Lenders pushing for NOME auctions beyond 2019

Greece’s lenders, especially the European Commission, are believed to be pushing for the continuation of the NOME auctions beyond 2019.

The energy-sector obstacles in the bailout’s second review – the electricity amounts main power utility PPC needs to offer to independent suppliers through the NOME auctions, as well as the progress of the overall plan intended to drastically reduce PPC’s retail market share – remain unresolved.

A teleconference held on Saturday night between the lenders and the Greek economic policy team, headed by the recently appointed energy minister Giorgos Stathakis, failed to provide solutions, which lowers the expectations of what can be achieved at today’s scheduled Eurogroup meeting.

The lenders insist that a roll out of electricity amounts offered through the NOME auctions needs to be continued every year until 2019, beginning with September, 2017, when PPC will need to include an amount representing 12 percent of consumption in 2016 as well as a repeat of an amount offered in 2016 (8 percent of consumption).

According to the lenders, this accumulative approach of NOME electricity amounts is expected to end up providing 46 percent of PPC’s electricity production to independent suppliers by 2019.

Greek officials oppose the compounding approach demanded by lenders, but are willing to accept its implementation just once, in 2017, sources have informed.

Local officials are pushing for an interpretation of the measure that offers 8 percent of the previous year’s consumption in 2016, 12 percent in 2017 and 13 percent in 2019, without any accumulation. Greek officials contend that these percentage figures are sufficient enough to ensure PPC’s reduced market share of less than 50 percent by 2020, the objective set.

Local officials argue that the bailout-linked agreement requiring market share losses at PPC should not be correlated with the electricity amounts offered through the NOME auctions.

As previous reported by energypress, the negotiating sides seem to have agreed to not revise the NOME starting price in January, factoring in latest CO2 emision allowance rights, which would lower the price level. Instead, the NOME starting price is expected to be revised in June and applied to ensuing auctions.