With the newly elected leftist Syriza-led coalition government having clearly expressed plans to cancel prizatizations in the energy sector, it remains to be seen what initiatives it can take without running against EU institutions and obligations.
In the case of PPC, the Public Power Corporation, privatization is not an EU obligation. However, the electricity market’s liberalization, offering traders equal access to lower-cost production, is compulsory.
Considering its plans to cancel the part-privatization of PPC, the new government will need to convince EU authorities on any plan of its own that may solve the issue of PPC’s exclusive access to lignite sources. The part-privatization would offer access to third parties. It cannot be cancelled if no alternative plans are implemented offering equal access to lignite sources, as well as to streams for hydrocarbon production.
The previous administration’s planned privatization of IPTO, the Independent Power Transmission Operator, a PPC subsidiary firm, through the sale of a 66 percent stake, is not a compulsory move either. However, the independence of IPTO and another PPC subsidiary, HEDNO, the Hellenic Electricity Distribution Network Operator, will need to be maintained as a means of offering greatest possible equal trading opportunities to market players. Any plan to scrap tenders for both these PPC subsidiary firms does not comply with EU law. Dividing the operations of sector firms, know as unbundling, applies to all EU member states, and has nothing to do with the country’s bail-out agreement.
The same goes for the previous government’s plans for NOME-type auctions. They may not represent the only solution for liberalizing the retail market, but if this plan is canceled, an alternative will still need to be found offering competition and access to the retail electricity market for new players.
In the gas sector, the previous administration’s agreement with the country’s creditor representatives, or troika, to divide the distribution network and open up the retail market stands as a combination of EU and bail-out package obligations. Sooner or later, local officials will need to provide a realistic solution that will open up the natural gas market for consumers, trading companies, and the industrial sector.