coronavirus

Power demand dives 14.61% in June as tourism slumps

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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%

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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

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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.

PPC secures financial relief, cash injections worth €300m

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Power utility PPC is reinforcing its financial position for protection against challenges already brought about by the coronavirus crisis and ones not yet fully apparent.

The corporation’s board has approved moves worth 300 million euros, including restructuring of high-cost loans, in an effort to boost its liquidity.

Financial tools and alternative borrowing sources have once again become available to the corporation following its return to profit territory and growth prospects.

Investors and banks are expressing renewed faith in PPC, as was made clear yesterday by three decisions taken by the utility’s board promising to inject about 300 million euros into the company.

CEO Giorgos Stassis and his board approved a JP Morgan offer worth between 200 and 250 million euros for unpaid receivables by customers in the low and mid-voltage categories. This package of unpaid receivables totals 260 million euros and concerns amounts overdue for no more than 60 days. The financial services company is offering an interest rate of 3.5 percent over a three-year period. Bonds will be issued by PPC through an SPV.

Also, the country’s four main banks, National, Alpha, Eurobank and Piraeus, have accepted a request by PPC for a delay in the payments of two 25 million-euro installments, respectively due June 30 and December 31, for a one billion-euro, five-year bond issued in 2018. The systemic banks, showing faith in PPC, agreed to receive these payments when the bond matures in 2023.

In addition, PPC has further diversified its borrowing sources. The board approved an Optima Bank proposal for a 15 million-euro debenture loan with floating six-month interest.

 

‘Energy ministry policies crucial in effort to revitalize economy’

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The energy ministry’s policies promise to play a pivotal role in the challenge faced by the government to revitalize the national economy following lockdown, energy minister Costis Hatzidakis has noted in an article featuring in GREEK ENERGY 2020, the energypress team’s latest annual publication covering the Greek energy sector.

Action is already being taken by the ministry through a decisive energy-sector agenda that aims for growth and is fully aligned with the European Green Deal, now a key economic growth tool throughout Europe, the minister notes.

New financial tools such as an EU recovery fund, worth 750 billion euros, according to a European Commission proposal, are designed to help the EU achieve its goal of transition towards a zero-emission economy through support for the gradual elimination of fossil-fuel dependence, RES growth and energy savings, the minister writes.

Greece is ready to make the most of this EU support package, effectively an additional NSRF funding program for the country promising capital worth around 32 billion euros, in order to achieve sustainable green-energy growth, according to Hatzidakis.

Besides decarbonization and RES development, other aspects incorporated into the energy ministry’s wider plan include:  electromobility growth; a third Saving at Home subsidy program for domestic energy-efficiency upgrades; reforms for greater competition, transparency and more attractive price offers in the energy market; reduced industrial energy costs; and energy-sector privatizations, the minister notes.

 

Crisis’ impact on Prinos looked at, Energean up against time

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The energy ministry has turned to specialized consulting firm assistance for a detailed analysis on the pandemic’s financial impact on the Prinos offshore oil field in northern Greece, the country’s only producing field at present.

The energy ministry’s secretary-general Alexandra Sdoukou, handling the matter on behalf of the ministry, is currently holding talks on a daily basis with officials at Energean Oil & Gas, the field’s license holder.

The company wants emergency government support amid the extraordinary market conditions, energypress sources have informed.

The two sides are believed to be closely examining related data to determine the extent of the financial damage, for this project, due to the plunge in international oil prices, prompted by lower demand amid the widespread lockdown.

Energean Oil & Gas has invested 50 million euros between September, 2019 and May to keep production flowing at Prinos, an aging field, sources noted.

Sustainability is becoming a growing challenge at this venture, employing a workforce of approximately 270 employees, market authorities have noted. A cutdown in operating costs is seen as essential.

A cash injection for “Epsilon”, a fresher field in the area also licensed to Energean, could be made as a support for the company. Another option may entail financial support by the Greek State in exchange for a stake in Energean. Alternatively, state guarantees could be offered for a bank loan.

