“The Energy Crisis in Europe: Myths and Truths” – A new book by Energypress journalist H. Aposporis

The energy crisis has hit us hard, regardless of profession, age, area or income. It tests consumers’ endurance and complicates producers’ choices, while threatening the entire economy with depression.

At the same time, it changes things inside the energy sphere itself, with effects that may end up being permanent, with dangers and plenty of redefinitions. It sets the public discourse about the connection between energy, the environment and growth to a whole new level. It creates new winners and losers globally.

The goal of this new book titled “The Energy Crisis in Europe: Myths and Truths” by Energypress journalist, H. Aposporis, is to present in a simple and understandable way for the average citizen what led us to the energy crisis, without requiring any special knowledge of the subject.

We are going to see what went right, what was at fault and where there was simply bad luck.

Moreover, the book records the chronicle of the crisis itself and its effects so far for Europe.

Last but not least, there is an attempt to foresee the next day, both immediate and long term through spotting new trends, future threats and opportunities, while examining different scenarios.

You can find the book on Amazon in ebook form.

Germany considering price cap, gas usage drop a condition

The German government now appears to be considering an EU proposal for a price cap on gas ahead of tomorrow’s informal EU meeting of heads of state, but Berlin’s acceptance of such an initiative would be conditional, requiring a compulsory and significant reduction in gas consumption levels throughout the EU.

Germany’s Vice Chancellor Robert Habeck, who heads the country’s energy portfolio, set this condition during a meeting yesterday with the energy ministers of Greece, Belgium, Italy, Poland and Spain, representing the five EU member states most supportive of a price cap on natural gas.

The European Commission’s recent proposal for an optional reduction in gas consumption would need to be made compulsory if Berlin is to accept a price cap on gas, Habeck told the five energy ministers, according to sources.

Despite Germany’s softer stance, work is still needed if a price cap on gas is to be implemented. An official decision cannot be reached at tomorrow’s EU meeting of heads of state as it is an informal session.

It will be followed by another informal meeting in Prague next Tuesday between the EU’s energy ministers.

Brussels is also working on the establishment of a new benchmark for natural gas that better reflects Europe’s new energy reality in which LNG, not pipeline gas, is now the dominant gas source.

PPC’s Ptolemaida V nearing full-scale test, lignite output up

The mechanical equipment of power utility PPC’s new, state-of-the-art Ptolemaida V power station is currently undergoing preliminary testing ahead of a full-scale trial run, expected towards the end of this month or early in November, before the facility is commercially launched and linked to the energy exchange in early January, PPC officials have told energypress.

The facility, whose testing began just a few days ago, will initially operate as a lignite-fired power station before eventually converting to natural gas.

A cross-party political decision to construct Ptolemaida V was reached nine years ago.

The launch of Ptolemaida V, a 610-MW capacity power station, promises to greatly contribute to the country’s energy security as its operation will enable significant amounts of natural gas to be saved for winter.

The new power station is a low-emitting facility with a high performance level able to rival natural gas-fueled power stations (CCGTs).

Greece’s lignite-fired electricity generation is being increased following a government decision reached in early July to boost lignite’s percentage of the energy mix. The objective is to double lignite-based output over the next 12 months, from 5 TWh to 10 TWh.

The country’s lignite-fired power production has been on the rise since early last summer, more-than-doubling in June, compared to the equivalent month in 2021, rising 61 percent, year-on-year, in July, and increasing 27 percent in August.

Athens household power cost below European average in September

The cost of electricity for Athenian households in September remained below the average of 33 European capitals, a latest monthly survey conducted by HEPI, the Household Energy Price Index, has shown.

Athens was ranked 16th in terms of retail electricity cost among the 33 European capitals, but rose to 11th place when purchasing power was taken into account.

Electricity cost increases continued in September in Athens and 12 other European capitals. In Athens, the cost of electricity rose 1.15 percent compared to the previous month.

As for natural gas, the setting is quite different, Athens being the 4th most expensive European capital city, following a 29 percent retail price increase in September compared to August, the third-biggest rise, according to the HEPI survey.



