Power subsidies in August
State to finance electricity bill payment via an extraordinary levy on suppliers’ earnings
The government has decided to subsidize household electricity consumption for August, under pressure from recent price increases. The subsidy will be financed through an extraordinary levy on the excess profits made by gas-fired power producers in July and August.
The announcements about the amount and beneficiaries of the subsidy will be made on Wednesday by Energy Minister Thodoros Skylakakis. According to sources, households with green tariffs and possibly also those with yellow, floating tariffs will get a subsidy.
The same sources say the electricity price above 15 cents per kilowatt-hour will be subsidized. In other words, consumers will pay up to 15 cents/KWh and the additional amount will be covered by the state through the Energy Transition Fund and with the income from the extraordinary levy on excess profits.
The decisions were taken on Tuesday at a meeting held at the prime minister’s office. “The government’s decision, therefore, is to impose for the next two months an extraordinary levy on natural gas electricity producers, so that we can use this revenue to be able to relieve the electricity bills in August. Because, at the moment, with the course of prices, citizens in August would indeed see a sharp increase in electricity rates,” PM Kyriakos Mitsotakis said on Tuesday in an interview with Skai TV.
For Wednesday, the average wholesale price was 218 euros/MWh, while the maximum level reached €712/MWh.
Ministry sources attribute the large increases in the wholesale electricity market to external factors. The problem starts with the major price hikes in the Hungarian market, which are transferred to Romania, Bulgaria and finally Greece through the interconnections.
At the same time, however, huge deviations are observed between the minimum and maximum values during the day. Therefore, while the minimum is at the level of €20-25, in the evening hours, when the photovoltaics come out of the system, the maximum price exceeds €600/MWh.