The finance ministry is also expected to become involved in the Prinos rescue effort. Much work lies ahead before any decisions can be reached. These will require European Commission approval.

Eurelectric calls for supplier protection against consumer debt

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Sector association Eurelectric, representing the common interests of the electricity industry at a European level, has delivered a list of proposals focused on protecting companies against the pandemic’s financial impact.

The association’s proposals include compensation for suppliers as well as their protection against excessive consumer debt resulting from the crisis.

The association recommends the establishment of state support programs to help consumers cover the costs of outstanding electricity bills.

Eurelectric also calls for a monitoring effort to identify possible energy shortages and lack of personnel at energy companies.

The association wants appropriate measures adopted to counter major financial impact anticipated by energy companies as a result of reduced electricity demand and prices. Government measures supporting energy-transition investment plans of companies have also been requested.

Other Eurelectric recommendations include the establishment of a long-term RES plan offering clarity and security for investors.

The association also points out the need for a mechanism designed to recover excessive debt related to the coronavirus crisis.

 

PPC rivals awaiting utility’s next pricing move for response

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Power utility PPC’s rivals are awaiting the utility’s next pricing-policy move before responding with offers of their own. A specially priced three-month package offered by PPC, the electricity market’s dominant player, to its customers as lockdown relief expires on June 26.

Lower wholesale electricity prices over the past couple of months as well as more efficient facility management by PPC, drastically reducing production from loss-incurring lignite-fired power stations, are two factors expected to enable the utility to keep offering appealing packages to customers, sector experts have told energypress.

An initiative taken by PPC during lockdown to equate usually higher tariff rates for consumption of more than 2,000 kWh with rates for consumption below the aforementioned limit could be an indicator of things to come from the power utility.

The market’s major independent suppliers are believed to have studied all possible scenarios in preparation for their respective responses.

PPC chief executive Giorgos Stassis has made clear the power utility’s intentions to regain part of its lost market share. The utility is expected to target specific customer profiles. In addition, bonus services may also be included in packages.

 

 

 

 

Energy exchange launch date rescheduled for September 17

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The energy ministry is set to reschedule the energy exchange market’s launch date for September 17, two-and-a-half months beyond the original June 30 date, following commitments made yesterday, during a virtual conference, by the power grid operator IPTO and Hellenic Energy Exchange (HENEX) administrations on the delivery of information systems and time required for trial runs.

The energy ministry is now expected to soon deliver a related ministerial decision, probably next week, setting the new schedule for the target model, or, more specifically, the energy exchange’s spot markets.

The compatibility of platforms and other applications being co-developed by the Greek energy exchange and IPTO for the balancing market is seen as crucial to the success of the new schedule.

As has been previously reported, a delay in the delivery of a balancing market platform to IPTO by General Electric, commissioned this project, has been a key factor behind the inability of officials to meet the original June 30 launch date.

A GE team that was stationed in Athens for this project left the country without notice, citing the possibility of greater pandemic danger ahead, in reaction to the outbreak.

IPTO, now closely coordinating with GE for a specific delivery date following the relaxation of lockdown measures, has promised to gradually deliver required information systems as of this month, prompting Greek authorities to set a new launch date.

According to the new schedule, certain trial runs testing combined energy exchange and IPTO systems will begin on June 22. Simulated testing, or a dry run, of all systems is expected to start on August 3 and last until markets are actually launched on September 17, given no issues arise.

Petroleum sector rebounding, Motor Oil deputy tells

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The petroleum market is now rebounding, a trend reflected by rising sales figures in May, Motor Oil’s deputy chief executive Petros Tzannetakis has told analysts during a virtual conference.

The official, responding to a related question, expressed cautious optimism for the petroleum sector’s performance this coming summer.

“Greece’s successful management of the pandemic can attract tourists. The borders have been opened and, at the same time, demand for gasoline is rising. I am cautiously optimistic,” Tzannetakis said.

It is currently not possible to make predictions on aviation fuel demand, he noted.

