The gap dividing Greece and the country’s lenders on energy sector measures needed as part of the effort to conclude the Greek bailout’s second review have been narrowed and should be bridged by Friday, energy minister Giorgos Stathakis announced after emerging from a meeting with lender representatives.
A plan for the sale of 40 percent of main power utility PPC’s carbon-fired production units, as well as a demand by lenders for the utility to increase its electricity amounts offered through NOME auctions – introduced last October to offer independent traders access to the utillity’s low-cost carbon-fired and hydropower sources – stand as the key energy-sector issues of these talks.
According to the agreement, a market test will be staged for old and new PPC carbon-fired power stations to determine the level of investor interest. If deemed to be insufficient, hydropower stations will be added to the power utility’s sale package. Legislative revisions for the number and content of PPC units to be sold are planned for December this year, while the sale process is slated for June, 2018.
A review of PPC’s market share contraction progress, scheduled for June, is unlikely to convince lenders that the utility is on track for a retail electricity market share of 75.24 percent by the end of this year. To get there, the utility needs to shed a further 12 percent from its current market share.
The two sides have agreed to limit potential buyers of PPC units to firms already active in Greece’s electricity supply market.
Also, as demanded by the European Commission, one of the country’s three lenders, electricity amounts to be offered at the NOME auctions will be successively increased through a compounding system. Electricity auction amounts offered each preceding year will be added to the following year’s amount. As a result, PPC will need to offer 20 percent of its output in 2017 and 33 percent in 2018. From then on, amounts are expected to fall as it is anticipated PPC will have sold units and cut its production capacity.
Buyers of PPC’s carbon-fired power stations will also be required to offer electricity amounts to NOME auctions. This measure is expected to prevent uneven competition between enterprises that have bought PPC production units and ones that have not.
An attempt by Greek officials to transfer a 17 percent share of PPC from the TAIPED state privatization fund to a superfund, intended to offer state assets a chance of improving their business performance ahead of privatization, appears unlikely to succeed.
The Greek State would maintain 51 percent control of PPC if privatization of the 17 percent stake of the utility currently under TAIPED’s control is avoided.