Ministry committee set to deliver energy-storage framework plan

Facilities operating purely as energy storage stations will be placed under one category for licensing and regulatory purposes, while a separate category will be established for operations combining storage and RES stations, according to a proposal being prepared by a special committee assembled by the environment and energy ministry.

Also, all electricity markets, such as the day-ahead, intraday and balancing markets, will be open to all energy storage units, regardless of category, according to sources.

Units operating as energy storage stations, alone, are likely to receive licenses through an existing framework already used to grant licenses to natural gas-fired power stations, sources informed.

RAE has resorted to this existing framework as a solution to offer production licenses to a number of companies that have lodged applications for large-scale battery facilities.

The committee, set to stage its final session tomorrow, is expected to present a finalized proposal early next week to authorities, including political officials, RAE, the Regulatory Authority for Energy, energy market operators, and the energy exchange.

The energy ministry, placing great emphasis on energy storage as part of the country’s decarbonization strategy, intends to forward the committee’s framework plan for public consultation at the end of June. The ministry plans to submit a related draft bill to Parliament by October 31.

Medium-voltage suppliers seek higher-priced deal revisions

A sharp rise in medium-voltage energy costs over recent times, resulting from higher wholesale prices, threatens to damage the competitiveness of Greek manufacturers, Antonis Kontoleon, president of EVIKEN, the Association of Industrial Energy Consumers, has told energypress.

Rallying CO2 emission right prices as well as persistently higher prices in the day-ahead and balancing markets have prompted electricity suppliers to seek revised medium-voltage agreements as protection against loss-incurring sales.

Electricity suppliers, maintaining business to business agreements with medium-voltage consumers have increased – by 20 percent compared to just recently – their number of requests forwarded for new supply agreements.

More crucially, suppliers are asking their customers to accept upward price revisions.

In many cases, suppliers have forwarded letters to customers informing that they will no longer be able to service existing supply agreements unless prices per KWh are raised.

Low-voltage consumers also face increased electricity bill costs following the activation, by suppliers, of cost-protection clauses.

Independent suppliers have activated wholesale price-related clauses, incorporated in their supply agreements, while power utility PPC has triggered, for the first time, a CO2 emission rights cost-related clause.

RAE, the Regulatory Authority for Energy, has summoned PPC’s administration to offer an explanation on this decision, at a meeting today. The authority is also expected to soon summon independent suppliers.

IPTO to challenge RAE’s €5m fine for west corridor line delay

Power grid operator IPTO will legally challenge a 5 million-euro fine imposed by RAE, the Regulatory Authority for Energy, for delays in the development of a “west corridor” transmission line in the Peloponnese, from Patras to Megalopoli, operator sources have informed energypress.

The authority’s decision is legally baseless and does not serve interests for optimal functionality in the energy market, the sources noted.

The RAE fine imposed on IPTO encourages local reaction in general and is detrimental to the effort being made for swift development of infrastructure projects around Greece, the operator’s sources added.

IPTO has never kept concealed delays it has faced to develop a small fraction of work remaining for the west corridor’s completion as a result of resistance raised by a regional monastery in the Kalavryta area, the operator sources asserted.

As soon as legal action was taken, late last year, against this project’s completion, IPTO informed RAE in writing about the initiative’s repercussions on the development plan, the sources said.

Also, IPTO does not accept any responsibility for balancing market cost increases, which have risen since last November’s target model launch, and will support its position by providing facts and evidence to RAE as well as other Greek and European authorities, the sources told.

 

Target model tweaks to determine end of balancing market measures

The amount of time still needed before RAE, the Regulatory Authority for Energy, can lift balancing market measures designed to contain related surcharge costs by limiting offers of market participants will depend on the progress of a road map for structural interventions to the target model.

The road map, being prepared by RAE in collaboration with power grid operator IPTO, is expected to be ready within June.

