DEPA Commercial turnover down 47.8% due to pandemic

Gas company DEPA Commercial has forecast an increase in natural gas volume-based sales of over 20 percent in 2021 following a pandemic-induced total turnover reduction of 47.8 percent last year, down to 396.5 million euros from approximately 760 million euros in 2019.

As a result, DEPA Commercial’s profit after tax in 2020 fell to 37.5 million euros from 67.9 million euros in the previous year.

Despite the reduction, DEPA Commercial offered shareholders – privatization fund TAIPED (65%) and Hellenic Petroleum ELPE (35%) – dividends totaling 6.6 million euros.

The company attributed its turnover drop to international market conditions shaped by the pandemic during the first half of 2020, which suppressed prices at international hubs, creating purchasing opportunities at spot markets, before price levels partially rebounded.

These conditions conduced opportunistic gas orders by major-scale consumers in Greece, who have usually covered a great part of their natural gas needs through DEPA, based on long-term supply contracts, the company explained.

In terms of volume, DEPA’s gas sales in 2020 totaled 25.5 TWh, down 6.7 percent compared to 2019, primarily as a result of the aforementioned factors.

Electricity demand up 7.5% in April, PPC market share steady

Electricity demand registered a sharp 7.5 percent rise in April, compared to the equivalent month a year earlier, driven by the government’s recent decision to ease lockdown measures, power grid operator IPTO’s latest monthly report has shown.

The relaxation of lockdown measures in Greece prompted a milder 1.5 percent increase in electricity demand in March, year-on-year.

On the contrary, electricity demand fell by 2.5 percent over the four-month period covering January to April, compared to the equivalent period a year earlier, according to the IPTO report.

This decline in electricity demand was approximately half the 5.1 percent drop, year-on-year, for the three-month period between January and March.

Electricity generation rose by 24.6 percent in April, compared to the same month a year earlier, according to the IPTO report.

Natural gas-fired power stations led the way, boosting their production by 52.4 percent, followed by lignite-fired power stations, whose output rose by 21.8 percent, RES units, increasing their generation by 5.8 percent and hydropower stations, which registered a 3.1 percent increase.

In terms of energy-mix shares, the pivotal role of natural gas-fired generation was once again made clear. It captured a 43 percent share of the energy mix in April, followed by the RES sector, capturing 36 percent, lignite with 11 percent, hydropower with 6 percent and electricity imports at 5 percent.

Power utility PPC’s share of electricity demand remained virtually unchanged for a third successive month in April, registering 65 percent, following a 64.8 percent share in March and 65.1 percent share in February.

Protergia, a member of the Mytilineos group, the frontrunner among the independent suppliers, was the only company to increase its market share in April. It rose to 8.2 percent share from 7.95 percent a month earlier.

Heron’s share was steady at 6.3 percent from 6.29 percent in March. Elpedison’s share experienced a mild drop to 4.72 percent from 4.88 percent. NRG’s share in April was unchanged at 3.99 percent, while Watt & Volt’s share slipped marginally to 2.44 percent from 2.58 percent.

Prinos support package, worth €100m, submitted to Parliament

A financial support plan for upstream company Energean’s Prinos field, south of Kavala, comprised of a state-guaranteed commercial loan of 90.5 million euros for the group’s domestic subsidiary, plus a supplementary loan of 9.5 million euros from the Greek State, has been submitted to Greek Parliament for approval following its endorsement by the European Commission.

The financial support to be offered for Energean’s Prinos field, based on a temporary EU support framework established to offer economic support in response to pandemic-related effects, will be provided by December 31, 2021, used to cover Energean’s investment and working capital needs over 12 months, and will have a maximum duration of 8 years.

The European Commission offered its approval of the support package as it deemed that Energean generates the greatest proportion of its domestic revenues through the sale of crude, acknowledging this activity has been hit hard by plummeting oil prices amid the pandemic, making it difficult for the company to gain access to capital markets.

According to the company’s results for 2020, announced at the end of April, Energean’s Greek subsidiary incurred operating losses of 83.4 million euros in 2020, forcing its parent company to provide it with 62.4 million euros during the year.

According to sources, Energean’s Prinos activity lost 120 million euros over the two-year period covering 2019 and 2020.

Despite improved oil price levels, more recently, the subsidiary’s inability to invest as a result of a lack of financing has led to a further reduction of production, which is expected to lead to losses of approximately 40 million euros this year.

PPC results for 2020 out today, analyst projections disagree

Power utility PPC’s financial results for 2020, set to be announced later today, are seen confirming the corporation’s ongoing positive course.

The company is expected to report robust 4Q results for 2020, including an EBITDA figure of 238 million euros, according to Pantelakis Securities, given its performance for the nine-month last year.

Operating expenses have been contained, fuel prices plunged, wholesale electricity prices fell, and the utility’s reliance on its loss-incurring lignite units was further diminished during the nine-month period.

For 2020 as a whole, the analyst projects PPC’s EBITDA will reach 938 million euros, a 180 percent increase compared to the 336.6 million euros posted in 2019, as a result of higher tariffs, lower energy purchase costs and reduced CO2 emission right expenses.

