RAE considering NOME limits for more effective auctions

RAE, the Regulatory Authority for Energy, seeking to reinforce independent electricity suppliers in their quest to achieve retail market share gains and also limit NOME-related electricity exports being made by traders, is working on a plan that would impose limits to the electricity amounts that may be acquired through NOME auctions.

These limits will be determined by the respective retail market shares of electricity suppliers and more than cover their current market needs. The limits being considered by RAE could, for example, enable independent electricity suppliers to purchase amounts ranging from 130 to 140 percent of their current market needs.

Traders have acquired supply licenses in order to participate in NOME auctions and have been selling electricity amounts to foreign markets where electricity price levels are higher.

The European Commission has warned RAE that export limits on NOME-related electricity amount purchases will not be accepted.

The NOME auctions were introduced to help independent electricity suppliers compete against the still-dominant main power utility PPC on fairer terms by offering third parties access to the utility’s low-cost lignite and hydrocarbon sources.

The RAE upper-limit plan has already been discussed between Greek officials and European Commission authorities and is not expected to encounter any approval issues, sources informed.

It remains unclear whether a remaining 718 MWh/h NOME auction electricity amount that needs to be offered to the market by the end of 2017 will be split into two auctions or auctioned off at one session.

LAGIE, the Electricity Market Operator, has proposed splitting the total into two smaller amounts. This prospect has alarmed independent electricity suppliers as it would encourage a bidding war for smaller amounts and increase auction purchase prices.

RAE, which has launched a public consultation process for market feedback, is expected to decide within the current week.