Crete-Peloponnese subsea cable installation to start soon

Power grid operator IPTO plans to begin installing a 135-km subsea cable for the Peloponnese-Crete grid interconnection, part of a larger project to ultimately extend this line to Athens, within the next few weeks. The installation’s exact starting date will depend on the weather conditions.

Also, a subsea cable interconnecting the islands Naxos and Syros, the final step in the third phase of the Cyclades grid interconnection, is expected to be electrified next month, according to the operator.

The Peloponnese-Crete project, in particular, is pivotal in the effort to reduce public service compensation (YKO) surcharges for consumers. The interconnections will also help utilize the renewable energy potential of islands.

The Peloponnese-Crete subsea cable installation, made challenging by deep waters reaching 1,000 meters, will require about two months to complete, IPTO sources noted. It will be the world’s longest subsea cable grid interconnection.

Installation work for a second subsea cable (107 km, 150 kV) between Syros and seaside Lavrio, on the southeastern tip of the wider Athens area, was completed last month in preparation for the electrification of the Naxos-Syros line, expected early October. High-voltage testing, over a 24-hour period, will precede the line’s electrification.

IPTO island links over next 10 years to offer 2.6 GW capacity

Power grid operator IPTO’s interconnections planned for the next decade will prepare the ground for new island-based RES projects representing a total capacity of 2.6 GW.

The operator’s ten-year national electricity grid development plan for 2021 to 2030, forwarded to RAE, the Regulatory Authority for Energy, for approval, offers major investment opportunities in the renewable energy sector.

Wind and solar energy farms operating on islands will be able to transmit their output to the mainland via underwater cables.

The IPTO ten-year plan offers a RES project installation capacity of 2,442 MW for Crete, the Cyclades, the Dodecanese and the northeast Aegean islands. This capacity represents potential investments estimated at 2.6 billion euros.

The completion of all four phases of the Cyclades interconnections, scheduled for the second half of 2024, will offer 332 MW for this region. Andros and Tinos will have a RES installation capacity of 72 MW, the capacity for Syros, Paros, Mykonos and Naxos will total 160 MW, while Santorini, Folegandros, Milos and Serifos will be offered a 100-MW installation capacity.

The completion of Crete’s small-scale mainland interconnection to the Peloponnese, scheduled for the second half this year, will offer a RES installation capacity of 160 MW. A further 600 MW will be added once the island’s major-scale interconnection to Athens is completed in 2023, when Crete’s wind and solar energy capacity total of new and existing RES projects is expected to reach 1,080 MW.

The RES expansion capacity on the Dodecanese and northeast Aegean islands will reach 1,030 MW, according to the IPTO ten-year plan. Samos, Chios and Lesvos will be offered a 360-MW share of this total; Limnos, Kos, Rhodes and Karpathos will get 570 MW, while Skyros will be offered the remaining 100 MW.

The grid interconnections in the island regions will be developed over three phases to be respectively completed in 2027, 2028 and 2029, according to the IPTO plan.

 

Cyclades 3rd phase interconnection set for completion late in 2020

The third phase of the Cyclades underwater electricity grid interconnection, to link Syros and Lavrio, east of Athens, is on schedule for completion in the fourth quarter of 2020, power grid operator IPTO has announced.

The installation of a second submarine cable covering the Lavrio-Syros section promises reliable, lower-cost power supply for the islands Syros, Paros, Naxos and Mykonos, IPTO noted. It also doubles transmission capacity to and from these islands, enabling further RES penetration into the national grid.

The total cost of this project, co-financed by EU and Greek institutions, is budgeted at 111 million euros.

Installation work for a first segment of submarine cable, measuring 28 km, is expected to be completed within the next few days, IPTO noted, adding that a second segment, covering 80 km, will be installed during the first quarter of 2020. The installation project is being performed by the Nexans Norway.

“We are very happy to continue our cooperation with our good partner IPTO. We are committed to the timely completion of the 3rd Cyclades Interconnection, which is a very important project,” noted Ragnhild Katteland, chief executive of Nexans Norway.

Officials of IPTO and Nexans Norway yesterday visited the ship to perform the project’s installation work, currently moored in Lavrio.

