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The government’s plan to boost energy-intensive industry

By Haris Fludopoulos

The agreement reached by the energy ministers of the E.U. for the reduction of natural gas consumption by 15% includes an explicit exception for the power generation sector, in case the stability of the electrical system is threatened, however there is no corresponding provision for the country’s industry.

This means in practice that the industry will be asked to proceed with load cuts in order to achieve the goal of reducing gas consumption.

In this context, the government is expected to pursue a dialogue with the country’s industry in the near future, in order to determine the scope for an agreed voluntary reduction in gas consumption for the coming winter.

Although for some sectors the reduction of consumption is difficult, nevertheless there are energy-intensive industries that have the possibility to use alternative fuel, such as oil for example.

Alongside a voluntary agreement to reduce consumption, the government is studying and promoting the establishment of a mechanism to compensate the industry for quantities of natural gas it agrees to cut.

This mechanism, we remind you, was officially proposed to the European Commission and the Council of Energy Ministers by Greek Prime Minister K. Mitsotakis, who even sent a letter last week to the President of the Commission, Ursula von der Leyen.

According to the Mitsotakis proposal, a common European fund will undertake to compensate industrial consumers for the reduction in natural gas and electricity consumption that they will achieve next winter.

In this context, the Greek government, even if Mitsotakis’ pan-European proposal does not proceed, is considering implementing the mechanism at national level, after approval of course by the European Commission.

This mechanism is being considered to be financed with funds from pollutant auctions, most of which is currently directed to the special RES account, which has now become surplus.

It is noted that in the past period, due to the explosive increase in natural gas prices, several industries that had the possibility proceeded to limit the consumption of natural gas and turned to the use of other fuels.

At least this is evidenced by the data of the natural gas system manager DESFA, which show a 71.05% reduction in natural gas consumption by industry (to 1.67TWh) in the first half of the year.

The reduction in natural gas consumption by industry reaches 4TWh and essentially represents more than 90% of the total decrease in gas consumption in the country by 10.31%.

Skepticism

In any case, however, the planning for industry compensation may cover the requirement that the country’s productive industries do not suffer financial losses from the possible reduction in their energy consumption, however, there is no shortage of objections that focus on the effects on the competitiveness of Greek industries .

And this is because the export industries of the country have in recent years, with great effort, managed to gain their place in the international scene and gain important market shares and customers. A possible reduction in gas consumption, which translates into a reduction in production, automatically means that these market shares and the international position of the Greek industry are at risk.

In any case, what is required for the industry is that any decisions be taken after consultation – as is also the case with the government’s intentions – in order to avoid unpleasant surprises.

Source: Capital

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