Battle for share of Crete’s electricity retail market begins in June

Energy firms are preparing to do battle on Crete for a share of the island’s retail electricity market once RAE, the Regulatory Authority for Energy, has approved a series of measures concerning gurantees provided by firms.

According to market officials, Crete’s electricity market, possessing the biggest of the country’s non-interconnected grids, is expected to open up to competition this June and will be followed by Rhodes at a latter date.

These same officials reminded that pursuing electricity-related business activities on the non-interconnected islands carry extraordinary demands as greater amounts of capital are needed for market penetration, compared to mainland markets.

Highlighting the tough market conditions to be confronted on Crete, electricity suppliers will need to purchase electricity loads in the wholesale market at elevated price levels of around 180 euros per MWh as a result of the high operating costs of petrol-fueled power stations covering the island’s electricity needs. These suppliers will then need to sell at lower levels of around 70 euros per MWh to compete against the main power utility PPC and will then need to wait for Public Service Compensation (YKO) reimbursements.

This boils down to meaning that substantial capital amounts will be required by independent suppliers as back-up for their electricity business endeavors on Crete, meaning that the market will be limited to large players.

According to energypress sources, more than three energy firms have already bolstered their ranks and are training personnel as well as dealers as part of the effort to capture market shares from PPC, Crete’s only power supplier at present.

Once all approval procedures have been completed by RAE and HEDNO, the Hellenic Electricity Distribution Network Operator, both Crete and Rhodes will operate as autonomous grids served by their own suppliers, who will purchase electricity loads from HEDNO, locally acronymed DEDDIE, and then sell to consumers.

The existence of large-scale hotel units on both Crete and Rhodes, major energy consumers belonging to a target market being eyed by independent suppliers, is a key attraction for new players in these markets.