Mass electricity exports feared as latest NOME auction approaches

Excessively high wholesale electricity prices in regional markets surrounding and directly impacting the Greek market will most likely offer traders major export opportunities for electricity amounts purchased at local NOME auctions, organizers suspect.

This is one of the main reasons why the country’s independent retail electricity suppliers, especially those with wide customer bases and a greater need for lower-cost wholesale electricity, fear auction prices at this Wednesday’s NOME session will be driven up to levels that will dig deeply into profit margins.

RAE, the Regulatory Authority for Energy, appears to be preparing to monitor the situation in an effort to counter abusive behavior by auction participants.

According to sources, RAE has good reason to believe that certain players are planning to bid very aggressively in an effort to secure electricity amounts for export.

RAE has already forwarded related letters to suppliers and traders who took part in the previous NOME auction to examine their use of electricity amounts acquired at previous auctions.

The authority may decide to stage hearings if unjustifiably large NOME electricity quantities are seen exported to foreign markets following Wednesday’s session.

NOME auctions were introduced in Greece roughly two years ago to offer independent players access to the main power utility PPC’s lower-cost lignite and hydrocarbon sources, the objective being to increase price-related competition in the country’s retail market.

Export limits for NOME-acquired electricity amounts have been lifted, enabling players to move freely. Even so, RAE maintains the right to conduct investigations and impose fines if it determines abusive behavior by participants.

A total of 400 MWh/h will be offered at the July 18 auction, whose starting price has been increased to 36.34 euros per MWh.

Besides the influence of regional markets and export opportunities, pundits also expect aggressive bidding this Wednesday as a result of the uncertainty concerning electricity amounts to be offered at future NOME auctions, planned to be phased out as PPC’s bailout-required disinvestment of lignite units progresses.

Many electricity suppliers are expected to bid for the biggest possible quantities at Wednesday’s auction to gain leeway for competitive offers to customers.

Wholesale electricity prices around Europe are also being pushed up by rising fuel and CO2 emission right costs, another factor that could motivate local traders to export bigger amounts.