Electricity subsidy in excess of 1.1 bln euros in August

State support to cover 90% of the hikes on household power bills, Energy Minister Skrekas said

Electricity subsidy in excess of 1.1 bln euros in August

Greece will extend subsidies to power bills at a cost of more than 1.1 billion euros in August to support households and businesses amid a spike in energy prices, Energy Minister Kostas Skrekas said on Monday.

Final consumer prices for electricity are expected to be set at 15-17 cents per kilowatt-hour in August, according to the minister’s announcements. The subsidy for household tariffs will be without any income criteria, concern all consumption and all residences (main and secondary) and amount to €337 per megawatt-hour (or €0.337/KWh).

The total amount of subsidies exceeds €1.13 billion next month and absorbs up to 90% of the increase for all residential consumers for the total monthly consumption and for main and secondary residences, 100% of the increase for beneficiaries of the Social Rates, 80% of the increase for small and medium-sized professionals with a power supply up to 35 kVa and 82-99% of the increase for farmers.

For industrial consumers, the subsidy will be €250 euros/MWh to absorb up to 67% of the increase. For natural gas and for commercial consumers, the subsidy amounts to €30 euros per thermal MWh.

The subsidies are increased by €411 million from those in July (€722 million). Some 500 million euros will be covered by the Energy Transition Fund with money that has flowed in from the extraction of surplus profits in the wholesale electricity market, while the Energy Ministry left open the possibility of a contribution from the state budget.

In an environment of global rate uncertainty, predicting the prices on which electricity suppliers will have to set their tariffs ends up being an extremely difficult and high-risk exercise, and this is reflected in the pricing method they followed in the first month of the repeal of the Adjustment Clause.

Prices for August, confirmed on Monday, vary between €0.484 and €0.585/KWh, though Elpedison is offering €0.438/MWh and Volterra proposes a tariff of €0.680/MWh. The rates for September must be announced by August 20.

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