Power suppliers lack incentive to enter island markets

The elecricity markets of the country’s non-interconnected islands cannot open up to competition as of January 1, as is planned, because insurmountable obstacles are discouraging the entry of independent suppliers.

Though regulations for this prospect were established back in 2014 market liberalization has so far been restricted to the islands of Crete and Rhodes.

Crete’s electricity market was opened up to independent suppliers in August, 2016, while Rhodes followed last January.

Theoretically, as of January 1 consumers on the country’s 30 non-interconnected islands, not including Crete and Rhodes, will supposedly be free to choose electricity suppliers.

Independent suppliers made dynamic entries into the markets of the aforementioned islands, especially Crete, but the early enthusiasm has since faded.

Suppliers operating in these markets do not have access to any NOME auction equivalent and, as a result, are purchasing electricity from the system at high prices.

NOME auctions were introduced in Greece’s main electricity market just over a year ago to offer independent suppliers access to the main power utility PPC’s low-cost lignite and hydropower sources.

The lack of any NOME equivalent for the non-interconnected islands stands as a major disincentive for independent electricity suppliers eyeing the islands, especially those with developed tourism sectors.

The resulting hesitancy of independent suppliers is expected to become very apparent in the new year, when little is expected to change, despite the liberalization of island markets.