Brussels set to launch action against Amynteo overtime use

The European Commission is set to launch a sanctions process against Greece in response to the country’s continued use of main power utility PPC’s lignite-fired Amynteo power station, whose 17,500-hour operating time limit, imposed for environmental reasons, expired approximately three weeks ago, on November 19.

The news of the imminent Brussels action was disclosed by a highly-ranked Directorate-General for Environment official in Athens last Friday, who added the specific department, responsible for EU policy on the environment, has not received any Greek extension request.

European Commission sanction procedures for such issues are typically lengthy and could take anywhere between a year or two to complete from the time Brussels forwards its initial complaint, the two sides exchange ensuing letters, Athens raises an anticipated objection, and Brussels issues a ruling, an official who is well-informed on the process told energypress.

Athens will aim to utilize this period and push ahead with a plan to complete an Amynteo power station upgrade that would enable the revamped unit to keep operating. The development of Ptolemaida V, a modern facility, may also be completed by then.

The Amynteo upgrade is not expected to begin until a bailout-required sale of three power stations at Megalopoli and Meliti has been completed.

The Mytilineos group, Gek Terna, Copelouzos, joined by China’s Shenhua, as well as Intrakat, have all expressed interest for involvement in the Amynteo upgrade.

 

 

CAT eligibility vital for prospects of PPC units sale, chief notes

The level of investor interest, asset value and achievable sale price of a bailout-required sale of main power utility PPC lignite mines and power stations will depend on whether the units being offered will be eligible for CAT remuneration, the power utility’s CEO, Manolis Panagiotakis, has told journalists.

Strong political support by the government, perhaps from its top level, will be needed as European Commission directives issued so far exclude lignite units from CAT mechanism payments, the PPC boss noted.

Conventional power stations, such as lignite-fired units, must satisfy a CO2 emission limit of 550 grams per KWh to qualify for CAT mechanism payments.

A European Commission proposal calling for even stricter limits is gaining growing support throughout Europe.

Given the developments, the PPC lignite units placed for sale will most likely remain ineligible for CAT support. If so, this will severely limit their appeal for investors in general. They would need to be taken on by industrial enterprises active in sectors eligible for mechanisms offsetting a considerable percentage of CO2 emission right costs.

Meanwhile, taking the sale process a step further, PPC shareholders yesterday approved a split from the corporation of the two lignite unit packages being offered in the sale of lignite mines and power stations, representing 40 percent of the utility’s overall lignite capacity.

Yesterday’s approval now enables PPC to open a data room through which six candidate investors will be informed on the details of assets included in the disinvestment.

“Our work begins now – to correctly inform interested parties, make appropriate presentations and highlight the details that make the units attractive investment prospects – in order to to achieve a satisfactory sale price,” PPC’s chief executive, Manolis Panagiotakis, informed journalists. “Now is also the time for the government and the European Commission to show, with action, their support for lignite-related production,” he added.

Three major local players, GEK-Terna, Mytilineos and ElvalHalcor, a member of the Viohalko group, as well as a fourth, the Copelouzos group, joined by Beijing Guohua, a wholly owned subsidiary of China’s Shenhua, submitted first-round expressions of interest for the PPC lignite units. Two Czech firms, EPH (ENERGETICKÝ Α PRŮMYSLOVÝ HOLDING) and Indoverse Coal Investments Limited, also emerged as surprise participants.

 

 

 

Two Czech firms emerge as PPC unit sale’s surprise contenders

The emergence of two Czech firms, EPH (ENERGETICKÝ Α PRŮMYSLOVÝ HOLDING) and Indoverse Coal Investments Limited, for expressions of interest in the first round of the main power utility PPC’s bailout-required sale of lignite mines and power stations, is the procedure’s surprise development so far.

Expressions of interest by three major local players, GEK-Terna, Mytilineos and ElvalHalcor, a member of the Viohalko group, joined by Beijing Guohua, a wholly owned subsidiary of China’s Shenhua, had been widely anticipated.

EPH is the most recent buyer of lignite units in Europe. The Czech firm acquired facilities with a total capacity of 8,000 MW in 2016. Located in Germany’s east, these lignite units were sold by Sweden’s Vattenfall. Roughly half were built in the 1980s and the other half about two decades ago.

Vattenfall, a state-owned firm, is believed to have sold these units to EPH in order to reduce its portfolio’s exposure to CO2 polluting lignite.

The corporate size of EPH is comparable to that of PPC. Its assets are valued at 12.8 billion euros and annual total turnover reaches about 6 billion euros. However, the Czech firm’s profit figures are a lot more robust. The company’s most recent EBITDA figure was reported at 1.9 billion euros.

