Benroubi

‘NOME auctions have run their race, alternative required’

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Nearly one third of the electricity amount offered to independent players at yesterday’s NOME auction remained unwanted, while bidding was non-existent, keeping prices flat at the recently elevated starting price of 58.12 euros per MWh throughout the session.

The absence of any bidding activity prompted officials to write off the future prospects of the NOME tool as a market opener and note that an alternative system must be found.

A total of 763 MW was offered to participants but 214 MW was not purchased.

“The NOME auctions have reached the end of their road,” Dinos Benroubi, head official at the Mytilineos group’s Protergia energy company, told an industry panel at an Economist conference in Athens. “This shows that NOME prices, determined by – and reflecting – lignite production, are no longer the way to open up the market…The NOME auctions have exhausted their limits and cannot be used as a tool to open up the retail electricity market,” the official continued, while adding that a new system needs to be introduced.

Full competition without total access to all energy sources is not possible, Benroubi highlighted, while noting that it is up to the country’s authorities to prepare and implement a new system.

The next NOME auction, scheduled for October, is planned to offer participants a record-level electricity amount of 1,029 MW, which includes a penalty quantity for the power utility PPC’s failure to meet an electricity market share contraction target included in the country’s bailout terms. Given the results of yesterday’s NOME auction, the outcome of the October session is already being seen as a foregone conclusion.

 

Protergia decision to develop 650 MW gas-fueled power station explained

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A decision by Protergia, a member of the Mytilineos corporate group, to develop a 650 MW natural gas-fueled power station is primarily based on long-term trends projected for the domestic energy market over the next 10 to 15 years, Dinos Benroubi, the energy division head at the Mytilineos group, informed participants at a conference staged by HAEE, the Hellenic Association for Energy Economics.

“We have made certain decisions and will push ahead with a new 650 MW gas-fueled power station,” Benroubi remarked.

Electricity demand is expected to significantly increase beyond 2025, while the European trend is headed towards decarbonization and a turn to renewable energy, according to projections made by IPTO, Greece’s power grid operator, the official explained.

By 2022, when the new Protergia gas-fueled power station is expected to begin operating, thermal units totaling 1,060 MW are expected to be added to the system while between 1,600 and 1,900 MW will be withdrawn by 2025, Benroubi noted.

He explained that, based on IPTO forecasts, a capacity sufficiency issue will emerge as of 2022.

“Acting together, we will all resolve this issue for the years 2020 and 2021 but, from then on, thermal output will be needed, it has become apparent,” Benroubi remarked.

According to Eurelectric, the sector association representing the common interests of the electricity industry at a European level, 1 MW of thermal capacity is needed for every 1 MW of wind energy capacity, the Mytilineos group’s energy head told.

Thermal output currently suffices to cover present RES levels, Benroubi explained, while questioning whether reduced thermal output will be enough to cover increased RES levels in 2025.

The corporation has estimated that, in 2025, a lignite-fired power station would generate electricity at a cost of 105 euros per MWh and a natural gas-fueled unit would produce at a cost of 67 euros per MWh, the official pointed out.

The development of a new natural gas-fueled unit is needed both in terms of grid needs and sustainability.

Retail electricity competition ‘needs production competition’

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The absence of fair competition in the electricity market, at a production level, will also deprive the market of true competition at a retail level, Dinos Benroubi, the chief official at independent electricity supplier Protergia, stressed last night during a roundtable discussion titled the Impact of Fluctuating Oil and Energy Prices on the National Economy, organized by the Greek Energy Forum, an international thinktank.

Benroubi, who noted that annual electricity costs for the country’s household and industrial sectors amount to 6.5 billion euros, also addressed the hefty grid-connection costs faced by Greece’s electricity consumers.

The Protergia official asserted that only half the electricity bill amount paid by consumers concerns production costs. Transmission and distribution costs represent another part of the overall cost, while about a third concerns other surcharges, Benroubi remarked.

The public service compensation (YKO) surcharge added to electricity bills, an amount paid by mainlanders in order to equate electricity costs for the country’s islanders, as Benroubi explained, needs to be resolved through the interconnection of the Greek islands with the mainland, he highlighted.

Though the benefits promised by this interconnection would cover its investment cost in no more than three years, development of its two sub-projects, concerning the Cyclades and Crete, is being severely delayed, Benroubi noted.

The Protergia head also stressed that Greece needs to focus on pursuing EU goals concerning decarbonization, RES targets, energy efficiency, energy storage and a trend towards presuming [electricity production by electricity consumers through PV generation, etc]. Instead, Benroubi added, the focus is on maintaining a state-controlled monopoly holding an 87 percent share of the retail electricity market and battling to regain lost ground, Benroubi added, referring to the main power utility PPC.

 

‘More caution needed when talking of private investments’

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Critics talking of opportunist investors in Greece’s electricity market, as well as of the need for private-sector investments by companies seeking to participate in a liberalized market, need to be more cautious with their words as the private sector has already poured significant amounts into the sector, Dinos Benroubi, Deputy Managing Director at Protergia, a member of the Mytilineos corporate group, remarked yesterday during a speech at the Athens Energy Forum.

Benroubi was responding to claims made on a regular basis by the main power utility PPC for the need of greater private-sector investment in electricity production. Most recently, the argument was also adopted by the energy ministry.

The Protergia official noted that private-sector investors have placed greater amounts into electricity production than PPC, noting the overall sum invested in recent times exceeds 2.5 billion euros, while adding that Protergia, alone, has invested over one billion euros of private capital, not public money, over the past few years.

Benroubi pointed out that consumers do not care whether electricity is being produced by PPC or private-sector companies, noting that their primary concern is lower prices and better services.

He said offers superior to PPC’s ten percent discount for punctual professional category consumers, announced earlier this week, have been offered by private-sector companies for years.

“Private-sector suppliers have been selling at even lower prices and discounts greater that ten percent for quite a while. PPC followed the trend,” Benroubi said. “Private-sector suppliers have been rewarding punctual consumers over the past year or two. So let’s not contend that prices would not have been reduced had it not been for PPC. Prices were driven down by competition, which is what led PPC to offer the discounts,” he continued.

Benroubi challenged PPC to rise amid the developments and propose realistic solutions for the market’s liberalization and also press ahead with adjustments meeting bailout demands. These include the introduction of NOME auctions, to offer third parties access to PPC’s low-cost lignite sources, as well as a 50 percent reduction of PPC’s dominant market share by 2020. Rather than focus on points of disagreement, PPC could table its own realistic proposal that could be accepted, Benroubi noted.

The Protergia official said that the NOME auction plan, as it stands, would not be implemented as players will not reach an agreement.

Benroubi also described the “Little PPC” plan, or partial sale of the power utility, as not realistic, adding that IPTO, the power grid operator, needs to comply with European standards rather than change opinion on the system’s needs each year.