DESFA market test for gas grid lift includes 3 pipeline doubles

Gas grid operator DESFA has begun preparing a market test for prospective gas transmission system expansion projects, based on a requirement set by RAE, the Regulatory Authority for Energy, as part of its approval of the projects.

The market test’s details are expected to be completed by the end of this month. A related event will then be staged to update gas transmission system users on the market test’s process as well as projects to be offered for capacity reservations.

RAE’s market test requirement for these projects has been incorporated into its approval of DESFA’s ten-year development plan covering 2022 to 2031, as the authority wants the operator to gauge the level of interest and need concerning the gas transmission system’s expansion.

According to energypress sources, three new gas pipelines, to serve as doubles at sections of the existing infrastructure, will be included in the market test.

One of the three pipelines is planned to complement infrastructure covering parts of the wider Athens area, a second pipeline is envisaged as a double for a pipeline running from Athens to Thessaloniki, and a third pipeline is planned to run as a double alongside a line from Thessaloniki to Komotini, northeastern Greece.

The EU’s decision to gradually diminish its reliance on Russian gas is changing the continent’s gas supply map. Subsequently, gas entry points from the continent’s south are now becoming more crucial, giving rise to the need for gas infrastructure boosts in Greece.


Firmest gas price cap backers in talks with German minister

The energy ministers of Greece, Belgium, Italy, Poland and Spain, representing the five EU member states most supportive of a price cap on natural gas, are scheduled to stage a teleconference with their German counterpart Robert Habeck today to analyze their price-cap proposal in an effort to overcome Germany’s resistance.

Berlin’s opposition to a European gas price cap and unilateral announcement of a 200 billion-euro national package for the energy crisis have disappointed many European governments, going into an informal EU meeting of heads of state this Friday with little hope of bold decisions.

EU member states are generally feeling increasingly frustrated by Germany’s refusal to back a collective European decision for the energy crisis, a stance Berlin will not be able to keep justifying.

According to sources, the group of five’s gas price cap proposal is set at a level that would ensure gas suppliers do not turn their backs on Europe and send their tankers to markets in Asia, where demand is set to rise in the lead-up to winter.

To guarantee supply to Europe, the continent’s price cap level will need to be set slightly higher than price levels at Asian energy exchanges.


RAE approvals steps towards new FSRUs off Corinth, Thessaloniki

RAE, the Regulatory Authority for Energy, has approved Elpedison’s Thessaloniki FSRU project as well as the final phase of a market test for Motor Oil’s FSRU plan, Dioryga Gas, off Corinth, west of Athens.

For Elpedison, the authority’s approval essentially signals the go-ahead for the Thessaloniki FSRU (floating storage unit) as the decision awards a 50-year project license until 2072.

A 50-50 joint venture involving Elpedison’s two partners, Edison and HELLENiQ, formerly known as Hellenic Petroleum (ELPE), the Thessaloniki FSRU will be developed at the Thermaic Gulf, just a few kilometers from Dock 6 at Thessaloniki port.

The Thessaloniki FSRU, planned to consist of four storage tanks offering a total of 170,000 cubic meters, is scheduled to be launched in 2025.

Besides approving guidelines for the final phase of Motor Oil’s market test concerning the Dioryga Gas FSRU project off Corinth, RAE also approved a capacity boost for this project, to 210,000 cubic meters from 170,000 cubic meters, as had been specified in the project’s original license, as well as Diorygas Gas’ transfer to Motor Oil’s MORE subsidiary, also hosting the petroleum group’s RES projects.


Lignite mine interest rekindled by PPC plan to boost reserves

Power utility PPC’s effort to boost lignite extraction for reinforced reserves, needed as this energy source has returned to the fore, at least temporarily, in the crisis, is helping to bring back into the picture the state-owned Ahlada and Vevi lignite mines, both sidelined, as the interest of private investors in these units has been revitalized.

Major energy and construction groups are expressing renewed interest in these lignite mines, both in northern Greece’s Florina region, sources informed. PPC’s lignite reserves stockpiled at power stations have reached 2.7 million tons but are still considered insufficient.

