Natural gas demand in Greece registered a substantial and unanticipated rise during July and August, contrary to expectations of a decline as a result of the economic slowdown prompted by the imposition of capital controls.
Instead, the arrival of capital controls, imposed by the Syriza-led government in late June, ended up serving as a catalyst for natural gas demand because the measure restricted electricity imports. Subsequently, the electricity shortage was covered by increased power production at gas-fueled power stations operated by main power utility PPC and independent producers.
Gas-fueled power stations run by PPC in Lavrio, southeast of Athens, Elpedison (ELPE, Edison, Eltech) in Thessaloniki, as well as two Heron (Terna) units over the two-month period needed to increase their gas consumption by well over 100 percent to meet electricity production requirements. Also highlighting the shift, gas-fueled power stations covered 10 percent of electricity demand in July, up from 5 percent in June.
According to data provided by natural gas grid operator DESFA, the inflow of natural gas in July and August was 15.4 percent higher than the equivalent period a year earlier. A total of 5,483,290 MWh of natural gas, approximately 471.5 million cubic meters, entered the country’s gas network’s three entrance points in Agia Triada (LNG), Sidirokastro (Russian natural gas), and Kipi (Azeri natural gas), compared to 4,753,487 MWh, or 408.8 million cubic meters, over the same two-month period in 2014.
The unexpected development, if continued, will serve to reduce the pressure being applied by suppliers on DEPA, the Public Gas Corporation, for the implementation of a take-or-pay agreement. The Greek gas company had agreed to have this condition activated, meaning compensation payments to suppliers, if gas orders failed to reach certain amounts.