PPC’s Kardia III and IV lignite power stations set for April 17 withdrawal

Power utility PPC’s Kardia III and IV lignite-fired power stations are nearing withdrawal as the two facilities are due to clock up 32,000 hours of operating time, their limit, on April 17.

PPC has scheduled to close down the two power stations this year as part of a decarbonization plan the company had announced in December, 2019. This plan was included in the National Energy and Climate Plan (NECP).

The two imminent power-station withdrawals, representing a capacity loss of 540 MW, will follow a first stage of exits carried out last year by PPC, when its withdrawal of Amynteo I and II, totaling 546 MW, launched the country’s decarbonization effort.

Besides producing electricity, the two Kardia units, located in Greece’s north, have also been used to provide district heating. Local authorities have asked the energy ministry to keep the two units on standby for a few more weeks until the early spring’s chilly weather is well and truly over.

PPC’s prospective Ptolemaida V unit will eventually take over district heating services following the adoption of intermediate solutions to cover next winter.

PPC also plans to withdraw Megalopoli III, in the Peloponnese, this year, earlier than the 2022 objective listed in the NECP.

Recovery plan eyes €270m for e-car part facilities, rechargers

National recovery plan features will aim to lay the foundations for an electric vehicle industry in Greece through 200 million euros in subsidies for the establishment of production facilities making batteries and parts for electric vehicles, sources have informed.

The national plan, to be fed by the European Commission’s Recovery and Resilience Plan, once approved in Brussels, is designed to create jobs where they are needed most, including in parts of west Macedonia, in Greece’s north, and Megalopoli, in the Peloponnese, whose lignite-dependent economies require restructuring as a result of the country’s decarbonization strategy.

The national recovery plan will also seek to offer a further 70 million euros in subsidies for the installation of approximately 8,500 recharging posts for electric vehicles, both regular and fast chargers, much higher in cost. Regular recharging units cost between 3,000 and 5,000 euros while fast chargers cost about 20,000 euros each.

Given the aforementioned subsidy plans, Greece’s electromobility effort could enjoy financial backing totaling more than 300 million euros, as, besides the 270 million euros being anticipated through the national recovery plan, an amount of between 30 and 40 million euros has already been secured through other financing programs.

The government plan aims for one in three vehicles circulating in Greece by 2030 to be electric.

 

Crete-Athens grid link omitted from Greek RRF proposal

A grid interconnection to link Crete with Athens has been omitted from a national plan containing 112 projects for which financial support will be sought through the European Commission’s Recovery and Resilience Facility.

It was the energy sector’s only surprise omission from the government’s plan for RRF support, to be submitted to Greek Parliament within the next few days for ratification before being forwarded to the European Commission.

Even so, progress of the Crete-Athens grid interconnection project, vital for Crete’s energy sufficiency without reliance on high-cost local power stations, will not be affected by the decision as a number of other financing options remain available, authorities have stressed.

These include the National Strategic Reference Framework and the Just Transition Fund.

The national RRF plan was discussed at a cabinet meeting yesterday ahead of its presentation, planned for tomorrow.

A proposal for a 200 million-euro injection into the RES special account, facing deficit territory, has been included in the national plan.

Other key features of the plans are: the country’s energy efficiency upgrade program for homes, businesses and public buildings; the decarbonization plan; installation of smart meters; upgrade and undergrounding of transmission lines; as well as development of electric vehicle recharging infrastructure.

EC examining compensation bid for PPC lignite closures

The government, determined to ensure compensation for state-controlled power utility PPC over its decision to prematurely close down its lignite-fired power stations, is seeking a solution through the European framework of options, an energy ministry announcement has informed.

The Greek State has submitted a compensation request to cover extraordinary costs related to the premature closure of four PPC lignite mines and lignite fired power stations, the ministry’s announcement noted.

European Commission Vice-President Margrethe Vestager, also Brussels’ Commissioner for Competition, has informed that the Commission views favorably the Greek initiative for a premature closure of these lignite facilities and is now examining the legal grounds of the compensation request, the energy ministry’s announcement added.

The Greek government wants compensation for PPC as the utility’s outgoing units have potential for a longer life, meaning PPC is being deprived of further earnings through these facilities.

A successful Greek compensation bid could also help cover extraordinary costs linked to the restructuring of lignite-dependent local economies.