Motor Oil proved to be durable and resilient amid the pandemic’s unprecedented demand and price collapse for petroleum products, the deputy chief noted. The  corporate group’s major debt reduction and high-level liquidity played a key role, he pointed out.

Record sales figures in preceding years contributed to the corporate group’s resilience during the lockdown period, he explained.

Gov’t examining pandemic’s impact on Prinos oil field

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The pandemic’s financial impact on offshore Prinos, Greece’s only producing oil field, south of Kavala, is being closely examined by government officials and specialized advisors, energypress sources have informed.

Conclusions have yet to be reached on the extent of the financial damage to the Prinos oil field, licensed to Energean Oil & Gas, but it appears the government will seek financial support for this venture through the European Commission’s Directorate-General for Competition.

Though it is still considered too early for any decisions, the government has apparently already recognized the damage inflicted on Prinos by the pandemic and subsequent drop in demand and oil prices.

The Greek government has pledged production continuity and job protection for Prinos, as was recently highlighted by deputy energy minister Gerassimos Thomas.

Limits have been exhausted to keep Prinos operating, Energean Oil & Gas officials have pointed out, stressing the cost burden on the company.

 

PPC chief delivers favorable news on a number of fronts

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Power utility PPC, undergoing gradual transformation, expects to have amortized the cost of an initial voluntary exit plan for lignite-unit workers within six months, while amounts owed by the corporation to a series of third parties are being reduced, chief executive Giorgos Stassis informed analysts during a conference call yesterday, following a presentation of first-quarter results.

The cost of an initial voluntary exit package concerning approximately 1,000 PPC employees working at lignite units in northern Greece, is estimated between 30 and 35 million euros.

Stassis offered positive news on a number of fronts, including electricity-bill payments and cash flow, service digitization, securitization of unpaid receivables, and the ongoing implementation of a five-year business plan.

Online payments by customers now represent 30 percent of transactions, an 80 percent increase since the beginning of the lockdown measures, while 18,000 customers per day turn to the corporation’s call center for information, up from 5,000, maximum, prior to the lockdown, the company boss informed.

PPC has chosen the current period to launch its initial voluntary exit plan in order to determine, within the next two-and-a-half months, how many of its 4,000 or so employees working at lignite-fired power stations and mines will take up the offer, offering severance pay totaling 35,000 euros.

State-controlled PPC wants to organize personnel transfers as part of the country’s decabonization process.  Vacant positions will be filled by workers to be transferred from PPC’s Amynteo facilities, planned to shut down in September, and Kardia, whose withdrawal is expected in 2021.

Electricity-bill payments by customers, down 18 percent in March and 14 percent in April, have rebounded to pre-lockdown levels since May, the chief executive informed.

Amounts owed to contractors, suppliers, operators and other third parties have fallen to 650 million euros from 900 million euros, Stassis said.

A small-scale securitization package for unpaid receivables up to 60 days will be offered in June or July, he added.

 

 

Electricity demand down 12.6% in April, industrial use slumps 23.6%

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Electricity demand slumped 12.6 percent in April compared to the same month a year earlier, the biggest drop registered by high-voltage industrial consumers, forced to suspend or restrict output during the lockdown, power grid operator IPTO’s monthly report has shown.

Industrial electricity consumption in April fell sharply by 23.6 percent, the IPTO report showed.

The drop in electricity consumption linked to mining activity was even sharper, falling 55.5 percent in April. Besides the lockdown, this drop was also attributed to significant operational restrictions implemented at power utility PPC’s lignite-fired power plants.

Electricity generation in April fell by 3.2 percent, to 2,893 GWh compared to 2,990 during the same month a year earlier, according to the data.

This reduction was mild compared to major shifts observed in sources of generation. Lignite-based generation fell by 62.7 percent year-on-year, confirming, most emphatically, the commencement of PPC’s decarbonization effort.

High costs for lignite-based generation severely reduced the operational time of PPC’s lignite-fired power plants, limiting lignite’s share of the electricity production mix to just 10 percent in April.