Lignitoryhia Ahladas SA, the company to which two lignite mines, Ahlada 1 and Ahlada 2, were leased by the Greek State, was declared defunct by the energy ministry in July as a result of its failure to meet agreement terms, primarily lease payments. The Ahlada mines have supplied lignite to PPC’s Meliti power station. Further back, Ahlada was operated by the AKTOR-TERNA partnership.

As for the Vevi mine, the country’s first lignite mine for which an attempt was made to transfer its operations to the private sector, three companies, Mytilineos, TERNA and Aktor, participated in a tender in 2008 before Aktor was eventually named the winning bidder in late 2014.

However, Aktor was not able to pursue the project as concessionaire after the left-wing Syriza party came into power shortly afterwards. The project agreement was never brought to parliament for approval during the Syriza government’s two tenures, from January, 2015 to July, 2019.


Distributors bent on network expansion despite crisis

Gas distributors EDA ATTIKI, EDA THESS and DEDA, unperturbed by the energy crisis, plan to expand the country’s gas network through the development of more than 3,000 kilometers of medium and low-pressure networks over the next four years, as well as digitization upgrades, investments worth a total of 740 million euros. RAE, the Regulatory Authority for Energy, has just forwarded the operators’ gas network expansion plans for consultation.

These investment plans demonstrate the willingness of all three gas operators to push ahead with their business plans for expanded gas usage as a key part of the country’s decarbonization effort, despite the sharp rise in gas prices.

Highlighting this intention, Italgas, whose acquisition of DEPA Infrastructure, the parent company of EDA ATTIKI, EDA THESS and DEDA, was completed one month ago, has just announced a loan of 580 million euros to be primarily used to help finance the gas network expansion plans of the three gas operators.

EDA ATTIKI, EDA THESS and DEDA cover the regions of wider Athens, Thessaloniki-Thessaly and the rest of Greece, respectively.

EDA THESS plans investments worth 233 million euros for new gas networks in the Thessaloniki and Thessaly regions.

EDA Attiki’s expansion plan for Athens, 570 km of low and medium-pressure networks by 2026, worth 122.23 million euros, will aim for 85,500 new connections by the end of 2026, taking the company’s total to 260,000 links.

DEDA Athens is planning over 2,000 km of new networks in seven regions, the biggest of the three initiatives, budgeted at 396 million euros.


Strong PPA demand prompts boost to 1,500-MW capacity

The energy ministry plans to boost a current 1,500-MW capacity made available to RES producers for Power Purchase Agreements with electricity suppliers or major-scale consumers as this capacity has been virtually exhausted due to robust demand. The extent of the capacity increase still remains unknown.

The large number of green investments being planned in Greece, along with medium-term electricity cost projections PPAs can offer electricity suppliers, are factors that have boosted demand for PPAs in recent months.

Demand would have been even higher if industrial consumers were not subject to a uniform ceiling on wholesale market compensation for green units.

Power grid operator IPTO is taking preliminary steps towards establishing a new priority list, expected in roughly one month.

Some investors behind CCGTs stalling, others forging ahead

Energy crisis uncertainty and the singling out of natural gas for its exorbitant price levels are factors troubling investors behind new combined cycle gas turbine (CCGT) plant projects.

Some investors have stalled their CCGT investment plans, waiting to see how developments unfold concerning gas prices and availability, while, on the other hand, more aggressive players are forging ahead.

Elpedison has yet to reach an investment decision on a new 860-MW CCGT at the company’s Thessaloniki refinery facilities. Despite having begun some preliminary work, Elpedison’s partners – HELLENiQ ENERGY, until recently named Hellenic Petroleum (ELPE), and Edison – have put their Thessaloniki CCGT project on hold to appraise international and European energy market developments.

If developed, Elpedison’s prospective 860-MW Thessaloniki facility would add to the joint venture’s two existing facilities. The HELLENiQ ENERGY petroleum group is also planning an FSRU at the Thermaic Gulf, which would establish a Thessaloniki hub for the company.

The Copelouzos group has also been troubled by the adverse market conditions. Group member Damco Energy had secured a license for an 840-MW CCGT in Alexandroupoli, northern Greece, but the high cost of natural gas and overall market uncertainty prompted the company to not go it alone and seek partners for the project.

