Market officials awaiting new government’s energy policies

The local market is awaiting today’s announcements by the newly elected Syriza-led coalition on the ministries to have authority over the crucial energy and industry sectors, as well as the officials to be handed control of these portfolios, as a first sign of its intentions.

Fuel market suppliers and retailers, in their first meetings with government officials, are expected to raise concerns such as illegal trading activity, fuel adulteration, and unfair competition.

As for the electricity sector, a return to real market conditions seems to be the objective. In remarks made yesterday, the head official of Italian company Terna indicated that the privatization procedure for IPTO, the Independent Power Transmission Operator, a PPC (Public Power Corporation) subsidiary firm, was now considered over.

This prospect has not come as a complete surprise for market officials as they were never fully convinced that a triple PPC-related privatization concerning IPTO, “Little PPC” – as an envisaged 33 percent break-away section for sale had been locally dubbed – and a 17 percent sale of the parent company to a strategic investor, would ever happen.

As it had been warned in the lead-up to Sunday’s snap elections, Syriza will face a challenge to sustain the feasibility of troubled independent electricity producers amid current market conditons. The same, more or less, goes for the renewable energy sources (RES) market.

As for the much-discussed tenders for hydrocarbon exploration and exploitation, some agreements have already been signed, while tenders concerning blocks in western Greece and a larger tender for twenty offshore blocks in the Ionian Sea and south of Crete are currently in progress. Expectations have fallen as a result of plunging crude oil prices in the international market, a major drawback for unexplored areas such as those in Greece, which are higher-cost ventures.

The new government’s policy on the geopolitical sensitive issue of gas pipelines will also be eagerly awaited my market officials.