RAE checking retail market for competition, sustainability

RAE, the Regulatory Authority for Energy, has requested data from all retail electricity market suppliers in an effort to determine whether real prospects for competition exist, the level of sustainability offered by current market conditions to suppliers, and whether regulatory interventions could be needed, energypress has been informed.

The authority has already received related information from suppliers and the examination procedure is in progress. Data requested by RAE includes electricity purchase costs, the total cost entailed in the effort to gain each new customer, profit margin details, as well as the financial results of all suppliers.

The first impressions gained by RAE are believed to be unfavorable. Independent suppliers are being forced to operate on narrow profit margins while certain firms, including vertically integrated players, are incurring considerable losses, the data accumulated so far has indicated.

These negative indications come in the wake of recent unfavorable results delivered by the international consulting firm Pöyry, commissioned by RAE to review the local electricity market, supplier performances, especially in the first half of this year, as well as the NOME auctions.

Pöyry determined that profit margins for suppliers are too narrow. The imposition of a supplier surcharge without any retail price revisions reduced net profit margins to levels of between 2 and 3 euros per MWh in the first half of 2017, the Pöyry study noted.

Conditions appear to have worsened following the latest NOME auction, which produced high purchase prices as a result of intensified bidding.

NOME auctions were introduced to the Greek market a little over a year ago to offer independent suppliers access to the main power utilty PPC’s low-cost lignite and hydropower sources.