On the contrary, the production share of interconnected RES facilities, benefiting from favorable conditions, rose sharply by 33.9 percent, year-on-year, to capture a market-leading 36 percent share of overall electricity generation in April.

Natural gas-fired power plants followed with a 30 percent share following an 11 percent year-on-year rise in output.

Electricity imports (grid interconnections) contributed 18 percent, while hydropower facilities increased their output by 19.8 percent to capture a 6 percent share in April.

PPC provided 951 GWh, or 56.6 percent of the production, while independent producers covered 43.4 percent.

Among the independent producers, Mytilineos led the way with 228.1 GWh, followed by Elpedison (210.4 GWh), Korinthos Power (154.1 GWh) and Heron II (136.3 GWh).

The IPTO data on generation highlights an increasing shift towards cleaner energy sources.

 

 

Target model, energy exchange plans shaped by meeting today

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The energy ministry intends to set new launch dates for the target model and energy exchange markets once it has drawn conclusions from a crucial meeting today with representatives of RAE, the Regulatory Authority for Energy, the Greek energy exchange, and power grid operator IPTO.

A previous June 30 target model launch date will definitely be missed as a result of various delays, including a pandemic-related hold up in the delivery of a balancing market platform by General Electric to IPTO.

The revised target model schedule, to be included in a related ministerial decision, will be based on the new feasible launch date for energy exchange markets.

No pending issues remain concerning the operating regulations to apply for the new markets. All rules have been approved.

Certain formula details, including a much-debated formula concerning the percentage of production each producer will be able to secure through contracts, are expected imminently, prior to June 22, when the tenure of RAE’s head official is set to expire.

A GE team that was stationed in Athens for the balancing market platform project left the country without notice, citing the possibility of greater pandemic danger ahead.

IPTO is now closely coordinating with GE for a specific delivery date, following the relaxation of lockdown measures.

Well-informed authorities insist that the energy exchange’s spot markets cannot be launched before mid-September.

 

Flight reconnections, geopolitics key for IPTO sale rescheduling

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Rescheduling details of a privatization plan for the sale of an additional stake in power grid operator IPTO will depend on the restart of the Athens-Beijing flight route, the reestablishment of face-to-face contacts blocked by the pandemic, as well as a reduction in geopolitical tension between China and the west.

IPTO’s strategic partner State Grid Corporation of China (SGCC), holding a 24 percent stake in the Greek operator, has expressed interest to boost this share. The Chinese company maintains first-offer rights in the event of a further sale.

Skillful diplomacy will clearly be needed to overcome any EU and US objections to an increased SGCC share in IPTO. Video conferences would prove insufficient. Greek foreign ministry officials will need to make at least one trip to China for related talks.

Greek governmnent officials intend to travel to Beijing for work on various matters following the summer, sources informed energypress. Bilateral issues have accumulated during the several months of lockdown. Many cancelled meetings need to be rescheduled.

More crucially, in the lead-up, the Greek side will need to prepare for these Beijng meetings by working through related matters with officials in Brussels and Washington.

PPC determined to stage small-scale securitization in June

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Appearing to have avoided the worst in a slowdown of electricity bill payments by customers, power utility PPC, whose revenue figures have gradually recovered to approach pre-pandemic levels, is now striving to offer its first of two securitization packages, a small-scale version concerning unpaid receivables of up to 60 days, in June.

PPC has yet to decide whether this package, which could rake in approximately 200 million euros for the utility, will be offered concurrently with a bigger, higher-risk securitization package containing unpaid receivables of more than 90 days. Its revenue potential for PPC is estimated at 300 million euros.

Regardless of when PPC decides to offer its large-scale securitization package, the smaller version will definitely go ahead as soon as possible, within June, if this is feasible, energypress sources informed.

Market sentiment will be instrumental in PPC’s decision. Fluctuating stock markets over the past few months have spooked the investment community. Global market indices have been at the mercy of breakthrough prospects for a coronavirus vaccine.

