A new government obtacle raised yesterday, via deputy development minister Stergios Pitsiorlas, obstructing main power utility PPC plans from collaborating with CMEC (China Machinery Engineering Corporation) for the construction and operation of Meliti II, a lignite-fired power station in northern Greece, is widely regarded as being just the tip of the iceberg against PPC’s plans for the future.
Energy minister Giorgos Stathakis recently noted that a new tender would need to be staged for part of the Vevi mine, whose output would be crucial for Meliti II. Making matters worse for PPC, the ministry has now added that collaborations such as the partnership envisaged by PPC with CMEC need to be established through tenders.
From the onset, PPC had been warned of competition concerns if a tender were not held and a partnership established directly with CMEC. The PPC boss Manolis Panagiotakis countered that the Chinese company would entirely fund the power station’s construction. However, this argument did not convince officials at the European Commission’s Directorate General of Competition.
This is not the first time PPC plans have run into a wall. Other recent inititiaves and ambitious plans presented by the utility were deemed unrealistic by the government and country’s lenders before being abandoned.
It is generally believed that PPC has wasted precious time and resources to engage in unnecessary battles rather than focus on more essential fronts that could bolster the utility amid the changing energy market and lead to results.
In the past, a PPC strategy questioning the legality of NOME auctions – introduced last October in an effort to break PPC’s market dominance by offering independent traders access to the utility’s low-cost carbon and hydropower sources – was contradictory as these auctions were introduced to replace a part-prizatization plan intended for PPC. The utility ended up withdrawing legal action it had taken.
Thoughts by PPC to launch new retail electricity companies as partnerships – a move intended to lower the utility’s market share, as is demanded by bailout terms – in response to the NOME auctions also ended up being dismissed following objections by the country’s lenders.
The PPC chief’s recent announcement, through media interviews, of a plan to co-develop two new lignite-fired power stations, not including Meliti II, with private-sector investors surprised both local and foreign officials. Such thoughts were not mentioned during the prolonged second-review bailout negotiations over the past few months, which included the participation of PPC officials and led to a condition requiring the utility to sell 40 percent of its lignite-fired power stations. Not surprisingly, this PPC initiative was viewed with suspicion in Brussels and not embraced by the Greek government.