It will offer a time frame for the implementation of all structural interventions planned and needed to promote rational behavior in wholesale electricity markets.

Restrictive measures were introduced on February 13 for an anticipated three-month period.

 

Target model non-compliance cost formula effective, IPTO notes

A new target model formula calculating discrepancy cost is proving effective as, in most cases, it is impacting the finances of electricity producers and suppliers when they deviate from distribution orders and loading plans, power grid operator IPTO has noted.

As a result, the discrepancy cost formula should, for the time being, continue to apply for both electricity producers and suppliers as it appears to be offering a balancing incentive, the operator has recommended.

IPTO’s proposal has been forwarded to public consultation, taking place until May 7, for a scheduled reassessment of factors concerning non-compliance charges following the target model’s recent launch.

Balancing market entry for RES, demand response by end of ’21

RAE, the Regulatory Authority for Energy, is planning the balancing market entry of all energy sector players offering flexibility to the grid by the end of this year, a prospect seen as a key factor in lowering balancing market costs.

As a result, RES players, through green aggregators representing them, will participate in the balancing market by the end of 2021, along with the demand response mechanism.

The addition of RES producers promises to intensify competition in the balancing market, which, combined with the demand response mechanism’s participation, will contribute to a further de-escalation of balancing market surcharge costs.

Wind and solar energy farms will have a place in the balancing market. Other RES technologies, such as biogas units, are linked to operating aid contracts with fixed tariffs.

The demand response mechanism’s participation in the balancing market promises to enhance the system’s flexibility, in terms of demand, while the entry of RES producers will make electricity production even more flexible.

Authorities gearing up for intraday market entry of traders

Authorities are picking up the pace on moves needed to also enable traders to begin participating in Greece’s intraday electricity market, one of the new wholesale markets emerging with the target model’s recent introduction.

The Greek energy exchange will forward its proposal for necessary market regulation amendments to RAE, the Regulatory Authority for Energy, within the next two months, energypress sources informed.

These revisions will take finalized shape through ongoing discussions between the energy exchange, as operator of the intraday market, power grid operator IPTO, managing international grid interconnections, and RAE.

The authorities are seeking to establish an optimal formula for the intraday market entry of electricity traders.

The talks, until now, have indicated that intraday day interconnection rights will not be required for transboundary trade between intraday markets that have not undergone coupling.

Therefore, traders will be able to participate in the intraday market by utilizing the amount of daily interconnection rights they have secured and not used for transboundary transactions in the day-ahead market.

The addition of traders to the intraday market promises to boost its liquidity, currently low. This will help liberate market players by offering them greater flexibility, limiting the pressure on the balancing market.

Foreign firms seeking local demand response service roles

Major European companies with considerable interests in energy exchanges abroad are now seeking to represent local industrial producers for demand response services in Greece’s balancing market.

Two major international players, currently assembling new related divisions in Greece, have already approached Greek producers to take on their representation.

Demand response system entry into Greece’s new balancing market is expected to begin within 2021, barring unexpected developments.

Once launched, foreign representatives will be able to assume demand-response, green-aggregator roles in Greece, offering balancing services to the system.

Power grid operator IPTO, in its effort to ensure grid stability, will be able to utilize the flexibility major-scale electricity consumers are capable of offering.

Market coupling with Bulgaria expected by early May

Market coupling to unify the Greek and Bulgarian day-ahead markets, representing a second step for the participation of Greek wholesale electricity markets in a pan-European unification of markets through the target model, is planned for late April or early May, sources have informed.

The forthcoming step was preceded by market coupling between Greece and Italy, unifying, as of December 15, the day-ahead markets of the two countries through a single price coupling algorithm, EUPHEMIA (Pan-European Hybrid Electricity Market Integration Algorithm). It calculates energy allocation, net positions and transboundary electricity prices.