The resulting insecurity is expected to subdue price levels investors will be prepared to offer PPC for its large-scale, higher-risk securitization package. PPC already feels more comfortable about moving ahead with the small-scale securitization package of lower-risk, short-term unpaid receivables, less susceptible to market conditions.

Energy projects a main focus of new financial support tool

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A financial-support plan backing energy projects, the circular economy – waste elimination and continual use of resources – as well as pivotal infrastructure features in a wider support program announced by government officials yesterday for the economy and enterprises.

The support plan, to involve public and private-sector money, will seek to achieve economic regrowth as lockdown measures are gradually eased.

Development and Investment Minister Adonis Georgiadis presented the various facets of the support program yesterday following a speech from Prime Minister Kyriakos Mitsotakis on the government’s plan for a restart of the economy.

The government intends to provide state support worth 400 million euros for the support plan’s section concerning energy, the circular economy and pivotal infrastructure. The amount will be channeled into the market by the Hellenic Development Bank.

In addition, this support fund will also seek to attract private-sector capital worth 600 million euros and ultimately generate energy-sector investments totaling approximately 3 billion euros.

Renewable energy and energy storage projects will be the main focus of this part of the support program, while qualification will be based on transparent criteria and banking rationale, officials noted.

The support plan’s section for energy, the circular economy and pivotal infrastructure, along with another section supporting strategic sectors of the economy, share the top spot in terms of state support – 400 million euros for each – among eight sections in total.

The total sum to be provided by the state for the support plan’s eight sections amounts to 1.8 billion euros, projected to snowball into investments worth 5 billion euros overall.

 

 

Suppliers skip surcharge payment credit offer for May

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Electricity suppliers have ignored a credit option made available by the energy ministry for 30 percent of regulated-charge payments to operators.

A gradual improvement in electricity-bill payment records by consumers, combined with the offer’s credit terms, generally deemed unappealing and risky, appears to have stopped suppliers from taking advantage of the measure.

Not a single electricity supplier chose to utilize the credit offer for April-invoiced  surcharge payments to power grid operator IPTO by a May 15 deadline.

Surcharges included in energy bills are paid by consumers and then relayed by suppliers to operators.

Suppliers showed little interest in the offer a month earlier. Just four suppliers chose to utilize the credit offer for March surcharge payments due in April.

The energy ministry acted swiftly to prepare and introduce this credit offer as a cash-flow relief measure amid fears of major energy-bill payment delays by consumers.

Consumers have improved their energy bill payment records over the past few weeks following a deterioration early in the lockdown. This upward trajectory has so far spared suppliers of cash-flow dramas.

Deferred surcharge payments must be settled four months down the road, along with any other existing obligations, according to the ministry’s credit offer extended to suppliers. They have adopted a cautious stance, fearing debt accumulation.

According to some sources, a number of suppliers have chosen to informally delay their relay of surcharges to the operator rather than take up the credit offer.

 

PPC picks Goldman Sachs as consultant for DEDDIE sale

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The board at power utility PPC has reached a decision to hire US financial services company Goldman Sachs as privatization consultant for the sale of a 49 percent stake in distribution network operator DEDDIE/HEDNO, a subsidiary, sources have informed.

This appointment is seen as the first step in preparations leading to the partial privatization, while the choice of a heavyweight consultant reflects the importance of the sale for both the government and state-controlled PPC.

The prospective entry of an investor with a 49 stake raises hopes for a major network upgrade, including digitization. Modernized infrastructure will help intensify competition in the domestic electricity market. However, enormous sums are needed.  A project entailing the installation of smart meters, alone, is budgeted at one billion euros.

European operators as well as foreign funds investing in energy networks and infrastructure expressed strong interest in DEDDIE prior to the outbreak of the coronavirus crisis.

The operator’s regulated earnings and steady yield serve as a safe and profitable haven for capital investment, while DEDDIE’s tremendous asset base expansion potential adds to the appeal for investors.

