PPC eyeing Turkish lignite deposit and unit development for needed revenue

The main power utility PPC is looking to acquire the development rights for a power station in Turkey’s Eskisehir area, in the northwest, with Chinese firm Shenhua as the investment’s partner, the utility’s chief executive Manolis Panagiotakis revealed yesterday during a speech delivered at the American-Hellenic Chamber of Commerce’s annual “Greek Economy Conference”.

PPC has unsuccessfully sought to enter southeast European markets over the past 14 years, both alone and with partners.

The Eskisehir area is home to Turkey’s third largest lignite deposit. Panagiotakis noted that becoming a “regional leader is a strategic choice” but did not elaborate any further on this plan.

According to Turkish media, Eskisehir lignite deposits currently controlled by the Electricity Generation Company Inc (EUAS), Turkey’s largest power company, and a development plan for the construction of a 1,080-MW power station in the area represent part of a privatization plan.

Interested parties face a January 26 deadline to submit offers to an international tender offering Eskisehir deposits with a condition for development of a 1,080-MW power station, according to Turkish media. The winning bidder will be able to sell electricity generated at the location to the national grid at a minimum price of 5 to 6 dollars per KWh, local media has reported.

Previous attempts by PPC to enter southeast European markets, none of which were successfully completed, have included an attempt to acquire the Bobov Dol power station in Bulgaria in 2003, a Negotino facility in the Former Yugoslav Republic of Macedonia (Fyrom) in 2007, as well as ambitious expansion plans with Germany’s RWE in 2009.

Last year, PPC, joined by China’s CMEC as its partner, was planning another attempt, but a breakdown of an endeavor by the two firms to co-develop a Meliti II power station in Greece appears to have also swept aside their joint plan for expansion into southeast Europe’s wider region.

Facing a drastic revenue reduction in the near future as a result of a bailout-required market share contraction in the Greek retail electricity market, from roughly 88 percent at present to 49 percent by 2020, PPC desperately needs to penetrate regional markets and offset the anticipated losses to remain afloat.