Gas distribution fees set, competition to intensify

Greece’s new natural gas distribution fee system, still officially unannounced,  has been finalized by RAE, the Regulatory Authority for Energy, setting the scene for full division of distribution and supply activities in the sector as of January 1, intended to help liberalize the market.

RAE set new distribution tariffs for four Greek natural gas market regions carved out – wider Athens, Thessalia, Thessaloniki, rest of Greece – after requesting additional data from DEPA, the Public Gas Corporation, and three EPA supply companies, still regional monopolies controlled by DEPA with respective 51 percent stakes. The tariffs, determined by one formula for all, differ for all four regions.

According to sources, energy and capacity fees are charged separately, while four consumer categories have been established – household, commercial, major-scale non-commercial consumers, and industrial.

The new distribution tariffs will come into effect as soon as they are endorsed. Consumers, especially industrial customers, are eagerly awaiting the new distribution fee levels. Local authorities recently introduced a hefty transitional price hike from 0.8 euros per Mwh to 4 euros per Mwh for all consumer categories without applying any specific formula to calculate the price level.

The transitional natural gas distribution fee of 4 euros per Mwh, implemented despite opposition from RAE, was originally planned to remain valid until last June but has been stretched out.

The country’s natural gas market is expected to be further liberalized at the beginning of next year as, besides industrial consumers, enterprises with major gas consumption levels are expected to gradually enter free markets, which is expected to generate competition in the current regional monopolies.

Competition in the natural gas market is expected to peak at the beginning of 2018 when supply for households is fully liberalized. As a result, the EPA supply companies currently maintaining regional monopolies will enter each other’s markets.