Greece’s market coupling with Bulgaria promises to create an even broader trading platform for market participants, sector officials noted. Besides bilateral contracts for energy imports and exports, market coupling will also facilitate automatic energy flow from the higher-priced country to the lower-priced country.

To date, Greece has clearly been an energy importer in its transboundary energy trading relationship with Bulgaria. It remains to be seen if this will be maintained under the new conditions.

Once market coupling of the Greek and Bulgarian day-ahead markets has been accomplished, Greece’s next step towards unification with European energy markets will be to link its intraday market with that of Italy, a step expected by next summer, through the implementation of complementary regional intraday auctions (CRIDA).

Further ahead, a third step, balancing market coupling through two European platforms, MARI (Manually Activated Reserves Initiative) and PICASSO (Platform for the International Coordination of Automated Frequency Restoration and Stable System Operation), is planned for the second half of 2022.

 

Balancing market cost falls to €10.99/MWh a week into measures

Balancing market measures recently introduced by RAE, the Regulatory Authority for Energy, have produced tangible results for market participants, judging by clearance price figures between February 15 to 21, the first full week since the measures were imposed.

However, market players were quick to point out that last week’s market conditions were shaped by unusual factors not making possible a safe assessment of the results produced by the measures. They were launched on February 13.

Extreme snowstorms affected electricity supply in many parts of the country and a technical breakdown at the Koumoundourou substation serving the wider Athens area required a full-scale response from the country’s electricity production units.

Between February 15 and 21, the balancing market cost registered 10.99 euros per MWh, down from 12.36 euros per MWh a week earlier, according to data provided by IPTO, the power grid operator.

The regulatory authority needed to intervene following a sharp rise in balancing market costs since November’s launch of the target model’s new markets.

Redispatching formula RAE’s next balancing market step

After imposing balancing-market restrictions for producer offers, as of February 13, RAE, the Regulatory Authority for Energy, is now planning further measures needed to fully rectify this market’s irregularities, including, most imminently, a formula to remunerate units for redispatching activities.

Redispatching, or unit loading changes made for security or grid sufficiency reasons during the Integrated Scheduling Process (ISP) stage, has often been implemented by power grid operator IPTO at units belonging to the Peloponnese system, as energy restrictions exist concerning the maximum amount of energy injections permitted for these units, due to the existing 150-kV system’s transmission capacity limitations, combined with increased penetration of RES units in the area.

However, a formula has yet to be established to distinguish between energy activated for balancing purposes and energy activated for other purposes.

RAE is seeking a complete and permanent formula to deal with issues concerning system restrictions, especially a mechanism under which units participating in dispatching will be remunerated.

As part of the effort, the authority, on the one hand, has asked power grid operator IPTO to propose a formula distinguishing energy activated for balancing purposes and energy activated for other reasons, and, on the other, offer recommendations for effective integration and application of these provisions in the balancing market code.

RAE is aiming to adopt the new measures as soon as possible. For the time being, a measure suspending the ability of players to submit negative-price offers for energy balancing is in place until a 400-kV line linking Megalopoli, Peloponnese with the main grid is launched.

Balancing market costs remained slightly elevated for a four successive week, IPTO data showed.

Day-ahead market prices unusually low despite crisis conditions

Though the balancing market and its various problems since November’s launch of new target model markets may have been the focus of attention of late, irregularities have also troubled the day-ahead market, necessitating a closer look, officials have stressed.

This need was first pointed out by Alex Papalexopoulos, one of the architects of the country’s electricity system, who observed that the day-ahead market has shown signs of offers being systematically submitted at levels below actual cost. He said market dumping was taking place, referring to offers submitted by lignite-fired units.

These concerns have now also been raised by Dinos Benroubi, head of energy supplier Protergia’s electricity and gas divisions, as well as Antonis Kontoleon, the chief official at EVIKEN, Greece’s Association of Industrial Energy Consumers.