RAE, the Regulatory Authority for Energy, and DEDDIE are currently working together to further modernize the operator’s regulatory framework.

Also, DEDDIE is currently finalizing a new business plan, covering 2020 to 2028. It envisions a gradual increase of annual investments to 350 million euros, more-than-double the current level of 150 million euros.

 

Supplier electricity-bill collections better than expected so far this month

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Electricity bill payments have so far been better than expected in May and are on the rise following shock results recorded in previous months, during the full-scale lockdown.

Worst-case supplier revenue scenarios for the month have so far been avoided, but it is still too early to tell as the majority of consumer payments are due at the end of the month.

For the time being, rebounding electricity bill collection records are gradually approaching pre-crisis levels. Electricity bill payments are generally down by about 10 percent at present, compared to a 30 percent slump amid the heart of the lockdown.

Power utility PPC is already improving on its electricity-bill revenue decline of 9 percent in April following a major slump of between 25 to 30 percent in the second half of March.

Electricity bill collection figures at independent electricity suppliers are also moving upwards and are presently about 10 percent below pre-crisis levels, energypress sources informed.

Suppliers with high exposure to business and professional clienteles have been hit especially hard as these consumer groups were grounded during the full-scale lockdown in March and April.

Revenue losses have been milder for suppliers focused more on household consumers. Their revenue losses are in single-digit territory.

The full extent of the pandemic’s damage on electricity supplier revenues will become clearer once the economy is fully relaunched and the government’s support measures reach an end.

An anticipated unemployment spike over the next few months will negatively impact electricity-bill collection records.

Also, a subdued summer for the country’s pivotal tourism industry will hurt electricity supplier revenues, traditionally boosted during the second half of the year as a result of heightened tourism-related business.

Suppliers may end up needing to resort to emergency cash support through low-interest bank loans, support mechanisms and other financial tools if it turns out to be a bleak summer, as is feared.

 

 

Energy groups pressing ahead with natural gas-fired unit plans

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The country’s major energy groups are pushing ahead with investment plans for new gas-fired power stations despite the pandemic’s unprecedented impact on the economy and electricity market.

Mytilineos, a vertically integrated group at the forefront of electricity production and supply, began constructing an 826-MW energy center at Agios Nikolaos in the Viotia area, slightly northwest of Athens, last October and is continuing to press ahead with this project.

Investment plans by other players are also maturing. GEK-TERNA is moving ahead with licensing procedures for a 660-MW unit in Komotini, northeastern Greece. The Copelouzos group is paving the way for a 660-MW facility in Alexandroupoli, also in the northeast, while Elpedison is carrying on with procedures for an 826-MW power station in Thessaloniki.

Copelouzos could partner with an investor for the group’s Alexandroupoli project, sources informed.

All the aforementioned corporate groups are positioning themselves in a new energy landscape being shaped by the dominant role of natural gas in the transition towards renewable energy and cleaner energy sources.

This trend became very apparent during the lockdown in Greece. Natural gas and the RES sector covered 60 percent of domestic electricity demand in March.

Power utility PPC is pushing ahead with its decarbonization program without any backtracking, despite the crisis. This is creating a need for new and modern gas-fired power stations.

Furthermore, Greek energy groups are continuing to eye Balkan markets for prospective electricity exports. Electricity generation in the neighboring region has not been satisfactorily upgraded in recent decades, market officials pointed out.

Vertically integrated groups are also eagerly anticipating a new permanent CAT mechanism.

Lockdown relaxation limits fuel sales drop, tourism pivotal

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Petroleum product traders have experienced a slight improvement in sales figures since the relaxation of lockdown measures at the beginining of May.

During this 13-day period, the fuel sales drop has been contained to 30 percent compared to regular levels, far better than a slump that reached as low as 60 percent in April.

The pandemic’s impact on diesel has been milder. Sales for this fuel are now down 10 percent after dropping 30 percent in April.

Market officials attributed this increase to the first-stage relaxation of lockdown measures. Also, the general public has remained apprehensive about using public transport, prompting a further rise in the use of private vehicles.

