Greece, Government will limit wholesale electricity prices

, SEE Energy News

The strategic goal of the government in Athens is to reduce retail electricity prices to the average level recorded in the first half of 2021, by introducing a price cap on the wholesale electricity market and state compensation packages for producers covering the price difference.

However, it remains unclear how this ambitious measure, worth at least 4 billion euros, will be financed in the current conditions.

The government’s plan will be implemented in coordination with all proposals published by the European Commission.

The announcements of the Greek government are not expected before May 18, when Brussels could submit proposals related to the energy crisis for the member states.

The price of natural gas in the coming weeks, as an unknown factor, adds risk to the government’s support plan. Gas prices could escalate further if Russian President Vladimir Putin decides to disrupt supplies; if the Russian war in Ukraine intensifies; or if any other adverse factor occurs.

Currently, a more favorable scenario would result in a price of at least 4 billion euros for the Greek government’s strategic plan to reduce electricity prices.

Three different sources of funding can be considered: energy transition from which monthly energy subsidies are currently funded; a surplus of 900m euros from a budget revision submitted to parliament two weeks ago; and money from the Recovery and Resilience Fund (RRF).