Revisions needed by June for next installment of RRF funds

Recovery and Resilience Facility milestones set by the European Commission for Greece this year were the focus of discussions between deputy energy minister Alexandra Sdoukou and Brussels officials at a meeting in the Greek capital as the government prepares to submit its application for a fourth installment of RRF funds.

The European Commission’s RRF task force has held a series of meetings in Athens over the past few days with all ministries involved.

Greece’s list of projects seeking financial support through REPowerEU, bolstering the preceding RRF initiative, is worth a total of 795 million euros and includes Exikonomo, a 560 million-euro subsidy program for energy-efficiency upgrades of buildings; a 75 million-euro support plan for hydrogen and biomethane development; a further 75 million euros for a CCS supply chain; and 85 million euros for energy storage systems.

However, revisions, part of the milestones set for the second quarter of this year, will need to be finalized and ratified in Greek Parliament by June before these sums can be extended.

The RRF, a Brussels support initiative introduced during the pandemic, has now reached its midway mark and is scheduled to be completed by August, 2026. Greece is expected to submit its application for a fourth installment of RRF funds in April.

RES units with new PPAs also eligible for fast-track grid links

An energy ministry legislative revision submitted to Parliament yesterday promises absolute grid-connection priority to RES producers who have established green-energy PPAs with domestic energy-intensive industrial producers and farmers as well as RES projects for which PPAs will be established after the legislative revision has been ratified.

Also, one group of RES units will not be subjected to grid-injection limitations for their output.

Power grid operator IPTO is expected to offer fast-track connection terms to a considerable number of RES facilities.

According to sources, RES projects representing an overall capacity of up to 1,600 MW could secure swifter grid connection terms as a result of the legislative revision.

As noted in the legislative revision, the capacity of RES projects to be given fast-track access to the grid will be determined by a ministerial decision to be issued by the energy ministry 60 days after the legislative revision has been ratified.

Leftover grid capacity for wind and solar energy projects not securing fast-track grid access will be drastically reduced.

This diminished capacity is expected to increase again once measures designed to free up grid capacity have been implemented.

However, these measures, to include greater RES grid-injection cuts and battery additions to mature RES projects with finalized connection terms, are not expected for quite some time, meaning connection terms will be handed out bit by bit to RES units not given fast-track connection terms through the new legislative revision.

Industrial PPAs, offering faster RES connections, in demand

Industrial PPAs are in demand as a new legislative revision submitted to Parliament yesterday by the energy ministry promises swifter connection terms for RES producers.

The ministry’s proposed amendment includes provisions giving connection-term priority to RES projects that have established, or are set to establish, PPAs for their production with energy-intensive industrial consumers.

Taking into account the grid’s capacity limitations highlights how coveted PPAs have become for RES producers as, once the legislative revision has been ratified, capacity available to these producers is expected to further diminish and make even more challenging their ability to connect new RES projects to the grid.

In comments offered to energypress, a number of market officials admitted no clarity exists as to how easy or not it could become for RES producers to ensure connection terms beyond the legislative revision.

Power grid operator IPTO’s deputy chief Giannis Margaris recently informed that 12.5 GW in RES facilities are currently operating, adding that leeway exists for an additional 6 GW without any saturation issues.

Concerns being considered at present are about the future, as connection terms already issued, along with RES projects in operation, total nearly 30 GW, the IPTO deputy pointed out. The ongoing discussion has to do with the ability to offer connection terms in the future, he pointed out.

 

 

 

IPTO, Nexans discuss Crete-Cyprus grid link details

An electrical grid interconnection to link the Cretan and Cypriot systems, work on which began last month, was essentially officially launched yesterday at a meeting in Athens between Greek power grid operator IPTO’s leadership and top officials of French multinational cable and optical fiber industry Nexans.

During the session – the first major meeting between IPTO’s leadership and Nexans’ chief operating officer Mathias Bruneau, who led a ten-member team – the cooperation’s principles, as well as project fundamentals, including when deep-sea surveys would commence, the interconnection’s routing and schedule, were all discussed in detail.

Installation of the project’s cable is planned to begin in 2026 and be completed in 2029. The Crete-Cyprus grid interconnection, a project budgeted at 1.2 billion euros, will cover a distance of 898 kilometers.

Just days ago, IPTO, the Greek power grid operator, reached an agreement with its Israeli counterpart to assemble technical teams for a cost-benefit analysis concerning the project’s next stage, to link the Cypriot and Israeli electrical grids.

Energy regulators of both countries will rely on the results of the CBA to divide costs that will be recovered through regulated revenues.

The wider project’s two sections, dubbed the Great Sea Interconnector, planned to link the Greek, Cypriot and Israeli electrical grids, will cover a total distance of 1,208 kilometers and is budgeted at 2.4 billion euros.

