Independent electricity suppliers are reexamining pricing polices, offers and existing supply contracts following the higher-than-expected prices reached at Wednesday’s NOME auction, a negative development applying further pressure on already-strained profit margins.
Certain suppliers are considering making adjustments to existing agreements while smaller suppliers possessing less substantial financial resources to dig into may be forced to increase tariffs in the medium-voltage sector, energypress has been informed. Tariff price hikes entail the risk of customer losses, but, for some suppliers, appears to be the only option available in an effort to remain afloat.
Tight situations for suppliers have also emerged in the low-voltage category. Supermarkets, for example, have been offered special tariff discounts by suppliers, now facing the possibility of loss-incurring deals as a result of Wednesday’s auction.
Smaller independent suppliers are deeply concerned about the extent of price hikes they can make as this could prompt shifts by customers to bigger suppliers, even returns to the main power utility PPC.
Independent suppliers are now planning to revise or temporarily freeze their promtional campaigns, sources have informed.
Contacted by energypress to comment on Wednesday’s high auction prices and the result’s impact on the ongoing effort to fully liberalize the electricity market, energy ministry officials noted that low purchase prices were not achieved, but suppliers did, at least, acquire substantial electricity amounts at a stable price that may allow them to pursue their respective campaigns.
According to the Greek bailout agreement, PPC faces an end-of-year electricity retail market share contraction target of 75.2 percent, still well under the 83.5 percent figure reported for September.
Energy ministry officials disagreed that the outcome of Wednesday’s NOME auction, seen slowing down PPC’s market share contraction process, could prompt the country’s lenders to demand the inclusion of hydropower units into PPC’s upcoming bailout-required unit sale package, until now a lignite-only offering.
Despite the drastically increased electricity amount of 717 MWh/h offered at Wednesday’s NOME auction, the final session for the year, prices reached as much as 45.25 euros per MWh, the highest level since the auctions were introduced to the Greek market a year ago with the purpose of offering independent suppliers access to PPC’s low-cost lignite and hydrocarbon sources.