At a time of crisis, high electricity demand and calls on industrial producers to hold back on energy consumption, day-ahead market prices remain very low and full-scale electricity exports are taking place towards Italy, Kontoleon noted during a panel discussion at Athens Energy Dialogues, a conference held yesterday.

Protergia’s Benroubi took the issue a step further by noting that RAE, the Regulatory Authority for Energy, must implement a monitoring mechanism for the day-ahead market, as, despite serving as a base for the target model’s functioning, it is displaying irregularities.

RAE wants measure of balancing market distortion cost

RAE, the Regulatory Authority for Energy, has requested power grid operator IPTO to calculate the financial impact of balancing market distortion costs since November’s launch of new target model markets.

RAE has since decided to impose restrictions on balancing market offers. These are expected to be published in the government gazette today or tomorrow, enabling their implementation three days after the date of publication.

RAE estimates it will have implemented the balancing market restrictions by the end of this week.

It remains to be seen if RAE’s request towards IPTO for a measure of the higher balancing market costs incurred by suppliers will result in retroactive returns for affected parties dating back to the early-November launch of the target model.

Non-vertically integrated electricity suppliers, severely impacted by the increased balancing market costs that resulted in higher wholesale market prices, are demanding retroactive rebates.

Balancing costs still elevated, suppliers insist on full returns

Balancing market costs remained elevated last week despite the introduction of a first round of balancing market restrictions decided on by RAE, the Regulatory Authority for Energy.

The total balancing cost was 9.82 euros per MWh between January 25 and 31, slightly lower than the level of 10.82 euros per MWh registered between January 18 and 24, according to data provided by IPTO, the power grid operator.

Non-vertically integrated electricity suppliers, impacted by wholesale electricity price increases resulting from higher balancing costs since November’s launch of new target model markets, insist that decisions eventual taken by RAE for returns to suppliers of excessive balancing costs need to be retroactively enforced.

RAE has promised to examine this demand but the decision it could take remains unclear.

It should be pointed out that the recently appointed energy minister Kostas Skrekas generally does not favor retroactive enforcement of energy-sector decisions.

At least one non-vertically integrated supplier appears to have taken extrajudicial action against IPTO, overseeing the balancing market, making note of this market’s distortions and the operator’s responsibility.

 

PPC to hold back on CO2 cost clause until at least March 31

Power utility PPC, facing rising CO2 emission costs, will not activate a related clause included in low-voltage supply agreements for protection until at least March 31, energypress sources have informed.

Otherwise, the overwhelming majority of the country’s households would soon be subject to significant electricity cost increases as CO2 emission costs have been on the rise over the past four months or so.

State-controlled PPC’s low-voltage supply agreements have included a CO2 emission clause since November 1, 2019.

Yesterday, carbon emission futures were priced at 32.78 euros per ton, slightly below a level of 35.14 euros per ton in mid-January.

CO2 emission costs have risen consistently since first hitting levels of 29 euros per ton in November, 2020.

According to recent forecasts by ICIS, specializing in commodity pricing, the upward trajectory of carbon emission costs will continue over the next three years, averaging 39.24 euros per ton in 2021, before skyrocketing to levels of 46 euros per ton in 2022 and 50 euros per ton in 2023.

PPC’s CO2-cost clause has already been activated for its medium and high-voltage supply.

The corporation plans to reexamine its CO2 clause freeze for low-voltage consumers beyond March 31.

Contrary to PPC, independent suppliers have incorporated wholesale market price clauses, not CO2 emission cost clauses, into their supply agreements.

Independent suppliers have activated their clauses as a result of higher balancing market costs. Their low-voltage consumers have consequently faced electricity bill increases ranging from 7 to 30 percent.

Balancing market measures this week, cost restraint at €10/MWh

Measures prepared by RAE, the Regulatory Authority for Energy, with the aim of restricting offers in the balancing market following sharp price rises since November’s launch of new target model markets, are expected to be implemented this week as soon as the authority’s related decision is published in the government gazette.

