Scenes from the previous energy crisis are returning to Greece’s wholesale electricity market today, with the average price hitting €232 and the evening peak climbing above €380 per megawatt-hour.
In effect, this is a four-year high, with prices in Greece last at these levels in January 2023, when the previous energy crisis was still in full swing and the electricity market was shaped each month by across-the-board subsidies for green tariffs.
The monthly average wholesale price is running at €169/MWh, up 8% on the previous month. October is the fourth consecutive month of increases (as were July, August and September), with implications for retail prices and the continued shift towards fixed-rate blue tariffs.
On a cumulative basis, the wholesale price has risen 54% over the past three and a half months, from €109.95/MWh in July to €169/MWh today. The period of peak demand — and higher prices — has yet to begin.
With more than half the month gone, the electricity market is pricing in increases to next month’s green tariffs. The bigger risk, however, is that these price levels will persist not only through the end of the year but for a significant part of 2027.
This risk brings closer the prospect of electricity subsidies returning, raising the question of how much the budget can afford, particularly when it will also have to channel funds into the fuel sector.
Against this backdrop, and with it clear that the winter cannot be weathered without new targeted measures, the government is seeking the “smart” policy mix that would allow it to provide another round of subsidies over an extended period, if Greece’s request — along with those of other countries — for fiscal flexibility fails to gain traction at the next European Council meeting on 26 November.
According to reports, the government is seeking additional funding under the escape clause (on top of €1 billion), with the aim of being allowed to change how it is used, so that it can be channelled directly into subsidies at the pump or on electricity bills.
Rather than spending the money on support for heat pumps, solar water heaters and rooftop solar panels, it would go directly to households and businesses to help contain energy costs.