Cyclades submarine interconnection enters final stage

The second phase of the Cyclades submarine cable interconnection has entered its final stage with the installation of cables from Evia to Andros and Andros to Tinos set to begin next week.

Italian company Prysmian, awarded the project by power grid operator IPTO, will begin work from Andros, energypress sources informed.

Existing power lines covering these two segments are being upgraded, for a capacity increase, at a cost of 21.2 million euros. Work on the two sections is expected to be completed by the end of this year, according to a contract signed between IPTO and Prysmian.

IPTO and the Italian firm had also collaborated for the Cyclades interconnection project’s first stage, linking coastal Lavrio, southeast of Athens, with Syros.

Just days ago, work was completed on the installation of a submarine cable linking the mainland with the Peloponnese at the Rio-Antirrio crossing. This project was undertaken by a consortium comprising Hellenic Cables and Fulgor.

 

New Mykonos grid interconnection to save €80m per year, energy minister tells

The country’s new electricity grid interconnections represent a significant step along the way towards a new era, energy minister Giorgos Stathakis noted during a speech at a ceremony held yesterday to inaugurate an interconnection project linking the island Mykonos with the mainland grid.

This project, which completes the first phase of the Cyclades grid interconnection with the mainland, promises annual savings of 80 million euros, otherwise spent on high-cost, high-polluting electricity generation at power stations operating on the islands. The operating costs of these facilities are covered by consumers through public service compensation (YKO) surcharges added to electricity bills.

The minister told the ceremony, attended by Prime Minister Alexis Tsipras, that he expects the Cretan submarine power cable interconnection to soon be completed. This project’s completion, covering electricity supply to and from Crete, the country’s biggest and most populous island, will lead to further public service compensation savings and also offer major environmental benefits. YKO costs in Greece amount to between 600 and 700 million euros per year.

Stathakis, during yesterday’s speech, also made reference to EU environmental targets for 2030. An EU objective has been set for the renewable energy sector to provide 32 percent of electricity consumed. The EU is also aiming for a 32.5 percent electricity consumption reduction compared to 2009 levels.

If these targets are to be achieved, the RES sector will need to double over the next decade and energy consumption will need to drop at a rate of nearly 1.5 percent per year.

The interconnections will provide crucial support for Greece in the country’s effort to reach these goals as current electricity production on the islands is harmful for the environment.

IPTO reports net profit surge, up 113% to €31.2m in 1Q

IPTO, the Greek transmission system operator, has posted a first quarter net profit of 31.2 million euros, up 113 percent increase compared to the 14.6 million-euro figure reported for the equivalent period a year earlier.

First-quarter operating profit at IPTO rose by 69.4 percent to 47.3 million euros from 27.9 million euros in the first quarter a year earlier, the operator reported.

Total revenues at IPTO fell to 56.7 million euros in the first quarter from 65.5 millon euros a year earlier, a 13.5 percent decline, it reported.

Revenue from Transmission System Rent also slipped in the first quarter, dropping 12.8 percent to 53.3 million euros from 61.1 million euros.

IPTO’s net debt figure fell by 32.7 percent to 157.7 million euros from 234.4 million euros.

The recently established ADMIE Holding SA, owner of a 51 percent stake of IPTO, reported a first-quarter net profit of 15.8 million euros.

IPTO’s first quarter results were positively affected by the ad hoc provision of 26.6 million euros following a Court Decision that dismissed the lawsuit of a contractor, the operator noted.

IPTO’s management, in close cooperation with ADMIE Holding and strategic investor State Grid International Development, is committed to the timely execution of one billion euro transmission system investments on a cumulative total until 2021, it stated.

A plan accelerating investments is in place. Commissioning of the 1st Phase of the Cycladic islands interconnection, worth 247 million euros, has been completed. IPTO has accelerated Phase 3 of the Cyclades Interconnection with the relevant tenders to be published during June. Phase 2 of the Cyclades Interconnection is underway with the selection of the tenderer for the undersea cable that will connect Naxos with Paros and Mykonos, the project’s budget being 42 million euros.

Furthermore, the interconnection of Crete with the Peloponnese has been launched with the publication of tender documents for the construction of the undersea cable connecting Peloponnese with Crete and the two substations at both ends of the cable.

