Minister of Environment and Energy, Thodoros Skylakakis, announced a three-pronged support plan for consumers facing increased electricity bills. During the detailed presentation of the measures, he did not provide specifics about the emergency tax and subsidies, which will be finalized by the end of July.
The Three Measures:
- Emergency reinstatement of the levy on electricity generation from natural gas: This will be imposed temporarily, for at least two months. The exact amount will be announced in the coming days.
- Household subsidies for August: The subsidy amount will be announced later, once there is a clearer picture of how prices will evolve. The subsidy will apply to green and yellow tariffs.
- Incorporation of the new European directive into an emergency intervention mechanism: This will address endemic market distortions.
Deputy Minister Alexandra Sdoukou stated that for household consumers, the consumption limit is expected to be 500 kWh. The subsidy amount will be clarified later, but subsidies will be higher for social tariffs.
What Happened After July 11 to Cause Increases? Minister Skylakakis explained that a combination of prolonged heatwaves, unexpected from Ukraine to the Balkans, increased demand from Ukraine due to the war, and persistent demand from Hungary and Romania to the West, led to price hikes. This phenomenon is expected to last a few more days. Futures markets suggest the situation won’t persist into August.
Consequences: Prices have surged to around 180 euros, and at night, when solar panels are not operating, to around 600 euros.
Minister Skylakakis explained that an emergency mechanism cannot be activated due to European conditions, but the government cannot remain idle, especially with the so-called “windfall profits.” Therefore, the government has decided to respond with three additional actions.
“The mechanism for capping producers’ revenues has ended. The new directive provides for an emergency mechanism but includes conditions that are unworkable. The crisis must last three months for it to apply. The government cannot remain idle in such circumstances, particularly with the presence of ‘windfall profits’,” he noted.
The minister mentioned that in the wholesale electricity market, prices continue to rise, reaching a new high of 218.77 euros per megawatt-hour, with the maximum hourly price hitting a record 759.92 euros per megawatt-hour.
Minister Skylakakis stated that the goal is for the state to be able to intervene a few days each year when there are windfall profits, following consultations with the European Commission. The government intervenes wherever possible to defend consumers, which is the aim of these interventions.
