Demands of energy-intensive industries
Greece’s energy-intensive industries are exposed to wholesale market fluctuations, as the formula has not yet been found to ensure competitive electricity costs without threatening the system regarding the ceiling on producers’ income, which collects money for subsidies of domestic tariffs.
Since January 1, nine factories in the country, namely six belonging to the Viohalco Group, two of AGET and the factory of paper producer MEL, whose contracts with Public Power Corporation have expired, are supplied with electricity at the wholesale market price, which due to low demand and high production from renewables is on the path of de-escalation and currently stands at 151.49 euros per megawatt-hour.
In June, Titan Cement’s contract expires, and at year-end that of Aluminium of Greece. The company’s negotiations with PPC for the signing of new contracts, which had started last spring, were stopped in July, when the mechanism for imposing a maximum price on the compensation of production units was put into effect. Industries have handed the environment and energy minister a request to abolish the ceiling on the production of RES intended for bilateral contracts, in order to have an alternative option for prices that do not undermine their international competitiveness, as PPC proposed pricing based on wholesale rates.
Minister Kostas Skrekas had previously promised the Hellenic Federation of Enterprises (SEV) exemption from the ceiling of the output from new RES projects that will sign bilateral contracts.
However, the regulation that is being promoted, based on what has been leaked so far, is that the exception will only concern physical delivery contracts and not virtual contracts, a development that does not solve the problem for industrial companies. “There is no justification for not lifting the cap on virtual contracts as well, not only on physical delivery contracts. The state should open the way for both, for businesses to choose. Physical delivery means consuming the energy when you produce it. This is a goal Google has set for 2030. How exactly will we achieve it?” an industry representative told Kathimerini.
Opinions in industry tend to agree that the government is aiming for an arrangement to disengage from legal issues arising from European regulations. PPC, however, states it is ready for 10-year green bilateral contracts.
