RAE opts to offer 718 MWh/h NOME amount through single auction

RAE, the Regulatory Authority for Energy, presumably paying attention to market player concerns of bidding wars and higher prices – expressed through a short public consultation procedure – as well as European Commission reaction, has decided to not split into two lots a remaining 718 MWh/h NOME auction electricity amount that needs to be offered to the market by the end of 2017.

Prior to RAE’s decision, LAGIE, the Electricity Market Operator, had proposed splitting this quantity into two lots, a 475 MWh/h amount for an auction on October 18, and 243 MWh/h for a second session on November 15. Instead, the entire amount will now be auctioned on the latter date.

Local officials and players had warned against a split into two smaller amounts, noting it would spark bidding wars and increase auction prices for independent suppliers seeking to penetrate Greece’s retail electricity market, still dominated by the main power utility PPC.

NOME auctions were introduced around a year ago to offer independent suppliers access to PPC’s lower-cost lignite and hydropower sources.

It remains indefinite whether RAE has sufficient time to prepare and implement an auction purchase limit plan intended to protect suppliers. Traders have acquired supply licenses so as to take part in NOME auctions and have been selling electricity amounts in foreign markets, where electricity price levels are higher.

These limits, which would more than cover the needs of suppliers, are expected to allow purchases that could, for example, range between 130 to 140 percent of respective current market needs.

The 718 MWh/h NOME amount that needs to be offered by the end of this year has been drastically increased from 246 MW/h. A further 229 MWh/h was added as part of the bailout revisions, requiring an extra 4 percent of the year’s original total, while a further 243 MWh/h was included to the year’s NOME auction as a result of PPC’s failure to meet market share contraction targets.