Greece to tax power generators’ windfall profits

The Greek government will tax the windfall profits of domestic power producers, created by the exceptionally steep increases in power prices since October, the Greek energy ministry has announced.

The Greek government will impose a 90pc tax on large power producers' windfall profits generated in October 2021-March 2022, which totalled €591mn ($623mn), Greek energy regulator RAE has calculated. The government will use the revenue generated by the tax to further support consumers, the energy ministry said.

The legislation also includes a new compensation mechanism for power plants that is based on their operating costs and is disconnected from wholesale power prices. The new mechanism will come into effect in July and will prevent power producers from generating windfall profits, the ministry announced.

The European Commission permitted EU member states to tax energy firms' windfall profits from March.

The Greek Henex spot averaged €235.55/MWh in the first quarter of 2022, up by €181.94/MWh from the same period last year. The spot cleared at a record high of €426.90/MWh on 8 March.

By Apostolos Tsarikas