Electricity suppliers facing challenges despite good news

Despite certain favorable developments emerging for the country’s independent electricity suppliers in 2019, such as the abolishment of a RES-supporting supplier surcharge and the main power utility PPC’s plan to reduce a 15 percent discount offered to punctual customers, independent suppliers face challenging times as a result of a gradual rise of the system marginal price (SMP), or wholesale electricity prices, driven up by increased CO2 emission right and fuel costs, as well as the diminished role of NOME auctions.

NOME auctions will become a less effective source for lower-cost electricity as amounts to be offered to participants will be greatly reduced, starting prices will be sharply higher, and electricity export restrictions planned by RAE, the Regulatory Authority for Energy, promise to confine the quests of players for new customers in other markets.

RAE has planned a 1,444 MWh/h electricity amount offering through NOME auctions in 2019. According to sources, the prospect of an additional 520 MWh/h offering, as a penalty against PPC for its failure to meet a market share contraction target set for 2018, will be dropped as the power utility is now downsizing its assets through a bailout-required disinvestment of lignite units.

Instead, the 1,444 MWh/h NOME amount allotted by RAE for 2019 is expected to be reduced by approximately 520 MWh/h, presuming the PPC disinvestment effort goes according to plan.

Should PPC successfully sell its Meliti and Megalopoli lignite-fired power stations, both part of the lignite disinvestment package, then the country’s electricity amount to be offered through NOME auctions in 2019 will be reduced to represent 13 percent of total consumption, from the previous level of 22 percent, according to a bailout term. This would reduce the NOME amount for 2019 to approximately 920 MWh/h.