According to sources, power utility PPC and gas company DEPA Commercial have joined Damco Energy for the Alexandroupoli CCGT. Official announcements on the partnership are expected soon.

Elsewhere, the GEK TERNA and Motor Oil groups have begun working on an 877-MW CCGT in Komotini, northeastern Greece. The former, in its publication of first-half results, noted work on the “Thermoilektriki Komotinis” project is continuing, its scheduled launch unchanged for 2024.






Power producers windfall profit tax formula unchanged

The details of a windfall profit tax imposed on Greek power producers will remain unchanged, for the time being, despite a political agreement at the Council of EU Energy Ministers last Friday exempting natural gas-fueled power stations from a price cap.

Greek officials estimate the current formula for recovery of windfall profits earned by power producers has accumulated 2.6 billion euros from July until the present, sources informed, adding producers have sufficient leeway.

The sources contended the Greek model’s principles should not change as they are based on the assumption that gas-fueled power stations purchase gas that is not based on TTF hub prices, but at lower prices, while, at the same time, their offers submitted to the day-ahead market take into account higher TTF prices.

Details on how last Friday’s agreement by the EU-27’s energy ministers will be implemented remain to be seen. An official document providing this information will soon be released, possibly this week.

According to the agreement, a ceiling of 180 euros per MWh will be implemented on the earnings of all power producers of all technologies (RES, nuclear, hydropower without storage, lignite, biofuels and geothermal) except natural gas. This limit will apply until June 30, 2023.

The EU energy ministers also agreed on a solidarity tax for fossil fuel producers, which, sources noted, will be set at a rate of 33 percent for windfall profits in 2022.

This extraordinary tax will not generate tax revenues until 2023, once corporate groups have announced their results for 2022. The Greek government plans to impose this solidarity tax on refineries, which have expressed opposition.

Bypass solution for Alexandroupoli FSRU gas to IGB pipeline

Gastrade, a consortium established by the Copelouzos group for the development and operation of northeastern Greece’s Alexandroupoli FSRU, and gas grid operator DESFA, have reached a verbal agreement for a technical solution that will temporarily skip the need for a compressor station in order to transmit gas from the FSRU to the Greek-Bulgarian IGB pipeline for export.

The Alexandroupoli FSRU is planned to be completed by December, 2023, well ahead of the scheduled completion, by DESFA, of the IGB gas pipeline’s compressor station in Komotini, expected in October, 2024.

Normally, the Komotini compressor station would be needed to transmit natural gas from the FSRU to the IGB pipeline, whose commercial launch is scheduled for tomorrow.

The verbal agreement between Gastrade and DESFA, mediated by RAE, the Regulatory Authority for Energy, is soon expected to be made official.

The resulting contract will include a timeline for the development, by DESFA, of necessary accompanying projects concerning the country’s gas grid. They need to be completed if the technical solution agreed to by Gastrade and DESFA is to be brought to fruition.



Uncertainty, multiple thoughts ahead of EU ministers meeting

The EU’s energy ministers meet in Brussels today amid a climate of uncertainty, exacerbated by a barrage of energy-crisis proposals, inappropriate conditions for crucial decision making.

Today’s session comes in the wake of the European Commission’s rejection of a proposal by 15 EU member states for a universal price cap on gas. Many proposals have since emerged.

Brussels yesterday brought back a price-cap proposal for Russian gas. However, it is believed there is little chance of the EU-27 reaching consensus on this measure for two key reasons. Firstly, it is feared Moscow would be prompted to disrupt its European gas supply through all remaining pipelines, including TurkStream, which supplies Greece. Secondly, a price cap on Russian gas supply would represent a breach of contract, by European companies, of Gazprom’s supply agreements, experts have warned.

Other proposals that have been brought forth in the lead-up to today’s meeting of EU energy ministers include European agreements with major LNG producers; the establishment of an alternative to the TTF benchmark that would be connected to the American Henry hub; a price cap on gas used for electricity generation; a windfall tax on excess refinery earnings; a limit to electricity producer windfall profits; and a compulsory reduction of electricity consumption.

Regardless of the choices made and route taken, ordinary European citizens will be anxious to see a reduction in energy costs.