 

Suppliers pressured by partial recovery of public service sums

Distribution network operator DEDDIE/HEDNO has, since April last year, been partially covering monthly public service compensation (YKO) reimbursments entitled by the country’s electricity suppliers, a shortfall putting their budgets under pressure.

This deficit is expected to widen further over the coming months without any specific solution yet in place.

Electricity suppliers are recovering an average of between 60 and 65 percent of amounts they should be receiving, energypress sources have informed.

The public service compensation special account’s revenues have decreased as a result of a drop in wholesale electricity prices and retail electricity tariffs, but outlays subsidizing electricity used by consumers on the country’s non-interconnected islands and by low-income households have remained steady.

The country’s public service compensation special account entered deficit territory for the first time in April last year, and, as a consequence, as foreseen by sector regulations, DEDDIE/HEDNO has, over the past 11 months, been asking electricity retailers to partially cover amounts they should be receiving for public services. This essentially means electricity suppliers are financing public services with their own capital.

Consequently, respective amounts owed to suppliers are adding up to tens of millions of euros, a significant additional burden on their finances.

The public service compensation special account ended 2023 with a deficit of roughly 300 million euros, a level expected to be repeated this year.

The energy ministry is promoting a plan to divide this deficit into three sections so that it may be dealt with over as many years, beginning this year until 2026. The state budget would take on the biggest share, according to this plan, being discussed by the energy and national economy and finance ministries.

 

Grid injection cuts to sharply increase over next two years

Grid-injection cuts of renewable energy production offered to the grid will increase considerably over the next couple of years as a result of a greater presence of operating renewables combined with relatively slower incorporation of energy storage units to the grid, formulas applied to calculate prospective cuts have shown.

RES grid-injection cuts totaled 228 GW in 2023 but are expected to more than double this year, reaching over 500 GW, before skyrocketing to more than 1.5 TWh in 2025, according to projections, which is unfavorable news for RES producers and consumers, who would both benefit if this output were fully utilized.

A first wave of energy storage units is not expected to be linked to the grid until early 2026, meaning grid operators will have no choice but to dump excess renewable energy production made available over the next two years.

At present, RES facilities in operation offer a total production capacity of between 11.5 and 12 GW, while the market penetration rate of new units entering the grid totals 2 GW, annually, and consists mostly of PVs.

At this rate, RES facility additions to the country’s grid are expected to total roughly 16 GW by 2026.

Over this period, electricity demand is projected to grow modestly, from 49 TWh in 2023 to 49.5 TWh in 2024 and 51 TWh in 2025. Such demand levels will be insufficient to fully absorb the additional RES output expected to be made available over the same period.

 

Produc-E Green program attracts considerable interest

The Produc-E Green support program, for which applicants face a nearing March 15 deadline, promises to create a domestic value chain in a number of energy-transition sectors, its heightened level of interest has indicated.

A total of 24 business plans have been submitted to the program for financial support in production activities concerning equipment and technologies playing key roles in the green economy.

More business plans are expected to be submitted to the program until this coming Friday’s deadline. Appraisals of applications are planned to commence immediately after this deadline has expired.

The 24 business plans submitted to date have budgets covering over 40 percent of the 199.7 million-euro sum made available through the support program, funded by the European Commission’s Recovery and Resilience Facility.

These plans include creating new production units, increasing production capacity of existing industries, and restructuring existing industries for switches to production of completely new products and equipment.

The support program has attracted business plans for investments in areas such as production of solar panels, wind turbines, photovoltaic cells, electric vehicle equipment and chargers, electric cables, as well as equipment for air-conditioning systems.

 

Banks may also join EDEYEP’s SPV for offshore wind farms

A special purpose vehicle being prepared by the energy ministry and authorities to oversee the development of offshore wind farms in Greece may include a banking group as a partner alongside EDEYEP, the Hellenic Hydrocarbons and Energy Resources Management Company, and power grid operator IPTO.

Banks could play an institutional role in the SPV to be established for what is considered a high-risk domain, whereas, on the contrary, individual investors would be less likely to commit capital to ventures entailing increased risk, officials have noted.

The energy ministry and EDEYEP’s leadership are currently engaged in talks for final decisions on the SPV’s line-up ahead of a related legislative revision, for the SPV, expected to be submitted to Parliament towards the end of March.

The SPV will be headed by EDEYEP so that the company may organize wind and deep-sea studies at marine areas marked out for a first wave of offshore wind farms.