To check the effectiveness of the new measures, electricity suppliers, hit hard by higher wholesale prices, have conducted simulated testing by applying the interventions to a considerable number of randomly selected 24-hour periods since the target model’s launch.

According to sources at some electricity supply firms, the testing has shown these measures can contain surcharge cost increases to single-digit figures.

The measures to be implemented any day now will combine to effectively create an upper limit for balancing market prices at levels of approximately 10 euros per MWh, as long as producers continue to exercise restraint when submitting offers, the sources added.

However, levels of approximately 10 euros per MWh remain unsatisfactory as they are many times over the balancing cost’s mandatory pool, ranging between 2 to 3 euros per MWh, the sources stressed.

Consumers paying the price for balancing market turbulence

Low and medium-voltage consumers – households, businesses, small-scale producers and industrial producers – are paying the price for the target model’s persisting market turbulence that has led to higher wholesale prices, especially in the balancing market, nearly three months after the launch of new markets.

Interventions made by authorities have yet to fully resolve issues and offer market stability.

Additional costs have been passed on to consumers despite no official price-hike announcements by electricity suppliers.

In the medium-voltage category, prices have risen to levels of between 67 and 69 euros per MWh from 59 to 61 euros per MWh prior to November’s launch of target model markets, introduced as a step towards harmonizing Greece’s market with EU markets.

The market turbulence has also overwhelmed consumers in the low-voltage category, where prices have risen consistently.

With the exception of the power utility PPC, whose prices have remained steady as the company’s supply contracts do not include wholesale market-related clauses, independent suppliers have passed on their elevated electricity purchasing costs to consumers through higher tariff rates. Most independent suppliers include wholesale market clauses in their supply agreements.

Making matters more troubling and confusing for consumers, independent suppliers each employ different wholesale market clause-activation levels and resulting pricing formulas, meaning it is difficult to tell whether their supply terms are being adhered to or not.

Price hikes by independent suppliers have ranged from 7 to 35 percent, electricity bills sent to energypress by frustrated consumers show.

At present, there is no sign of any price de-escalation. The cost of wholesale electricity in the balancing market has remained on an upward trajectory. Last week (January 18-24), price levels averaged 10.82 euros per MWh, up from 7.77 euros per MWh in the previous week.

The wholesale market clauses of independent suppliers are expected to keep producing price hikes for some time even if possible additional measures by RAE, the Regulatory Authority for Energy, lead to an overall price de-escalation. This is due to a latency between the wholesale clearing procedure and clause activation.

 

Retroactive enforcement of balancing market rules sought

Non-vertically integrated electricity suppliers are seeking retroactive implementation of measures introduced recently by RAE, the Regulatory Authority for Energy, to contain balancing market prices at rational levels.

Balancing market costs rose sharply in the weeks following November’s launch of new target model markets, prompting an escalation of wholesale electricity prices that severely increased the purchasing costs of non-vertically integrated electricity suppliers.

These suppliers are now determined to seek returns from RAE and power grid operator IPTO for additional outlays prompted by flaws in balancing market rules that were not detected until after the launch of new markets.

A set of new rules just introduced by RAE constitute recognition by the authority of the abusive behavior practiced by producers prior to the intervention, the suppliers contend.

Non-vertically integrated electricity suppliers are pushing for even stronger measures. They believe the new rules rely too much on the goodwill and cooperation of producers, still able to return to irrational behavior and consequently threaten the sustainability of firms and financially pressure consumers.

On the same wavelength, EVIKEN, the Association of Industrial Energy Consumers, has criticized RAE for backing away from its own proposals, noting industrial energy costs currently depend on whether balancing market participants will exercise pricing restraint.

Key issues in new minister’s first session with EC officials

Today’s first meeting, via teleconference, between Greece’s recently appointed energy minister Kostas Skrekas and European Commission authorities, as part of Brussels’ ninth post-bailout review, will focus on four key issues: power utility PPC’s lignite monopoly; the proper functioning of target model markets; energy-sector privatizations, and the decarbonization plan for west Macedonia, a lignite-dependent area in the country’s north.