DEPA’s TotalEnergies LNG deal a break away from Russia, TTF

A gas supply agreement reached between DEPA Commercial and France’s TotalEnergies, securing, for the former, French LNG quantities totaling 10 TWh, nearly one-third of annual Russian gas supply, based on references prices not linked to the Dutch TTF hub, up to 90 euros per MWh more expensive than other hubs, paves the way for further agreements not connected to the TTF and Russian supply.

According to sources, DEPA Commercial is currently working on a strategic long-term LNG supply agreement with another major international player, once again using a pricing formula linked to a hub other than the TTF.

These moves are ensuring energy sufficiency for DEPA Commercial’s customers as well as the country, at competitive prices.

DEPA Commercial’s 10-TWh LNG agreement with TotalEnergies, which, according to sources, will result in supply from November until March next year, is equivalent to five months of Russian gas consumption in the Greek market.

The TotalEnergies amount should be enough to cover the country’s needs during this five-month period if Russia completely disrupts gas supply to Europe. In 2021, Greece’s gas imports from Russia totaled 35.37 TWh.

The Greek energy ministry’s leadership and DEPA Commercial officials are preparing for a trip to Azerbaijan, postponed three weeks ago, to seek an agreement for further gas quantities, at prices that are more competitive than the current Azerbaijani supply deal, DEPA Commercial’s most expensive.



RAE proceeding with legislative steps for energy storage

RAE, the Regulatory Authority for Energy, is examining a further step in legislative preparations for energy storage’s induction into the country’s grid, the authority’s president Athanasios Dagoumas has told an IENE (Institute of Energy for Southeast Europe) conference on “Electricity storage and grid management for maximum RES penetration”.

The authority is looking to proceed with an energy storage formula for distribution network operator DEDDIE/HEDNO and power grid operator IPTO, concerning energy storage services such as ancillary services and congestion management.

Up until July this year, RAE had issued a total of 337 licenses representing a capacity of 23.5 GW, concerning storage projects, purely, as well as hybrid projects – combining storage with RES – and pumped storage units.

The vast majority of these RAE licenses concern pure storage units and were issued between January, 2021 and July, 2022.

Investors behind the projects have, as a result of newer legislation, been requested to resubmit supporting documents for older licenses in order to have them renewed.

Many of these investors have already provided the necessary documents and are awaiting license renewals, while RAE is believed to be preparing a great percentage of these, sources informed.

‘Virtual net metering law for businesses by Christmas’

Legislative action to utilize technology enabling virtual net metering through solar energy installations for medium and high-voltage voltage consumers have been announced by energy minister Kostas Skrekas.

The minister said legislation for medium and high-voltage voltage virtual net metering would be ratified by Christmas to enable enterprises to use self-produced electricity generated by off-site PV systems.

The minister, who was speaking at the Professional Chamber of Athens (EEA), addressed the energy crisis and responded to related questions by members on government intervention and actions.

Skrekas told the chamber’s members that energy sufficiency has been secured through government measures but stressed energy waste will need to be restricted.

Recent data showed an electricity consumption reduction of 13 percent in early September and a 40 percent drop in demand for natural gas over the past three months, the minister noted.

Monthly auctions for industrial energy-saving compensation

Industrial consumers – high and medium-voltage – will be offered energy-saving incentives through monthly auctions offering compensation for bids with the lowest compensation levels, it has been decided at an extraordinary meeting yesterday involving the energy ministry, RAE (Regulatory Authority for Energy), distribution network operator HEDNO/DEDDIE and power grid operator IPTO.

The session was staged ahead of tomorrow’s meeting of EU energy ministers, whose agenda will include talks for the establishment of a formula reducing electricity usage.

The European Commission has prepared a plan for 5 percent reduction of electricity consumption during peak hours, but, following negotiations over the past few days, this reduction rate could be cut to 3 percent. Member states are expected to seek flexible terms.

Electricity consumption restrictions, in Greece, between 6pm and 9pm are seen as a certainty following yesterday’s meeting of Greek officials. Also, an additional hour during non-peak hours will most likely be introduced, but it remains unclear whether this hour will be set in the morning, from 9am to 10am, or in the evening, from 9pm to 10pm.

