NOME auction set for slight delay, intense bidding seen

Procedures leading to this year’s third NOME auction are behind schedule, meaning that the upcoming session, whose date had been set for July 12, will be delayed by a few days, energypress sources have informed.

A joint ministerial decision by the energy and finance ministries on the session’s starting price ought to have been published in the government gazette by last Friday, which is not the case, for the session to go ahead on time.

Objections raised by the main power utility PPC on a proposal delivered by RAE, the Regulatory Authority for Energy, prompted a disagreement between authorities on Friday, which has prompted a delay in the ministerial decision’s publication.

The response from LAGIE, the Electricity Market Operator, which was supposed to announce the auction’s terms today, remains unclear. According to sources, the operator will forward the auction’s terms to RAE for authorization but leave open the starting price.

As has been previously reported, RAE has proposed a starting price of 32.05 euros per MWh, lower than previous levels.

Pundits expect fierce bidding at the next NOME auction as current market data indicates an imminent rise in wholesale electricity prices across Europe, including Greece.

This anticipated price rise is expected to boost the interest of independent suppliers at the next NOME auction, where they will seek relatively lower prices for leeway amid toughened market conditions and uncertainty.

A 15 percent discount offered by PPC to punctual customers last summer and the utility’s tolerant handling of customers with arrears has managed to greatly immobilize consumers considering shifts to independent suppliers.

Besides PPC’s strategies, these independent suppliers must now also take into account the likelihood of elevated wholesale electricity prices as well as costlier imported electricity this summer. These developments will narrow profit margins, increase market risk, and, as a result, boost the interest of independent suppliers at the next NOME auction, where opportunities for favorable deals will be sought.

The NOME auctions were introduced last October to offer third parties access to PPC’s low-cost lignite and hydrocarbon sources.

The European Commission is widely believed to be planning to abolish upper and lower limits for the wholesale electricity market (scarcity pricing), which means prices will rise sharply whenever demand exceeds supply.

Starting price aside, the electricity amount to be offered at the next NOME auction will remain unchanged at 145 MWh/h. On the contrary, the year’s fourth auction, scheduled for December, will offer the lower starting price as well as increased electricity amounts, in accordance with a 4 percent increase demanded by the revised bailout.