The energy ministry is pressing on with procedures leading to September’s introduction of bailout-required NOME auctions, which will provide third parties with access to main power utility PPC’s low-cost lignite and hydropower sources as a measure to help break the utility’s dominance, despite a recent announcement by the utility’s boss of a unit sale plan presumably intended to prevent the auctions plan.
While delivering a speech at an Economist conference in Athens last week, PPC’s chief executive Manolis Panagiotakis disclosed a plan to carve out new retail electricity companies from the existing utility and sell them, with customers on board, a move obviously intended to avoid the NOME auctions, detailed in Greece’s bailout plan.
Not coincidentally, Panagiotakis announced that the first of these new retail firms, representing six to seven percent of PPC’s clientele, or about 400,000 customers, would be ready for sale in September, which is when the first NOME auction is scheduled to take place.
However, this initiative, attributed entirely to PPC’s administration, without any energy ministry involvement – the Greek State owns 51.12 percent of the utility – does not appear able to stop the ministry from preparing the plan to introduce NOME auctions when and as expected.
According to energypress sources, procedures are continuing as normal and, following an opinion provided by RAE, the Regulatory Authority for Energy, a ministerial decision specifying the auction starting price will be announced within the next few days.
The formula detemining the starting price will factor in the variable costs at PPC’s lignite and hydropower stations. Sector authorities, in comments to energypress, estimated that the NOME auction starting price will be set two to three euros below the current System Marginal Price (SMP). The SMP level in May, according to a report issued by LAGIE, the Electricity Market Operator, was 41.20 euros per MWh.
September’s first NOME auction is expected to mark the beginning of a truly competitive Greek retail electricity market. The auctions are also expected to provide PPC with an opportunity to operate idle lignite units currently not contributing to the grid but, nevertheless, costing considerable amounts to maintain as a result of fixed costs.