The four issues were addressed in preliminary talks last week between Alexandra Sdoukou, secretary-general of Greece’s environment and energy ministry and Brussels technocrats.

It remains to be seen if the European Commission will again commend Athens, and to what extent, for the target model’s functioning, as Brussels had done last November, when the model’s new markets in Greece were launched as a step to harmonize EU energy markets.

However, weeks into the launch, balancing market costs skyrocketed, leading to sharply increased wholesale electricity prices. RAE, the Regulatory Authority for Energy, is now considering to introduce an adjustable price-containing measure to be set as a percentage of day-ahead market prices.

The European Commission, in the latest talks, can also be expected to push for the launch of a market test concerning an agreement offering independent players access to PPC’s lignite-based electricity production.

Though the interest of independent players for lignite-based electricity may have diminished given its increased cost, this antitrust case, unresolved for years, remains a big concern for the government as Brussels could associate it with pending Greek issues.

The complexity of PPC’s lignite monopoly case was deepened following a decision by the previous energy minister, Costis Hatzidakis, to bundle the matter with a Greek compensation request based on the utility’s need to keep running lignite-fired power stations for energy sufficiency. According to reports, his successor, Skrekas, will not sway from this policy.

As for energy-sector privatizations, a sale plan for gas supplier DEPA Commercial has attracted considerable interest but officials are concerned as parent company DEPA is embroiled in an ongoing lawsuit with ELFE (Hellenic Fertilizers and Chemicals).

DEPA has appealed a verdict awarding the producer a compensation amount of 60 million euros following overcharging claims. The case could be deferred until September, meaning binding bids by possible DEPA Commercial buyers may need to be delayed.

Greece’s decarbonization master plan features 16 key investment proposals that are expected to create over 8,000 jobs, directly and indirectly, in lignite-dependent areas. However, numerous complex matters need to be resolved, including the transfer of related property controlled by PPC, Brussels’ approval of a series of incentives for new investments, and scores of licensing issues.

RAE upper limit on balancing market offers still possible

A decision by RAE, the Regulatory Authority for Energy, on whether to intervene further following yesterday’s decisions to suspend negative prices for balancing energy market offers and limit them in accordance with minimum production levels that are technically possible will depend on how balancing market prices unfold, authority officials have pointed out.

The possibility of an upper limit for balancing energy market offers cannot be ruled out, the RAE officials explained.

Commenting on yesterday’s initiatives by RAE, electricity producers, on the one hand, and non-vertically integrated suppliers, traders and major-scale consumers, on the other, offered conflicting opinions.

The imposition of a zero-level threshold for offers was not necessary as extreme prices, or behavior, no longer exist in the balancing market to justify the measure, electricity producers contended, warning that it could prompt new market distortions.

The producers also expressed concern over RAE’s preference to not set a specific time period for the negative-price suspension’s validity.

At the other end, Antonis Kontoleon, the head official of EVIKEN, Greece’s Association of Industrial Energy Consumers, noted that RAE has taken a step back from its own proposal for an upper limit on balancing energy market offers as well as upper and lower limits for balancing capacity market offers.

Industrial energy consumers will remain dependent on whether balancing market participants exercise restraint, the EVIKEN chief underlined.

Suppliers and traders described the two RAE measures implemented yesterday as a first step in the right direction.

The impact of the measure limiting offers in accordance with minimum production levels that are technically possible cannot be quantified, they noted, adding the zero-level threshold measure will prevent sharp price rises but would prove insufficient if, for any reason, self-restraint stops being observed in the balancing market.

One trader noted that the zero-level threshold, to prove effective, must be maintained until power grid operator IPTO completes the “western corridor” grid in the Peloponnese.

