GEK Terna: Industrial role crucial for PPC lignite units sale

The GEK Terna Group intends to take part in the first round of the main power utility PPC’s bailout-required sale of lignite units, like all other major corporate groups active in Greece’s energy market, but its participation in the second round of the disinvestment procedure, when binding offers will be submitted, will depend on a series of factors, the most important of these being whether investing in the lignite sector makes business sense, given the terms to be offered, board members made clear at a company shareholders’ meeting held yesterday.

Terna plans to take part in the PPC sale, offering investors power stations and mines representing 40 percent of the utility’s overall lignite capacity, through the parent company, not Terna Energy, board members informed in response to shareholder questions.

GEK Terna Group’s CEO Giorgos Peristeris (photo), in sideline discussions, pointed out that participation in the sale appears feasible only if industry is involved. More specifically, investment teams vying for the units would need to include companies eligible for energy-cost offsetting mechanisms, or buyers would need to establish long-term energy sale agreements with major-scale industrial consumers.

Energy-cost offsetting mechanisms are crucial as rising CO2 emission right costs are changing the wider market conditions, GEK Terna Group officials noted.

The number of employees to be attached to each PPC lignite unit sold is another vital factor as this will shape operating costs and the sustainability of respective units, group officials stressed.

The acquisition of all three of the sale’s lignite-fired power stations on offer by just one buyer represents a major risk as the resulting exposure to coal would come at a time when market changes, on a European scale, do not encourage such moves, GEK Terna Group officials noted.

For the time being, the GEK Terna Group, a leading player in Greece’s renewable energy market, plans to continue placing emphasis on the RES sector, and will also seek a greater role in foreign markets, through Terna Energy, company officials said. The company plans to further increase its investments in the US market and reduce exposure to the Greek market and the risks entailed.