The lofty prices generated at yesterday’s NOME auction, reaching as much as 45.25 euros per MWh, the highest level since the auctions were introduced to the Greek market a year ago, has alarmed officials and raised questions as to what more needs to be done to further liberalize the country’s retail electricity market and break the main power utility PPC’s dominance.
A drastically increased electricity amount of 717 MWh/h offered at yesterday’s auction, the final session for the year – it lasted about 13 hours and ended late in the night – was not enough to prevent a bidding war among the participants, who pushed for purchases in anticipation of higher electricity prices this coming winter.
The bulk of the electricity amount offered at yesterday’s auction was sold for 45.15 and 45.20 euros per MWh/h. The top price paid was 13.2 euros over the auction’s starting price.
The factors behind yesterday’s elevated price levels have yet to be determined.
The auction’s result severely dampens, if not makes impossible, the prospect of any spectacular market share shifts in the foreseeable future as it leaves independent suppliers with insufficient profit-margin leeway to pursue aggressive pricing policies.
Quite clearly, yesterday’s session confirmed that the NOME auctions, alone, are not enough to bring about major changes in Greece’s retail electricity market.
Pressure by the country’s lenders for structural changes can now be expected to enter the picture, including demands on the Greek government to add PPC hydropower units to PPC’s bailout-required sale package, whose content is still being negotiated. The government has, so far, adamantly refused to discuss adding hydropower units to state-controlled PPC’s sale package, and, instead, is insisting on a lignite-only sale package that includes ageing units requiring revamps.
The issue is now expected to surface in the immediate future. Energy minister Giorgos Stathakis is scheduled to meet with lender representatives tomorrow.
NOME auctions were introduced to offer independent suppliers access to PPC’s lower-cost lignite and hydropower sources. Yesterday’s auction was seen as crucial for retail electricity market developments in 2018.