Alternative suppliers upbeat about market gains if disincentives go

Although alternative electricity suppliers managed to capture just five percent of the local electricity market by the end of 2015 and remain under the shadow of main power utility PPC, whose share stood at a commanding 95 percent, emerging suppliers are confident of an imminent turnaround.

This optimism is based on the presumption that the expected NOME auctions – to provide third parties with access to PPC’s low-cost lignite and hydropower sources as part of the plan to help break PPC’s near-monopoly – will be introduced as planned and that disincentives in the sector are swept aside, an official representing a major alternative energy company told energypress.

Despite the ongoing advertising campaigns projecting special offers by alternative electricity suppliers, households have so far remained mostly hesitant to abandon PPC for a number of reasons.

One factor behind the hesitancy is linked to the failed retail market entries of Energa and Hellas Power several years ago, which both ended in financial scandal. Also, the number of consumers able to service their electricity bills on time appears to be low considering the scope of unpaid overdue electricity bills at present. PPC is making efforts to stop consumers with arrears from transfering to rival power suppliers. In addition, local consumers, quite paradoxically, seem to continue to distrust the private sector even though protests of an inefficient public sector, and enterprises linked to it, are widespread.

The aforementioned factors, it should be stressed, primarily concern household consumers. The thinking is quite different among professional and industrial consumers, whose decisions are cost-based. Alternative power suppliers have captured a 20 percent market share in this sub-category, prompting PPC to make special offers to punctual customers.

Alternative power suppliers believe that the mindsets of household consumers will gradually also change, leading to market share gains for the emerging companies in this sub-category as well. The arrival of NOME auctions, a bailout obligation intended to reduce PPC’s retail and wholesale markets shares to levels below 50 percent by 2020 should help steer a growing number of consumers towards the alternative suppliers.

Disincentives such as PPC’s effort to obstruct or restrict consumers with arrears at PPC from switching suppliers need to be scrapped, as was recently pointed out by Michel Piguet, Managing Director at Elpedison.