Island hybrid RES, energy storage project auctions in first quarter of ’23

The energy ministry is striving to stage two auctions, one for hybrid RES facilities on non-interconnected islands, and another for a first wave of energy storage units to be linked to the grid, in the first quarter of 2023.

The energy ministry plans to soon decide on a cluster of islands to be included in the auction for hybrid RES facilities on non-interconnected islands.

The ministry intends to take into account bidding levels submitted for an existing hybrid system on the Greek island Astypalaia, the westernmost of the Dodecanese islands, when it decides on the starting price for the auction concerning hybrid RES facilities on non-interconnected islands.

As for the auction concerning energy storage units supporting the grid, the energy ministry is striving for a swift process as project development deadlines set by the Recovery and Resilience Facility (RRF), to fund these auctions, are extremely tight.

According to the RRF deadlines, contracts for the winning bidders need to be awarded before the end of 2023, and the storage facilities must be completed by the end of 2025.


Time limit for universal electricity supply service

RAE, the Regulatory Authority for Energy, has, according to sources, received orders from the energy ministry to impose a time limit on the period consumers can rely on a universal electricity supply service, covering the needs of black-listed consumers reported by suppliers for electricity-bill payment failures.

At present, usage of the universal electricity supply service by consumers with outstanding electricity bills has no limit, but higher tariffs are charged for the service.

It is provided by the country’s five biggest electricity suppliers, in terms of retail market share, who share the pool of old and new unwanted customers and provide the universal supply service.

Recent market data showed an increasing trend in the number of households resorting to the universal electricity supply service.

RAE has proposed the establishment of a collective debt-flagging system, which would be maintained by distribution network operator DEDDIE/HEDNO, based on consumer appraisals provided by electricity retailers.

Consumers who continue to not pay electricity bills through the universal electricity supply service will face electricity supply cuts, under the proposed revision.



European gas index may link TTF with US, Japan, S. Korea

The European Commission is moving towards establishing a new European benchmark for natural gas that would link the Dutch TTF index, currently providing reference prices for Europe, with the American hub Henry, as well as other indices, including the Japanese and South Korean systems.

Brussels is looking to broaden the scope of the European bloc’s reference pricing system so that it could reflect Europe’s gas imports market with greater accuracy and objectivity.

A new European benchmark will need to also factor in LNG quantities being traded and could be linked with the Japanese and South Korean indices, European sources noted.

European Commission officials explained it would be more appropriate and realistic to establish a new benchmark linked to real supply and demand conditions, rather than relying on the TTF, no longer reflecting the continent’s balance between supply and demand.


EU energy tax revision talks for RES incentives in December

The need that has arisen for windfall profit taxes in the European energy market, both in electricity production and the petroleum sector, has generated discussion for a wider tax solution in the energy sector.

Energy tax revisions for an updated European formula to benefit the renewable energy sector will be discussed by EU finance ministers in December, according to an announcement by the Czech Republic, currently holding the rotating EU presidency.

Earlier this year, European Commissioner for Energy Kadri Simson admitted an older directive, delivered 15 years ago, is not helping the EU achieve energy and climate goals.

The objective is to impose higher taxes on fossil fuels and lower taxes on the RES sector in order to create incentives for investment in green energy. Climate criteria will be used to establish tax rates, resulting in highest tax rates for conventional fuels.


Electricity demand down 13% in August, third month in a row

Electricity demand dropped for a third successive month in August, falling by 13.1 percent, overall, compared to the equivalent month a year earlier, power grid operator IPTO’s monthly report has shown.

Households and businesses were the biggest contributors to this reduction, cutting their usage by 13.94 percent, according to the operator’s report.

High-voltage consumers reduced their electricity consumption by 3.24 percent in August, compared to the same month in 2021, the IPTO data showed.

Electricity demand fell 11.24 percent in July, year-on-year. Electricity demand actually rose in June, but only marginally, 1.28 percent, a slowdown compared to May’s increase of 3.37 percent.