IPTO has also submitted to RAE, the Regulatory Authority for Energy, its proposal for the interconnection of the Dodecanese, paving the way for a new major island interconnection project, the operator noted.

In April, IPTO completed successfully a voluntary exit scheme, with the participation of 136 employees eligible for retirement rights. The resulting reduction of the annual payroll cost is estimated at 8.5 million euros per annum, the operator noted.  Furthermore, the aforementioned scheme offers the company the opportunity to hire new recruits, it added.

 

Commercial launch of Cyclades link, now functional, delayed

Commercial barriers preventing suppliers from entering the Cyclades island electricity markets continue to exist despite the launch of an interconnection project a month and a half ago.

Though the interconnection is now fully operational on a technical level, the islands, except for Andros and Tinos, have yet to be commercially incorporated to the national grid.

Consequently, suppliers are still unable to purchase lower-cost electricity in the wholesale market or at NOME auctions in order to offer island consumers attractive alternative deals.

The Cyclades interconnection now offers mainland grid links to Syros and Paros while Antiparos, Naxos, Koufonisi, Schinoussa, Iralkia, Ios, Sikinos and Folegandros are all linked to the mainland system via Paros.

A ministerial decision, which has been delayed, needs to be signed so that the Cyclades may be officially incorporated into the national grid.

If the decision is not signed soon, reidents and businesses on the islands will not be able to benefit from lower-cost electricity supply offers during the summer, when electricity consumption levels increase due to hot weather and tourism, sources stressed.

Island electricity load estimates and RES output will be factored into the country’s daily energy program once the ministerial decision is signed.

Cyclades first phase link ‘ready this week’, new contracts soon

The first phase of the Cyclades interconnection is set to be completed this week with the Mykonos link, while the developers of the wider project’s second phase, to connect Naxos and upgrade existing links between Tinos, Andros and Evia, will be selected in early May, Giannis Margaris (photo), the deputy chief at IPTO, the power grid operator, told conference staged this week by SEV, the Hellenic Association of Industrialists.

Also, next month, IPTO, the power grid operator, plans to announce a tender for the third phase of the Cyclades interconnection, entailing the installation of an additional underwater power cable between Syros and Lavrio, the IPTO deputy noted.

Meanwhile, IPTO is also completing a study concerning the Dodecanese interconnection, whose results will be forwarded to RAE, the Regulatory Authority for Energy, he informed.

A plan for the fourth phase of the Cyclades interconnection, submitted by the operator to RAE in late March, has been included in IPTO’s ten-year development plan covering 2019 to 2028.

IPTO’s investment program includes projects, to be completed by 2021, worth a total of one billion euros, the IPTO deputy told the conference. These concern island interconnections with the mainland grid, upgrading the system, as well as cross-border interconnections, Margaris pointed out.

IPTO is currently pushing ahead with two major interconnection projects, the Cyclades and Crete interconnectons, he said.

The first phase of the Cyclades interconnection, budgeted at 245 million euros, is set to finish by the end of this week with the Mykonos interconnection, he said.  Eleven Cycladic islands are now linked, Margaris said, stressing the importance of EU Multiannual Financial Framework and EIB funding.

 

 

 

Cyclades, Crete links to increase IPTO tariffs as of 2019

A decision on IPTO (power grid operator) electricity transmission and distribution costs for the four-year period covering 2019 to 2022, anticipated towards the end of the year, is expected to lead to related tariff rises as the cost of the Cyclades and small-scale Cretan interconnections will be factored in.

The operator intends to start recovering amounts concerning cost coverage of these projects before the Cyclades interconnection is completed and ahead of work on the small-scale Cretan interconnection.

Public service compensation (YKO) surcharges included on consumer electricity bills to primarily subsidize high-cost electricity production on Greece’s non-interconnected islands will not have yet been reduced once these hikes are implemented.

However, this surcharge, also supporting the Social Residential Tariff (KOT) program offering subsidies for lower-cost electricity to underpriviledged households, will be reduced once the aforementioned interconnections have been completed.

IPTO’s ten-year program, a binding schedule, foresees completion of the small-scale Cretan interconnection, to link the island with the Peloponese, in 2020.

