BUSINESS

Measures to ease firms’ energy costs

Athens is close to an agreement with Gazprom on lowering the price Greece pays for natural gas imports By Dimitra Manifava

The Environment and Energy Ministry on Thursday announced a series of measures amounting to at least 150 million euros and intended to reduce the cost of energy for Greek industry, although the response from energy-intensive companies was lukewarm.

The four main measures, to be implemented in the next 10 days, should have a direct impact on industries such as steelmakers, which have recently threatened mass layoffs and factory shutdowns.

The first of the measures concerns the application of the so-called “interruptibility” agreements, which will allow the grid operator to cut the electricity supply to energy-intensive plants for one or more hours during peak periods, saving power for the grid and money for the industries when rates are at their highest. The ministerial decision to that effect is almost ready and will be discussed with the European Commission next week.

Another measure concerns the return of part of the Public Gas Corporation’s profits to all of its clients, including households, by reducing natural gas rates. The ministry described the size of those profits as “significant.”

The ministry will also reduce the special levy that medium-voltage industries pay to support renewable energy power producers, amounting to 8.87 euros per megawatt hour, down to the level paid by high-voltage consumers – 1.79 euros/MWh. Finally, “major” natural gas consumers will continue to enjoy the benefits of belonging to this category up to the end of 2015 even if they have ceased to qualify as such.

“The measures are not new. They are what we had proposed to the ministry, but at a first glance they are in the right direction,” said the representative of one energy-intensive company.

The sector’s reaction remains guarded, as industry officials say that first of all they need to know when these measures will be put into practice – as any delay beyond March will be disastrous for the steel industry in particular – while secondly they want to see what the government’s attitude is during the Public Power Corporation (PPC) board meeting next Friday, as that will significantly affect the energy landscape in the country.

More government initiatives to support energy-intensive sectors are expected during Friday’s inner cabinet meeting.

Local industry is expecting another boost from a deal that Greece is close to striking with Russian energy giant Gazprom on the rate Greek consumers pay for natural gas. Agreement is likely on the price of $393 per 1,000 cubic meters, with retroactive application from June 2013.

Deputy Minister for Energy Asimakis Papageorgiou reiterated on Thursday that negotiations with Gazprom are in the final stages and estimated that an agreement will be reached in the next few days, with the prospect of the Greek side resorting to arbitration diminishing.

Although the rate offered is not quite what the Greek side had been hoping for – a price closer to the average of $380 per 1,000 c.m. that other European countries are charged – the deal is set to greatly benefit both energy-intensive industries and households. Greece currently imports natural gas from Gazprom at a rate of $460 per 1,000 c.m.

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