Lower starting price, firm bidding at next NOME session

The starting price for Greece’s next NOME auction, the third to be held this year, on July 12, is expected to be revised within the next few days to slightly over 32 euros per MWh, which is around five euros less than the level set for the previous session.

The anticipated starting price reduction is expected to incite aggressive bidding at the NOME auction and ultimately lead to further market share gains for independent electricity suppliers against the main power utilty PPC.

Thought the bidding at the next NOME session is expected to be intense, electricity amount purchase prices should remain relatively subdued as a result of the lower starting price.

Heightened bidding interest is expected at the upcoming NOME auction as a result of higher electricity prices forecast for the short-term around Europe, including Greece. Subsequently, independent suppliers will be keen to secure low-cost electricity amounts at next month’s session. Low-cost purchases would provide independent suppliers with leeway to maneuver over the next few months.

The NOME procedure was introduced in Greece last October as a means of offering independent traders access to PPC’s low-cost lignite and hydrocarbon sources.

Besides the lower starting price expected at the next NOME session, all other aspects will remain unchanged, including the amount to be offered, this being 145 MWh/h.

However, increased electricity amounts and a further starting price revision are expected to be offered at the fourth NOME auction, scheduled for December.

A revised bailout term requires an additional 4 percent of electricity to be added to the December session. This will provide a further 200 MWh/h, which, combined with a plan by local authorities to offer 245 MWh/h at the December session, will bring the total amount to 445 MWh/h.

According to the updated Greek bailout agreement, in 2017, PPC will need to offer 16 percent of its electricity, instead of 12 percent, as had been originally planned. In 2018, the utility must offer 19 percent, up from 13 percent, while, in 2019, the offering needs to rise further, to 22 percent from 13 percent.

Official market data released yesterday by LAGIE, the Electricity Market Operator, showed that PPC’s retail electricity market share slipped to 85.53 percent at the end of May, almost one percentage point less than April’s 86.49 percent.

This represents the fourth consecutive month in which PPC has lost a market share of around one percentage point. Even so, a bailout target requiring PPC’s market share to drop to 75.24 percent by the end of 2017 remains extremely doubtful.