PPC partnerships, including hydropower units, seen in 2016

The energy ministry has initiated talks with the country’s creditor representatives for the establishment of partnerships between main power utility PPC and private enterprises as a means of meeting the electricity market’s main target set in last summer’s bailout agreement, this being to reduce the utility’s market share to 50 percent by 2020, both in production and supply.

The move by the Greek government comes as a reaction to the lack of progress made by the country in  the wider energy reforms effort. The NOME auction plan, another tool intended to reduce PPC’s market dominance by providing third parties with access to PPC’s low-cost lignite and hydropower sources, now seems increasingly incapable of producing the desired result.

Energy ministry sources yesterday reiterated that the NOME plan is a transitional measure, adding that objectives will be met through other initiatives.

The government has opted to push for the establishment of new ventures with private investors as a means of reducing PPC’s market dominance because it fears the lack of overall progress of electricity market reforms could revive an older part-privatization plan for the utility, whose prospective breakaway section has been locally dubbed “Little PPC”.

Some sources said a new company involving PPC and private investors could be established within 2016.

Enterprises active in the Greek market, such as Edison and ELPE (Hellenic Petroleum), have already expressed interest in engaging themselves with potential PPC-related partnerships. Interested parties have apparently already made requests for partnership terms to be clarified and have also set their own conditions as prerequisites.

Prospective investors want lignite-fired power stations and hydropower stations to be included in PPC’s overall package for partnerships. However, lignite-fired power stations, especially older units, are burdened by emissions-related costs which seem likely to be increased further over the next few years as environmental targets are pursued, making them a less appealing business prospect. This increases the importance of PPC’s hydropower stations in any potential partnership.

Besides the government’s interest to include hydropower stations in the PPC partnerships package, PPC is also believed to have accepted the prospect, despite opposing public remarks made by company officials. All officials involved in the matter know that failure to do so will inevitably lead to a relaunch of the part-privatization plan for PPC.