PPC unit sales package to be determined by September test

The rescheduling, for a latter date, of the sale of main power utility PPC hydropower units, a more immediate sale of old and new lignite-fired power stations, as well as the continuation of NOME auctions - not only by PPC but any independent electricity firm that may acquire lignite-fired stations from the utility - make up the three key points included in a summary by Greek government officials of where the bailout-related energy sector demands currently stand following talks with lenders in Brussels last week, energypress sources have informed.

It is believed that plenty more work will be needed to finalize an energy sector deal contributing to the conclusion of the bailout’s second review.

This summary is expected to be presented tomorrow by energy minister Giorgos Stathakis to five fellow Syriza party MPs representing the west Macedonian region of Greece’s north, where political opposition to the sale of any PPC units runs high and could trouble the coalition, holding a slim majority in parliament.

The absence, for the time being, of PPC hydropower units from the utility’s bailout-imposed sale plan, as well as the continuation of NOME auctions – offering traders electricity produced by low-cost lignite and hydropower sources – for all firms operating such units, both represent new factors in the energy sector negotiations, according to the Greek government’s portrayal of the current situation.

Though the plan to include PPC hydropower units in the utility’s sale package is believed to have been placed on hold, it should be pointed out that the European Commission, which has studied Greece’s electricity market for years, appears convinced that persisiting market distortions can only be eliminated if PPC surrenders its exclusive control of hydropower units.

Seeking to push the PPC unit sales plan as deep into 2018 as possible in a bid to bolster its chances of political survival, the coalition appears to have agreed to stage a market test this coming September. This stage of the sale process is intended to reveal the level of interest in PPC’s units by both local and foreign investors. The current schedule also entails an ensuing legislative revision by December this year, to specify the number and type of PPC units to be included in the sale package. The sale plan, according to the schedule, will then be carried out in June, 2018.

Though the lenders appear to have softened on a demand that would require PPC to sell a proportion of units representing 40 percent of its production capacity, this is by no means definite, sources informed. This demand echoes a European Court decision issued in 2009.