Preliminary talks for 9th post-bailout review begin today

Power utility PPC’s lignite monopoly ordeal, the effort to ensure proper functioning of target model markets, the progress of privatization plans, and Greece’s decarbonization master plan for the lignite-dependent local economies of west Macedonia, in the country’s north, and Megalopoli, Peloponnese, are the key issues on the agenda of the ninth post-bailout review set to be conducted by the European Commission.

Preliminary review talks are scheduled to commence today between energy ministry officials and Brussels technocrats. These will be followed by higher-level talks involving technocrat chiefs and Greece’s newly appointed energy minister Kostas Skrekas.

Though his predecessors faced plenty of pressure, especially over PPC’s dominance, the new minister could be in for a hard time if pending energy-sector issues are not directly dealt with.

RAE, the Regulatory Authority for Energy, and power grid operator IPTO are still seeking solutions to tackle problems faced by the target model’s new markets. They got off to a problem-laden start in November, prompting a sharp rise in balancing market costs during the first few weeks.

As for energy-sector privatizations, the plan to offer a 49 percent stake in distribution network operator DEDDIE/HEDNO appears to be making sound progress and attracting strong interest, as exemplified by the participation of 19 participants in December’s market test.

On the contrary, the privatization plan for gas supplier DEPA Commercial could be destabilized by the company’s ongoing legal battle with ELFE (Hellenic Fertilizers and Chemicals) over an overcharging claim made by the latter. This battle could delay and affect the DEPA Commercial sale.

The Just Transition Plan for Greece’s decarbonization effort is now beginning to make some progress, but this unprecedented endeavor’s degree of complexity cannot be overlooked. Vast amounts of land controlled by PPC need to be repurposed, Brussels must approve investment incentives, and licensing matters need to be resolved, amongst other matters.

Balancing market costs subdued for second consecutive week

Balancing market costs remained subdued for a second consecutive week, the total cost of three uplift accounts, according to official data provided by power grid operator IPTO, registering 5.87 euros per MWh in the tenth week since the November 1 launch of the target model. Its introduction prompted sharp balancing cost increases in the first few weeks.

More specifically, the uplift 1 account reached €1.39 per MWh, uplift 2 was €0.79 per MWh, and uplift 3 registered €3.69 per MWh.

According to IPTO data on the three uplift accounts during the first ten weeks of the target model, their total cost was €8.37 per MWh in the first week, climbed to €15.68, €19.45 and €20.06 per MWh in the second, third and fourth weeks, respectively, before peaking at €43.37 per MWh in the fifth week. The uplift total then plunged to €8.08 per MWh in the sixth week, before eventually falling further to levels of €5.74 and €5.87 per MWh in the ninth and tenth weeks, respectively.

Day-ahead market prices have also been low over the past two weeks of subdued balancing market costs, meaning the overall cost in the wholesale market has dropped.

Low electricity demand as a result of the mild winter weather, so far; the lockdown measures, even if not absolute; more accurate electricity demand forecasts by power grid operator IPTO; as well as increased output by RES and hydropower units, have all been cited as factors in the reduced cost of wholesale electricity.

In addition, more rational offers by producers have also contributed to the normalization of balancing market prices.

Balancing market prices down for third successive week

Balancing market price levels have fallen considerably for a third consecutive week, between December 21 and 27, latest figures published by power grid operator IPTO have shown.

According to this data, the balancing market price averaged 7.18 euros per MWh for the seven-day period, considerably lower than levels of about 10.5 euros per MWh registered a week earlier.

RAE, the Regulatory Authority for Energy, is making an effort to normalize the target model’s new markets, launched two months ago.

Balancing market prices rose sharply during the first few weeks of the launch, especially troubling non-vertically integrated suppliers and forcing the authority to prepare a price ceiling for producer offers.

The recent downward trajectory in balancing market prices has been interpreted as an effort for price restraint by producers.