The extraordinary market conditions last year were favorable for PPC, the analyst pointed out, as the pandemic-related reduction of electricity demand enabled the utility to stop operating its high-cost lignite-fired power stations for extended periods.

PPC is currently phasing out its lignite facilities, until 2023, as part of the country’s decarbonization effort. CO2 emission right costs have begun rebounding since December.

Pantelakis Securities expects PPC’s sales to fall by 10 percent in 4Q to a level of 1.191 billion euros, while net profit for the fourth quarter is estimated at 39 million euros.

For 2020 as a whole, total turnover is expected to fall by 4 percent, year-on-year, to 4.71 billion euros and net profit is anticipated to be 53 million euros.

PPC’s net debt for 2020 is seen slipping to 3.5 billion euros from 3.68 billion euros at the end of 2019.

Optima Bank sees a less favorable picture for PPC’s 2020 results, projecting losses of 79 million euros, well below losses of 1.68 billion euros in 2019, and a total turnover reduction of 5.5 percent, to 4.655 billion euros.

 

New deadline extensions granted for work at hydrocarbon blocks

The higher risk entailed in hydrocarbon exploration as a result of the coronavirus pandemic and a mass turn, including by petroleum companies, to green-energy activities are factors forcing investors with licenses to Greek blocks to delay their development plans.

Energean Oil & Gas and Hellenic Petroleum (ELPE) have both requested and been granted deadline extensions for preliminary exploration work at two blocks to which they hold licenses that were approved by Greek authorities in 2017 and 2018, respectively.

These extensions concern offshore Block 2 in the Ionian Sea – for which Energean is the operator with a 75 percent stake following Total’s withdrawal in February, 2020, and ELPE the minority partner with a 25 percent stake – and an onshore block in the northwest Peloponnese for which ELPE is the sole participant.

Energean requested and was granted a 24-month extension, until March 15, 2023, by EDEY, the Greek Hydrocarbon Management Company, for preliminary work at Block 2 in the Ionian Sea.

EDEY also granted ELPE an extension, though shorter – 6 months, to September 15, 2021 – for the completion of preliminary work at its northwest Peloponnese license. ELPE originally sought a 20-month extension until March 15, 2022.

These extensions follow a decision, early this year, by Repsol and Energean to return to the Greek State their license to an onshore block at Etoloakarnania, northwestern Greece.

Also earlier this year, EDEY granted a third extension to ELPE and Edison E&P (now Energean, following its acquisition of the Italian company’s local hydrocarbon portfolio) for initial drilling at a Gulf of Patras block in the country’s west, which has been extended to January, 2023.

JinkoSolar PV module prices up 15%, further rises over next 6 months

Prices of solar energy modules produced by JinkoSolar, one of the largest PV panel manufacturers in the world, have risen by roughly 15 percent in the Chinese market over the past few weeks, Dany Qian, vice president of the China-based producer, has noted in a PV-Magazine interview.

The results of certain key tenders announced recently show a price increase of between 10 and 15 percent, while an even higher increase is being anticipated for upcoming sessions, the deputy chief pointed out in the interview.

The Chinese market is crucial as a solar module price indicator as it brings to the forefront a shortage of raw materials, Qian pointed out.

Increased PV module prices, according to Qian, can be attributed to shortages of module frames and raw materials such as polysilicon, glass and silver, as well as a lack of manufacturing capacity to meet strong demand at present.

Glass and polysilicon producers are making efforts to increase their production capacity, but establishing new factories and production lines will require more time.

Also taking into account the US dollar’s continuing slide, following stimulus measures to ease the pandemic-related hardship, PV panel prices are expected to rise further, Qian noted.

The strong demand, at present, will prompt further PV module price rises for at least another six months, the JinkoSolar deputy projected.

Electricity demand falls 9.5% in January amid stricter lockdown

Stricter lockdown measures in January and their impact on business activity prompted a big reduction in electricity demand, down 9.5 percent compared to the equivalent month a year earlier, when lockdown measures had yet to be imposed, according to power grid operator IPTO’s monthly report.

Most of the country’s retailers were forced to disrupt their business activities in January following a period of less stringent retail measures in the form of a click-away service, enabling customers to pre-order and pick up goods from shops by appointment or, this measure’s extension, click-in-shop, permitting customers to enter stores, see and even try products by appointment.

Electricity demand in the high-voltage category was down by 3.3 percent in January compared to the same month a year earlier, the IPTO data showed.

Interestingly, despite the plunge in electricity demand, electricity production increased by 12.9 percent in January, hydropower being the biggest mover with a 221 percent increase, following power utility PPC’s decision to use its hydropower units as a result of elevated water reserves.

The domestic production increase was attributed to a fall in electricity imports and rise in electricity exports, the greatest quantity going to Italy (43%), followed by North Macedonia (24%), Bulgaria (22%), Albania (9%) and Turkey (2%).

RES output was higher by 43 percent in January as a result of strong winds during the month, while, on the contrary, lignite-fired generation fell 43 percent. Natural gas-fueled power station output was also down, marginally, by 2 percent.

