Supplier surcharge vanishing profit margin, Pöyry study finds

A recently imposed electricity supplier surcharge has left suppliers with the narrowest of net profit margins and weakened competition, the preliminary findings of an ongoing study being conducted by international consulting firm Pöyry have determined, energypress has been informed.

RAE, the Regulatory Authority for Energy, has commissioned Pöyry to conduct an impact assessment on Greece’s NOME auctions, which, according to the bailout agreement, needs to be finalized by the end of this year.

The assessment is crucial as it could serve as a base guiding the country’s creditors towards further measures needed to further liberalize Greece’s electricity market and intensify competition.

Coinciding with other initiatives now in progress, such as an upcoming market test for the main power utility PPC’s bailout-required sale list to be comprised of lignite-fired power stations, the NOME impact assessment could greatly shape the overall developments.

The assessement’s early findings determined that net profit margins for electricity suppliers are hovering at low levels ranging between 2 and 3 euros per MWh. It has also found that all suppliers would be incurring losses at present if the NOME auctions did not exist. They were introduced last October to offer independent traders access to PPC’s low-cost lignite and hydropower sources.

These findings confirm the views of pundits and officials who insist that Greece’s electricity market conditions are not yet ripe for full competition.