Minister to propose general gas price cap, protection fund

Greek energy minister Kostas Skrekas, taking part in an emergency meeting of EU energy ministers this Friday, will propose the establishment of a European fund to counter consequences of any future energy crises, as well as a general price cap on natural gas for all exporters, the latter proposal supported by Greece and three other member states.

A European fund for future energy crises could be designed to help protect European households and businesses from future price explosions, the proposal’s backers will support.

This fund’s structure and principles could be based on a Greek risk compensation mechanism announced by Skrekas, the country’s energy minister, in late August.

The Greek mechanism is now ready to be implemented following revisions to the public service compensation system, taking effect October, to generate increased revenues for energy crisis tools.

Financial sources for the European fund proposal have yet to be specified by Greece and the proposal’s three other backers. The money needed for this fund could stem from a low-interest European Investment Bank loan, carbon emission rights, as well as leftover Recovery and Resilience Facility (RRF) amounts.



Public service compensation system revised, October launch

Revised public service compensation (YKO) surcharges for electricity bills, recently announced by energy minister Kostas Skrekas, will come into effect as of next month, households of the previous system’s three consumption level categories facing a uniform rate of 1.7 cents per KWh.

The revised public service compensation system is expected to result in an additional 300 million euros, annually, for a risk hedging mechanism.

The revisions will result in a public service compensation increase of 1.01 cents per KWh for low-voltage consumption levels of up to 1,600 KWh during a four-month period, as this category’s existing rate is 0.69 cents per KWh.

On the contrary, the public service compensation cost for households using greater electricity amounts will be reduced as the existing surcharge for consumption levels between 1,601 and 2,000 KWh is 5 cents per KWh and 8.5 cents per KWh for consumption over 2,000 KWh.

Medium-voltage consumers will face a public service compensation increase, from 0.69 cents per KWh to 1.7 cents per KWh.

The public service compensation surcharge rate will remain unchanged at 4.14 euros per MWh for energy-intensive industrial consumers.

Under the new system, farmers using low-voltage electricity will face increased public service compensation surcharge rates, as will municipalities, for their road lights.


IPTO set to join EuroAsia Interconnector by year’s end

Power grid operator IPTO is expected to join EuroAsia Interconnector, a Cypriot company established to link the Greek, Cypriot and Israeli power grids, by the end of the year.

IPTO’s anticipated board approval of the company’s agreement with EuroAsia Interconnector is the next step in IPTO’s process of acquiring a stake in the company, expected to be at least 25 percent.

EuroAsia Interconnector accepted an official proposal submitted by IPTO in late July. Speaking at the recent Thessaloniki International Fair, IPTO president Manos Manousakis noted EuroAsia Interconnector’s acceptance of the Greek power grid operator’s terms ensures IPTO’s participation in the Greek, Cypriot and Israeli power grid interconnection, a project of strategic importance.

Once the IPTO board approves the agreement, the operator will need to conduct due diligence, expected to take place within the next month or two.

The deal for IPTO’s acquisition of a stake in EuroAsia Interconnector is expected to include terms for a further stake increase in the Cypriot company.

The agreement’s technical and financial details promise to propel the development of the Crete-Cyprus segment of the overall project, the most mature of all segments.

The Crete-Cyprus segment will end the electricity isolation of Cyprus, the EU’s only remaining member state still disconnected from fellow member states, and also boost Greece’s role as an electricity transmission hub in southeast Europe.

A total of 898 kilometers of subsea cables are planned to be installed at a depth of up to 3,000 meters for the Crete-Cyprus grid link.


Athens to seek one exemption, revision at crucial EU meeting

Greece will seek one exemption as well as a revision to three European Commission proposals intended to raise funds from the energy market to help households and businesses cover costlier electricity bills when the EU’s energy ministers stage a crucial meeting this Friday.

Greek energy minister Kostas Skrekas will strive for the continuation of a revenue recovery mechanism without a lifting of a price cap on natural gas-fueled power stations.

The European Commission has proposed a maximum price for all electricity generation technologies (RES, nuclear, hydropower without storage, lignite, biofuels and geothermal), with the exception of gas. However, the Greek model has featured a price cap on gas-fueled units since July.