In terms of energy mix share, natural gas-fueled power stations held a 36 percent share, RES units captured 35 percent, hydropower’s contribution represented 16 percent, and lignite was responsible for 13 percent of total electricity generation in January, the IPTO figures showed.

PPC covered 66.6 percent of electricity demand in January, followed by Mytilineos (7.52%), Heron (5.89%), Elpedison (4.63%), NRG (3.49%) and Watt & Volt (2.74%).

ELPE posting results amid strong pressure felt by petroleum industry

ELPE (Hellenic Petroleum), to post financial results today amid the pandemic’s adverse conditions, seen also impacting the global petroleum industry throughout 2021, is expected to announce adjusted losses of 14 million euros for 4Q in 2020, following a profit of 24 million euros in the equivalent period a year earlier, according to an Optima Bank estimate.

The petroleum group’s adjusted EBITDA for 4Q is expected to be 62 million euros, a 48 percent reduction from the previous year.

As for 2020, overall, ELPE’s adjusted EBITDA is expected to be 318 million euros, a 44 percent reduction. Adjusted losses are expected to be 1.5 million euros following a profit of 182 million euros in 2019.

The petroleum group intends to move ahead with a transformation plan and green-energy investment plans this year.

ELPE, as an initial goal, aims to develop a RES portfolio totaling 300 MW capacity in 2021 and 600 MW by 2025.

The corporate group has already begun work on a 204-MW project in Kozani, northern Greece, following a takeover deal.

Any prospect of a recovery by the global petroleum industry appears distant. Many facilities around the world have continued to restrict their operations.

A recent Wood Mackenzie report projected the European refining industry will register losses measuring 1.4 million barrels per day until 2023 as a result of the pandemic’s ongoing lockdown measures.

At least two refineries in the Mediterranean region are currently examining the prospect of closing down.

Spain’s Repsol on verge of exiting Greek upstream market

Spanish petroleum firm Repsol, a member of consortiums holding licenses to three fields in Greece, is on the verge of leaving the country’s upstream market as a part of a wider strategic adjustment prompted by the oil crisis and the pandemic, developments that have impacted exploration plans, as well as a company plan to reduce its environmental footprint, sources have informed.

The upstream industry has been hit hard by the pandemic, which has driven down prices and demand. The EU’s climate-change policies are another key factor behind Repsol’s decision.

Repsol is believed to have decided to significantly reduce the number of countries in which it is currently present for hydrocarbon exploration and production, the intention being to limit operations to the more lucrative of fields.

All three fields in Repsol’s Greek portfolio are still at preliminary research stages and do not offer any production assurances, meaning they will most probably be among the first to be scrapped by the company from its list of projects.

Respol formed a partnership with Hellenic Petroleum (ELPE) for offshore exploration in the Ionian Sea. Repsol is the operator in this arrangement. A license secured by the two partners for this region in 2018 was approved in Greek Parliament a year later.

Also, in 2017, Repsol agreed to enter a partnership with Energean Oil & Gas, acquiring 60 percent stakes, and the operator’s role, for onshore blocks in Ioannina and Etoloakarnania, northwestern Greece.

Repsol maintains interests in over 40 countries, producing approximately 700,000 barrels per day.

EBRD: Green projects in Greece a priority, RES-based economic recovery

The European Bank for Reconstruction and Development (EBRD) is strongly interested in Greek energy market investments, Andreea Moraru, the bank’s head of Greece and Cyprus, has stressed in an interview with energypress.

The EBRD official spoke extensively on significant investment opportunities being created by the energy transition.

Since 2015, the EBRD has invested over four billion euros in Greece, participating in numerous major projects, Moraru informed, noting its recent support for power utility PPC, an investment worth 160 million euros, one of the bank’s largest, to cover customer payment volatility following the outbreak of the pandemic, exemplifies EBRD’s strong support for Greece.

The full interview follows:

What is the role of the EBRD compared to that of other banking institutions? 

The EBRD is a development bank committed to furthering progress towards ‘market-oriented economies and the promotion of private and entrepreneurial initiative. Our role is to be complementary to the commercial banks, to work alongside them and to support them.

Αdditionality is among the founding principles underlying our work and the particular support and contribution that the EBRD brings to an investment project which is not available from commercial sources of finance. Alongside transition and sound Banking, it is one of the three founding principles underlying our work. By ensuring that we are additional in everything we do, we ensure that our support for the private sector makes a contribution beyond that available on the market and does not crowd out other private sector actors.

Whenever we consider financing a project, we analyze whether similar financing can be obtained from private sector local banks or non-banking institutions.

Many of our markets are relatively high risk, and the private sector will only lend for short periods of time or at such high rates as to make the project unfeasible. For major new projects in the field of infrastructure, for example, longer-term financing may not be available on reasonable terms or conditions. This is where the EBRD fits in.

