Industry urges Greek government to fix “distorted” renewables market

20 November 2017
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The leftist Greek government has clashed with the country’s energy providers over the continuation of a special levy (ELAPE) imposed in order to balance the renewable energy sources account, which is a bailout obligation.

The industry claims that the levy distorts the market and its abolition could save money for consumers. On the other hand, the Greek Ministry of Energy and Environment told EURACTIV.com that it legislated considering the “interests of the entire society”.

Since 1999, the deployment of Renewable Energy Sources (RES) in Greece has been supported by the special RES levy ETMEAR, which was directly paid by consumers.

The RES levy had to be adjusted to in order to balance the RES account deficit, meaning the money earmarked for compensating RES producers.

Instead, the Greek government imposed a special levy on power suppliers to cover this deficit. Greece’s Public Power Corporation (PPC) did not roll over this extra cost onto consumers, therefore all suppliers followed suit.

As a consequence, the targeted liberalisation through a loss of the incumbent’s market share in the retail sector was held up, industry sources claim.

This new levy derives from clearing the wholesale market without the presence of RES, exclusively for the purposes of domestic retail, but traders are exempt from it, something that constitutes state aid according to industry sources.

EU sources told EURACTIV that it is impossible to speculate on whether something is state aid or not and that it was up to member states to notify any state aid to the European Commission.

According to the latest data, the RES account deficit will have been eliminated by the end of the year and the mechanism is even projected to move into surplus. But press reports in Athens suggest that the government aims to keep ELAPE and at the same time reduce ETMEAR in order to reduce consumer costs.

But the industry has reservations about the effectiveness of such a move and claims that ELAPE should be abolished, considering that it has served its purpose.

It also considers that the current structure of the ELAPE distorts the market, as it’s an additional burden for energy providers, even for the Public Power Corporation (PPC), which pays 85% for it.

On the other hand, if it’s removed, competitive tariffs will be offered to consumers.

“The maximum possible raise of ETMEAR will in no case exceed €6-7 per year for each consumer. If ELAPE is abolished, reductions in consumer tariffs could even exceed €20 a year,” sources told EURACTIV.

Consumers first

In an emailed response to EURACTIV, the Greek Ministry of Energy and Environment confirmed that the deficit of ELAPE would be brought down to zero by the end of 2017.

As far as ETMEAR is concerned, the ministry noted that its formulation was a subject of the Regulatory Authority for Energy, which exclusively decides on the issue.

“In any case, the alleviation of consumer electricity bills, as well as vulnerable groups of the population, is a consistent policy of the Ministry and the government,” the ministry emphasised.

“It is sensible for the industry to express views that serve its interests. However, the government’s task is to legislate taking into account the interests of the entire society and the course of the economy,” it added.

Particularly about energy, the ministry explained that its primary objective is the transformation of the electricity market and its transition to the target model, as well as the change of the energy mix of the country, “where RES are supposed to have a dominant role”.

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