As for the Cyclades, the first phase of the overall proect was inaugurated a few days ago. The second phase is expected to be completed early next year, a third phase is set to be completed at the end of 2020, while work on the fourth phase should soon commence.

The maintenance cost of local power stations on Paros, including stand-by costs to be sustained until the Cyclades interconnection is completed, is one of the factors that will increase IPTO’s transmission costs.

As was reported by energypress yesterday, IPTO’s electricity transmission and distribution costs for 2018, expected to be calculated next week, should lead to a decline of approximately 10 percent for high and medium voltage consumers. Household tariffs are not expected to change while mild hikes are expected for low-voltage electricity used by professionals.

IPTO board to visit SGCC heads in Beijing for results presentation

The administration of IPTO, Greece’s power grid operator, has scheduled to visit Beijing next week to present to the leaders of State Grid Corporation of China (SGCC), the operator’s strategic partner, IPTO’s latest and yet-to-be-released financial results as well as a business growth plan. SGCC acquired a 24 percent stake in IPTO last year.

According to sources, IPTO’s results, to be released within the next few days, will be better than expected, a prospect that will surely please the operator’s Chinese partner.

Meanwhile, the operator is waiting for a decision, any day now, from RAE, the Regulatory Authority for Energy, on new tariffs, to apply for a four-year period.

IPTO is bolstering its position through the development of new interconnections, planned to follow the first phase of the Cyclades interconnection.

The second phase of the Cyclades interconnection with the mainland is expected to be completed in early 2019. A third phase is planned to be completed by the end of 2020, while a fourth phase is set to be added to the operator’s ten-year business plan covering 2019 to 2028.

An international tender for the first phase of the Cretan interconnection, a small-scale connection to link Crete and the Peloponnese, is expected to be announced within the next few days. Talks with the EuroAsia consortium for the establishment of a partnership for development of the second phase of the Cretan interconnection, to link Athens with Crete, are in progress.

The Cretan interconnection is planned to be incorporated into the prospective EuroAsia project, which will link the Greek, Cypriot and Israeli grids.

Major Cyclades interconnection ‘achievement of past two years’

The power grid operator IPTO’s launch on Monday of the Cyclades interconnection’s first phase represents a historic achievement for the national grid and marks the completion of a project essentially developed over the past couple of years despite being initially tabled back in the 1970s, Manos Manousakis, the operator’s chief executive, has told Athens radio station Sto Kokino.

“Following numerous misadventures and postponements, the first contract was signed in September, 2014 and the project was developed between 2015 and now,” Manousakis stressed.

The Cyclades interconnection’s first phase, a 108-km underwater power cable link, stretches from a power facility at coastal Lavrio, southeast of Athens, to Syros. From there, a 33-km cable runs to the northern part of Tinos, a 46-km cable connects Syros with Paros, and a third line, 35 km long, links Syros with Mykonos. Finishing touches are now being made to the Mykonos link, expected to be completed within the next few days.

This network will offer indirect links – from Paros – to Naxos, Antiparos, Koufonisi, Schinoussa, Iraklia, Ios, Sykinos and Folegandros.

A total of 87,000 island residents, plus tourists during the summer months, will have access to steady-voltage electricity via high-tech means, the IPTO chief noted in the radio interview.

Over the next twenty years, the project, including its ensuing stages, promises to offer financial benefits worth 2.7 billion euros, Manousakis noted.

The project’s budget, worth 245 milllion euros is being covered by the EU’s National Strategic Reference Framework (NSRF), the European Investment Bank (EIB) and IPTO company funds.

The project’s second phase, planned to include links between Paros and Naxos, Naxos and Mykonos, as well as an upgrade of of an existing cable connection linking Andros with Livadi, in southern Evia, and Andros with Tinos, is expected to be completed in 2019.

A third phase, to link Syros and Lavrio, is scheduled to be completed in 2020, two years earlier than originally planned.

The fourth phase includes south and west Cyclades islands such as Sifnos, Milos and Santorini, an island with enormous electricity consumption levels.

 

 

Minor hikes, decreases seen for network surcharge revisions

Network usage and distribution fees appearing as surcharges on electricity bills are set for mild increases and decreases, depending on respective consumer categories, but average levels will remain unchanged, energypress sources have informed.

