PPC’s lignite unit sale package ‘to be based on 2030 capacity’

A main power utility PPC bailout-required sale package representing 40 percent of the utility’s lignite-fired power stations will be based on a forecast of the utilty’s lignite-related output in 2030, leading energy ministry sources have informed.

The utility is expected to withdraw a number of lignite-fired power stations over the next few years, a prospect that will lower production capacity and, therefore, reduce the amount of lignite-fired units PPC will need to include in its sale package.

At present, PPC’s lignite-fired production capacity exceeds 4,500 MW. The production level to be forcast for 2030 will take into account expected withdrawals, such as units in Kardia and Amynteo, as well as additions of new units in Ptolemaida and Florina, assuming PPC presses ahead with a plan to collaborate with CMEC, the China Machinery Engineering Corporation, for the development and operation of new units.

Greek officials, including PPC and energy ministry working groups, are aiming to deliver to the European Commision a finalized sale list of PPC lignite-fired units within the next month.

The energy ministry has expressed doubts about Meliti II, a project in the Florina area, as well as PPC’s proposal for the establishment of new retail electricity subsidiaries to be offered to investors, in the form of partnesrships, as part of the utility’s effort to reach market share contraction targets demanded in the bailout agreement. PPC has announced it will offer a first retail electricity subsidiary for sale in late June.

The energy ministry sources, in latest comments, insisted that NOME auctions – introduced last October to offer independent traders access to PPC’s low-cost lignite and hydrocarbon sources – remain the main tool for PPC’s needed market share contraction.

Commenting on state-controlled PPC’s current financial standing, the energy ministry sources assured  there was no reason for concern. The sources noted the ministry had contributed to settling outstanding debt owed to the utility by the Greek State, saved the utility’s most profitable division, the hydropower sector, and guarateed cash inflow for the utility through the split-and-sale plan for the power grid operator IPTO, a PPC subsidiary.

The ministry sources anticipated that PPC’s forthcoming debt payment and capital needs in 2018 and 2019 would be financed by cash to be raised from unit sales.