DG Comp: Market test to shape next steps of PPC units sell-off

A market test launched just days ago by the European Commission’s Directorate-General for Competition for main power utility PPC’s bailout-required lignite units sell-off may represent the beginning of further developments, a DG Comp official has indicated in comments to energypress.

“We’ve begun with the market test, based on the proposals made, and will wait for its results before we decide on any further steps,” the DG Comp official told energypress.

The market test, now underway as a procedure intended to measure the level of investor interest and also provide interested parties with an opportunity to make enquiries, cannot be guaranteed to produce the results desired by PPC and the Greek government, which negotiated the content of the current sale package with the country’s lenders, the DG Comp official suggested.

Without a doubt, the DG Comp’s next steps will be determined by the outcome of the market test. The sale effort will go ahead only if the market test convinces Brussels that the existing sale package of state-controlled PPC lignite-fired power stations, lignite mines, and a construction permit for a new power station (Meliti II) can deliver the required results.

If not, the DG Comp maintains the right to intervene for sale package revisions as it sees fit.

The DG Comp source told energypress that a European Court rejection of a PPC appeal in 2016 means that European Commission decisions made in 2008 and 2009 regarding the utility’s market dominance must now be implemented.

PPC and Greek government officials are confident the market test will deliver positive results and enable the disinvestment process to proceed as planned. PPC and energy ministry officials have already approached prospective investors and claim that many of these, both local and foreign, have responded favorably. It will soon become apparent whether these upbeat Greek expectations are justified.

Given the future prospects of lignite, facing rising CO2 emission right costs in Europe, PPC will probably be glad to unload part of its lignite portfolio for a satisfactory price. This could improve the utility’s financial standing and help fund initiatives in other energy domains.