Energy market causes panic
Crunch time has arrived for legislative interventions to remove the readjustment clause in power supply contracts and the new mechanism for recouping excessive earnings from the wholesale market. It finds the consumers with high expectations of price cuts, the suppliers on the verge of a nervous breakdown – as they are losing their safety clause against rate hikes – and the government staff feeling the agony of what the cost will look like.
The implementation of the measures from Wednesday, July 6 for the mechanism in the wholesale market and from September (for August consumption) regarding the suspension of the clause comes at an extremely unfavorable moment in terms of the evolution of natural gas rates, which is also at the root of high electricity prices.
Europe, after an ambitious plan to replace two-thirds of Russian gas imports with alternative sources by the end of 2022 and Sisyphean efforts to implement it, is coming to terms with the grim reality and hastily drawing up contingency plans for the coming winter, upgrading the scenario of complete disruption of Russian natural gas flows to basic. All European countries are working on this painful scenario for the European economy, which triggered a new frantic rally in the price of natural gas, bringing ever closer the serious threat of recession.
The effect of this external factor on electricity prices for the Greek consumer will be particularly negative and significantly asymmetric compared to other European consumers, as gas accounts for more than 40% of the domestic fuel mix for energy production. That is expected to increase from July with the integration into the grid of the new unit of Mytilineos with a capacity of 880 megawatts, in which the competent bodies largely support the country’s electricity sufficiency in the two months of July and August with the strengthening of demand due to the air conditioners.
Exogenous factors alone discount high wholesale power prices for the time ahead and widen the gap with the 15-17 cents/kWh target price set by the government through its commitment to flat-rate 80% of increases.
