SYRIZA: The Mitsotakis government created a 2.2 billion euro surplus in electricity in the last 12 months

The real surplus profits of electricity producers exceed 1.7 billion euros amid an extreme accuracy crisis for consumers, according to SYRIZA.

This results from the Report on the assessment of the actual surplus profits for the period July 2021-March 2022 presented by the representatives of the Environment and Energy Sector of SYRIZA-PS, Sokratis Famellos and Peti Perkas, in a relevant press conference that they granted today and which was held hybridly at the offices of SYRIZA-PS.

It is about 1.7 billion euros in excess profits, i.e. gross profit on the part of the electricity producers selected by the Mitsotakis government, which were produced on the backs of consumers, households and productive entities. This is also the amount that the government owes, as it has committed after a lot of pressure from us, to tax 90% directly and return directly to consumers. The government must recalculate the surplus profits in the correct way that was applied in the SYRIZA-PS Report and not with unacceptable methods (e.g. deduction of discounts) to seek to reduce the surplus profits that will be taxed.

The amount of real surplus profits finally significantly exceeds the 927 million euros calculated by the Energy Regulatory Authority (RAE) for a 6-month period. In fact, the SYRIZA-PS Report estimates that the surplus profits of electricity producers for the 12 months July 2021-June 2022 are estimated at 2.2 billion euros, while the “skyrocketing” profits of RES for the 12 months July 2021-June 2022 charged to consumers and expected to be returned as a consumer subsidy through the Energy Transition Fund, is estimated at €1.2 billion.

The Report – according to the official opposition – proves, with data from RAE, that the rise in prices in the pre-day market of Greece had started three months earlier, from July 2021, and RAE’s calculation, which only includes the period of October 2021, is incomplete – March 2022.

In addition, Greece, based on the published data, recorded on a monthly basis and for almost every month, among the highest prices in the wholesale energy market pan-European, first in August and November 2021, in January, February and April 2022 .And moreover, from 08.05.2021, PPC applied the readjustment clause which unfairly and abusively transferred the whole of the wholesale accuracy to the consumers.

At the press conference, special reference was made to the endogenous characteristics of the Greek electricity market that make Greece vulnerable and more exposed to the effects of the Ukrainian crisis: to the government’s choice to start the precision rally by increasing PPC tariffs by 20% in September 2019, in the disgraceful profit most of 2020 where PPC also participated, in the launch of the Target Model (Target Model) without sufficient preparation, without control and regulation, in tolerance on the part of the government and the competent regulatory authorities (Energy Regulatory Authority and Competition Commission) phenomena of price manipulation and the operation of an oligopoly in the Greek energy market as well as the Mitsotakis government’s decision to tie Greek electricity generation to natural gas for decades, behind the violent and sham lignitization where the replacement of PPC’s lignite units with expensive units of private natural gas and not replacement with RES.

Regarding the methodology, the SYRIZA-PS Surplus Profits Assessment Report is based on the calculation of the difference between producers’ revenues and the actual full cost of production, considering a reasonable total wholesale profit margin on the variable cost of production (5%), in order to do not transfer distortions, malfunctions or technical issues related to the operation of units between different periods.

The representatives of the Environment and Energy sector of SYRIZA-PS noted that in the period July 2021-June 2022 the observed increase in the cost of the wholesale electricity market amounted to approximately 8 billion euros. Overall, the cost of the wholesale market amounted to ~11.4 billion euros in the period July 2021-June 2022, while the corresponding cost amounted to ~3.4 billion euros in the previous 12-month period.

Finally, they commented on the government’s new mechanism, the “Temporary Mechanism for Returning Part of Next-Day Market Revenues” of Law 4951/2022: “This mechanism hides new excess profits of more than 1 billion euros a year signed by the Minister, while the electricity suppliers’ invoices, just a few days before August. The government is unfortunately leading us into uncharted waters while any commitments it has made have been continuously denied for a year now. The energy crisis of precision and strategy highlights the urgent need for political change in Greece “.