In the midst of a perfect storm for energy prices in the summer of 2024, the Greek government announced subsidies to by imposing a fee on electricity producers solely from fossil gas (and not lignite).
The energy price rally this July is a multi-factor issue. The starting point was the black out at power plants in Albania, Montenegro and Hungary. As a nearby interconnected country, Greece was one of the first candidates to meet the extra demand in neighbouring countries.
As Nikos Mantzaris explained on ERT’s main newscast on 16 July, shortly before the announcement of the government measures, the increased demand from the Balkans, combined with the fact that there has not been sufficient production of cheap renewable energy to meet demand, has prompted the use of more expensive gas and lignite plants, resulting in higher prices.
Based on Katerina Christofilidou’s report for ERT, the excess gains tax measure does not directly benefit consumers who will have to pay exorbitant electricity bills.
On the contrary, Nikos Mantzaris proposed the introduction of a permanent wholesale price cap, in order to limit profits at source (without burdening households and businesses) and at the same time to avoid a repetition of the phenomenon of the volatility of electricity prices in the future when similar circumstances arise.
It was also stressed that we must remain committed to renewables and storage, thus creating a ‘shield’ against both the climate crisis and high energy prices, as this option is by far the most cost-effective.
You can see the full report here.