EPH maintains assets in central Europe – Czech Republic, Slovakia, Germany, Hungary and Poland – as well as in Italy and the UK.

The EPH group was established in 2009 with the PPF group, which has invested in Greece’s OPAP state lottery, among its founding shareholders. Through subsidiaries, EPH controls and operates lignite-fired power stations, mines, telethermal systems, natural gas networks and storage facilities. It also operates as a coal trader and supplier of electricity and natural gas and owns a number of renewable energy units.

The main shareholder at EPH, 42-year-old Daniel Kretinsky, sold 31 percent of EPH Infrastructure to Australia’s Macquarie Infrastructure and Real Assets in 2016. Kretinsky also holds stakes in Czech media and is a co-owner of the Sparta Prague soccer club.

Indoverse, the other Czech firm to emerge for the first round of PPC’s sale, is active in the Czech Republic’s coal market and operates one power station and mines. Early this year, the company’s head, energy-sector investor Pavel Tykac, who is ranked one of his country’s five wealthiest individuals, declared an intention to invest over one billion euros in European coal-fired power stations.

Tykac has been involved in a number of contentious issues and has needed to face legal charges prompted by unorthodox business practices, including aggressive takeover attempts.

He is the sole owner of Sev.en Energy Group, Indoverse’s parent company. The Sev.en energy group is far smaller than Greece’s PPC. It produces approximately 10 million tons of lignite each year and operates a 410-MW lignite-fired power station.

PPC sale draws expected local players, Shenhua, Czech firms

Three major local players, GEK-Terna, Mytilineos and ElvalHalcor, a member of the Viohalko group, as well as a fourth, the Copelouzos group, joined by Beijing Guohua, a wholly owned subsidiary of China’s Shenhua, have – as was anticipated – all submitted first-round expressions of interest for the main power utility PPC’s sale of bailout-required sale of lignite mines and power stations. Two Czech firms, EPH (ENERGETICKÝ Α PRŮMYSLOVÝ HOLDING) and Indoverse Coal Investments Limited, also emerged as surprise participants. The deadline for expressions of interest expired yesterday afternoon.

PPC needs to disinvest power stations and mines units representing 40 percent of the utility’s overall lignite capacity.

The list of first-round bidders could be revised if partnerships are established or entrants fail to meet criteria enabling qualification for binding bids in the second round. The PPC board will decide on the qualifiers.

Finalized investment schemes will need to be officially declared by the end of July. A September deadline is expected to be set for binding bids.

It is not yet known if any of the sale’s early participants intend to submit binding second-round bids. They are expected to decide after examining PPC’s financial, technical and legal information to be made available to first-round participants through a data room. Investors are not expected to decide any sooner than next month.

The sale price to be demanded by PPC will be a crucial factor for investors. Though definitely interested in acquiring lignite-fired power stations and mines as a means of  controlling their cost of electricity sold, participating suppliers are troubled by the rising production cost of solid fuel-based power generation, a development prompted by EU climate change policies.

PPC advisers upbeat on wider turnout for lignite units sale

The main power utility PPC’s advisers steering the utility’s bailout-required sale of lignite mines and power stations representing 40 percent of the utility’s overall lignite capacity, are confident that, besides local players, a considerable number of foreign investors will also emerge to submit first-round expressions of interest. The deadline for participants expires today.

Over the past few days, it has been rumored that the sale could attract investors from India. This remains to be seen, later today. For the time being, a number of local players, namely GEK-Terna, Mytilineos and Viohalco, as well as the Copelouzos group, expected to join forces with China’s Shenhua for this sale, are believed to be the only certainties.

It is not yet known if any of these probable participants will submit binding second-round bids. They are expected to decide after examining PPC’s financial, technical and legal information to be made available to first-round participants through a data room. These details will help participants determine whether the purchase of lignite units represents a sustainable investment or not. Investors are not expected to decide any sooner than next month.

The sale price to be demanded by PPC will be a crucial factor for investors. Though definitely interested in acquiring lignite-fired power stations and mines as a means of  controlling their cost of electricity sold, participating independent suppliers are troubled by the rising production cost of solid fuel-based power generation, a development prompted by EU climate change policies.

According to European Commission studies and forecasts, emission right costs in the EU, already elevated, are expected to climb further, from 14.43 euros per ton, yesterday’s price, to over 30 euros per ton in 2030.

