RES sector officials set to react to ‘disruption’ plan cost burden

One of the immediate bailout conditions facing the energy ministry concerns issuing a ministerial decision by the end of this month for the implementation of a “disruption management” plan, an urgent matter for the country’s industrial sector, or energy-intensive consumers. During his short tenure, the caretaker government’s interim energy minister Ioannis Golias assembled a committee to keep the work process on this front flowing.

Working out who will cover the costs of this plan, which will enable energy cost savings for major-scale industry in exchange for shifting energy usage to off-peak hours whenever required by IPTO, the power grid operator, is a tricky task requiring the right balance if it is to be made fair.

A plan, already endorsed by the European Commission, has been ready for months. But it foresees the annual cost, estimated at between 50 million and 60 million euros, being shouldered by the renewable energy sources (RES) sector. If adopted as is, existing photovoltaic  and wind-energy producers will have 3.6 percent and 1.8 percent of revenues withheld, respectively. RES sector officials, especially PV and wind-energy representatives, have already reacted to the plan. The discontent is expected to be made clearer over the next few days, according to energypress sources, as the RES officials awaited last Sunday’s election result and the resulting energy minister.

Panos Skourletis, who was reappointed to the ministry’s helm following the Syriza-led coalition’s re-election, will need to deal with what is developing into an increasingly complicated issue.

Greek industry is anticipating the arrival of the “disruption management” plan as one of the measures that will help offset its loss of a 20 percent discount on electricity offered to the industrial sector by the main power utility PPC, another bailout demand.

If Skourletis decides to confine the “disruption management” plan and reduce its payout benefits for the industrial sector as a means of reducing the burden on the RES sector, he will need to find alternative ways to maintain energy-intensive electricity tariffs at current levels in an effort to help keep major-scale enterprises afloat. Access by industrial consumers to the prospective NOME-type electricity auctions, which would help their electricity-cost issues, has already been rejected by the European Commission.

The “disruption management” plan, alone, is insufficient to help maintain industrial electricity costs at levels enjoyed until now, courtesy of the 20 percent PPC discount being eliminated.

The reduction of PPC’s operating costs in recent years, which have not been rolled over to consumers, needs to be addressed by the ministry. PPC has benefited from the elimination of CATs and the Variable Cost Recovery Mechanism, as well as from the drastic decline in fuel prices.

“Our enterprises consider energy cost as being at a specific level. We don’t raise specialized issues such as ‘disruption management’ plans, NOME-type auctions, or tariff discounts. This is the business of the state,” an industrial sector authority told energypress. “It can go ahead and use any legal means it likes, as long as competitive energy costs for enterprises are ensured. Otherwise, the few remaining industrial enterprises that continue to operate in Greece will cease doing so.”