These revised fees, channelled to IPTO, the power grid operator, and HEDNO, the Hellenic Electricity Distribution Network Operator, are expected to be made by RAE, the Regulatory Authority for Energy, within the next few days before coming into effect a month later for a four-year period.

The imminent surcharge revisions will follow the recent approval of IPTO’s ten-year development plan covering 2018 to 2027.

It includes a commitment by the operator to complete Crete’s small-scale submarine cable interconnection by 2020, according to energypress sources. The third phase of the Cyclades interconnection is now also due to be completed in 2020 after authorities decided to hasten the project’s development by two years.

The endorsement of IPTO’s ten-year development plan was a prerequisite for RAE to proceed with its network usage and distribution surcharge revisions as the development costs of projects are a major factor in these calculations.

The HEDNO-related reductions will cover a wider gamut of consumers, sources informed.

 

Paros plant sidelined as initial Cyclades link begins operating

A power plant on the island Paros, suppling the island as well as Antiparos, Naxos, Iraklia, Schinoussa, Koufonisi, Ios, Sykinos and Folegandros, has been shut down and placed on standby as the first phase of a Cyclades submarine cable interconnection is now operating following electrification and tests.

The Cyclades underwater power cable link, a 108-km line, stretches from a power facility at coastal Lavrio, southeast of Athens, to Syros. From there, a 33-km cable runs to the northern part of Tinos, a 46-km cable connects Syros with Paros, and a third line, 35 km long, links Syros with Mykonos.

All of the region’s old fuel-powered power plants will stop operating and remain on standby.

The second phase of the Cyclades interconnection with the mainland system is planned to include links between Paros and Naxos, Naxos and Mykonos, as well as an upgrade of of an existing cable connection linking Andros with Livadi, in southern Evia, and Andros with Tinos.

The installation of submarine power cables for this second phase of the Cyclades connection, budgeted at 80 million euros, is expected to be completed by early 2019. The appraisal of offers submitted to a related tender is now at an advanced stage.

A third phase, budgeted at 100 million euros, to include the installation of a second cable link between Lavrio and Syros, is planned to be finalized by the end of 2020. IPTO, the power grid operator, recently decided to hasten this project’s progress. Tender terms are expected to be announced within the next few days.

A fourth-phase Cyclades interconnection is also being prepared. It will link Lavrio with Serifos, Serifos with Mylos, Mylos with Santorini, and Santorini with either Paros or Naxos.

The fourth phase will be added to IPTO’s ten-year business plan covering 2019 to 2028. IPTO has already received a related study conducted by RAE, Regulatory Authority for Energy, and HEDNO, the Hellenic Electricity Distribution Network Operator.

 

 

 

Lenders want full KOT, YKO details for bailout’s 4th review

No pending energy-sector issues stand in the way of the bailout’s third review, now being finalized, but, during the program’s upcoming fourth and final review, the country’s lenders are expected to press for details as a means of preventing a repeat of various energy-sector account deficits, as experienced with the public service compensation (YKO) and Social Residential Tariff (KOT) accounts.

Miscalculations prompted a need for the return of older public service compensation amounts to the main power utility PPC, which had been burdened by these additional costs for years as the fear of political cost had stopped a succession of administrations from making needed adjustments.

According to energypress sources, the lenders have requested, from the Greek government, a full analysis of recent social residential tariff revisions and the impact of these on the public service compensation account.

The government has decided to broaden the coverage of its social residential tariffs,   supporting struggling households with subsidized electricity, to 1.35 million households from a previous total of 680,000.

A small public service compensation account deficit is expected to be produced this year as a result of favorable revisions for consumers. Greek officials argue that public service compensation costs will decline in the near future as a result of the development of the Cyclades and Crete interconnection projects. The lenders want details on these calculations.

Public service compensation surcharges are included on electricity bills to cover elevated electricity generation costs on non-interconnected islands.

 

IPTO: The day after the ownership unbundling

The following speech, published in its entirety, was delivered by Manos Manousakis, chief executive at IPTO, Greece’s power grid operator, at the Athens Energy Forum yesterday. 

Ladies and Gentlemen,

It is an honor and a pleasure to be one of the speakers of this year’s Athens Energy Forum, which is taking place against the backdrop of the radical transformation of the Greek energy market, which is being liberalized.

