The government must now find significant funding to lower electricity bills for tens of thousands of energy-intensive small and medium-sized businesses, which are right to complain that they have been left entirely outside the scope of the measures.
From bakeries, patisseries and restaurants to dry cleaners, carpentry workshops and all kinds of small manufacturers, costs for a huge number of SMEs with high energy needs have risen by 25% in the past quarter alone, according to the figures cited.
Worse still, everything points to further electricity price rises, with oil surging above $113 yesterday and energy markets turning red once again as natural gas climbed above €91 — a 193% increase compared with before the war in the Persian Gulf began.
Caught in the grip of this “polycrisis”, SMEs will be one of the few groups for which the budget will again be tapped for targeted subsidies.
Scheme under review
A scheme similar to the one in 2024-25 is being considered, according to Deputy Environment and Energy Minister Nikos Tsafos, who spoke yesterday at the 8th Renewable & Storage Forum. Papastavrou had made a similar reference at the same conference the day before.
The programme at the time offered a subsidy on electricity bills to more than 1 million SMEs with annual turnover of up to €10 million, variable electricity tariffs and no record of electricity theft. But the package attracted very little interest, with few businesses responding to the ministry’s call, as the subsidy was extremely small.
That is why the Ministry of Environment and Energy is running the numbers again, revisiting the measure and starting the exercise from scratch, in order to target it more effectively and determine which businesses it will cover.
Of the roughly 1 million SMEs in Greece, several tens of thousands are estimated to be energy-intensive, while there are 12,000 bakeries alone (1,500 have closed in recent years, as the Hellenic Federation of Bakers said in a recent letter to the prime minister).
An explosive mix of energy and bond-market turmoil
All this is happening as the government makes clear every day that the challenge is growing. This is particularly true as the clouds of the energy crisis meet pressure in bond markets, limiting the scope for fiscal intervention even in Europe’s largest economies, setting off a domino effect in markets and driving prices higher.
“We are experiencing a huge energy shock, along the lines of the one Europe faced in 2022. Two of the most important pillars of natural gas and oil exports have been disrupted. We are seeing Brent, gas and electricity at high levels, lower nuclear output, a poor year for hydropower and high carbon dioxide costs,” Mr Tsafos said yesterday.
The obvious question, at a time when Europe is failing to rise to the occasion and persists with recommendations to “turn off the lights and consume less energy”, is what the government will do.
And what calculations has it made about where it will find the money to subsidise both fuel and electricity this winter, if Europe ultimately rejects the prime minister’s request for fiscal flexibility?
Households, fixed tariffs and industry
In practice, the only new measure in the government’s approach is support for SMEs, as N. Tsafos described the situation yesterday.
* For households, he reiterated his view that, for now, subsidies are not under consideration because the electricity market offers ways to protect consumers, such as blue tariffs.
The counterargument, of course, is that seven in 10 consumers, or 3 million people, are practically unable to switch immediately to fixed tariffs. That does not necessarily mean they are protected, however. In the spring, when many fixed-rate contracts expired at once and customers tried to renew them, they were offered much higher rates because suppliers had hedged at much higher prices. So the question of how households can be protected remains.
* For industry, N. Tsafos said that a very good support package for this year had already been announced and that the government did not intend to announce anything further. Asked about the status of the €95 million package announced by the prime minister a few weeks ago at the SEV, he said the Ministry of Environment and Energy was in advanced talks with the European Commission.
“We are waiting for the Commission to answer a question from us. We are very close. Whether we can issue the ministerial decision in one or two months does not depend on us,” he said.
Batteries: 10 GW pipeline
On batteries, responding to criticism over delays in implementing projects, Mr Tsafos said the overall pipeline exceeds 10 GW. He therefore believes the target of 4 GW by 2028 is achievable.
He also cited targets set by other European countries, noting that Spain, which has six times as much renewable generation as Greece, has set a target of 4-5 GW of storage by 2028 — the same as Greece.
Hungary’s target is 700 MW, despite its higher penetration of solar power.
Finally, on distortions in the balancing market, an issue EBIKEN has repeatedly highlighted, with costs (€35 per megawatt hour in September) significantly inflating final bills, the deputy minister did not hide his concern. Notably, RAAEY vice-president Dimitris Fourlaris announced yesterday that IPTO had been asked to submit a report on the current state of the balancing market before the Authority takes action.