Panagiotis Ladakakos, President of ELETAEN, the Greek Wind Energy Association, has pointed out a series of concerns that will need to be addressed by authorities in the lead-up to the development of the offshore wind farms sector in Greece, including shaping an appropriate structure for upcoming auctions; ensuring support for EDEYEP, so that the company may fulfil its role; and remaining fully aware of positions maintained by local communities.

The ELETEAN president raised these points at an offshore wind farms event staged by RAAEY, the Regulatory Authority for Waste, Energy and Water, as part of Renewable Energy Tech, the main event held by energypress.

PV growth rate readjustment to 1 GW, annually, expected

New PV installations are expected to reach a lofty level of nearly 2 GW this year before adjusting to an annual growth rate of about 1 GW thereafter.

Energy consultant Stelios Psomas, speaking at the recently staged Renewable Energy Tech event staged by energypress, noted he expects a robust readjustment, close to annual levels of 1 GW, in the forthcoming years as a result of prevailing market conditions and an increase in RES grid-injection cuts.

An annual PV installation growth rate of approximately 1 GW would still make Greece a major European market, the official noted.

“The market is currently surviving as a result of major projects that secured connection terms in the past and are currently under construction,” Psomas told the Renewable Energy Tech event. “We are a small country with relatively low demand and we still don’t have sufficient interconnections. The market will inevitably calm down a bit from now on, but it will continue growing at a rate of 1 GW, which is still a very good figure,” he added.

 

 

Net-metering until June for residential roof-mounted PVs

The energy ministry will phase out net-metering applications for different categories of consumers over various stages as part of a procedure replacing these with net billing, an accordance with new European Commission policy on the matter.

Remuneration programs concerning net-metering systems will be abolished upon their expiry dates, top-ranked energy ministry officials have informed.

New subsidy programs not yet launched will premier exclusively based on the net-billing model, the sources added. These include a subsidy support program for residential roof-mounted PVs, currently in progress with applications facing a June 30 deadline.

Both net-metering and net-billing compensate solar-system owners for transferring electricity to the grid when their panels overproduce, but the ways the two systems compensate differs.

Net metering credits equal the retail electricity rate paid by customers for electricity. On the contrary, net billing credits equal the wholesale rate electricity companies pay for electricity.

 

 

Older industrial PPAs to be given connection-term priority

A legislative revision promising connection-term priority to RES projects whose output is intended for long-term PPAs with industrial and agricultural consumers will apply only to older agreements going back two years, such as those established between power utility PPC and metal processing company Viohalko and cement producer Titan, energypress has been informed by sources at the energy ministry, preparing to submit the revision to Parliament today.

The legislative revision will be attached to a finance ministry bill concerning a 15 percent minimum tax rate on multinationals.

Market players who rushed to establish PPAs in the lead-up to this legislative revision will not be entitled to connection-term priority rights.

The number of PV projects – in terms of capacity – to be granted connection-term priority rights as a result of the legislative revision will be decided through a ministerial decision at a latter date, when the energy ministry has a precise figure on the number of PPAs energy-intensive consumers have established with RES producers.

However, it is already considered certain that roughly 500 MW in PV projects to be developed for lower-cost electricity to the agricultural sector will benefit from the legislative revision.

The overall capacity of RES projects – for agricultural and industrial energy consumption – linked to this legislative revision may be below a 1,300-MW capacity initially reported.

 

Producers’ even share of grid-connection costs unchanged


The energy ministry intends to keep unchanged a formula limiting power grid operator IPTO’s cost coverage of projects connecting electricity producers to the grid to 50 percent of the cost, ministry officials have told energypress.

In doing so, the ministry has backed IPTO following a challenge by RAAEY, the Regulatory Authority for Waste, Energy and Water, over the formula evenly splitting the cost of grid-connection projects between the operator and electricity producers.

IPTO contends the ministry has opted for a 50-50 formula as part of its effort to accelerate RES investments, increase the energy-mix share of renewables, and achieve national energy-transition targets.

The energy ministry plans to implement a stricter cost-control monitoring system for these projects, as they are carried out by the users, themselves. A formula designed to objectively determine the cost of grid-connection projects is expected to be introduced as a key tool in this monitoring plan.

In July, 2022, the government ratified legislation requiring electricity producers to cover 50 percent of the cost of their grid-connection projects.

This 50 percent cost-coverage requirement concerns renewable energy projects, development of transmission lines connecting thermal power plants, energy storage units, as well as high-voltage consumers.

Bill on connection-term priority for PPAs headed to Parliament

A legislative revision promising connection-term priority to RES projects whose output is  intended for long-term PPAs with industrial and agricultural consumers is ready and set to be submitted to Parliament, possibly even today.

The revision is expected to be attached to a finance ministry bill concerning a 15 percent minimum tax rate on multinationals, expected to be voted on early next week.