Additionality can also be non-financial in nature, where EBRD’s interventions contribute to better project outcomes that would not have been required or offered by commercial financiers. This can include the provision of comfort to clients and investors by mitigating non-financial risks, such as country, regulatory, project, economic cycle or political risks. Additionality may also be derived from the EBRD’s involvement in helping projects and clients achieve higher standards than would have been required by the market, such as through sharing its expertise on better corporate governance or above ‘business as usual’ environmental or inclusion standards.

Do you consider the energy sector in Greece to be suitable to contribute to the development and reconstruction of the Greek economy? For what reasons?

Absolutely. In general, the EBRD’s vision for the energy sector is of a partnership between industry, governments and consumers that delivers the essential energy needs of societies and economies in a manner that is sustainable, reliable and at the lowest possible cost.

In Greece the energy sector is embarking upon its biggest transformation yet, moving away from its reliance on lignite (c. 20% of total electricity production in 2019) to renewables and a smaller fleet of significantly less carbon intensive gas generating units. The NECP aims to achieve reduction in greenhouse gas (GHG) emissions by more than 55% by 2030 compared to 2005, planned to be achieved through: (i) decommissioning of all 4 GW of lignite-fired generation capacity by 2028 (3.4GW by 2023), (ii) 8.7 GW of new renewable generation capacity to added by 2030, reaching a total of 19 GW, and (iii) 2 GW of new gas generation capacity added for system support and security. The country remains committed to implementing the NECP as planned despite the negative impacts the CV19 crisis is expected to have on the Greek economy in 2020 and beyond.

Greece’s withdrawal from coal is a fundamental transformation that will create substantial sector and social challenges with the following broad implications: (1) constructing large volumes of low carbon generating capacity in order to ensure energy security in an increasing electrified economy, (2) reengineering the country’s transmission and distribution networks to reflect the additional penetration of distributed, intermittent renewable energy, and (3) addressing the social and economic impacts of the closure of a major part of its existing energy infrastructure, i.e. ensuring a just and inclusive transition.

We have supported many energy projects so far, especially renewables, working together with leading companies, such as GEK Terna, Mytilineos and HELPE among others.

A recent milestone is our support for the largest renewable energy project in Greece and the largest solar energy project in south-eastern Europe to date, the new solar park in Kozani. In 2017, we also approved a framework committing up to €300 million to finance renewable energy investments in the country.

The main reasons why this sector is important for the development of the Greek economy and thus our participation, is first to help the decarbonization of the country and the transition to a greener economy, as well as to strengthen local linkages and regional integration.

What is the EBRD’S philosophy about its presence in the Greek economy and especially in the energy sector?

In Greece in particular, supporting sustainable energy and infrastructure is among our top priorities. In fact supporting sustainable energy and infrastructure is one of the pillars of the newly approved country strategy. Our investment strategy in the energy sector going forward will aim at further liberalization and diversification of the energy market focusing on renewables and increased renewable energy capacity and a more diversified energy mix to promote decarbonization of the economy. EBRD could support a second phase of feasible renewable energy projects with project preparation / technical assistance and financing (biomass and biogas plants, use of waste heat in greenhouses for high value-added agriculture, electricity storage facilities, green hydrogen production plants and other forms of energy storage.

We see that it’s challenging to meet EU climate goals in Greece and our goal is to support the country with that. Our approach and philosophy is in line with the National Energy and Climate Plan and we are very glad the Greek government is committed to close all lignite plants. We need to keep this momentum, despite the current Covid-19 crisis, and turn the country greener.

One good example is our recent support for PPC (DEI). This has been one of our largest investments (€160 million) and the first time we supported the public sector in Greece. This facility supports PPC’s working capital needs at a time of customer payment volatility following the outbreak of the crisis. It also strengthens the resilience of the electricity sector as a whole by ensuring the stability of essential utility supplies and maintaining the momentum towards decarbonization.

What are the characteristics of private companies that could apply to be supported by the EBRD?

When we consider financing a project we analyze different aspects, such as how it supports the green economy, if it promotes women or youth inclusion, if it can enhance the competitiveness and resilience of the Greek economy etc. We look at the financial strength of the project as we operate according to sound banking principles. We cannot finance companies in certain sectors like defence-related activities, tobacco, substances banned by international law or gambling facilities.  As I have already mentioned, we also need to be additional.

We work in a wide range of sectors, from energy, infrastructure, manufacturing, property, tourism, agriculture to trade and financial institutions. We also support SMEs with business advice, know-how transfer and trainings.

What are your conclusions from your cooperation so far with Greek companies and institutions?

We’re very proud of all our projects in Greece so far. Since commencing our operations in 2015, the Bank has invested more than €4 billion in the country, helping respond to the financial crisis. Against a turbulent political and economic backdrop, the EBRD helped stabilize the financial sector, support private companies through export-oriented growth and lay the foundations for greater private sector participation in critical energy and infrastructure projects that have also strengthened regional integration.

We faced several challenges because of the financial crisis, but this was expected and was exactly the reason why we came to the country. Our main conclusion is that Greek companies have strong potential and very talented workforce, who we’re glad to be working with. The COVID-19 pandemic has abruptly interrupted Greece’s steady recovery, but we’re confident that the country can build back better.