At the same time, the Greek market is gearing up to meet the main challenges arising from the implementation of the EU Energy Policy, namely:

  1. The increased penetration of Renewable Energy Sources in the Transmission System and Distribution Grid
  2. The de-carbonization of electricity production and
  3. The integration of the wholesale electricity markets of the EU member states through the introduction of the target model

I will start by briefly explaining the new ownership status and the benefits that stem from it.

As most of you probably know, in June 2017 the ownership unbundling of IPTO [locally acronymed ADMIE] took place.

The Greek State owns a controlling shareholding stake of 51%.

State Grid of China, the world’s largest utility company, is IPTO’s second biggest investor with a 24% stake and active participation in its management.

The company further diversified its investor base following the listing of its affiliate company IPTO Holding in the Athens Stock Exchange.

The strategic partnership between the Greek State and State Grid has already started to show results, through the improvement of the financial and operational ability.

With this structure, IPTO aims to exemplify the way a company under state control can modernize itself and improve its efficiency, in order to play a leading role in the new energy landscape.

In this context, the company has set two main objectives for 2018:

First, faster project delivery.

Second, successful implementation of the target model and specifically of the balancing market, which falls under IPTO’s responsibility.

The new administrative model of the company will facilitate the achievement of these objectives.

One milestone of the restructuring process, which took place at the end of 2017, was a voluntary exit scheme which was successfully completed a few days ago. The participation far exceeded management’s expectations.

Through this scheme, IPTO aimed to make room for younger, highly skilled employees who are sorely needed.

Another important element is that the active management of IPTO’s assets has been placed at the heart of its new organizational model.

The ambitious targets for RES penetration into the energy mix require the upgrade of the infrastructures for the electricity transmission and the ‘smartening’ of the grids.

All the modern TSOs in Europe (RTE from France, ELIA from Belgium, 50 Hertz from Germany etc.) consider asset management as one of their main functions.

IPTO is now following their example with the creation of a new Asset Management Unit.

The main mission of this Unit is the optimal exploitation of the company’s assets, the extraction of maximum value from their use.

In this regard, I would like to point out that IPTO is implementing a broad asset renovation program and the first tenders will be published in the near future.

With this new improved administrative structure, IPTO will be better prepared to pursue its first objective, which is the timely execution of the major interconnection projects that are foreseen in the company’s business plan.

We are talking about investments of 1 billion euros until 2021.

The company is prioritizing the Cyclades and Crete Interconnections.

The first phase of the Cyclades interconnection, which entails the interconnection of Syros, Paros and Mykonos to the mainland transmission system, is already in the test phase of electrification.

As a result, both the security of electricity supply and the environmental footprint of those islands will be upgraded.

The dated, fuel oil power plants [on islands] will soon cease to operate.

IPTO is also placing great emphasis on the Crete Interconnections which are of pivotal importance to the Greek economy.

Why? Because they will secure the energy supply of the country’s largest island and drastically reduce the cost of electricity for all Greek consumers.

In the course of the implementation of these projects, the company will benefit from the technical expertise of State Grid, which is spearheading China’s effort to transition to clean energy.

State Grid is a world leader in developing Ultra High Voltage Transmission Lines and building smart grids that promote the utilization of RES.

It boasts the largest installed capacity of wind and solar production in the world.

It is obvious that IPTO has a lot to earn from its know-how.

At a recent international conference, a State Grid executive stated that the company’s goal is to turn Greece into an electricity hub via interconnections to the Balkans, Africa and Asia.

It should be noted that according to a recent study of an Expert Group the development of new transnational electricity interconnections is becoming an EU priority, as the current interconnection target of 10% is not considered ambitious enough and it will be increased to 15% by 2030.

Europe is heading towards a well-integrated energy market.

Electricity interconnections are the physical component of making this market truly European by connecting Member States’ networks, thus offering:

-capacity for electricity trade

-improved security of supply

-integration of the growing share of renewable electricity production.

In this direction, IPTO is prioritizing the development of a second electricity transmission line between Greece and Bulgaria. This project has already been included in the list of Projects of Common Interest for the European Union.

