PPC sale package may include future units, union boss told

Prospective carbon-fired power stations still under construction or merely licensed for development may be included in main power utility PPC’s bailout-required sale package, which will need to represent about 40 percent of the utility’s total production capacity, energy ministry Giorgos Stathakis made clear during a meeting yesterday with the head of Genop, PPC’s main union, Giorgos Adamidis, according to sources.

This update implies the possible inclusion in the sale package of Ptolemaida V and Meliti II, two major PPC projects still at preliminary stages.

The meeting was dominated by the implications for the content of PPC’s sale package following an agreement reached a day earlier between the Greek government and the country’s lenders to conclude the bailout’s second review. An evaluation process of PPC units and mines, needed to determine the sale list’s content, was discussed.

PPC will need to have resolved this issue by July. The utility must hire a consultant to help prepare the sale package as soon as possible.

The production capacities of all PPC carbon-fired units, their expected life spans, and the energy-producing potential of mines need to be factored in when putting together the sale list. These three factors produce different results when applied in various combinations.

PPC’s current carbon-fired production capacity amounts to roughly 4,280 MW. Three years on, this figure is expected to drop to 2,480 MW as a result of the withdrawal of ageing facilities with a total production capacity of 1,800 MW. Carving out 40 percent of the utility’s production capacity for the bailout-required sale package would lead to different results depending on the timing of the proportion’s application.

A market test, expected to be held in autumn to measure the level of interest of investors in PPC’s carbon-fired units, may well fail to produce satisfactory results. In this case, hydropower stations would need to be added to make the package more enticing for investors, as was pointed out a few months earlier to the energy minister by an Elpedison energy firm official.

The addition of hydropower units would require piecing together a new PPC unit sale package, then staging a second market test, and, ultimately, shifting tenders from June, 2018 to later that year.

Such a delay would keep the contentious PPC sale issue alive on the eve of 2019, when national elections are due, assuming the current coalition completes its four-year mandate. The politically tricky task of selling PPC units may end up being inherited by the country’s next administration. Polls indicate that the main opposition conservative New Democracy party is well ahead.