The main power utility PPC plans to adopt risk hedging practices in order to limit the uncompensated impact of fluctuating international CO2 emission right prices, which, in recent times, have risen to levels representing a considerable part of the utility’s overall electricity production cost.
PPC’s first quarter results, posted this week, showed that its CO2 emission right costs increased by 22.9 percent despite an 18.5 percent reduction of lignite-based electricity production and a 54.5 percent hydropower output increase.
Earlier this week, PPC’s board decided to set up a specialized team to systematically monitor the European market, buy CO2 emission rights at relatively lower prices and utilize resulting reserves to cover needs when price levels are high, PPC’s boss Manolis Panagiotakis has informed.
PPC is also considering the prospect of securitizing amounts owed by customers as a means of creating an additional cash flow source. Consultants hired by PPC have already conducted an unpaid receivables management study.