We have an excellent cooperation with the Greek Government whom we are supporting on a number of initiatives.  In late 2020, the EBRD joined forces with the Ministry of Development and Investments of Greece to establish a new public-private partnership (PPP) preparation facility cooperation account, following a request from the Greek authorities. We are also working close with the Ministry of Finance on development of a capital market strategy, a project supported by DG Reform.

What are your plans for the new year?

We will focus on supporting the recovery of the Greek economy, by helping with the immediate needs of the Greek businesses because of coronavirus, as well as with their long-term growth plans. Green projects, including in the energy sector, will be our priority, but we’ll also be active in other sectors. We’ll continue supporting the banking sector, too.

Do you consider the investment risk in our country increased after the great economic crisis and in the light of the current crisis due to a pandemic?

The financial crisis had a strong impact on Greece, but we recognize that the Greek economy had started recovering and growing in the recent years. It’s true that COVID-19 containment measures are likely to depress economic output and cause particular disruption to the tourism industry, reversing the economic recovery and hindering investments in the near term, not only in Greece, but also in most countries. There are still many things that need to be improved in the country to attract more investors, but we don’t consider the investment risk much higher than it used to be. The Greek economy can recover after the pandemic.

 

Gasoline sales down 40% this month, poor year for fuel sector

The liquid fuel market has been the hardest hit energy sub-sector in 2020, as highlighted by poor sales figures for December, by far the worst month of this year’s pandemic-affected sector results.

Gasoline sales are expected to end December 40 percent lower compared to the equivalent month a year earlier, car diesel sales are forecast to drop 15 percent, while heating fuel demand has slumped by 50 percent this month compared to this time a year earlier.

Overall, liquid fuel sales are projected to end 40 percent lower in December and 6 percent for the year.

Heating fuel demand for the year is projected to end up 20 percent, a development attributed to considerable purchases made last April by households, who made the most of lower prices.

Though Greece’s current lockdown has permitted motorists to circulate within their regions until an evening curfew, the forbiddance of longer-distance movement, from province to province, has been a major setback for auto fuel sales.

In addition, the pandemic-induced slump of the tourism sector, a major source of revenue for Greece’s fuel market, has also impacted fuel sales.

Looking ahead, petroleum firm projections for the first quarter of 2021 are not optimistic. Sector players believe lockdown restrictions will continue to be enforced.

A recent 7 percent tax increase on auto fuel, to support green energy, is another setback for the liquid fuel market. Prices, at the pump, will rise by 3 cents per liter.

 

Strong market test turnout for DEDDIE sale, 18 players in all

A total of 18 prospective bidders have taken part in a market test staged by Goldman Sachs for power utility PPC’s forthcoming sale of a 49 percent stake in subsidiary firm DEDDIE/HEDNO, the distribution network operator.

The list, forwarded by Goldman Sachs to PPC, includes investors already familiar to the Greek market such as US firm Blackrock, specializing in transportation and energy infrastructure long-term investments; prominent infrastructure funds; as well as many European operators.

France’s Engie and Italy’s Enel, both often linked with the DEDDIE/HEDNO sale, were not among the 18 market test participants, sources informed.

Interestingly, no previous market test staged to gauge interest in the prospective sale of any Greek State asset has generated such a strong turnout.

Authorities behind DEDDIE/HEDNO’s partial privatization hope this more than promising response for the market test will result in intense bidding competition and a higher sale price.

A clear picture on the number and identity of the sale’s participants will become apparent on January 29, the deadline for the procedure’s first round official expressions of interest.

Officials have attributed the strong market test interest to five key factors: the operator’s new regulatory framework; an elevated WACC level of 6.7 percent for 2021 to 2024, well over levels of between 2.5 and 3 percent offered by other European operators; strong confidence in the governance of the country, pivotal for long-term investments; good timing, as, at present, no other network operator in Europe is up for sale; and a massive accumulation of global capital currently available for investment as a result of numerous lockdowns imposed in many parts of the world since March.

The Greek government will aim to complete DEDDIE/HEDNO’s partial privatization in the first half of 2021.

 

PV market faces severe shortage, higher prices and shipping costs

Solar panel supply has dried up in the Greek market, as is also the case throughout Europe, creating difficulties for PV investors, big and small, who are seeking to develop solar parks ahead of RES auction deadlines or to secure non-auction tariffs.

The solar panel market shortage has been attributed to a significant increase in PV installations, both globally as well as in China, essentially the world’s sole PV producer.

Investors already committed to tariff contracts are subject to major solar panel delivery delays, while others now making efforts to purchase equipment needed to develop their solar parks are unable to find delivery dates any sooner than the third quarter of 2021.

Besides the market shortage of solar panels, shipping containers from China have also been hard to come by, possibly as a result of a sharp increase in the trade of electronic goods during the pandemic, prompting higher transportation costs.

Solar panel prices have also risen considerably, compared to levels last summer, which has caused business plan issues for prospective green-energy producers.