Given these conditions, investor interest in PPC’s disinvestment of lignite units is expected to be limited to industrial enterprises eligible for offsetting mechanisms compensating such expenses.

 

 

PPC lignite unit bidders to move alone for sale’s initial stage

Most of the local corporate groups planning to submit first-round expressions of interest for the main power utility PPC’s bailout-required sale of lignite mines and power stations representing 40 percent of the utility’s overall lignite capacity are expected to move independently before forming consortiums for the second round, if the acquisition of units offered is deemed sustainable.

All investors, expect for the Copelouzos group, which has made clear it intends to join forces with China’s Shenhua from the start, are expected to bid alone in the first round.

The deadline for first-round expressions of interest expires this Thursday. At this stage, GEK-Terna, Mytilineos and Viohalco, along with the Copelouzos-Shenhua partenership, are expected to emerge as the first round’s local bidders.

No further partnerships involving Greek firms are expected at this preliminary stage of the sale process despite ongoing talks between various parties. Talks for the establishment of consortiums are seen maturing in July, once the short list of second-round qualifiers takes shape.

The sustainability prospects of units offered by the sale’s terms will be crucial in determining the bidding interest of second-round qualifiers.

According to sources, current talks between interested parties not only concern initial equity line-ups but long-term partnerships for power supply.

Given the increased CO2 emission right costs, investor interest in PPC’s disinvestment of lignite units is expected to be limited to industrial enterprises eligible for offsetting mechanisms compensating these expenses.

Two major Greek industrial groups, Viohalko and Mytilineos, are eligible for offsetting mechanisms.

 

PPC set to appoint boards of two firms selling lignite units

The main power utility PPC intends to appoint, within the next few days, the boards of two new companies to carry the utility’s lignite mines and power stations included in a bailout-required sale representing 40 percent of the corporation’s overall lignite capacity, CEO Manolis Panagiotakis has announced.

Procedures for the disinvestment are believed to be progressing on schedule. Investors have until June 21 to express first-round, non-binding interest for the units included in the sale.

A broad turnout is expected in the first round, but many local investors insist they will emerge for the sale’s preliminary stage on an exploratory basis.

The two new PPC firms will operate concurrently with the sale procedure, according to the power utility’s boss.

The increased cost of CO2 emission rights, consistently over 15 euros per MWh in recent times, is a concern for the sale as it adds to the risk faced by prospective investors.

“We could make a bid if we see that the units can operate even with a marginal profit margin,” the representative of one potential investor, still reserved about the prospects of the units up for sale, told energypress.

The Mytilineos group and GEK-Terna have both declared they will submit non-binding offers on June 21, but it remains unknown whether they will be willing to make follow-up offers. Elpedison has insisted it will not turn up for the first round. The Stasinopoulos group is expected to participate, either independently or as part of a consortium. The first-round participation of a consortium comprised of the Copelouzos group and China’s Shenhua is also seen as a certainty.

According to the sale plan, binding offers will be submitted in September following the provision of data-room access to participants, offering details on the units to be sold.

 

 

 

 

 

PPC announces lignite units tender a day ahead of schedule

The main power utility PPC has just announced an international tender offering a bailout-required sale package of lignite units one day ahead of tomorrow’s scheduled date.

Prospective investors will have until June 21 to submit official expressions of interest and June 11 to forward any queries concerning the overall sale procedure.

Power stations and mines representing 40 percent of PPC’s overall lignite capacity have been included in the sale package.

The preferred bidder is scheduled to be officially announced on October 17. Binding offers will need to be submitted by September 1. Then, PPC’s board is scheduled to meet on September 20 to endorse the sale and purchase agreement as well as a financial appraisal procedure.

On July 3, the PPC board plans to endorse prospective investors who express interest as well as the procedure leading to the submission of binding offers.

It remains to be seen who the participants will be and how much they will be willing to offer for PPC’s lignite units.

At present, three investment teams are expected to submit official expressions of interest. The Copelouzos group, joined by Chinese energy company Shenhua, is one of the three, Terna Energy is another, while the metals industry Viohalco, one of the country’s biggest energy consumers, is the other player seen as a certainty.

The aforementioned players could also establish partnerships between them of with other investors still out of the picture.

Whether these prospective investors will progress beyond the preliminary stage to submit binding bids is another story. This will largely depend on the variable costs of units, currently not known; lignite’s level of participation in the country’s energy mix; as well as other still-unspecified matters, such as the CAT eligibility of lignite units.

