NOME auction lignite exclusion ominous for smaller players

The country’s smaller, non-vertically integrated independent electricity suppliers stand to face increased retail market pressure that could lead to takeovers and mergers given the anticipated end of lignite’s input to NOME auctions early in 2019.

NOME auctions will be reshaped if all goes acording to plan with the upcoming bailout-required sale of main power utility PPC lignite units, representing 40 percent of the utility’s lignite capacity.

The energy ministry and the country’s lenders are believed to have already reached an agreement on the future shape of NOME auctions as a follow-up plan to the PPC sale of lignite units, energypress has been informed.

If the sale of PPC lignite units is completed as planned and their new owners begin operating the units early in 2019, lignite will be excluded from ensuing NOME auctions.

The first post-sale NOME session 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. This is expected to bring about significant market changes and difficulties for suppliers, especially the smaller players.

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. Even so, NOME price levels have clearly remained below System Marginal Price (SMP) levels, offering some degree of security to independent suppliers.

NOME auctions offer independent players access to PPC’s lower-cost lignite and hydropower sources.