Heating fuel sales were up over the past few weeks compared to  an equivalent period last year as consumers took advantage of a massive drop in oil prices to stock up for next winter.

A new extension granted by the government for heating fuel supply until the end of the month is not expected to make an impact on sales figures. Most consumers have already stocked up and heating fuel prices are now gradually rising.

The pandemic’s development, impact on wider activities and, most crucially, tourism this summer will be instrumental for the future course of fuel sales figures. Current levels are expected to remain unchanged over the next two to three months.

A finance ministry relief measure for payments of special consumption tax and VAT on fuel purchased between May 4 and 19 has not been a great help for market liquidity, officials pointed out.

DEPA Trade, Infrastructure sales delayed for after summer

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The final rounds of privatization procedures for DEPA Infrastructure and DEPA Trade, two new entities formed by gas utility DEPA to facilitate its sale, will be postponed until after summer as a result of the pandemic’s impact on global economic activity and investments, pressuring asset values, sources have informed.

Investors are being offered the Greek State’s 65 percent stake and Hellenic Petroleum ELPE’s 35 percent share of DEPA Infrastructure and DEPA Trade.

However, the privatization fund TAIPED, combining its efforts with the energy ministry and RAE, the Regulatory Authority for Energy, intends to press ahead with a June launch of a privatization procedure for a depleted offshore gas field south of Kavala planned to be developed as an underground gas storage facility.

An appraisal of first-round offers submitted by nine investment teams for DEPA Infrastructure and that many more for DEPA Trade is expected to be completed within June.

Barring unexpected developments, TAIPED should announce its list of finalists for both sales next month. This will be followed by the opening of a virtual data room facilitating due diligence procedures for both companies.

Ministry examining delayed RES auction feasibility for July date

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Energy ministry officials are examining a number of factors to determine whether the next RES auction for new wind and solar energy project installations can be held in July.

An original plan to stage this auction in June has already been ruled out. If a date in July is not feasible, then the session will need to be delayed until the year’s final quarter.

Ministry officials would rather avoid such a scenario as they do not want to give investors the impression of wider coronavirus-induced devastation in the sector.

A successful RES auction on April 2 was greeted by the energy ministry as a positive sign for the sector.

The number of mature projects ready to participate in the next auction is a key factor being examined at the ministry.

RAE, the Regulatory Authority for Energy, wants 482 MW of wind energy projects and a further 482 MW for solar energy projects offered this year.

A second factor being considered at the ministry is whether RAE, currently understaffed, can administratively support an auction in July.

Also, the tenures of RAE’s head official, deputy and a board member expire on June 23. This could also complicate the authority’s ability to stage an auction in July.

 

Government working to promote major-scale RES projects

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The government is working on upgrading the country’s legal framework for the RES sector in an effort to promote the development of major-scale projects, not just smaller wind and solar energy farms.

The need for a national RES strategy revision has been intensified by the prospect of major pandemic-induced damage to the tourism industry, the backbone of the Greek economy.

Big RES projects promise to attract foreign funds managing portfolios worth billions. An influx by such funds promises to create jobs, generate economic growth and help Greece reach its ambitious RES objectives set for 2030.

The government took an important first step yesterday by ratifying legislation to simplify the RES licensing procedure. But this is not enough. Ensuing steps in the overall procedure for RES investments also need to be simplified.

“We have begun and are working on proposals to simplify procedures for the next stages all the way to the installation permit. We are also moving forward with other issues to accelerate the RES sector’s penetration of the energy mix,” deputy energy minister Gerassimos Thomas recently told parliament.

Independent supplier revenues plunge, tariff cuts not possible

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Independent electricity suppliers, pressured by lower revenue figures and increased bad-debt risk as consumers, mainly businesses, struggle to pay their bills, have not been able to offer tariff reductions in response to the dramatic drop in the cost of electricity production brought about by lower natural gas prices.

The System Marginal Price, reflecting, to a certain degree, the cost of electricity, averaged 28 euros per MWh in April, down from 62.4 euros a year earlier.