Having mentioned the integration of the EU energy market, I would like to move on to the second objective of IPTO for this year, which is the setting up of the Balancing Market, the part of the target model for which the company is responsible.

I will try not to go into the highly technical details.

Let me just say that the Balancing Market is the last of the four Target Model markets.

However, its role is very important since it reflects the actual cost of balancing electricity supply and demand, close to real time.

A well designed Balancing Market is not only important to provide the TSO with sufficient Balancing Services at all times in order to safeguard secure system operation.

It is also essential to ensure an efficient functioning of the overall electricity market.

Consequently, they affect Participants’ decisions in the forward market timeline.

The basic principles of the Balancing Market design are:

-Central Dispatch System

-Unit based participation in the market

The Balancing Market consists of:

A Balancing Energy Market,

Balancing Reserve Market

Imbalances Market, which is an ex post market for settlement of imbalances

IPTO performed a Public Consultation on the Balancing Market Code between December 2017 and January 2018.

Participants’ comments were received and the most recent update is that a second version of the Code was sent to the Regulatory Authority for Energy for the subsequent phase two of the Public Consultation, which is going to be performed by the Authority.

I hope I gave you an oversight of the day after the ownership unbundling of IPTO.

Let me conclude my speech by saying that the future will be electric, de-carbonized and interconnected. IPTO will play an important role in this process.

Thank you

Cyclades interconnection 4th phase added to IPTO 10-yr plan

IPTO, the power grid operator, has decided to include the fourth phase of the Cyclades islands interconnection into its next ten-year plan, covering 2019 to 2028.

This decision comes following talks between IPTO and RAE, the Regulatory Authority for Energy. The operator’s new ten-year plan has yet to be submitted to RAE, which only recently approved IPTO’s current plan for 2018 to 2027.

IPTO’s chief executive Manos Manousakis recently announced that the third phase of the Cyclades interconnection, an underwater cable linking coastal Lavrio, southeast of Athens, with Syros, would be developed two years sooner than had been planned, in 2020. This part of the project is budgeted at 102 million euros.

As for the second phase of the Cyclades interconnection – including the addition of Naxos and an upgrade of existing submarine cables linking Andros with Tinos and Livadi (Evia), the appraisal of offers submitted for sub-contracts is at an advanced stage. Work will get underway once these sub-contracts have been signed, the aim being to complete the second phase within 2019.

 

Public Service Compensation revisions creating new deficit

Recent legislative revisions to Public Service Compensation (YKO) categories and charges will reduce revenues needed to fully balance this account, used to cover high-cost electricity generation on non-interconnected islands and also subsidize power supply to low-income households.

Under the new system, higher YKO surcharge rates applying to higher consumption level categories are not imposed on entire electricity amounts consumed, as was the case under the previous formula, but to consumption amounts exceeding category upper limits.

This change is expected to deprive the YKO account of tens of millions of euros, annually.

The Cyclades are being interconnected to the mainland electricity grid this year, a development that promises to lessen the demands of the YKO account and subdue any developing deficit. Even so, the YKO account deficit will not be fully covered and transformed into a surplus figure until other Greek island interconnections are completed, especially that of Crete, the country’s largest and most populous island.

The YKO account benefits to be offered by the Cyclades interconnection are believed to be worth 100 million euros, annually, according to a 2014 estimate.

Cyclades link project open to non-EU bids, SGCC strategically placed

A revision by IPTO, Greece’s power grid operator, to the terms of an international tender concerning a Cyclades islands interconnection has opened up the process to non-EU firms that have signed government procurement agreements (GPAs) with the World Trade Organization (WTO).

Even so, market officials consider the emergence of bids from companies based in countries such as China, Brazil and India, obvious candidates as a result of the revision, an unlikely prospect given the interest in such projects of China’s SGCC, which acquired a 24 percent stake in IPTO earlier this year.

SGCC’s strategic partersnhip with IPTO is expected to repel bids, including from other Chinese companies specializing in submarine cable interconnections, for this IPTO project and similar upcoming endeavors.

The revised terms concern the second phase of a Cyclades islands interconnection project to link Paros with Naxos and Naxos with Mykonos. The project is budgeted at 42 million euros, not including VAT.

The revision of the tender’s terms includes a deadline extension for offers, now reset for January 12.

