IPTO to be closely monitored for energy security protection

The heightened level of administrative authority granted to SGCC (State Grid Corporation of China) for its 24 percent stake acquisition of power grid operator IPTO, whose details were released through yesterday’s disclosure of the operator’s new shareholders agreement, has come as a surprise, but local and European energy authorities will be closely monitoring the operator as a means of protecting the country’s energy supply security.

The arrival of the Chinese company, which has been granted veto rights for a series of key matters, is expected to improve IPTO’s functional ability through SGCC investments and knowhow.

RAE, the Regulatory Authority for Energy, can be expected to closely monitor IPTO and be ready to swiftly intervene with measures securing electricity supply security should the new IPTO board fail to agree on issues. Disagreement at two consecutive IPTO board meetings will push RAE into action, according to the shareholders agreement.

The increased administrative rights, which have raise certain energy security issues, can be expected to also keep the European Commission alert.

IPTO’s shareholders will need to be careful not to infringe national and EU law. The operator’s certification includes terms that will prompt reassessment should regulations not be honored.