The government’s decision to attach the energy-related legislative revision to a bill that does not concern the energy sector highlights its urgency to push ahead with a plan  offering support to the agricultural and industrial sectors, lower-cost electricity being a key part of this effort.

Though the legislative revision covering connection-term priority will not contain any specific information on capacity-related figures – this will be specified through an ensuing ministerial decision – it is expected to facilitate roughly 1,300 MW in PV projects that have established PPAs with agricultural and industrial consumers, 700 MW for the former and 600 MW for the latter.

RAAEY’s Energy Ombudsman service proving useful

An Energy Ombudsman launched by RAAEY, the Regulatory Authority for Waste, Energy and Water, on February 1 for resolving disputes between consumers and suppliers or market operators is provi ng useful, early data on the new service has indicated.

Some 50 applications concerning disputes, primarily pricing disputes, have already been submitted, but ten of these have not been accepted by the Energy Ombudsman as their cases are currently being examined by other agencies and decisions are still pending, energypress sources informed.

Two cases have already been settled through the new RAAEY service, while outcomes on the others are pending.

Consumers can only resort to the new Energy Ombudsman fcr settlement of disputes if they have not already filed cases to other agencies or courts.

Consumers must first raise their cases with their supplier or the relevant market operator and, if they deem the response as insufficient, can then turn to the Energy Ombudsman for help.

Besides pricing disputes, other disputes that may be settled through the Energy Ombudsman, covering both the electricity and natural gas markets, could include disagreement over clauses, consumption levels, as well as energy-bill ambiguities.

 

RES injection cuts at 228 GWh in ’23, bigger cuts in 2024-25

Renewable energy output not injected into the grid last year, to keep the market balanced, reached a considerable sum of 228 GWh, roughly 1.1 percent of overall renewable-energy output in 2023, while the level of grid-injection cuts is expected to rise further in 2024 and 2025.

At present, power grid operator IPTO is making these grid-injection cuts horizontally and proportionally, limiting the production capacities of RES facilities in operation. Also, cuts are being made at projects enabling remote intervention.

The 228 GWh of renewable energy output not injected into the grid in 2023 resulted from a need to maintain a balance between excess production and demand, as well as to keep imports and exports at an equilibrium – not to prevent grid congestion.

Further grid-injection cuts are anticipated over the next couple of years as RES penetration will increase significantly but electricity demand is seen remaining relatively unchanged.

These grid-injection cuts cuts are expected to drop considerably as of 2026, when a first wave of energy storage units is planned to be launched.

A special framework being developed by a project-management division at the energy ministry will also help subdue these cuts as it should offer clarity to investors by offering a far clearer picture on the proportion of RES output that will not be injected into the system and for which, therefore, they will not be compensated, meaning investors will be able to shape business plans without threatening the financial viability of their projects.

Extra budget sum needed for special a/c’s widened deficit

Lower natural gas price levels in recent times and the subsequent drop in wholesale electricity prices have reduced retail electricity tariffs but widened the deficit of the Public Service Compensation (YKO) special account, meaning additional state budget money will be needed to fill the gap.

This special account’s revenues have decreased, while outlays subsidizing electricity used by consumers on the country’s non-interconnected islands and by low-income households have remained steady.

Just weeks ago, energy ministry and finance ministry officials determined, during talks, that a sum of roughly 300 million euros would need to be drawn from the state budget to partially cover the Public Service Compensation (YKO) special account’s deficit. However, given latest conditions, an additional sum of at least 100 million euros in budget money will be needed.

The two ministries reached an initial agreement on the state-budget sum required in mid-February, but ensuing calculations following a significant drop in wholesale electricity prices revealed that the Public Service Compensation (YKO) special account’s deficit has widened further.

The additional state-budget sum of at least 100 million euros needed for this account may require officials to revise an earlier plan dividing its deficit, estimated at 700 million euros, into three parts for gradual coverage between this year and 2026.

TTF hike raises concerns over perceived ‘return to normality’

A steady rise in the TTF index over the past few days, following more than a year of decline, has market players concerned about the direction natural gas prices could take for the rest of this year.

The TTF, Europe’s gas benchmark, had fallen to as low as 23 euros per MWh a few weeks ago but has now rebounded, reaching a level of 28 euros per MWh yesterday. Gas futures dated December, 2024 and onwards are currently priced at over 30 euros per MWh.

The rising trend comes following a very mild winter of low consumption, which, however, was higher compared to last year.

Market players do not appear to be fully convinced by Europe’s extension of measures aiming to reduce demand for yet another year, until the end of next winter.

