Lenders advise against split of 720 MWh/h NOME amount

The country’s lenders have advised Greek authorities to not break up into two lots an increased electricity amount of 720 MWh/h planned to be offered at the country’s next NOME auction, within 2017.

RAE, the Regulatory Authority for Energy, will need to decide, by the middle of next week, whether to offer this total amount through one auction or as two smaller amounts over two sessions.

The RAE board is expected to meet on the matter within the current week, possibly today. At present, there is no indication as to which way the authority’s decision may go.

According to energypress sources, the lenders have notified RAE, in writing, warning that a split of the 720 MWh/h electricity amount into two lots would intensify bidding as a result of the smaller amounts offered and, consequently, drive up purchase prices, which defeats the purpose of the NOME initiative.

A limited electricity amount of 145 MWh/h was offered at the country’s most recent NOME auction, last July, prompting a bidding war between buyers that drove prices up to 43.05 euros per MWh. Such price levels seriously limit the ability of independent electricity suppliers to challenge PPC, the main power utility.

The company has already dampened market competition conditions by offering punctual customers a 15 percent discount on electricity bills.

This PPC initiative was taken in the summer of 2016, just months before the NOME auctions were introduced in Greece last October to offer independent electricity suppliers access to PPC’s lignite and hydropower sources, the intention being to enable lower-cost electricity purchases that would help the independent firms chip into PPC’s dominant market share.

The utility faces bailout-required market share contraction targets. It has already fallen behind. This discrepancy could eventually prompt the country’s lenders to resort to structural solutions for Greece’s electricity market, beginning with a demand for PPC to sell hydropower units. To date, the utility has only included lignite facilities in a bailout-required unit sales package.

The country’s lenders have also expressed their opposition to any electricity export restrictions on NOME participants.