PCI application in making for Greek-Austrian-German grid link proposal

Austria and Germany are considering a Greek proposal for a 3-GW electricity grid interconnection, a project that would directly transport green energy produced in Greece to the two countries.

Energy minister Kostas Skrekas unveiled this project plan during a speech yesterday at the Renewable & Storage Forum, a two-day conference organized by energypress, continuing today.

Germany is believed to be seeking alternative green energy sources as, according to the minister’s comments at the conference, the country cannot develop RES projects in its south as a result of environmental measures protecting the Black Forest.

Sources informed that officials are working on an application for PCI classification concerning this grid interconnection.

Power grid operator IPTO, the sources added, has prepared plans for two alternative routes, one crossing Albania, Montenegro, Croatia and Slovenia, before reaching Austria and Germany’s south, the other a subsea route from Albania’s coastline to Slovenia followed by an overland crossing to Austria and Germany’s south.

Europe on alert, energy futures surging, concerns grow in north

Intensifying fears of energy security dangers around Europe next winter are becoming apparent as energy futures continue skyrocketing to unimaginable levels.

Europe is now in a state of heightened alert as the continent’s north, better equipped with greater energy storage facilities, is showing clear signs of serious concern, which was not the case earlier this year, when members of the continent’s south, including Greece, were systematically underlining the dangers ahead at every EU summit.

EU energy ministers have lined up yet another extraordinary Council meeting for July 26 to seek solutions for the Russian-induced gas supply crisis anticipated for next winter.

Highlighting Europe’s growing concerns, French futures for the fourth quarter, the heart of winter, yesterday peaked at 1,000 euros per MWh.

The French government’s announcement of a plan to fully nationalize debt-laden energy giant EDF in order to help it ride out the European energy crisis and invest in atomic plants preceded this latest price surge. Half of EDF’s nuclear reactors are currently sidelined as a result of technical issues.

In Germany, futures for December, 2022 yesterday exceeded 455 euros per MWh, fueled by news that the country’s Ver.di trade union has asked the government to accelerate a rescue plan for the Uniper energy group. The company itself has ascertained that a lump-sum tax plan stands no chance of being imposed, adding that consumers will not be called upon to cover the cost of the energy group’s rescue plan.

In neighboring Austria, moves are being made to secure space at Haidach, one of Europe’s biggest storage facilities, as Russia’s Gazprom has not met rules requiring storage facilities to cover a minimum level.




Europe on edge, tested by Putin’s ruble payment demand

Tension in Europe has risen with signs of disorientation emerging over Russian president Vladimir Putin’s demand for ruble-currency payments to cover Russian natural gas supply.

German chancellor Olaf Scholz, according to Moscow, initially agreed on this payment term for Russian gas supply, but this was swiftly denied by the chancellery.

Italian prime minister Mario Draghi abruptly rejected Putin’s ruble-based payment plan for Russian gas supply, while Polish prime minister Mateusz Morawiecki has called on Europe to impose an embargo on Moscow and follow his country’s example by stopping all Russian energy imports until the end of the year.

Europe is on high alert. Reliance on Russian energy reaches as high as 80 percent in Austria. Germany’s dependence on Russian energy is also high, at 55 percent.

Both countries have taken steps for gas rationing over the payment stand-off with Russia, fearing, like all of Europe, a halt in energy deliveries from Russia because of the dispute over payments.

Robert Habeck, Germany’s federal minister for economic affairs and climate action, has called on citizens to use electricity as moderately as possible.

Should Putin take the dreaded step and cut energy supply to Europe, distribution of existing natural gas reserves, as well as supply from non-Russian sources, will need to be prioritized, with preference for hospitals, power stations and crucial industries, needed to avoid economic collapse.

If European governments are forced to announce a state of emergency, an electricity rationing plan will need to be implemented for all households. The UK was forced to adopt such an extreme measure, for fuel, during the oil crisis in 1973.

In Greece, a halt in Russian natural gas supply would stop economic activity in just a few days. The country’s daily gas consumption reaches approximately 200,000 MWh, of which 115,000 MWh is supplied by Russia.

Additional LNG shipments in April; the mooring of an FSRU at the Revythoussa islet LNG terminal, just off Athens, for a capacity increase; full-capacity generation at the country’s lignite-fired power stations; as well as an agreement with Italy to ensure storage capacity at the neighboring country’s gas storage facilities, for strategic reserves, are all necessary steps ahead of next winter.

It remains to be seen if Russia’s war on Ukraine will carry on into summer and require extreme measures, or end soon, to the relief of all.

The TTF gas exchange ended trade yesterday at 118 euros per MWh. Wholesale electricity prices in Greece today are at 222.38 euros per MWh.

In comments offered during yesterday’s opening day of the two-day Power & Gas Forum staged by energypress, Pantelis Kapros, Professor of Energy Economics at the National Technical University of Athens, estimated that natural gas prices, even if the war were to end now, will average between 50 and 70 euros per MWh this year.




Local market still unaffected by Austria gas hub explosion

Greece’s energy market has remained unaffected, without any danger of supply shortages and increased prices, for the time being, following yesterday’s blast at Austria’s Baumgarten gas hub, which killed one person and injured at least 18, according to police reports.

The blast at Baumgarten, one of Europe’s main distribution hubs, prompted a 23 percent increase in wholesale natural gas prices within minutes of the explosion to reach a four-year high, but the effects have not reached as far as Greece.

This may be explained by the fact that Greece’s natural gas market does not feature many buyers and sellers, nor does it serve as a gas hub, but, instead, is supplied directly via a route stretching from Ukraine all the way to the Greek-Bulgarian border.

However, it is still too early to rule out any impact on the small Greek market over the next few days, especially if repair work at the damaged Austrian facility is delayed and European gas demand levels remain high as a result of the winter conditions.

Market officials noted LNG prices may rise if the damage at Baumgarten proves extensive. No further affects are anticipated for the time being, according to authorities.

Besides the lignite-fired power stations currently on hand in Greece – four of five units at the main power utility PPC’s Agios Dimitrios facility, as well as the utility’s Megalopoli III and IV and Amynteo II – the country’s grid is also being supported by gas-fueled facilities in Aliveri, Lavrio, Megalopoli V, a Heron facility, Elpedison’s unit in Thisvi, as well as units operated by Protergia and Korinthos Power.

To date, no gas import shortages, or exports, to cover increased needs in central Europe, have been registered.

Austria’s Baumgarten facility, on the Slovakian border, supplies one tenth of total European demand and is a key distribution center for gas hailing from Russia and Norway.

A Bloomberg report described the incident as a warning that highlights the age-factor of much of Europe’s key energy infrastructure.

Just hours prior to the explosion in Austria, an underwater pipeline connection transfering natural gas from the North Sea to northern Europe needed to be temporaily closed after a minor rupture was detected. Also, gas storage facilities in the UK are frequently forced to shut down as a result of ageing pipelines.

The majority of Europe’s natural gas infrastructure was developed between 1960 and 1980, during a period when the former Soviet Union was exploiting new Siberian deposits for increased gas exports to west Europe.

Ageing gas infrastructure requires increased attention and maintenance over time. Increased demand also accelerates deterioration.

Lower natural gas and oil prices have prevented any talk of replacing some of Europe’s ageing energy installations.

The UK has been impacted most, in terms of prices, by the Baumgarten gas hub explosion, which coincided with increased demand from northern Italy to Scandinavia as a result of the drop in temperatures.