The recent insecurity that has crept into the market appears to stem from Europe’s anticipated loss of Russian gas imported via a Ukrainian corridor. A five-year pipeline gas transit agreement between Kyiv and Moscow for Russian gas supply to Europe via Ukraine expires at the beginning of 2025. Ukraine has declared it does not intend to renew this agreement.

This bilateral agreement’s end is expected to reduce the EU’s total gas imports by 5 percent. The loss will need to be offset by an increase in LNG shipments.

Unfavorable news from across the Atlantic has further unsettled market players. Natural gas producers such as EQT have decided to reduce output as a result of extremely low gas prices in the domestic market.

The downward trajectory of the TTF in recent months was driven by weak demand in Asia, including China, a trend whose continuation cannot be depended on. Also, the EU cannot count on next winter being as mild as the previous two winters.

 

Reed Smith advises PPC Renewables on acquisition of wind projects portfolio from Intrakat S.A.

ATHENS – Global law firm Reed Smith has just announced that it has advised PPC Renewables S.M.S.A., the renewables arm of Public Power Corporation S.A., one of the leading power utilities in Southeast Europe, on its successful acquisition of a portfolio of wind assets totalling approximately 164 MW from Intrakat S.A.

In addition, the firm advised on the parties’ strategic cooperation for the joint development of a 1.6 GW renewable energy projects portfolio.

PPC Renewables, a wholly owned subsidiary of Public Power Corporation, one of the leading power utilities in Southeast Europe, has been a pioneer in wind and solar power sectors since the 80s. It currently operates a fleet of renewable power plants in excess of 700 MW, while it has a projects portfolio of 1 GW under construction. The company aims to create an expanded and diversified portfolio of renewable and energy storage projects totalling 5 GW within the next five years.

Intrakat Group is a leading player in the Greek construction sector, engaged in the development of large-scale infrastructure projects, the construction of commercial and industrial facilities, as well as the manufacturing of steel structures. The group is also actively involved in a wide range of other business activities such as telecoms, renewables, environmental management and the development of real estate projects.

The agreement concluded between the parties relates to the acquisition from PPC Renewables of three entities of Intrakat, which are owning either directly or indirectly, via SPVs, a portfolio of operating, under construction and ready-to-build wind power projects with an aggregate capacity of approximately 164 MW, and the participation of PPC Renewables in four entities of Intrakat, which are owning either directly or indirectly, via SPVs, a portfolio of wind and solar photovoltaic power projects under development, with an aggregate capacity of approximately 1.6

GW. The strategic cooperation between the parties may be further expanded under certain conditions to include a sizeable portfolio of battery energy storage projects.

The transaction corresponds to an enterprise value of €100 million for the percentage participation of PPC Renewables, while the value of the joint investment, in its potential full development, is estimated to exceed €1 billion.

The Reed Smith team that advised on the deal was led by Athens corporate partner Dimitris Assimakis, supported by counsel Minas Kitsilis and associates Georgia Koui and Eleni Alexiou. Senior associate George Fountas and associate Zissis Papazissis advised on certain finance law aspects of the transaction, and Brussels partner Christian Filippitsch advised on the competition law aspects of the transaction.

Assimakis, corporate partner and head of Reed Smith’s Greek energy team, commented: “We are thrilled to have supported PPC Group on this mega deal for the Greek renewable market, and assisting the group once again in getting closer to the achievement of its strategic goal to become the green energy champion in Greece and the wider region. Indeed, a fascinating journey that highlights the new identity of the group and makes evident that this is not going to be just a short trip.”

“The transaction, despite the great volume of the corporate vehicles and the assets involved and the complexity of its structure, was completed in only two months’ time, an unprecedented record and not only for the Greek market, thanks to the very high professionalism, strong commitment, and dedication of all the parties involved. A special mention to PPC Renewables management and its execution teams for their unparalleled skillfulness and business orientated approach but most importantly, a big thanks to all of them for the continuous trust in our practice.”

About Reed Smith

Reed Smith is a dynamic international law firm dedicated to helping clients move their businesses forward. With an inclusive culture and innovative mindset, it delivers smarter, more creative legal services that drive better outcomes for clients. Its deep industry knowledge, longstanding relationships and collaborative structure make the law firm the go-to partner for complex disputes, transactions, and regulatory matters.

Protasis-Sagemcom victorious in smart meters extra tender

A joint bid by Greek company Protasis and France’s Sagemcom Energy & Telecom SAS appears to have emerged victorious in a supplementary tender staged by Greek electricity distribution network operator DEDDIE/HEDNO for the installation of an initial lot of 360,000 low-voltage smart meters around the country, as an addition to 7.3 million smart meters planned through the project’s main tender.

The main tender still has a long way to go as technical and financial details included in bids submitted December 7 amount to hundreds of pages and represent a humongous task for officials. But the progress made with the supplementary tender comes as an encouraging sign.