 

 

PPC lignite units draft bill ratified, sale price a challenge

The successful staging of a bailout-required sale of three main power utility PPC lignite-fired units as well as mines, whose draft bill was ratified in parliament yesterday, stands as the next major challenge for both the government and the power utility.

The units to be offered for sale in the form of two packages, representing assets in the north and south, need to be split from the corporation by the end of May so that the tender’s staging may immediately follow. The entire sale procedure needs to be completed within 2018.

PPC’s chief executive Manolis Panagiotakis is confident the power utility will emerge from the sale as a smaller but more robust corporation.

“PPC stands to gain from a successful sale of lignite units,” Panagiotakis declared in parliament. “We will turn a page, meet our commitments and change the firm’s energy mix,” he added.

Failure to complete the sale, representing 40 percent of PPC’s lignite capacity, will inevitably bring the utility’s hydropower units into the picture.

PPC and the energy minister Giorgos Stathakis are desperate to avoid such a development, vaguely described as a resort to “structural measures” in the bailout if PPC fails to meet its obligations concerning its shares of the retail electricity market and production.

The participation of major energy firms and the price offers they will be willing to make are crucial factors for the sale’s success.

A desired price for the assets included in the sale package has not been included in the bill just ratified. A minimum price level is anticipated from an independent valuator.

Lignite asset values around Europe have been impacted by the EU’s decarbonization policy as well as projections of elevated CO2 emission right costs in the future.

At this stage, it appears that the mimimum price level to be set by the independent valuator is unlikely to be reached by investor offers.

Both the energy minister and PPC boss are confident investors from Greece and abroad will express interest in the sale package.

Panagiotakis, the PPC chief, believes the investment interest from abroad will be led by Chinese firms, including CMEC, SPIC and Shenhua.

 

 

 

 

 

 

 

Brussels rejects Amynteo time extension, upgrade now urgent

The European Commission appears to have rejected a Greek request for an operating hours extension of the main power utility PPC’s Amynteo lignite-fired power station, making the need to environmentally upgrade the facility extremely urgent.

Both the power utility and energy ministry are believed to have already accepted this position, according to energypress sources.

The Directorate-General for the Environment, in particular, has opposed a second request  made by Greek authorities, following an unsuccessful initial effort, calling for an extension of the ageing Amynteo facility’s remaining lifespan from 19,500 operating hours to 32,000.

A more positive stance on the prospect by the Directorate-General for Energy had raised the hopes of Greek officials, but it now appears the environmental authority’s position on the matter has prevailed.

This development means that PPC will need to act fast until the end of 2018 for a financing solution and assignment of the unit’s environmental upgrade so that the power plant can continue operating and, furthermore, ensure that the provincial city of Amynteo, in the country’s north, is not left without a telethermal facility as of 2019. Telethermal technology would cover the heating needs of Amynteo’s 10,000 or so inhabitants at an exceptionally low cost.

The Mytilineos group, GEK-TERNA, and the Copelouzos group, backed by China’s Shenhua, have all submitted upgrade proposals for the Amynteo facility.

As was disclosed yesterday by energypress, the energy ministry’s upgrade decision will be based on a series of critertia, key factors being the project’s assured financing as well as  assurance of low-cost electricity for major energy-intensive industries as a means of boosting their level of competitveness.

The Mytilineos corporate group’s Amynteo upgrade proposal, forwarded just days ago by chief executive Evangelos Mytilineos, entails a 110 million-euro revamp and lifespan extension to 2030 in exchange for a favorable long-term electricity supply agreement concerning the group’s Aluminium of Greece industrial enterprise. This proposal called for electricity absorption of between 300 and 400 MW per year, from the unit’s total capacity of 600 MW. Mytilineos left open the possibility of other industrial enterprises also taking part in the agreement. The Viohalco industrial group is believed to be interested in such a project, but the prospect remains unconfirmed.

GEK-TERNA had forwarded its environmental upgrade proposal to the energy ministry in October in exchange for favorable electricity tariffs.

The Copelouzos group and China’s Shenhua have proposed upgrading the lignite-fired facility in exchange for a stake of the facility.

 

 

 

Lower-cost industrial electricity a ‘key factor’ in Amynteo plan

Officials at the energy ministry see an environmental upgrade of the main power utility PPC’s ageing Amyneo lignite-fired power plant as an opportunity that would offer energy-intensive industry lower-cost electricity in the long run.

The Mytilineos group and GEK-TERNA have both proposed to upgrade the Amynteo facility in exchange for favorable electricity tariffs over an extended period, while the Copelouzos group and China’s Shenhua have joined forces to propose upgrading the lignite-fired facility in exchange for a stake of the facility.