IPTO plans to stage a series of tenders for major submarine interconnection projects over the next few years, beginning in 2018, which makes for lucrative prospects.

A third phase of the Cyclades interconnection concerns the development of a link between coastal Lavrio, southeast of Athens, and Syros, budgeted at 150.5 million euros and scheduled for completion in 2022.

Other upcoming interconnection projects planned include a small-scale Cretan interconnection linking Hania with the Peloponnese, budgeted at 322.7 million euros. Its tender is expected to be completed in 2018.

A tender for the large-scale Cretan interconnection, budgeted at 713 million euros, is planned to take place somewhere between 2019 and 2020.

Development of the EurAsia Interconnector, to link the Greek, Cypriot and Israeli grids, budgeted at 3.5 billion euros, is also being pursued.

The agenda also includes the EuroAfrica Interconnector, planned to link the Greek, Cypriot and Egyptian electricity grids. Offiical estimates for this project’s cost have yet to be released, but it should be in the range of the budget calculated for the Euroasia Interconnector. A 320-kilometer submarine crossing whose development is planned to commence in 2019, its budget is estimated at 2.4 billion euros. The Euroasia Interconnector has already been classified as a Project of Common Interest (PCI), enabling EU funding.

Major developments can be expected in the interconnection domain. Without a doubt, SGCC, as IPTO’s strategic partner, has already secured the pole position.

 

 

RAE pushing for more specific interconnection project targets

IPTO, the country’s power grid operator, is facing RAE (Regulatory Authority for Energy) pressure to establish more specific targets for the development of submarine island interconnection projects, especially those concerning Crete and the Cyclades, which are included in the operator’s ten-year plan (2018-2027), sources have informed.

RAE wants realistic target dates to be set, which, if missed, would lead to penalties, unless the delays are justified by certain circumstances, such as legal proceedings, for example.

The energy authority is increasing the pressure to avoid further delays, a common occurence at IPTO with major projects in the past.

Completion of the interconnection projects would reduce energy generation costs, a benefit that would be rolled over to consumers, currently covering high-cost electricity generation on the non-interconnected islands through Public Service Compensation (YKO) surcharges imposed on electricity bills.

Binding targets for IPTO are expected to come into effect in 2018 and include the Cretan interconnection project, to be developed over two stages (minor and major interconnections) and the Cyclades interconnection (second and third stages).

The new IPTO board, established following SGCC’s (State Grid Corporation of China) recent acquisition of a 24 percent stake, has already accelerated the pace at which the interconnection project is being handled by the operator, according to sources.

Prior to the arrival of IPTO’s Chinese strategic partner, RAE’s leadership often threatened to transfer the island interconnection projects to other companies. These threats are no longer being made.

According to IPTO’s current ten-year development plan, the minor Cretan interconnection (140-180 MW) is expected to link the island, Greece’s largest, with the Peloponnese by 2020, while the major interconnection (700 MW) is planned to link Crete with the wider Athens area by December, 2023. However, the operator has noted that Cretan electricity demand will not be fully integrated into the country’s grid until 2025, a prospect that has raised concerns.

Progress of the minor Cretan interconnection has been hampered as a result of legal action taken by residents of the Lakonia region’s Malea peninsula, where the submarine cable running from Crete is planned to reach the Peloponnese. Local residents are demanding revisions, including an alternate location, and have taken their case to the Council of State, Greece’s Supreme Administrative Court.

 

Retail electricity competition ‘needs production competition’

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

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

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

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

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

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

 

Cyclades interconnection stations delayed until summer

IPTO, the power grid operator, estimates that between six and eight months of additional time will be needed to complete four sub-stations that make up part of the Cyclades interconnection project. Completion of all four sub-stations had originally been scheduled for the end of this year.

The delay has been attributed to various obstacles encountered by local sub-contractors. On Syros, the sub-contractor faced difficulties in finding an appropriate spot to dump project-related waste, which caused months of delay. The matter has now been resolved, according to IPTO.

The Lavrio sub-station, the most fundamental of all four, faced similar problems to the Syros project.

The Mykonos part of the project needed to overcome archaeological obstacles, which caused delays.

An objective to deliver the completed sub-stations within the summer of 2017 has now been set.