The major tender’s anticipated delay prompted DEDDIE/HEDNO to announce its supplementary tender so that some progress can be made during the major tender’s appraisal period.

The same four bidders have submitted offers to both tenders. Besides the joint bid submitted by Protasis and Sagemcom Energy & Telecom SAS, US corporation Itron’s Spanish subsidiary, fellow US firm Elster Rometrics’ Romanian subsidiary, and Slovenia’s Iskraemeco submitted bids to both procedures.

This initial lot of 360,000 smart meters has been marked out for large-scale consumers as well as public-sector agencies and enterprises all over the country.

 

HEDNO legally shielded in case of transformer-upgrade effects

The energy ministry is preparing a legislative revision designed to offer distribution network operator DEDDIE/HEDNO legal protection against transformer short circuits.

The revision, likely to be attached to a forthcoming urban planning bill, will oblige medium-voltage consumers to take appropriate action protecting their installations from damage that could be caused by short-circuit level increases.

DEDDIE/HEDNO is currently staging preliminary studies concerning an upgrade of the electrical distribution network’s transformers.

The energy ministry’s legislative revision will ensure that the distribution network operator will be spared of any legal issues should this upgrade have adverse effects on installations of medium-voltage consumers located up to 3 km from respective substations.

The ministry’s legislative revision will require consumers to inspect their electrical installations ahead of the operator’s upgrade of transformers. Should any issues be identified during these checks, consumers will need to replace any necessary equipment at their expense.

According to sector officials, the revision is essentially a precautionary measure as electrical equipment currently being used is relatively modern – less than 20 years old – with specifications to withstand increased short-circuiting levels.

Transformers in areas where investors have expressed interest to install RES facilities will be given priority by the distribution network operator during its upgrade process.

 

Energy Exchange to launch pilot platform for PPAs in Q3

A pilot platform being developed by the Energy Exchange for renewable energy PPAs is expected to be launched within the third quarter of this year, energypress sources have informed.

The main idea, given the current maturity of the market, is to offer common ground where the parties involved – RES producers and off-takers – can converge to negotiate bilateral contracts.

A simple platform will be offered to facilitate the needs of buyers and sellers, the sources noted, adding the Energy Exchange will not include more complex functions such as billing, clearing or other services.

Also, the Energy Exchange is developing a contract template as assistance for parties interested in establishing PPAs, especially smaller players. It will be at their discretion whether to use it or not.

The aim will be to offer a formula ensuring proportionality and balance between producers and off-takers in order to minimize the possibility of contracts being broken over the slightest of issues.

No particularly challenging regulatory issues remain pending for the platform’s operation, meaning delays are unlikely.

The Energy Exchange may revise the platform’s original form at a latter date in order to offer additional services that would correspond with the PPA market’s increased maturity anticipated over time.

EU energy-crisis concerns over Ukraine corridor ‘manageable’

European fears of further energy-crisis woes that could result from the nearing end of a five-year pipeline gas transit agreement between Kyiv and Moscow for Russian gas supply to Europe via Ukraine, appear to be manageable, as long as a series of specific measures are implemented, most EU ministers responsible for energy agreed at an Energy Council in Brussels yesterday.

The bilateral agreement between Ukraine and Russia expires at the beginning of 2025. Ukraine has declared it does not intend to renew this agreement.

Further energy-crisis concerns as a consequence of this agreement’s conclusion, expected to reduce the EU’s total gas imports by 5 percent, can be prevented if EU member states speed up their development of roughly 20 LNG facilities planned from Europe’s north to south; renewable energy investments gain further momentum; energy-savings measures are continued; natural gas consumption reductions continue at the current rate; and LNG imports are increased to make up for reduced Russian gas imports, energy ministers of most EU member states agreed at the Brussels meeting.

Last year, approximately 14 bcm of Russian gas was transported through the Ukrainian corridor to countries such as Austria, Hungary and Slovakia.

Numerous EU member states achieved renewable energy production all-time highs last year. In Portugal, renewables covered 61 percent of the country’s energy needs in 2023. RES coverage of Greece’s energy needs reached 57 percent. In Germany, RES units met 52 percent of the country’s energy needs, while in Belgium the figure reached over 30 percent.

‘Elounda offshore wind farm limitation plan in progress’

A legislative revision intended to minimize the perceived visual disturbance of offshore wind farms planned off Elounda, northeastern Crete, following strong local reaction, is being worked on, energy minister Thodoris Skylakakis has told Parliament.

The government has decided to reduce the size of the Elounda marine area that would host offshore wind farms to a plot capable of hosting units with a maximum capacity of 400 MW, 57 percent below the original plan’s capacity.