Energy ministry officials are already making clear that the main criterion to be applied in the appraisal of these proposals will be the extent to which they assure lower-cost electricity for industries as a means of boosting their level of competitveness and complying with EU and Greek competition terms. At present, industrial enterprises are offered special tariffs by PPC on an individual basis.

Similar deals entailing upgrades for lower-cost energy have been reached in France.

PPC is currently preparing to move ahead with a bailout-required sale package of lignite units. Amynteo was excluded from the sale list by European authorities but the upgrade proposals offer potential to extend the old facility’s lifespan, currently running out of time.

The future course of the Amynteo lignite-fired power plant will depend on government decisions concerning the country’s energy strategy, PPC officials told energypress earlier this week. Lignite’s share of the country’s energy mix would need to remain considerable for the Amynteo upgrade to make sense, officials explained. It is believed that a lignite presence in the energy mix of close to the 19 TWh reached last year would justify an Amynteo upgrade. Lower levels of around 16 TWh would make Amynteo redundant, the sources added.

Just days ago, the Mytilineos corporate group’s chief executive Evangelos Mytilineos made a 110 million-euro offer to upgrade PPC’s ageing Amynteo plant and extend its lifespan to 2030 in exchange for a favorable long-term electricity supply agreement concerning the group’s Aluminium of Greece industrial enterprise. The proposal called for electricity absorption of between 300 and 400 MW per year, from the unit’s total capacity of 600 MW. Mytilineos left open the possibility of other industrial enterprises also taking part in the agreement. The Viohalco industrial group is believed to be interested in such a project, but the prospect remains unconfirmed.

GEK-TERNA had forwarded its environmental upgrade proposal to the energy ministry in October in exchange for favorable electricity tariffs.

 

PPC waiting for gov’t decision on Amynteo unit for direction

 

The future course of the main power utility PPC’s Amynteo lignite-fired power plant will depend on government decisions concerning the country’s energy strategy, utility officials told energypress when questioned about the utility’s intentions following three upgrade investment proposals made for Amynteo by GEK-TERNA, Mytilineos and Copelouzos-Shenhua.

PPC’s chief executive Manolis Panagiotakis is definitely interested in attracting an investor to take on the environmental upgrade of the ageing Amynteo facility, which would spare the utility of needing to provide capital of its own for the project, as long as lignite’s share of the country’s energy mix remains considerable, the sources noted. It is believed that a lignite presence close to the 19 TWh reached last year would justify an Amynteo upgrade.

If the annual share of lignite in the energy mix is limited to no more than 16 TWh then certain lignite-fired power stations will be redundant. Amynteo would certainly be sidelined in such a case. Newer plants and units included in a bailout required sale package of PPC lignite units, from which the Amynteo facility was dropped, would carry on operating.

PPC is waiting for energy ministry decisions on Amynteo around March, when they are expected to be revealed and forwarded to the European Commission, before deciding, the officials noted.

 

PPC eyeing Fyrom, Albania, Turkey to offset local retreat

Greece’s main power utility PPC, keen to gain from the opportunities offered by an early entry into a foreign electricity market now being liberalized, is looking to acquire EDS, an electricity trading company with a 320 MW portfolio in Fyrom, the Former Yugoslav Republic of Macedonia, representing 40 percent of the neighboring market, and possessing a presence, through subsidiaries, in the Serbian, Slovak and Kosovo markets.

Facing severe bailout-required market share contraction targets in Greece, PPC is desperately seeking to offset its anticipated domestic retreat with the generation of revenues abroad.

Though it is still too early for PPC to make any formal announcements on investment objectives in the wider region, the power utility has, for quite some time now, been examining a variety of prospects, including investing in Albanian hydropower facilities. PPC has already established a subsidiary in Albania.

Turkey is another neighboring market being examined by PPC. Early last month, PPC’s chief executive Manolis Panagiotakis, speaking at the American-Hellenic Chamber of Commerce’s annual “Greek Economy Conference”, revealed that the Greek power utility was looking to acquire the development rights for a power station in Turkey’s Eskisehir area, in the northwest, with Chinese firm Shenhua as the investment’s partner. “Our strategic choice is to become leaders in the region, which will enable us to develop as a modern electricity company,” Panagiotakis had remarked, suggesting PPC needs the support of foreign capital to remain afloat.

