Greece: Subtle drop in electricity prices

The final results of the electricity settlements for December for private consumers do not affect and do not affect the level of 15-17 cents per kWh, as measures are taken to reduce subsidies.

The forecasts of recent days about a reduction in retail tariffs by more than 10% have not been confirmed, and this is primarily reflected in the monitored market – ΔΕΗ . The former state-owned, now privatized, main electricity operator in Greece announced tariffs of just under 40 cents per kilowatt hour with low demand. In December, this fee is reduced to 38 eurocents. However, for the consumer, the final settlement price does not change and does not change at the level of 15-17 cents, as it is set after the announcement of state subsidies in recent days. The only beneficiary of this meager reduction will be the state budget, which will recognize smaller amounts. Other utilities are dropping retail tariffs below 40 cents per kilowatt hour, with prices fluctuating as the ongoing discounts kick in.

Meanwhile, as November progresses, it is again being argued that the new system introduced in the EU last year means that the current indexation point will lead to windfall profits for state-owned companies. As yesterday, the company must announce tariffs next month ten days before the start of training, “guessing” the wholesale prices reported by the Hellenic Energy Exchange (HEX).

In August last year, the average wholesale price was 430.3 euros per megawatt, while the average retail price announced by the company on 20/7, 606.2, left a gross margin of 40.9%. In recent months, this margin has increased. In September, it reached 90.9%, as retail tariffs were 790.8 euros, while the average wholesale tariff remained at 414.2 euros. The margin hit a record high in October, reaching 166.2% after the average wholesale price fell to 232.8 euros per MWh. Wholesale price growth remains low, averaging 207 euros, so the margin is back to 90%.

These huge distances and inflated margins (even after calculating reasonable profits, operating costs, etc.) have led the Ministry of the Environment to firmly declare the creation of a mechanism for excess profits. However, everything will be protected by how this excess profit is retained. Since the method will be determined by the court decision of the ministry, while the amendment accepted the solution of the request of suppliers to deduct uncertainties, system losses, environmental risk, discounts, etc.