PPC disinvestment flop costly, NOME tally at 115% of output

Besides generating further pressure for a new, broadened and more generous disinvestment package offering to buyers, the failure of the main power utility PPC’s bailout-required sale of lignite units has also drawn increased attention to the utility’s unrelenting retail market share, another Greek bailout commitment.

A considerably increased electricity amount the power utility must now offer through NOME auctions in 2019 is one direct consequence.

As has already been announced by RAE, the Regulatory Authority for Energy, PPC must offer 1,972 MWh/h to market players over four NOME auctions this year. Previously, 1,444 MWh/h had been scheduled for 2019 but a penalty amount of 528 MWh/h has been added as a result of PPC’s failure to meet its end-of-2018 market share contraction target.

The new NOME tally for 2019, representing 115 percent of the utility’s total lignite and hydropower production, essentially means PPC must not only offer market players its entire lignite and hydropower-based output at prices lower than the System Marginal Price (SMP), or the wholesale price level, but also  purchase a considerable extra electricity amount from the wholesale market, representing 15 percent of its lignite and hydropower-based output, to make up the numbers, before selling this supplementary amount through the NOME auctions.

PPC’s market share at the end of 2018 stood at 80.29 percent, well over the target of 62.24 percent. A 49.24 percent target has been set for the end of 2019.

RAE allotted just 350 MWh/h to last week’s first auction for the year assuming PPC’s disinvestment of lignite units would succeed.