RES operator upgrading systems to curb bureaucracy for investors

DAPEEP, the RES market operator, is introducing a series of operating upgrades with the aim of limiting bureaucratic obstacles and subsequent delays faced by renewable energy producers.

Forthcoming upgrades include automatic tax updates, certifying no pending tax payments, for parties interested in developing RES projects.

The operator, as of January 1, has already introduced an online signing procedure for RES contracts and their deliveries.

As a result, the time needed by the operator to sign new RES contracts through the digitized procedure has been slashed to a maximum of five days from an average time of 79 days recorded in September last year, when the operator’s current administration took over at DAPEEP.

In addition, a personalized profile system offering investors updates on their monthly RES production figures will soon be made available by the operator.

The operating upgrades were recently presented by DAPEEP’s chief executive Yiannis Giarentis during an online conference staged by POSPIEF, the Pan-Hellenic Federation of Photovoltaic Producer Societies.

PPC debt to end year at €600m, down from €900m last year

Power utility PPC’s debt owed to energy market operators as well as project contractors has continued to fall, quelling fears of a debt-reduction slowdown during the country’s second lockdown.

The power utility’s total debt figure is projected to end the year at approximately 600 million euros, down from 900 million euros in July, 2019, a 35 percent drop in a year and a half, according to sources.

The company’s debt reduction is declining at an average rate of 18 million euros per month, driven by an improved collection record for unpaid receivables and better operating profit figures.

PPC’s payments to RES market operator DAPEEP, power grid operator IPTO and distribution network operator DEDDIE have all improved for a complete turnaround compared to a year earlier.

The power utility’s outlay for liquid fuels, natural gas, solid fuels, CO2 emission rights and electricity purchases, down by 678.1 million euros during this year’s nine-month period compared to the equivalent period a year earlier, has been a favorable factor in PPC’s improved results and debt-reduction effort.

PPC aims to further reduce its total debt to a level of between 250 and 300 million euros by the end of 2021.

 

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.

RAE nearly done with processing for backlog of RES license applications

RAE, the Regulatory Authority for Energy, is close to completing its processing effort for a backlog of some 1,400 RES license applications representing approximately 24 GW in wind and, primarily, solar projects.

RAE’s processing of a backlog of applications submitted during four cycles from September, 2018 to June, 2019 has been completed, while the authority’s examination of applications submitted in September, 2019 is expected to be completed within the next few days, sources informed.

Once RAE officials complete their processing of last September’s applications, they will begin work on applications submitted last December, which should result in the completion of processing work for the entire backlog by the end of this month, officials have estimated.

A small fraction of the RES license applications submitted during the four cycles between September, 2018 to June, 2019 were rejected. More specifically, of 811 applications examined by the energy authority, 246 were granted production licenses for 1.522 GW in wind energy projects and 430 investment plans were given licenses for 6.2 GW in solar projects.

Meanwhile, public consultation staged by RAE for new rules concerning producer certificates in the RES and combined heat and power (CHP) domains has been completed.

A new platform being developed by RAE for producer certificates will be simple, safe and transparent, and also linked to platforms operated by other entities, including DAPEEP, the RES market operator, so that applications may be swiftly processed, authority officials have informed.

PPC improves payment rate for operator debt, down to €650m

Power utility PPC has increased its rate of payments for debt to operators, reducing the total amount owed from 900 million euros in July, 2019 to approximately 650 million euros at the end of last July, energypress sources have informed.

This debt, owed to power grid operator IPTO, distribution network operator DEDDIE/HEDNO and RES market operator DAPEEP, has fallen at an average of between 22 to 24 million euros per month.

PPC aims to reduce its debt to these operators by a further 100 million euros by the end of the year, which would reduce the figure to 550 million euros.

If the current payment rate is maintained, PPC’s debt to operators may drop to a level of between 260 and 270 million euros by the end of 2021.

The power utility’s improved operator-related debt performance, a turnaround compared to a year earlier, when company officials had warned better days along this front were a long way off, has, by extension, helped DAPEEP improve its payment record to RES producers for their output.

PPC’s annual deficit was at a level of approximately 900 million euros last year.

Cost-reduction initiatives and a suppression of energy commodity prices during the pandemic have helped PPC stabilize its finances.

The utility’s outlays for liquid fuels, natural gas, CO2 rights and electricity purchases fell by 33.7 percent, or 561.3 million euros, in the first half this year compared to the equivalent period a year earlier.

 

Market support measures worth €550m may prove insufficient

A number of electricity market support measures planned by market authorities and firms for the next few months are estimated to be worth 550 million euros, but this may not be enough.

The effectiveness of the measures will depend on the depth and duration of the pandemic-related recession, still in the making.

Should the Greek economy contract by 10 percent this year, as projected by the IMF in a report announced yesterday, and the effects spill over into 2021, as is feared, then the current measures will prove insufficient.

Authorities yesterday announced an initiative offering lighter terms to electricity suppliers for surcharge payments to market operators.

