July’s virtual stagnancy of market shares in Greece’s retail electricity market, set to be repeated in August, according to sector officials, has been primarily attributed to a coinciding 15 percent discount offered by main power utility PPC to punctual customers, rather than the customary immobility, on a wider business level, experienced during the summer months.
PPC’s retail market share remains stubbornly high, at around 90 percent, while independent suppliers share the other ten percent. This boils down to meaning that extra ground will need to be covered in less time if independent suppliers are to reach the bailout-required objective’s first target of capturing a 20 percent market share, overall, in 2017.
The slow market share shifts make even more crucial the role to be played by the upcoming NOME auctions, intended to provide third parties with access to PPC’s low-cost lignite and hydropower sources as a measure to break the utility’s dominance. The NOME auctions now represent the basic tool, or only tool, capable of steering the electricity market in this direction.
The starting price for the auctions, scheduled to start in September, has been set at 37.35 euros per MWh, according to energypress sources. Interested parties now have their minds focused on the final prices to be reached through the auctions, or how much lower electricity purchase prices can be for suppliers compared to the System Marginal Price (SMP), used to determine wholesale electricity prices.
The auction terms, electricity amounts to be offered in 2017, and the rate at which these amounts will be released, will play key roles in determining price levels. Initial auction terms and conditions prepared by LAGIE, the Electricity Market Operator, are still making their way through the public consultation procedure, given a deadline extention until September 9. RAE, the Regulatory Authority for Energy, will stage an information day next Monday, offering interested parties an opportunity to voice their opinions.
Retail electricity market authorities, in comments offered to energypress, stressed that sufficient electricity amounts will need to be made available at the auctions in order to cover the needs of all independent suppliers and avoid a bidding war which could elevate purchase prices close to the SMP level and render the NOME procedure useless in terms of its ability to generate electricity retail market competition and prompt a contraction of PPC’s market share.