Five power supply firms that had purchased electricity amounts disproportionate to their retail market shares at previous NOME auctions have been summoned to hearings by RAE, the Regulatory Authority for Energy.
The authority reached this decision yesterday, on the eve of today’s latest NOME auction, to determine whether the five firms have acquired electricity amounts bigger than their domestic market needs in order to export excess amounts either directly or indirectly, via traders. If so, fines could be imposed.
Even though export limits implemented in the past have been lifted following a demand by the country’s lenders, RAE continues to view the NOME auctions as a tool for supporting competition and shifting retail electricity market shares from the still-dominant power utility PPC to independent suppliers.
NOME auctions offer third parties access to PPC’s lower-cost lignite and hydropower sources.
“Anybody contravening this principle is breaking the rules and needs to offer explanations,” a RAE official told energypress.
LAGIE, the Electricity Market Operator, has eliminated two firms, OTE and Eunice, from today’s NOME auction for insufficient provision of electricity load data.
Both OTE and Eunice described their eliminations as unfair and declared they would appeal. But LAGIE appears determined to send out a strict message to all participants that NOME irregularities will not be tolerated.
It is believed traders will bid aggressively at today’s auction for electricity amounts to be exported to markets where wholesale electricity prices are higher.
Aggressive bidding by export-minded traders would force local suppliers to purchase NOME electricity amounts at higher prices offering narrower profit margins for supply activity in the local market.
Officials fear the increasing cost of CO2 emission rights and elevated wholesale electricity prices around Europe could also play a role in lifting bidding prices at today’s auction.
A starting price of 36.34 euros per MWh has been set for today’s session, up from the previous level of 32.05 euros per MWh.
A planned phasing out of the auctions in accordance with PPC’s bailout-required disinvestment of lignite units, as well as an uncertainty surrounding the auctions following the target model’s implementation, are other factors expected to impact today’s session and motivate participants to bid hard to acquire the biggest possible electricity amounts.