The trajectory of wholesale electricity prices during the final weeks of the month will be a key factor in deciding whether the government will extend the August subsidy into September. In August, the subsidy helped shield Greek households from the sharp price hikes experienced in July, offering support of 1.6 cents per kilowatt-hour.

By yesterday, August 25, the average wholesale electricity price stood at 123 euros a megawatt-hour, down just 9% from the record annual price recorded in July. But another negative message is given by today’s upwardly indexed electricity prices as the next day’s market soared by 52% to almost 143 euros a megawatt hour with the maximum day price reaching 368 euros and the lowest 83 euros/MWh. This large increase, which is observed correspondingly across the European electricity market, comes despite the increased participation of renewables in the energy mix at 45.8% compared to 33.82% of natural gas, with imports covering 9.5% of the mix and hydropower at 4.53%.

The jump seen in the European electricity market appears to be linked to the start of the annual maintenance of Norway’s gas infrastructure as for about three weeks from the end of August, Europe will lose flows estimated to be equivalent to the daily gas needs of Italy or France. In a period of increased demand due to high temperatures and sharp price volatility, the maintenance adds another ring of concern to the market as Norway becomes a key supplier of fuel to the Old Continent.