China has announced a five-year PV installation plan to run at an annual rate of 65 GW from 2021 to 2025. Also, global PV demand is soon expected to reach 200 GW, annually.

Quite clearly, solar panel production, for the time being, cannot meet demand. This shortage is expected to last until at least the end of the first half in 2021.

 

 

 

Schools, airlines, heating fuel to contain lockdown effects on fuel

Fuel market officials are hoping certain lockdown exemptions, such as the non-closure of primary schools, plus airline traffic and heating fuel demand, will result in smaller losses for the sector compared to the country’s first lockdown earlier this year.

If the latest measures remain as they stand for the lockdown’s duration of at least three weeks, beginning last Saturday, then the decline in fuel sales is expected to be far milder than the 45 percent reduction experienced during the country’s first lockdown, implemented last March, fuel market officials have projected.

Seasoned authorities estimate the fuel market’s reduction in sales could reach 20 percent.

The ongoing transportation by parents and guardians of primary school students to school, continuation of flights, as well as greater heating fuel needs of household members kept in by the lockdown, are all expected to help contain the drop in fuel sales.

Though these factors may offer fuel professionals some consolation, the fuel market is entering uncharted territory as the eventual duration of the lockdown remains unknown.

Also, a large number of households have yet to recover from the financial consequences of the first lockdown. Their budgets will have tightened.

ELPE lockdown impact fears expressed amid poorer conditions

Hellenic Petroleum ELPE chief executive Andreas Siamissis has expressed fears of the latest lockdown’s impact on fuel consumption, which he will believes will be considerable, during a presentation of third quarter results to analysts.

Narrowed refining margins, which dropped to historic lows during the third quarter, combined with a drop in demand, resulted in unprecedently difficult conditions, ELPE officials noted.

However, rays of hope have emerged for an imminent improvement in refining margins, they added.

Elpedison, ELPE’s joint energy venture with Italy’s Edison, registered a strong power generation performance, up 31 percent in the nine-month period, aided by competitively priced LNG for its production units, company officials informed.

Electricity sales rose by 5 percent, while operating profit reached 43 million euros, from 15 million euros a year earlier.

As for the natural gas market, the commercial activity of gas utility DEPA, in which ELPE holds a 35 percent stake, increased in the third quarter.

DEPA – whose two new entities, DEPA Commercial and DEPA Infrastructure, are both headed for privatization in a procedure that is expected to be completed by March, 2021 – reported a 3Q volume-based sales increase of 48 percent. Its EBITDA figure moved up to 18 million euros, up from 6 million euros a year earlier.

ELPE’s list of imminent RES projects has more-than-doubled compared to last year, the company officials informed.

PPC awaiting first securitization deal cash injection this month

Power utility PPC, seeking to financially bolster in anticipation of tougher pandemic-related market conditions, expects, within November, to benefit from an initial collection of approximately 150 million euros following two securitization agreements reached last summer with JP Morgan and Pimco for unpaid receivables.

This forthcoming initial cash injection, expected to eventually reach as much as 200 million euros, concerns a small-scale securitization package, for unpaid receivables of up to 60 days, reached between PPC and JP Morgan early last summer.

PPC then established an additional deal with Pimco for longer-term unpaid receivables of more than 90 days, expected to rake in up to 300 million euros, for a combined securitization total that may ultimately reach 500 million euros.

The power utility expects to receive about 200 million euros from the Pimco deal in December or January. This means PPC should have received a total of about 350 million euros in initial payments from JP Morgan and Pimco by no later than the end of January.

This amount promises to serve as a safety net in the coming months of market insecurity and tightened cash flow, and, in addition, partially fund PPC’s new business plan.

Currently being worked on, and expected to be far more ambitious than a previous version delivered at the end of 2019, PPC’s new business plan should be announced around mid-December.

It is expected to feature swifter RES project development and lignite unit withdrawals, as well as more ambitious electromobility initiatives.

The 500 million-euro securitization amount will certainly be needed for these investments.

Energy companies, including PPC, look to reinforce ahead of tough winter

Energy sector companies, including power utility PPC, are looking to financially reinforce ahead of what is likely to be a challenging winter in terms of cash flow.

Though overall market activity is clearly better compared to last March, when lockdown measures were introduced in Greece, persisting four-digit figures for new domestic coronavirus cases and hints of tougher pandemic measures in Athens, as is already the case in Thessaloniki, leave no room for complacency.

PPC, fearing stricter lockdown measures could last a while, is working intensively to collect some 500 million euros stemming from two securitization packages for unpaid receivables by late November or early December. The company is also intensifying its hunt for payments from consumers regarded as able but unwilling to service electricity bill arrears.

The power utility has a number of fronts to cover financially. Firstly, the company has offered employees voluntary exit packages as part of its decarbonization drive to phase out lignite-fired power stations. PPC is also preparing to make the first of a number of major RES investments. The utility is also in the midst of a successful and fast-moving effort to reduce debt owed to operators – power grid operator IPTO; distribution network operator DEDDIE/HEDNO; and RES market operator DAPEEP; as well as sub-contractors.