The Eskisehir plan entails the development of a 1,080-MW power plant, according to Turkish media. Lignite deposits in the area currently belong to EUAS (Electricity Generation Inc), which, along with the prospective power facility, represent part of a privatization plan. A January 26 deadline has been set for binding offers, while, according to local media, the winning bidder will be able to sell electricity production to the Turkish grid, through this facility, at a minimum tariff level of 5 to 6 dollars per KWh.

According to the bailout terms, PPC needs to reduce its Greek retail electricity market share to 49 percent by 2020.

 

 

Three investors interested in Amynteo facility upgrade

Three investors have expressed an interest to environmentally upgrade the main power utility PPC’s 600-MW Amynteo lignite-fired power station, until recently regarded as an ageing, discarded unit of limited lifespan and potential, energypress has been informed.

The Copelouzos corporate group, joined by China’s Shenhua, is believed to have emerged first to express an interest in the upgrade project in exchange for a majority share in the venture to sell its electricity output to the grid.

In addition, a representative of an unnamed major local energy group is also believed to have forwarded a specific proposal concerning the utilization of state-controlled PPC’s Amynteo power station to the utility’s CEO Manolis Panagiotakis and energy minister Giorgos Stathakis. This expression of interest was apparently made a few months ago, well ahead of the recent finalization of a list of PPC lignite units to be included in a bailout-required sale package.

An intention by PPC to have Amynteo included in this sale package was stopped by the lenders as a result of the facility’s limited lifespan – in its current condition.

A third proposal was apparently forwarded by an energy-intensive industrial producer interested in upgrading the Amynteo power station in exchange for favorably priced electricity supply to its facilities. A fellow industrial producer may also be involved in this initiative.

This third proposal is believed to have resulted from a recent appeal by Panagiotakis, the PPC boss, to the industrial sector, urging its players to capitalize on the developments and secure reliable, competitively priced electricity.

Panagiotakis, presenting his thoughts at a recent American-Hellenic Chamber of Commerce conference, invited investors to take part in an upcoming market test for the sale package of PPC lignite units, representing 40 percent of the utility’s total lignite capacity, as well as environmental upgrades of ageing units not included in the sale, in exchange for favorably priced electricity supply deals.

For quite some time now, PPC’s administration has turned to the private sector in search of capital for the environmental upgrades of old units as the utility’s coffers are currently unable to cover the cost of such investments.

The purported cost of the Amynteo power station’s environmental upgrade, as well as the stabilization of the area’s mine affected by a landslide last June, has varied. Some authorities estimate both projects, combined, could require 200 million euros.  investments.

It remains unclear what percentage of Amynteo PPC could retain if negotiations with investors proceed.

 

PPC eyeing Turkish lignite deposit and unit development for needed revenue

The main power utility PPC is looking to acquire the development rights for a power station in Turkey’s Eskisehir area, in the northwest, with Chinese firm Shenhua as the investment’s partner, the utility’s chief executive Manolis Panagiotakis revealed yesterday during a speech delivered at the American-Hellenic Chamber of Commerce’s annual “Greek Economy Conference”.

PPC has unsuccessfully sought to enter southeast European markets over the past 14 years, both alone and with partners.

The Eskisehir area is home to Turkey’s third largest lignite deposit. Panagiotakis noted that becoming a “regional leader is a strategic choice” but did not elaborate any further on this plan.

According to Turkish media, Eskisehir lignite deposits currently controlled by the Electricity Generation Company Inc (EUAS), Turkey’s largest power company, and a development plan for the construction of a 1,080-MW power station in the area represent part of a privatization plan.

Interested parties face a January 26 deadline to submit offers to an international tender offering Eskisehir deposits with a condition for development of a 1,080-MW power station, according to Turkish media. The winning bidder will be able to sell electricity generated at the location to the national grid at a minimum price of 5 to 6 dollars per KWh, local media has reported.

Previous attempts by PPC to enter southeast European markets, none of which were successfully completed, have included an attempt to acquire the Bobov Dol power station in Bulgaria in 2003, a Negotino facility in the Former Yugoslav Republic of Macedonia (Fyrom) in 2007, as well as ambitious expansion plans with Germany’s RWE in 2009.

Last year, PPC, joined by China’s CMEC as its partner, was planning another attempt, but a breakdown of an endeavor by the two firms to co-develop a Meliti II power station in Greece appears to have also swept aside their joint plan for expansion into southeast Europe’s wider region.

Facing a drastic revenue reduction in the near future as a result of a bailout-required market share contraction in the Greek retail electricity market, from roughly 88 percent at present to 49 percent by 2020, PPC desperately needs to penetrate regional markets and offset the anticipated losses to remain afloat.