According to sources, if Greece is unable to keep its price cap on gas-fueled units, then a surcharge of 10 euros per thermal MWh of natural gas quantities used by electricity producers will be imposed. This measure, announced last week, would raise 400 million euros annually, market officials have estimated.

Greece is also expected to seek revisions to a Brussels proposal aiming for a reduction in  electricity demand. Athens, sources informed, wants Brussels’ proposal for a 5 percent electricity consumption demand to be optional, not compulsory, as the European Commission has proposed. Major Greek industrial players have reacted against this measure, citing reduced competitiveness abroad.

Greece will adopt an extraordinary 33 percent tax on windfall profits earned by Greek refineries in 2022, Brussels’ third measure, the energy minister informed during a SKAI TV interview on Saturday.


Price caps a risky solution, expert warns, proposing filters for bids

A leading energy market expert, professor Alex Papalexopoulos, has reiterated his opposition to a complete reform of the European electricity market, believing proposals currently being tabled will lead to perilous conditions.

Speaking at the 17th IAEE European Energy Conference, Dr. Papalexopoulos, the architect behind Greece’s target model, noted markets are signaling the need for reduced dependence on natural gas, representing too great a share of the energy mix.

The European electricity market needs reforms, but not in the manner currently being discussed in Brussels, Dr. Papalexopoulos contended. Instead, revisions should focus on issues such as flexibility and back-up solutions, the expert noted.

Dr. Papalexopoulos pointed out that US wholesale markets are equipped with special filters that examine offers submitted by gas units and determine whether these have the potential to manipulate the market. Equivalent filters do not exist in Europe, resulting in excessively high prices, he noted.

Dr. Papalexopoulos expressed doubts about price caps and recovery of windfall profits, noting they actually do not exist.


Budget spending on subsidies tightened for rest of year, 2023

The state budget’s capacity for electricity and gas subsidies is set to tighten as the government is determined to limit their total cost for 2022 to 1.8 billion euros, after having already spent 1.3 billion euros this year.

Government support measures worth 1.1 billion euros for October include no more than 100 million euros in budget money, slashed from 600 million euros in September.

The government plans to limit its budget allocations for electricity and gas subsidies to a total of 500 million euros from now until the end of the year, or between 160 and 170 million euros per month. The same level of budget spending on energy subsidies is expected in 2023.

A draft budget for 2023, to be submitted to parliament in the first week of October, includes an extraordinary amount to help get the country through the year’s difficult first few months of winter and early-autumn weather.

According to sources, this extraordinary amount will total between 400 and 500 million euros, or 80 to 90 million euros per month, clearly not enough if Russia’s war in Ukraine and the energy exchange turbulence continue.

All will depend on how international gas prices develop. Gas futures for 2023 were at 169 euros last week, 200 euros a few days ago, and 188 euros yesterday. Prices have been fluctuating between 20 and 40 euros per day.



Ministry, power producers to discuss diesel as alternative

A leading energy ministry official has scheduled, for today, a teleconference with electricity producers operating gas-fueled power stations to discuss the prospect of emergency diesel supply for alternative generation purposes should natural gas imports encounter issues.

The energy ministry’s secretary-general Alexandra Sdoukou and producers will  overview the supply chain to be activated for diesel as an alternative liquid, if market conditions require such action.

Previous thoughts by officials for power stations to partially run on diesel fuel, a few hours per month, to help ease natural gas demand, appear to have been abandoned as producers have raised concerns about various complications.

Instead, diesel will only be used as an alternative fuel by gas-fueled power stations if gas imports reach perilously low levels and the country enters a period of heightened alert. RAE, the Regulatory Authority for Energy, will need to approve the switch by producers to diesel.

Five gas-fueled power stations in Greece are equipped to also run on diesel. Power utility PPC operates one of these in Lavrio and another in Komotini, Elpedison operates two more, in Thisvi and Thessaloniki, and Heron operates such a unit in Viotia.

Experts have previously informed energypress gas-fueled power stations can run on diesel for a maximum of five days per month without any technical issues or maintenance needs and 40 days a year. This limitation is necessary to avoid excessive soot accumulation and facility underperformance, the experts noted.