Greek consumers: The level prices must reach for subsidies to stop

The limit at which the state will stop subsidizing household electricity bills was determined by the Minister of Environment and Energy.

Kostas Skrekas, during the presentation of the updated National Energy and Climate Plan-ESEK and asked about when the subsidy for electricity bills will stop, said: “When the competitive charges fall to 0.15 to 0.16 euros per kilowatt hour, then the subsidy for households will stop”.

Tiered subsidies

When the Minister of Energy referred to the specific amount, he meant the price lists announced by the electricity providers.

It is noted that PPC with the subsidies granted by the state reaches final electricity prices of 0.15 to 0.16 euros per kilowatt hour.

Asked about the Eurogroup’s recommendations for targeted subsidies, the Minister of Energy commented that Greece applies tiered and not horizontal subsidies.

Surprising prices

For February, there is an upheaval in the electricity bills of households and businesses. Providers are expected to pass on the reductions in TTF natural gas prices to the Greek market.

The result will be, according to business executives’ estimates, the competitive fees they announce on January 20 will be as much as 50% lower than they were this month.

Price lists

The nominal price that the suppliers will give is estimated to be even at the levels of 0.20 to 0.22 euros/kWh, when for January the range was from 0.35 to 0.49 euros/kWh.

If these forecasts are confirmed, then the subsidies announced by the Ministry of Environment and Energy will lead the final electricity prices to summer 2021 levels.

The pricing method

The large TTF reductions did not pass through to the retail Greek electricity market.

This is because the sellers of natural gas to power producers price based on the previous month’s prices. In February, the power companies will integrate the reductions and then the benefit will pass to consumption from the big jump in natural gas.

The TTF since December 15, when it was at 135 euros/MWh, has plunged more than 50% to the levels of 63 euros/MWh.