 

PPC looking for Amynteo upgrade partner – sale or not

The main power utility PPC is looking for a partner to upgrade and extend the life of its ageing Amynteo lignite-fired power station in the country’s north, regardless of whether this facility is included or not in the bailout-required PPC lignite unit sale package, still being negoitiated.

The Amynteo facility’s operating life is set to expire in two and a half years and will need to be withdrawn from the grid unless a major revamp is performed. Most PPC lignite-fired units will soon require upgrades if they are to keep operating. This overall revamp effort is expected to cost hundreds of millions of euros and cannot be shouldered alone by PPC, struggling with cash flow problems.

Just weeks ago, the PPC board approved an international tender for a 145 million-euro revamp project concerning four units – I, II, III and IV – at its Agios Dimitrios power station near Kozani, northern Greece.

PPC is expected to make similar moves for all its facilities, including ageing Amynteo, which, judging by indications emerging from negotiations between the energy ministry and the European Commission’s Directorate-General for Competition, will be removed from the sale package and replaced by the more modern Megalopoli facility in the Peloponnese.

Pundits expect PPC to reach revamp project decisions very soon. If PPC chooses to proceed with an Amynteo upgrade that would stretch the facility’s lifespan by a further 10 to 15 years, then this investment would be expected to cost around 100 million euros.

At this stage, China Shenhua Group, one of China’s biggest coal and energy trading corporations, appears to be the most likely partner for the Amynteo upgrade project.

Last winter, a team of Shenhua officials visited the Amynteo facility, close to Florina. It was followed by a visit from PPC chief Manolis Panagiotakis to the company’s headquarters in Beijng, and, in turn, the Shenhua deputy chief, Li Dong, visited Greece in September to sign a Memorandum of Cooperation with the Greek power utility.

A team of PPC officials plans to soon visit the Shenhua headquarters and also travel to Indonesia to examine emission-countering upgrades carried out at facilities in the country by the Chinese company.

With the exception of Agios Dimitrios V and Meliti I, all other PPC lignite-fired power stations require upgrades.

Amynteo’s two units, offering 600 MW, are run down. Kardia’s I, II, III and IV units, offering a total capacity of 1,212 MW, will need to close in 2020 so that a coal deposit located underneath the facility may be utilized. At the Agios Dimitrios facility, units I, II, III and IV, representing 1,220 MW of the facility’s 1,595-MW total, would need to close down in 2025 if no upgrade is performed. Agios Dimitrios V can operate until 2040 as is. The two units in Megalopoli and Arkadia, whose capacity totals 500 MW, have a lifespan until 2025.

 

 

PPC boss invites China’s Shenhua to take part in utility’s lignite units sale

The main power utility PPC’s chief executive has openly invited Chinese energy company Shenhua to participate in a bailout-required disinvestment procedure expected to soon offer buyers 40 percent of the utility’s lignite capacity.

The PPC boss, Manolis Panagiotakis, was speaking at the Clean Energy Development Forum, staged as part of the ongoing Thessaloniki International Fair.

Panagiotakis expressed confidence that Shenhua, the world’s biggest coal producer, could utilize this 40 percent of PPC’s lignite capacity in an efficient and profitable way.

Regional markets have an extremely important role to play in Europe’s market integration plan, while PPC, aiming to be a key player in this process, is seeking partnerships with companies such as Shenhua and the Copelouzos Group, Panagiotakis told the energy conference.

The Chinese energy giant’s CEO, Dr. Ling Wen, confirmed Shenhua’s investment interest in Greece, in comments offered to the local ANA-MPA news agency.

Several months ago, Shenhua and the Copelouzos Group signed an agreement to co-develop green energy projects and upgrade power stations in Greece and other countries. The amount to be invested through this partnership is estimated at 3 billion euros.

PPC head stresses utility’s persistence with China partnerships plan

The main power utility PPC’s top official has once again highlighted his determination to stick to a plan envisioning business partnerships with Chinese enterprises as a way out of the utility’s problems along many fronts.

Manolis Panagiotakis, PPC’s chief executive, is counting on Chinese capital and knowhow as support for the utility’s new investment plans, intended to offset bailout-required market share losses in electricity production and retail, the official made clear in an interview for Chinese news agency Xinhua, which took place in northern Greece’s west Macedonia region, a key local energy producing region.

PPC’s administration is striving to lead the utility into a new era where business interests will stretch beyond electricity production and sales, Panagiotakis noted in the interview, adding that Chinese firms are pivotal to these aspirations.

