Electricity bills / New increases are coming in July – How much will green tariffs increase

The upward trend in wholesale electricity prices this month continues unabated, making it clear that further increases in retail tariffs are on the way in July as early heatwave consumption rises, as demand for air conditioning and refrigeration and the ongoing tourism seasons push up the demand for electricity.

The June market started and is still moving at high levels, exceeding 100 euros per megawatt hour, taking us back to January when wholesale prices were at similar levels, as the noticeable de-escalation started from February and continued until May.

If there isn’t a significant price drop in the next, final week before the June market closes, July is expected to be hot, with additional increases, and it will now be the second month of rising tariffs.

It is noted that May in wholesale has already closed with an increase of almost 35% compared to April, which was transferred to the June tariffs, leading to increases in retail and especially in the green tariff, which the majority of households have joined, over 36% on average .

The price hikes that have come since the first month of summer have found the government in a pre-election frenzy, blaming the… air that was not sufficient and recommending that citizens switch providers, downgrading yet another focus of accuracy that is suffocating households, instead to control the market. After all, it is no coincidence that he conveniently made comparisons not with the immediately preceding month (May), but with January. It remains to be seen which culprit he will point to in the near future, as long as the looming continuation of current increases is confirmed.

New pricing on the way

Based on the latest prices in the wholesale electricity market, the first three weeks of June (1-21/6) close with an average price of 97.36 euros per megawatt hour, compared to 81.08 euros in May and 60.11 euros in April, i.e. with increases of 20% and almost 62% respectively. In fact, they are dangerously close to the levels of 100 euros, closer to the prices of last December.
If we assume that the wholesale price will not show dramatic changes in the last week of the month and how it will be maintained at these levels, then by rough calculations the price per kilowatt hour, without discounts, will be found in July near 15-15.5 cents in green tariff (based on the initial price of PPC which also sets the tone for the supply market). Of course, last month, with the price increases being announced a few days before the European elections, there were some particularly… generous discounts (-38%), which are not at all certain to be repeated with the same intensity next month.

We remind you that in June the retail price increases (final price on the special tariff) start for basic consumption from 11.65% and reach for the largest consumptions (by a company) up to 70.17%.

It is noted that the increases are particularly noticeable in the green-special tariff that was subsidized by the government of the Netherlands, which instituted it for reasons of comparability only, since it is now clearly demonstrated that it is the most expensive option, to which it has, however, automatically switched since the beginning of the year (when the subsidies stopped and the clause returned) the majority of domestic consumers.

The firsts are back

However, this month our country has exceeded the limit of 100 euros per hour for several days, returning some days to the first positions of the countries with the most expensive wholesale price in Europe. In fact, on June 15, Greece was crowned again… champion with the highest wholesale cost. The highest price (s.s.: until 21/6) was recorded on June 3 with 119.27 euros/mega-
hours, while the maximum daily price has reached 270.79 euros. On a monthly basis, the Greek market is in fourth place with the highest wholesale price, after Ireland, Poland and Italy, while it is also the fourth most expensive market for (H1) 2024 in Europe.

Regulator the gas again

However, the days with prices close to or above 100 euros have a common denominator: the imported, fossil natural gas that dominates the electricity generation, the smaller share of RES and imports and the almost non-existent contribution of lignite. There were days when the participation of gas in the energy mix exceeded 50%. On the contrary, with a strong presence of RES, hours with almost zero values ​​were recorded.

In the meantime, since May, the market price of natural gas (Dutch TTF), which moves mainly
at the level of 35 euros per megawatt hour (on 3/6 it exceeded 36 euros), when in April it was around 25 euros.

After the end of the winter months, the international price of natural gas has increased by 40%, sounding the alarm about volatility in the markets, brought mainly by geopolitical developments and extraordinary events that disrupt the supply internationally, confirming that the dependence on natural gas imports remain strong.