PPC’s total debt to third parties, which was at a level of 900 million euros in July, 2019, was reduced to approximately 650 million euros in June and fell further to 580 million in a latest measure.

The company aims to reduce this debt figure to 550 million euros by the end of the year. However, tougher lockdown measures would probably slow down this debt-reduction effort.

Repsol given 6-month extension for Ioannina license preliminary work

A pandemic-related extension request made by Spain’s Repsol for an additional six-month period to complete preliminary research concerning a license in Ioannina, northwestern Greece, has been granted by EDEY, Greek Hydrocarbon Management Company, in a decision reached last week that resets the deadline for April 2, 2021.

Repsol, operator of a consortium formed with Energean Oil & Gas for the Ioannina license, had lodged its extension request late in August.

Repsol’s preliminary research work at the Ioannina license was initially expected to be completed by early October ahead of a decision on whether it would proceed with drilling.

The pandemic has severely impacted the upstream industry worldwide. Multinationals engaged in hydrocarbon research and production activities have severely limited their investment plans as a result of the pandemic’s impact on petroleum markets.

A rebound for the upstream sector appears highly unlikely any time soon given the rising second wave of coronavirus cases.

The EDEY extension will enable Repsol to conduct a more thorough analysis of seismic data collected and enable the company to hold on for the prospect of improved upstream industry conditions.

EDEY justified its extension by noting it will help the investors complete their assessment of technical work conducted during the preliminary stage.

 

 

Household PV producers still awaiting decision for new plan

Electricity consumers interested in installing solar panels with capacities of up to 6 kWp on rooftops for the sale of production to the grid are being forced to keep waiting as a result of a delayed ministerial decision, despite the ratification of related legislation in March.

This ministerial decision was planned for June but the emergence of other priorities at the ministry, including preparations for a subsidy program supporting electric vehicle purchases through the EU’s post-pandemic recovery plan, has delayed this decision’s delivery.

Legislation was approved in March to once again enable household consumers to sell their self-produced electricity to the grid at a set price. An older program, concerning solar panels of up to 10 kWp for both households and businesses, expired on December 31, 2019.

The new legislation sets a selling price of 87 euros per MWh, or 8.7 cents per KWh, for domestic PV producers. 

The pending ministerial decision is expected to fine-tune various installation details.

The new program enabling households to sell their self-produced PV output to the grid should be ready for launch by autumn, barring no further delays.

Industrial consumers preparing to leave long-time supplier PPC

Three of eight industrial groups traditionally supplied high-voltage power by power utility PPC and holding contracts that expire at the end of this year are involved in advanced talks with domestic independent suppliers for new supply contracts, energypress sources have informed.

PPC dominates the high-voltage electricity market with a 97 percent share, but this figure could drop considerably if industrial consumers reach agreements with new suppliers.

Leading cement producers AGET Heracles and TITAN, as well as Macedonian Paper Mills (MEL), are the three industrial consumers involved in talks with independent suppliers for high-voltage contracts, the sources noted.

All three have never before held contracts with any other electricity supplier, but their shifts away from PPC, probably not concurrently, now appear highly probable. Such a development would signal the start of competition in Greece’s high-voltage electricity market.

Lower wholesale prices, which have widened profit margins, as well as lower natural gas prices lowering generation costs at gas-fired power stations operated by independent producers, are key factors behind the likely shifts of industrial consumers to independent suppliers.

Industrial producers, gearing up for the post-coronavirus era, are seeking lower energy costs but are not satisfied with the tariff levels offered by PPC, market officials have noted.

High-voltage power demand up during lockdown, exchange data shows

Industrial high-voltage electricity demand during lockdown in Greece registered an unanticipated increase, rising by 12.46 percent in March, 21.86 percent in April, 30.62 percent in May and 19.71 percent in June, all compared to the equivalent month a year earlier, according to figures provided by the energy exchange.

Prior to lockdown, high-voltage electricity demand registered a milder 2.46 percent increase in February compared to the same month a year earlier.

Overall, in the first half of 2020, demand for high-voltage electricity rose by 14.87 percent compared to the equivalent period a year earlier, the energy exchange figures showed.

On the contrary, demand for mid-voltage and low-voltage electricity between February and May fell to lower levels compared to last year, according to the energy exchange data, reflecting inequalities in the impact of the pandemic on various economic sectors.

Mid-voltage electricity demand slumped 18.89, 22.43 and 22.08 percent in April, May and June, respectively, compared to the equivalent months a year earlier.

In the low-voltage category, concerning households, electricity demand fell considerably during the five-month period from February to June, registering drops of 6.08, 10.96, 19.1, 12.77 and 18.45 percent, respectively.

Figures provided by power grid operator showed an overall decrease, for all categories, of 4.3 percent in the first half of 2020 and a high-voltage demand decrease of 9.4 percent.

Over €500m secured for new energy efficiency upgrades fund

Greece has secured over 500 million euros for a third “Saving at Home” subsidy program promoting energy efficiency upgrades of homes. This amount will stem from a sum of 32 billion euros allotted to Greece through the EU’s new post-coronavirus recovery package, energypress sources have informed.