Panagiotakis noted that agreements already reached between PPC and major Chinese firms point to a bright future for Greek-Chinese collaborations in the energy sector. Chinese enterprises can play a fundamental role in the Greek energy sector’s new strategic planning, the PPC chief remarked.

The PPC head cited the utility’s plan for the co-development, with CMEC, of a lignite-fired power station in Meliti, northern Greece. He described this as a feasible project regardless of the outcome of a bailout-required sale faced by PPC concerning 40 percent of its lignite capacity.

He also made note of another plan involving CMEC for the development of a smart meters production facility. A preliminary agreement has already been signed for this project.

Panagiotakis described SGCC’s (State Grid Corporation of China) recent acquisition of a 24 percent stake in IPTO, Greece’s power grid operator, as a positive development. He stressed that PPC is keen to expand this SGCC strategic partnership, citing the electric car market and a submarine power cable interconnection project to link the Greek mainland with Crete.

The PPC chief also noted that the Greek power utility is interested in working with Shenhua on various projects concerning innovation in the environmental sector, an area in which Shenhua has made major progress, he added.

Panagiotakis has held meetings with 21 major Chinese enterprises on two official visits to China since taking over the helm at PPC about two years ago.

 

 

 

 

Bailout an obstacle for Chinese interest in PPC projects

Greek energy ministry and main power utility PPC officials appear to be fully aware of concerns in Brussels over warming Greek-Chinese ties for various Greek energy-sector projects, as indicated by additional terms in the recently revised bailout agreement.

These European Commission concerns explain why PPC chief Manolis Panagiotakis remained reserved despite a firm interest expressed by Chinese investors for the Greek energy market during his visit to China earlier this week.

A clause added to the revised bailout, which notes that prospective buyers of PPC units, “based on available information, should neither create any apparent competition problems nor cause delay risks in the implementation of structural measures” could, in one sense, be interpreted as an attempt to obstruct the development of Meliti II and, in addition, block Chinese investors from buying exisiting PPC units and becoming involved in partnerships for the construction and operation of new ones.

PPC and CMEC (China Machinery Engineering Corporation) signed a Memorandum of Understanding (MOU) last September and have held extensive talks on joining efforts for the development of Meliti II, a prospective carbon-fired power station in the Meliti area, close to Florina in Greece’s north.

The Chinese State, which controls CMEC, is also behind SGCC (State Grid Corporation of China), whose agreement to acquire a 24 percent stake in the power grid operator IPTO, a PPC subsidiary, was endorsed by Brussels several days ago. Brussels appears concerned by the prospect of a concerntration of control for the Chinese State.

Pundits told energypress that the additional bailout term will obstruct PPC’s planned collaboration with Chinese companies, a prospect viewed with increased concern by EU member states such as Italy, France and Germany, which, despite their negative stance, have yet to display any clear interest in PPC’s prospective sale of utility units, a bailout requirement.

CMEC, still requiring certain details before making a final decision, appears keen to move ahead with the development of the Meliti II project, sources informed following the PPC chief’s visit to China. The issue may have cleared up within the next month. The future of the nearby Vevi mine, whose coal supply is crucial for existing Meliti I and prospective Meliti II, is a pivotal factor that will influence CMEC’s interest.

Energy minister Giorgos Stathakis recently announced that a new tender will need to be staged for part of the Vevi mine. If so, this could deflate CMEC’s interest in Meliti II.

In China, Panagiotakis, the PPC boss, presented his plans for the development of two more coal-fired power stations, not including Meliti II, in talks with Chinese investors, including the Shenhua and SPIC enterprises.

Shenhua appears interested in becoming involved in environmental upgrades of exisiting PPC power stations and development of new units.

 

 

China Shenhua Group interested in Amynteo upgrade project

China Shenhua Group, one of China’s biggest coal and energy trading corporations, has expressed an interest to participate in the upgrade project of an ageing main power utility PPC lignite-fired power station in Amynteo, close to Florina, in northern Greece.

A team of China Shenhua Group officials visited the 600-MW capacity facility last week, following up on a preceding expression of interest in the upgrade project, according to an article published by Greek daily Kathimerini.

During the visit, the Chinese corporation’s officials also held preliminary talks with the Kopelouzos Group on the possible establishment of a partnership for the upgrade.

The lifespan of PPC’s ageing Amynteo station has been restricted to 17,000 hours by the European Commission as a result of its carbon emissions. PPC has requested an extension to 32,000 hours.

Last December, Ling Wen, President and Vice Chairman of the Board at the Shenhua Group, and a team of associates visited Athens for talks with all of the country’s major energy corporations.