The Mytilineos corporate group’s disclosure, over the weekend, of an investment plan concerning a new natural gas-fueled electricity production unit in Greece comes as the second of three pivotal energy-sector moves promised by the group, following a 110 million-euro offer to upgrade the main power utility PPC’s ageing Amynteo lignite-fired power plant in exchange for a favorable long-term electricity supply agreement.
The latest move promises to impact the wholesale electricity market, the main power utility PPC’s bailout-required sale of lignite units, as well as competition between independent players.
As a new electricity production unit offering the lowest variable cost, the new facility will consistently gain entry into the system ahead of PPC’s most modern facility, Meliti, thereby impacting the wholesale market.
As for the PPC sale of lignite units, this latest move clearly expresses a preference by the Mytilineos corporate group, a leading local player, to invest in a new natural gas-fired unit that will be guaranteed priority access to the system.
An investment worth 300 million euros, the new unit, whose capacity is planned to amount to 650 MW, can be directly compared to two PPC lignite-fired units included in the bailout-required disinvestment – Megalopoli (511 MW) and Meliti (289 MW) – in terms of capacity, market participation potential, emission costs, and other factors.
As for competition in the market, this new unit could serve as a catalyst for a swifter formation of two to three groups that could find a place in Greece’s electricity market, as has been pointed out in the past by Evangelos Mytilineos, CEO at Mytilineos.
Besides the electricity market, this new Mytilineos investment move will also impact the natural gas market as the total natural gas consumption level of the Mytilineos group facilities will exceed two billion cubic meters, annually, making it the country’s biggest natural gas consumer representing about 40 percent of overall demand. This should further boost the corporate group’s negotiating strength.
A third energy-sector move by the Mytilineos group, still undisclosed, should take its recent series of investment plans in the energy domain to a total of one billion euros.
The corporate group’s third move, believed to be worth between 500 and 600 million euros, is expected to be announced in early May.