Greek Industry: Government subsidies for 2023 electricity bills

The Greek government is contemplating a financial support scheme to help heavy industry deal with energy costs next year.

The total cost of electricity for high voltage factories, according to competent sources, is estimated at 1.5 billion euros. A scenario which has been made for the provision of electricity supply contracts with prices at 300 euros per Megawatt hour.

In the first half of next year, the electricity supply contracts signed by PPC with the major electricity consumers before the energy crisis will gradually expire. The electricity prices agreed by the two sides, according to information, were at the level of 60 and 70 euros per Megawatt hour, while today the electricity prices are almost six times higher, at 400 euros per Megawatt hour.

Sources say discussions on new power supply contracts between the public utility and industries are ongoing. However, the above-mentioned cost of electricity for factories electrified by the high voltage is expected to be largely supported by the government through subsidies.

PPC

PPC, as noted to OT by sources, is already contributing with the loss of revenue from the ceiling that has been placed on electricity production since last July. It is estimated that the government will increase the subsidies for the next year and part of the cost will be borne by the industries.

The aforementioned solution seems to be the only way to maintain the competitiveness of the domestic industry.

An alternative solution for providing cheap electricity to energy-intensive industries is the conclusion of bilateral “green” power supply contracts (PPAs). It is a form of agreement by which power producers and suppliers ensure industries with green electricity at a low and stable price for many years. Electricity is produced by photovoltaic parks or even wind farms, which have very low costs.

However, according to the information, PPC is not in a position for the immediate period to conclude PPAs as it has a road ahead of it for the construction of photovoltaic parks that will have the possibility of providing electricity at a low cost.

Discussions

PPC and industrialists have been in discussions for weeks about the new landscape as it is formed by the end of their contractual relations in electricity supply. The common ground of both sides is that heavy industry will need state support, something that also happens in the other EU member states. Governments, one after the other, are proceeding with decisions to approve financial schemes to subsidize industries.

The Greek industry, in addition to the preferential prices it enjoyed until now with the contracts it had concluded with PPC, also benefited from financial support in the context of the monthly subsidy for electricity bills. However, the explosion of electricity prices to the levels of 400 euros per Megawatt hour and the uncertainty for 2023 caused by both the inability to predict the outcome of energy prices and the expiration of contracts with the public company lead the government to seek a package of subsidies. The purpose is to cover part of the cost of 1.5 billion euros that will lighten energy costs while keeping factories competitive in foreign markets.