Electricity suppliers will be able to pay 30 percent of their regulated charges marked out for the power grid operator IPTO, distribution operator DEDDIE/HEDNO and RES market operator DAPEEP for the two-month period of April and May over four monthly installments, according to an energy ministry plan. This measure, alone, is estimated to be worth about 200 million euros.

Also, power utility PPC and distribution operator DEDDIE/HEDNO, its subsidiary, appear to have secured European Bank for Reconstruction and Development (EBRD) loans, for next month, totaling between 180 to 200 million euros.

Suppliers offered lighter terms for surcharge commitments

An energy ministry provision promising electricity suppliers supportive terms for surcharge payments to market operators has been included in a wider legislative act facilitating pending and urgent matters linked to various ministries.

Electricity suppliers will be able to pay 30 percent of their regulated charges marked out for the power grid operator IPTO, distribution operator DEDDIE/HEDNO and RES market operator DAPEEP over four monthly installments, according to the energy ministry plan.

A one-month grace period will be offered for the first installment. Suppliers will need to keep servicing the other 70 percent of regulated charges as normal.

The lighter terms are crucial for electricity suppliers, fearing they may not receive a large percentage of regulated surcharges included in electricity bills as a result of rising unpaid receivables.

Over the past few weeks, electricity bill payments have fallen by levels of approximately 30 percent.

Though offering some relief to electricity suppliers, the less demanding terms for their payment of regulated charges will tighten the budgets of market operators and consequently weaken their ability to remunerate conventional and RES electricity producers for output to the grid.

Authorities intend to combat this threat through a security mechanism now being pieced together.

Security fund initially limited to operators, suppliers must wait

A security fund being established by the energy ministry as financial protection for electricity market players from the pandemic’s repercussions will, for the time being, be limited to covering the needs of market operators.

A wider package also including protection for suppliers, as was initially intended, will need to be examined later on as its cost, estimated anywhere between 600 million and one billion euros, is considered too substantial by authorities.

Limiting the security fund’s coverage for market operators will require an amount of between 100 and 200 million euros, it has been estimated.

The security fund’s sum promises to compensate power grid operator IPTO, distribution network operator DEDDIE/HEDNO and RES market operator DAPEEP for regulatory surcharges not expected to be received under the current conditions.

Consumer electricity bill payments, which include regulatory surcharges, are projected to fall by approximately 30 percent over the next two to three months.

 

 

Electricity suppliers financially pressured by coronavirus crisis

Electricity suppliers are feeling the financial effects of the coronavirus crisis, threatening to increase the level of electricity bill arrears amid reduced consumption and lower sales.

Consumers are now contacting suppliers to request installment-based payment arrangements, or, worse still, expressing an inability to meet electricity bill payments, energypress has been informed.

Retailers and small businesses whose operations are being stifled by the coronavirus lockdown are particularly feeling the pressure.

Electricity suppliers maintaining a dominant mid-voltage customer base are very concerned as the coronavirus spread has already begun inflicting financial damage on sectors such as tourism, hotels and restaurants, all expected to be particularly affected by the ongoing crisis.

Retailers, too – except for supermarket chains, registering rising sales figures – are also under severe pressure. Their position will deteriorate further as a result of a government decision temporarily shutting down most shops as of today.

Electricity suppliers are more or less helpless at present. Distribution network operator DEDDIE/HEDNO would not execute any electricity-cut orders amid these extraordinary conditions.

Subsequently, suppliers are calling for a delay of their payments to operators such as power grid operator IPTO, DEDDIE, and RES market operator DAPEEP for network usage fees, a RES-supporting ETMEAR surcharge and other such obligations.

 

New RES support system facing issues ahead of launch

A new RES market support system, FOSETEK, appears unlikely to be launched on its imminent October 1 scheduled starting date as too many issues remain unresolved for the little time remaining.

In an announcement, RES market operator DAPEEP has noted that a 15-day document processing period is required from the date of applications before RES facility owners can be summoned to sign new support agreements. The system’s launch date is now just one week away.

Under the new system, RES producers operating through Feed-in Premiums (FIP) and possessing facilities with capacities of more than 3 MW in wind energy or over 500 KW in solar energy are obligated to participate in the day-ahead market. So, too, are operators with RES stations over 20 years old – primarily wind energy – and tariff agreements set to expire.

RES producers with FIP agreements have not been paid since July 1 and are currently unable to issue invoices for electricity produced and provided to the grid as a result of the changing support system.

 

Solar parks of 400 KW and over subject to target model terms

The EU plans to reduce a level committing solar power parks to target model terms  to 400 KW from 500 KW as of January 1, 2020, a development that promises to directly impact investor plans. Related Greek legislation will need to be ratified by the start of next year.

As a result, DAPEEP, the renewable energy market operator, will endorse operating aid contracts, reinforcing fixed prices, for new solar energy parks of up to 400 KW, while ventures with capacities over this level must hold feed-in premium contracts.

Target model obligations for holders of feed-in premium contracts require their participation in day-ahead markets – for matters concerning energy, not price – and the balancing market, which carries a discrepancy cost for investors.

According to sources, an EU decision has also been reached that will enable member states to continue offering existing and approved RES support systems for a two-year period beyond 2020, in 2021 and 2022.