The new program, to offer generous incentives to medium and high-income earners, will be set an objective to annually upgrade 60,000 homes into smart homes. This target could be raised to 80,000 homes buildings, according to some sources.

Smart energy management systems, electric vehicle recharging units and roof-mounted solar modules are among the projects to be eligible for subsidized funding through the new third round of the Saving at Home program, to be officially announced within the next few days ahead of a September launch.

The third Saving at Home program is expected to be followed by a long series of new-generation programs to become available from 2021 over a three-year period as part of a national strategy, now being shaped, to be funded by Greece’s 32 billion-euro share of the EU post-coronavirus recovery package.

According to energy ministry estimates, annual sums of at least 750 million euros are expected to be injected into smart home upgrades between 2021 and 2023, project activity that should reach a sum of between 2 and 2.5 billion euros.

EU recovery fund compromise cuts into JTF for lignite end

A significant contraction of the Just Transition Fund that has resulted from a major compromise deal just reached between the EU’s north and south for a huge post-coronavirus recovery package has raised questions about the decarbonization effort’s financing and ability to progress smoothly.

A sum of 30 billion euros initially planned by the European Commission to be offered to lignite-dependent EU members states for their transition to cleaner energy will be cut to 10 billion euros.

A variety of post-coronavirus recovery sub-funds have been reduced in size, including the JTF, established to support Europe’s decarbonization process.

Prior to the compromise deal, a European Commission proposal had been made to increase the JTF amount for the EU’s lignite-dependent members to 40 billion euros from an initial sum of 7.5 billion euros.

Subsequently, Greece now stands to receive a few hundred million euros for its  decarbonization policy following an earlier estimate for a sum of 1.7 billion euros. The loss for Greece is worth approximately one billion euros.

The recovery package talks over the past few days saw a split between nations hardest hit by the virus and “frugal” members who were concerned about costs.

The deal centers on a 390 billion-euro program of grants to member states hardest hit by the pandemic. Italy and Spain are expected to be the main recipients.

It is the biggest joint borrowing ever agreed by the EU. Summit chairman Charles Michel described it as a “pivotal moment” for Europe.

 

Power demand dives 14.61% in June as tourism slumps

Electricity demand slumped 14.61 percent in June, compared to a year earlier, despite the month’s lifting of lockdown measures, latest Greek energy exchange figures have shown.

June’s drop in power demand, attributed to the unprecedented decline in tourism activity, was even bigger than the declines registered in April and May, 13 percent and 9 percent, respectively.

Numerous hotels and other tourism industry units have not opened for business. Also, flight bans were essentially not lifted until the beginning of this month.

Responding to the drop in electricity demand, energy producers have restricted output by 16 percent.

Natural gas and renewables dominated electricity generation in June. Natural gas-fueled generation covered 36.56 percent of demand, while RES production covered 26.43 percent, the energy exchange’s June report showed. Electricity imports covered 23.93 percent, hydropower 7.43 percent and lignite-fired production 5.64 percent.

 

 

Consumer shifts between independent suppliers at 30%

Roughly 30 percent of electricity consumers shifting from one electricity supplier to another are not moving away from the power utility PPC, as was usually the case up until just a few months ago, but from one independent supplier to another, a reflection of a further increase in competition, to the benefit of consumers, latest market data has shown.

Besides price offers, consumers are now also taking into consideration other factors such as supplier reliability, service standards and provision of supplementary services when choosing suppliers. This broader consideration is seen as a sign of the electricity market’s growing maturity.

Independent suppliers now face bigger bad debt figures as a result of an increase in unpaid receivables prompted by a number of factors, including business closures, consumer departures despite unpaid electricity bills, payment defaults, as well as tax file number changes by consumers seeking escape.

The scale of this undesirable situation for independent suppliers is nowhere near that of the enormous collection problem faced by PPC.

However, the bad debt problem highlights that independent suppliers, as a consequence of their efforts to boost market shares, are now dealing with a growing number of unreliable consumers. It also underlines the market’s tightened cash flow, especially in the business sector, as a result of the pandemic and recession.

Ministry still examining Energean Prinos rescue plan

The energy ministry is continuing its close examination of a business plan delivered by Energean Oil & Gas for the rescue of its Prinos offshore oil field in northern Greece, requiring investments totaling 75 million euros in 2020 and 2021 if the venture is to be kept afloat following the negative impact of  lower oil prices and the pandemic, according to the company.

“The ministry is continuing to examine the data provided by the company as well as the business plan. They have determined the size of the necessary funds at 75 million euros but we, too, need to verify this,” an energy ministry official informed.

Early signs of a petroleum market rebound are encouraging but this does not mean that the market has fully recovered, the official added.

The ministry acknowledges the potential damage closure of the oil field would have on the local economy and, as a result, is looking for solutions, the official added.

Energean officials have stressed that time is running out for the oil field’s rescue, urgently needing a solution to remain viable.

The government will need to utilize the EU’s temporary state aid framework to ensure financial support for the Prinos oil field, Greece’s only producing field at present, and its necessary investments.