‘Market test to shape future of PPC’s hydropower plants’

Despite previous denials, the government is now making increasingly clear the prospect of main power utility PPC hydropower stations being added to the bailout-required package of PPC unit sales should an upcoming market test, to be held around September or October, indicate insufficient investor interest in the utility’s coal-fired power stations alone.

Energy minister Giorgos Stathakis tried as best he could to allude to the prospect of hydropower stations being added to PPC’s sales package in comments last Friday, during a visit to the country’s north, where the demand by lenders for utility unit sales is a particularly politically sensitive issue. Much of PPC’s coal-fired producing capacity is located in the wider region.

Stathakis, responding to reporter questions, informed that a three-way plan for a sale package made up of coal-fired power stations would be established between the government, lenders and the state-controlled utility within the next few months. The minister added that if this plan fails to make it through the upcoming market test then the “threat of additional structural measures will exist.”

Pundits believe that investors anticipate the initial plan’s failure and are already focusing their attention on the addition of hydropower stations to the PPC sales package. Coal-fired power stations alone, analysts contend, will not attract investors as such units generate electricity at a cost of between 50 to 60 euros per MWh at a time when electricity may be purchased through the NOME auctions for no more than 37 euros per MWh.

NOME auctions were introduced last October to provide independent traders access to PPC’s low-cost carbon and hydropower sources.

The country’s lenders want 40 percent of PPC’s coal-fired production capacity to be placed for sale. The details remain vague and will need to be clarified during the upcoming three-way negotiations between the government, lenders and PPC.

The three sides will need to agree on whether the 40 percent figure will apply to PPC’s capacity as it stood in 2015, this year’s capacity figure, which has contracted as a result of unit withdrawals, or the prospective figure of 2020, when PPC’s coal-fired production capacity is expected to have shrunk further. It also remains unclear whether coal mines will be included in the package.