A NOME auctions adjustment proposal prepared by the country’s lenders and forwarded to Greek government officials recommends a phase out of lignite production contributions to the sessions by April, 2019 and a small increase of hydropower input.

Greek energy minister Giorgos Stathakis is scheduled to meet with troika officials this Wednesday.

The lignite phase-out proposal is based on the condition that the main power utility PPC’s bailout-required disinvestment of lignite power stations and mines, representing 40 percent of the utility’s lignite capacity, will be completed as envisioned and on schedule.

A road map proposed by the lenders would require an announcement of an international tender offering PPC’s lignite assets within May.

If this part of the procedure is staged as planned, then a certain penalty expected to be imposed on PPC, following a June review, for its failure to meet bailout-required retail electricity market share contraction targets will be halved.

PPC’s market share has dropped to 82 percent, behind schedule, and needs to fall to 62.24 percent by the end of the year, an objective already ruled out as impossible.

Another road map condition requires the announcement of a preferred bidder by this coming September.

Also, sales and purchase agreements for two lignite packages to be offered, one carrying assets in the north and the other assets in the south, will need to be signed by October.

New owners will need to complete payments and take over the assets for sale by February, 2019, according to the road map.

In addition, a futures market for energy products will need to begin operating by April, 2019.

Greek government officials do not appear to oppose these conditions. If all goes according to plan, legislation for the new NOME model could be prepared within the first fortnight of June.

The prospective end of lignite-dominated NOME auctions is expected to have a huge impact on market conditions, especially non-vertically integrated smaller independent suppliers.

The first NOME session following the lignite units sale will probably be staged in April, 2019. It appears that, by then, the NOME auctions will be left with hydropower-sourced electricity, which currently represents 6 percent of the total NOME offering to auction participants.

Since their introduction to the Greek market about a year and a half ago, NOME auctions may have generated higher price levels than those needed by independent suppliers to compete more fiercely against PPC, the dominant player but, even so, price levels have clearly remained below System Marginal Price (SMP) levels, offering some degree of security to independent suppliers.

A number of pundits believe the increased retail market pressure to be faced by smaller suppliers will lead to takeovers and mergers.