Elounda is one of ten areas included in an initial 2-GW plan for offshore wind farm development around Greece.

Just two or three offshore locations, primarily Elounda, met resistance from local communities, while 95 percent of areas proposed have not provoked any reaction, the minister informed.

Greece’s offshore wind farm development plan is of major importance to the national economy as the country possesses the greatest wind-energy potential in the eastern Mediterranean, Skylakakis supported.

Elounda offers excellent wind-energy potential, but concerns over visual disturbance have resulted in a need to revise the area’s development plan, Skylakakis noted.

“Cases of visual disturbance are difficult as any activity can result in disturbance. We need to keep in mind that, in order to have renewables, some disturbance to the overall setting is inevitable. There is no part of this country without a beautiful setting,” the minister stressed.

He went on to note: “There is a fundamental misunderstanding. Energy production is not for [the benefit of] producers, but for consumers. When it comes to energy matters, we tend to think that production is for producers to have profitable investments. In reality, it is to achieve lower energy prices.”

 

 

RES producers rethink 2-year contract freezes as DAM falls

Changing wholesale electricity market conditions that have led to lower prices are prompting RES producers to reconsider exercising a right to suspend, for two years, long-term operating contracts with RES market operator DAPEEP in order to establish PPAs or to engage in direct market participation.

Last month, numerous RES producers submitted applications to have their long-term operating contracts with DAPEEP suspended for two years but are now taking a step back and reevaluating whether it would be wise to do so.

Suspension applications submitted in February represented a total RES capacity of over 1,000 MW but investors who followed through to freeze their tariff agreements with DAPEEP, for two years as of March 1, totaled roughly 85 MW.

In January, when the two-year suspension right was introduced, RES producers representing roughly 150 MW went ahead with PPA suspensions. This figure is forecast to drop even lower, to a level of about 50 MW, in March.

Lower day-ahead market prices in the wholesale electricity market are forecast to remain low for quite some time. This is encouraging electricity consumers interested in establishing PPAs with RES producers to demand far lower prices for long-term supply agreements.

European fears of further energy-crisis woes not yet over

European Commission officials fear the continent has yet to fully break away from further energy-crisis dangers, despite capacity-filled gas storage facilities and a mild winter, as a five-year bilateral pipeline gas transit agreement signed by Kyiv and Moscow in 2019, three years before Russia’s invasion of Ukraine, is set to expire at the end of this year and could lead to higher energy prices.

The agreement’s end would reduce the EU’s total gas imports by 5 percent, the European Commission has briefed Brussels officials in a memo, Politico has revealed. Countries in central and southeast Europe would be particularly affected, the memo notes.

Natural gas supply to EU member states has continued through this Ukrainian-Russian transit agreement, despite the ongoing war.

However, Ukraine has declared it does not intend to renew this agreement, which  facilitates Russian gas supply to Europe, while European Commissioner for Energy Kadri Simson has noted it is not in the EU’s interests to push for an extension.

 

 

Activity abounding for €1.9bn Great Sea Interconnector

Greek power grid operator IPTO, project promoter of the Great Sea Interconnector, a 1.9 billion-euro project planned to link the power grids of Greece, Cyprus and Israel, is engaged in talks with the European Investment Bank for a loan of approximately 500 million euros.

IPTO plans to soon stage a teleconference with EIB in order to provide additional information supporting this project as an optimal solution for Cyprus’ energy sufficiency in an effort to remove feasibility reservations expressed by the bank in the past.

Also, IPTO’s chief executive Manos Manousakis and associates have scheduled a series of meetings in Nicosia tomorrow, including with Cyprus’ finance minister Makis Keravnos, for the Cypriot state’s entry into the GSI project with an equity amount of up to 100 million euros. These meetings will be the latest of regular meetings agreed to with Cyprus for talks on the project’s progress.

Besides Israel fund Aluma and Abu Dhabi-based fund TAQA, other investors, both from the wider region as well as the USA, are believed to be interested in becoming project stakeholders.

In addition to the 500 million-euro loan for the GSI being discussed with EIB, a further 500 million euros in loans is expected to be extended by Greek banks, currently in talks with IPTO, while 657 million euros in EU funding is also anticipated.

Adding to the overall activity concerning the GSI’s development, a team of leading officials from Norwegian company Nexans is scheduled to visit Athens on March 13 for talks with IPTO’s leadership. Nexans has begun manufacturing work for the project’s cable.

Next step taken for gas system upgrade’s market test

Gas grid operator DESFA is preparing to take a next step towards a binding stage for a market test concerning an upgrade and expansion of the Greek gas transmission system by putting the procedure’s guidelines to public consultation, energypress sources have informed.

