RAE, the Regulatory Authority for Energy, has decided to increase the electricity amount to be offered to independent suppliers at the year’s first of four NOME auctions on January 17 and decrease the amount, by a proportionate level, for the year’s last session in October.
The authority’s decision to redistribute the NOME auction electricity amounts comes following a public consultation procedure staged for market feedback on a proposal presented by LAGIE, the Electricity Market Operator.
As a result, the year’s initial NOME auction will offer participants 215 MWh/h instead of 192 MWh/h, while 531 MWh/h, instead of 550 MWh/h, will be offered at 2018’s final session on October 17.
Minor adjustments were made to the second and third auctions, scheduled for April 18 and July 18, respectively, which will both offer participants 190 MWh/h instead of 192 MWh/h.
The year’s total NOME amount of 1,126 MWh/h represents 19 percent of total consumption, as has been agreed to for 2018 with the country’s lenders.
An additional amount of around 430 MWh/h to 450 MWh/h will need to be added as a penalty resulting from the main power utility PPC’s failure to meet its retail electricity market share contraction targets in 2017. The utility was off by around 9 percent based on data provided for November.
During recent negotiations with the Greek government, the country’s lenders pressed for the additional electricity amount to be lumped on to January’s total, but this was not technically feasible. Instead, the penalty electricity amount is expected to be added to the April and July auctions.
A progress check will be conducted in between these two auctions, in June. If PPC is still behind on its market share contraction targets, a further penalty electricity amount will be added to the NOME auctions. Elevated electricity amounts are expected to be offered through the NOME auctions in 2018.
As for 2019, the overall amount to be offered will be increased to 22 percent of total consumption from 19 percent this year.
PPC has been set retail electricity market share contraction targets of 75.24 percent by the end of 2017, 62.24 percent by the end of 2018, and 49.24 percent by the end of 2019. PPC’s market share stood at 84.2 percent in November, latest market data showed.
The NOME auction starting prices are planned to be assessed annually, every June, and apply for ensuing sessions. No major changes are expected to the current starting price of 32.05 euros per MWh, unless CO2 emission prices at international energy exchanges change drastically.
If PPC’s bailout-required lignite units sell-off plan goes according to plan in 2018, then the lignite offering to the NOME auctions will be reduced and the hydropower share increased. Such a development is expected to significantly reduce NOME starting prices as hydropower generation costs are far lower than lignite-fired electricity generation costs.
The NOME auctions were introduced in Greece a little over a year ago to offer independent suppliers access to PPC’s lower-cost lignite and hydropower sources.