On 6th October 2022, the EU Council adopted Regulation 2022/1854 “on an emergency intervention to address high energy prices” (the Regulation). The Regulation introduces the following measures aiming to mitigate the effects of high energy prices:

* an obligation for EU member states to decrease electricity consumption by at least 5% during identified peak hours (between 01.12.2022 and 31.03.2023)
* a recommendation for EU Member States to reduce their total monthly gross electricity consumption by 10% and achieve demand reduction
* the introduction of a temporary revenue cap on market revenues of electricity producers obtained from the generation of electricity through sources such as renewables, waste, nuclear, lignite, and crude petroleum products until 30.06.2023
* the introduction of a temporary mandatory solidarity contribution in 2022 and/or 2023 on windfall profits generated from activities in the crude petroleum, natural gas, coal and refinery sectors.

The Regulation entered into force on October 7, 2022, and it is directly applicable in all EU Member States subject to Member States’ own national policies to be adopted in order to comply with the Regulation’s requirements. To that end, Greece has taken certain national measures in line with the Regulation, which can be outlined as follows:

I. Establishment of an Electricity Demand Reduction Service (Law 4994/2022 & Ministerial Decision ΥΠΕΝ/ΔΗΕ/135277/4706 (OJ Β’ 6649/23.12.2022)

The establishment of an Electricity Demand Reduction Service is stipulated, which shall be construed as an obligation of the electricity consumers or aggregators to limit the active power they consume or represent during the identified peak hours i.e. from 18.00 to 21.00, at least to a determined amount resulting from the conduction of competitive bidding processes (auctions) for the electricity demand reduction, in return for financial compensation.
Aggregators as well as consumers representing portfolios with one or more consuming locations shall have the right to participate in the auctions, provided that the total annual consumption of each portfolio for the year 2021 is at least 13 GWh. To this respect, two types of auctions are set forth for each peak hour, namely type 1 and type 2, which shall be held following prior approval of the EU Commission on a quarterly and monthly basis respectively. Following each auction, the providers of the service shall be selected and the amount of the electricity demand reduction per portfolio with regards to the peak hour for which the auction was held shall be specified. In case the selected providers do not manage to limit the active power they consume or represent during peak hours according to the determined value, charges for non-compliance shall be imposed. The Electricity Demand Reduction Service shall be provided until 31.03.2023.

II. Imposition of an extraordinary levy on excess revenue generated by electricity suppliers (Law 4994/2022)

The new levy shall be imposed and recovered on a quarterly basis at a rate of 60 % on excess revenue of electricity suppliers arising from their operations in the national energy retail market. The excess revenue is determined on a monthly basis and equals the amount of revenue that exceeds a certain maximum retail price, which is set based on the average cost of electricity supply plus a reasonable profit mark-up. The said levy equals the total amount of excess revenue per month, provided that it does not fall below the maximum retail price. Otherwise, the monthly levy is zero and the negative amount can be offset against the excess revenue of the following months.

III.   Imposition of price caps in the wholesale market for electricity producers of all categories (Law 4951/2022 & Ministerial Decision ΥΠΕΝ/ΔΗΕ/69734/2413 (OJ Β’ 3517/06.07.2022)

A temporary mechanism for the return of part of the revenues of the Next Day Market and Intra Day Market was established, according to which part of the revenues which participants in the Day Ahead Market are entitled to is withheld, while a remuneration price cap is determined (for RES units at 85 Euro/MWh, for Large Hydro units at 112 Euro/MWh, for lignite and natural gas generators, the cap is variable based on fuel and CO2 costs).

IV. Imposition of a temporary solidarity contribution (art. 114 of the Law 5007/2022)

Companies established in Greece, whose gross revenue for the fiscal year 2022 arises from activities in lignite mining, crude oil and natural gas extraction, coking production and oil refining sectors at a rate of at least 75%, shall be subject to a temporary solidarity contribution. This contribution is of an urgent and extraordinary nature, aiming to to mitigate the effects of the energy crisis on households and shall be imposed on the surplus profits of the abovementioned companies during the fiscal year 2022. The surplus profits are defined as the positive difference between the taxable profits of the fiscal year 2022 and of the 1/4 of the total taxable profits or losses for the fiscal years 2018 up to 2021 at a rate of 120%.

The Editorial Team