Based on the foreseen procedure, the guidelines, along with all project proposals, will be submitted to RAAEY, the Regulatory Authority for Waste, Energy and Water, for approval ahead of the beginning of the market test’s binding stage, planned for May.

The market test’s overall procedure began last year with a non-binding stage that attracted grid-capacity requests covering 2024 to 2050 from a total of 27 companies.

Seventeen of the 27 requests were submitted by companies from abroad, mainly central and southeast Europe, as well as the USA. This turnout highlights Greece’s upgraded role on the regional energy map. The other ten requests were submitted by Greek companies.

Authorities are less confident of a solid turnout by investors in the binding phase as demand for natural gas has been on the decline.

 

Karish North and second gas export riser online and new GSPA signed

London, 29 February 2024 – Energean plc (LSE: ENOG TASE: אנאג) has announced:

  • Karish North and second gas export riser online, enabling utilisation of the FPSO’s maximum gas capacity
  • New Gas Sale and Purchase Agreement (“GSPA”) signed for an initial 0.6 bcm/yr[1], rising to 1 bcm/yr from 2032 onwards

Karish North and second gas export riser online

Karish North first gas was safely achieved on 22 February 2024. The Karish North production well is currently utilising the second gas export riser, the installation of which was completed in December 2023. The Energean Power FPSO now has four production wells in operation, increasing well stock redundancy and flexibility to meet the demand requirements of Energean’s gas buyers.

New GSPA signed with Eshkol Energies Generation LTD

Energean Israel has signed a new GSPA with Eshkol Energies Generation LTD, majority owned Dalia Energy Companies Ltd, for the supply of an initial 0.6 bcm/yr1, rising to 1 bcm/yr from 2032 onwards.

Energean supplies gas to all four IEC power stations that have been privatised: Ramat Hovav, Alon Tavor, East Hagit and now Eshkol. This new contract is in line with Energean’s strategy to bring competition and security of supply to the Israeli market, and to secure long-term cash flows for its shareholders via its long-term gas contracts.

The GSPA is for a term of approximately 15 years, for a total contract quantity of up to approximately 12 bcm and represents circa $2 billion in revenues over the life of the contract. The contract contains provisions regarding floor and ceiling pricing, take or pay and price indexation (not Brent-price linked). The GSPA has been signed at levels that are in line with the other large, long-term contracts within Energean’s portfolio.

Mathios Rigas, Chief Executive of Energean, commented:

“Energean has successfully delivered another milestone in bringing our fourth well, Karish North, to first production. This provides us operational flexibility and enables us to utilise the FPSO’s maximum gas capacity.

“The new contract with Eshkol is a further testament to the trust in Energean from the Israeli electricity producers, adds circa $2 billion of revenues over the life of the contract to our business, and is in line with our strategy to secure long-term reliable cash flows from long-term gas contracts.”

[1] From 3 June 2024 to 31 December 2031

RES units without priority to be given 50% battery subsidies

The energy ministry is working on offering an alternative form of support, through subsidies for battery installations, to RES projects linked with PPAs for industrial consumers should these projects miss out on priority status for appraisals of their connection-term applications.

RES units placed in Group B, in terms of priority, and not granted priority status for appraisals of their connection-term applications will, as a form of compensation, receive subsidies covering 50 percent of battery installations, the energy ministry has decided.

These batteries will be permitted to absorb energy from the grid, in addition to their respective RES units, thereby decreasing their investment cost.

The energy ministry has decided to grant priority status for connection-term applications concerning Group B RES projects whose output is intended to contribute to energy needs entailed in power utility PPC’s existing PPAs with metal processing company Viohalco and cement producer Titan.

RES projects planned to secure lower energy costs for farmers will also be granted priority status for their connection-terms procedures. A related legislative revision is expected to soon be submitted to Parliament.

 

PPC variable green tariff for March down to 9.4 cents/KWh

A further reduction in wholesale electricity prices in February, down to an average of 72.2 euros per MWh, from 93 euros per MWh a month earlier, has created conditions for lower retail electricity prices in March.

Power utility PPC’s variable green tariff has been set at 9.4 cents per KWh for March, not including any discount the supplier will decide to offer.

Rival power suppliers are expected to follow suit and lower their prices for March, down to roughly 8 cents per KWh, based on formulas applied.

Sliding natural gas prices at the TTF in recent times could lead to a further decline in electricity prices in April, assuming the TTF index remains at its currently low level of around 24 to 25 euros per MWh.

Besides variable green tariffs, the country’s new color-coded tariff system, introduced January 1 to simplify price comparisons, also offers variable yellow tariffs, a lesser risk for suppliers, as their levels are set at the end of each month. In addition, consumers may opt for fixed blue tariffs.