Greek officials preparing the NOME auction model intended to increase competition in the electricity market are placing less emphasis on the plan’s short-term objective of reducing main power utility PPC’s retail market share by 25 percent and focusing on the longer-term ultimate target of a 50 percent reduction by 2020.
According to energypress sources, lenders have acknowledged the effort’s degree of difficulty and need for time and have subsequently stepped back on the pressure being applied for the short-term. The NOME auctions will offer electricity wholesalers access to PPC’s low-cost lignite-fired power production.
Local officials charged with preparing the NOME plan, primarily a team at RAE, the Regulatory Authority for Energy, along with assistance from IPTO, the power grid operator, and PPC, are currently preparing Greece’s NOME proposal to be delivered to the lenders. The energy ministry is responsible for the effort.
Lenders agree a trial period will be needed for the model. Greek officials have proposed that the NOME auctions begin by offering electricity amounts of between 300 and 400 MW for a short period to test market demand. It is estimated the plan may gradually develop into a fully functional system by 2017, which would offer leeway until the 2020 objective.
Besides the model’s specifics and intermediate objectives all the way to 2020, the starting price of auctions, a crucial detail, also needs to be determined. PPC has pushed for a price of 59 euros per MWh, but this level is believed to be too high and would fail to draw wholesalers to the NOME auctions. A court decision has noted the starting price should be set at 36 euros per MWh. At this stage, a figure somewhere in between seems most likely.
If Greek officials fail to reach an agreement with lenders on a NOME model considered capable of reducing PPC’s dominant market share to 50 percent by 2020, then alternative solutions, such as an older plan to part-privatize PPC, will need to be resorted to.