Power rates look set to soar

Why electricity costs in Greece are expected to rise further over the course of this summer

Power rates look set to soar

Electricity consumers should expect further rate hikes in July after the price increase in the wholesale market, while a permanent threat for additional charges is the deficit of the renewables account (ELAPE), which the latest forecasts raise to 600 million euros by year-end, from €450 million in March.

Even with the expected inflows that the competent operator (DAPEEP) anticipates to have from the reduced ETMEAR refunds (fee in favor of RES) and the “green” fee on diesel traffic, the deficit will remain at the high level of €300 million. 

That is the elephant in the room that is growing into a huge problem for the political leadership at the Energy Ministry, which is unlikely to avoid an adjustment of ETMEAR to cover part of the hole. In fact, sources say the ministry has initiated an increase in ETMEAR to the level of 17.65%, a plan that was frozen due to the European elections. However, the amount of adjustment of ETMEAR as well as the time of implementation is expected to be reviewed by evaluating the results of the elections for the ruling party, depending on the directions given by the prime minister himself.

ETMEAR is collected from electricity bills as a regulated charge. The ministry is aiming for an increase close to €20 euros/MWh, which will most likely be imposed after the summer so that the electricity tariffs do not soar.

However, hikes for consumers in July and August, according to the data so far, will be inevitable. Last week’s high temperatures sent electricity demand up 19%, and the average wholesale price jumped to €101.5/MWh, hitting a 21-week high in the seven-day period June 3-9, despite an increase in the share of renewables in the mix for electricity generation by 6% and hydroelectric by 23% compared to the previous week.

Another factor that pushed up the wholesale power price last week was the 13% increase in the price of natural gas at the Dutch TTF hub due to the problems created in the natural gas export infrastructure from Norway.

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