consumption will be subsidized.

4. The subsidy of low voltage companies.

The available information wants companies that are electrified by low voltage to be included in this category with various criteria, mainly consumption .

The resources for the grants will come from the Energy Transition Fund, which is managed by DAPEEP (RES and Guarantee of Origin Manager). They want information that at least 1.5 to 2 billion will be require. for the partial protection of the aforementioned consumers from the rally of price increases in energy.

Energy Transition Fund revenues come mainly from pollution rights. Their prices are moving upwards so there is optimism about securing the necessary resources.