This sharp drop has been attributed to the increased grid participation of natural gas-fired power stations, using low-cost LNG, as well as renewable energy units.

On the downside for independent suppliers, electricity demand fell by 14 percent in April, further aggravating their cash flow predicament.

Electricity bill payments have dropped considerably amid the lockdown, falling by as much as 50 percent in April, suppliers have informed.

Power utility PPC, which has traditionally battled bad-debt problems, is the least affected, its electricity bill collections falling by approximately 25 percent. This has been attributed to the company’s client base, comprised mostly of households and high-voltage consumers.

On the contrary, independent suppliers, suffering far sharper revenue drops, serve many small and mid-size businesses, badly affected by the lockdown.

Households have consumed greater amounts of electricity during the lockdown and generally serviced their bills.

It is feared some 100,000 enterprises may go out of business in the next few weeks. This would be a major setback for independent electricity suppliers.

 

Oil drilling plans on hold, forced by price collapse, pandemic

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Preliminary hydrocarbon exploration work planned by oil companies at licenses in the Ionian Sea and south of Crete is being postponed for an indefinite period that could last as much as a year, possibly more.

Upstream players are revising plans as a result of the collapse in oil prices and the coronavirus pandemic, a double setback for the sector.

Worse still, investment conditions for the Ionian Sea and Crete areas are made even more challenging by the fact that neither has yet to reveal sustainable fields.

In addition, both Greek zones are deep-sea areas of depths ranging from 2,500 to 3,000 meters, making exploration a high-cost venture.

Global oil majors are reducing investments and expenses by the billions in response to the unfavorable market conditions that have emerged over the past couple of months.

Fields with proven reserves have not been spared, which pushes untested fields such as those in Greece even further down the priority list.

The resumption of drilling ventures still at preliminary stages is not likely until oil prices rebound, energy minister Costis Hatzidakis noted in an interview with Greek daily To Ethnos.

It is a similar picture for Cyprus. The Eni-Total consortium yesterday announced it is postponing oil drilling activities in Cyprus’ Exclusive Economic Zone until March or April next year.

Lockdown prompts electricity demand slump of 14% in April

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Electricity demand slumped by an unprecedented 14 percent in April, driven down by lockdown measures that have restricted movement and forced hundreds of thousands of businesses to suspend their operations, figures provided by power grid operator IPTO have shown, according to energypress sources.

The IPTO data strictly concerns demand through the grid, not electricity amounts declared by companies at the Greek energy exchange, the sources noted.

In March, electricity demand was down by 1.8 percent compared to the equivalent month a year earlier.

The demand drop in the high-voltage category for industrial consumers was 23 percent, nearly double the overall decline. Major manufacturers opted to disrupt their operations to limit losses prompted by lower market demand.

April’s 14 percent drop in electricity demand is the biggest on record. A bigger fall of 18 percent was recorded in July, 2013, but this data includes network figures, which, if factored in, limit the drop to 12 percent.

Electricity demand is expected to remain subdued in the coming months as enterprises will need some time before rebounding to normal business levels.

Senfluga allocates €500,000 to Greek health and non-profit sectors

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Senfluga, the company owned by Italy’s Snam (54%), Spain’s Enagas (18%), Belgium’s Fluxys (18%) and Coupelouzos Group’s DAMCO ENERGY SA (10%), has allocated 500,000 euros for the Greek health system and non-profit sector, the company announced in a statement.

These Senfluga funds enabled the purchase of 90,000 isolation suits from a Chinese supplier. The medical material will be shipped to Greece in the next few days.

The donation is also aimed at supporting social initiatives advanced by foundations. Funds have already been primarily allocated to the national health system as well as NGOs such as ActionAid Hellas, Doctors of the World Greece and IASIS, which, together, have activated a helpline and are contributing to efforts made by the Greek State for relief and support measures.

Senfluga is the main shareholder of Greek gas grid operator DESFA with a 66 percent stake.