RAE now considers that it should wait before imposing tough restrictions on producer offers.

 

 

Zenith, Fysiko Aerio, Watt+Volt want lower price ceiling for producers

Three non-vertically integrated electricity suppliers, Zenith, Fysiko Aerio (Attiki GSC) and Watt+Volt, have called for a further reduction to an upper limit proposed by RAE, the Regulatory Authority for Energy, for producer offers in the balancing market.

The three suppliers expressed their common view through a joint letter forwarded to a public consultation procedure staged by RAE on the matter.

Balancing market costs have soared since the launch of the target model’s new markets several weeks ago, placing non-vertically integrated suppliers under great pressure.

In other proposals, Zenith, Fysiko Aerio and Watt+Volts also called for retroactive implementation of the price ceiling proposal, from November 1.

The trio described the balancing cost surge of the past few weeks as a “brutal transfer of wealth”, warning that retroactive enforcement of the measures proposed for the restoration of a smooth-operating balancing market, from its very first day, represents the last resort to avoid legal disputes between parties involved.

 

IPTO to cover balancing costs if its discrepancies are hefty

The projection of required system reserves has been identified as one of the problems increasing balancing market costs, RAE, the Regulatory Authority for Energy, seeking to resolve the issue for properly functioning target model markets, and power grid operator IPTO, responsible for the balancing market, have both determined.

The reserve amount is directly linked to IPTO forecasts on the grid’s needs, at high and low levels. Either way, producers are compensated for adding or removing energy from the system.

Responding to the sharp rise in balancing costs since the target model launch of new markets several weeks ago, RAE, the Regulatory Authority for Energy, is preparing to make a change to the current framework by adopting a formula that would offer IPTO an incentive for forecasts that are as accurate as possible so as to avoid large discrepancies.

The authority is looking to impose a discrepancy limit, which, if exceeded, either at low or high levels, will require IPTO, not electricity suppliers, to cover resulting costs.

RAE has also forwarded for public consultation another revision entailing special discrepancy charges for the Peloponnesian grid until a 400-KV transmission line begins operating in the area.

 

 

Suppliers want lower price limits for producers, retroactive returns

Electricity suppliers are demanding a further reduction to a price ceiling proposed by RAE, the Regulatory Authority for Energy, for balancing market offers by gas-fueled producers, and, in addition, also want an upper limit of 3.5 euros per MWh imposed on compensation for this service.

This 3.5-euro compensation rate per MWh, which reaches approximately 5 euros per MWh when system-loss charges are added, is one of the highest in Europe, suppliers contend.

Suppliers also want electricity and balancing market cost limits to apply retroactively as of November 1, 2020 with returns of resulting amounts owed by the end of this accounting year.

Non-vertically integrated electricity suppliers have reacted strongly against sharply increased balancing market costs and far higher wholesale electricity prices since the launch of the target model’s new markets several weeks ago.

Three of the country’s non-vertically integrated electricity suppliers took part in public consultation staged by RAE, the Regulatory Authority for Energy, to present their objections and proposals, energypress sources informed. The procedure ended yesterday.

 

EVIKEN requests balancing market restrictions for at least 6 months

EVIKEN, the Association of Industrial Energy Consumers, wants a price ceiling imposed for at least six months in the balancing market, warning producers are seeking to elevate industrial electricity tariffs despite the absence of any corresponding production cost increases.

Restrictive measures for a three-month duration, as proposed by RAE, the Regulatory Authority for Energy, in its related public consultation procedure would not suffice, EVIKEN warned.

The association, in a letter submitted to the public consultation procedure, also requested retroactive implementation of a price ceiling in the balancing market, beginning November 1, 2020.

Balancing market costs have risen sharply since the launch of new target model markets six weeks ago, pushing up wholesale and retail electricity prices.

The electricity market’s current structure enables oligopolistic practices that are not subject to monitoring, EVIKEN noted in its letter.