The energy ministry is basing Greece’s compensation bid on a recent European Commission decision approving 52.5 million euros for the Netherlands as compensation for the premature closure of its Hemweg coal-fired power station.

The Netherlands has implemented law forbidding the use of coal for electricity generation beyond January 1, 2030.

PPC bond issue aims for real-money investors, market clout

Power utility PPC, which has just issued a 500 million-euro bond expiring in 2026, is aiming to attract foreign institutional investors – or real-money investors placed in the real economy, not hedge funds – to the issue, which, the corporation hopes, will also enjoy a solid course in secondary-market trading and help establish the company’s clout in capital markets.

PPC began presenting this bond issue to institutional investors yesterday and will continue to do so over the next two days in an effort to maximize the level of participation in the issue, a Sustainability-Linked Bond, the first of its kind to be offered by a Greek company.

The power utility is committing to a 40 percent CO2 emissions reduction by 2022, which if not achieved, will add 50 basis points to the bond’s yield.

The issue’s order book closes on Thursday. A clear picture on the turnout and type of investors drawn to the issue should emerge today or tomorrow, the latest.

PPC’s push to reduce CO2 emissions, which the company has told investors will fall from 23.1 million tons in 2019 to 13.9 million tons in 2022, is based on two key factors, a planned withdrawal of lignite-fired units representing a total capacity of 3.4 GW by 2023 and a change of investment direction focusing on renewables.

Data shows that PPC managed to reduce its CO2 emissions by 56 percent between 2005, when levels were 52.6 million tons, and 2019. A drop to the 2022 objective of 13.9 million tons would represent a 74 percent reduction, compared to 2005. If achieved, such a reduction would exceed the national target of 62 percent.

An improved BB- rating from Fitch late in December was a key factor in PPC’s decision to head to capital markets at this point in time.

RES spatial plan to be delivered within 2021, Action Plan notes

The completion of a RES sector spatial plan within the current year has been included in an energy ministry Action Plan for 2021, just published along with the respective action plans of all other ministries.

The energy ministry’s action plan lists interventions planned for 2021 in nine areas under its authority, including energy-sector privatizations, energy market reforms, support for decarbonization and recycling, adoption of circular economic principles, greenhouse gas emission reduction, the tackling of climate change effects, as well as green energy transition.

RES sector measures this year will help cut down the time needed by new RES projects for licensing procedures to two years, the ministry anticipates in its action plan.

It also expects the installation, by the end of the year, of at least 2,000 recharging units for electric vehicles in public areas, including along highways, and at private properties, including domestic and commercial.

On the privatization front, the energy ministry expects all seven energy privatization plans to have been completed or reached an advanced stage by the end of the year.

On energy market reforms, the adoption of a remuneration mechanism for grid sufficiency, to replace a transitional mechanism remunerating flexibility, is a standout feature.

The energy ministry also intends to adopt, as Greek law, an EU directive promoting energy storage and demand response systems.

The ministry’s action plan also anticipates the signing of agreements this year for distribution network development and RES penetration support. It also expects DEDDIE/HEDNO, the distribution network operator, to announce a tender for the installation of smart power meters within the current year.

Taking into account plans by DEDDIE/HEDNO and power grid operator IPTO, the ministry expects investments in distribution and transmission networks to reach one billion euros this year.

Investments for gas network upgrades and expansion are expected to reach at least 300 million euros, primarily driven by projects planned by gas distributor DEDA, covering all areas around the country except for the wider Athens, Thessaloniki and Thessaly areas.

On international projects, the action plan notes that a Greek-Bulgarian gas pipeline project, the IGB, promising to significantly diversify Greece’s gas sources, will be completed by the end of 2021.

A latest edition of the Saving at Home program subsidizing energy efficiency upgrades of properties, budgeted at one billion euros, will stimulate work on 80,000 buildings in 2021, according the energy ministry’s action plan.

This activity will contribute to a National Energy and Climate Plan objective for an improvement, by 2030, of energy efficiency at buildings by 38 percent, reducing energy consumption to levels below those registered in 2007, the action plan notes.

 

DESFA focusing on gas pipeline for west Macedonia network

Gas grid operator DESFA and energy ministry officials are currently discussing financing options that could be sought for the operator’s plan to develop a gas pipeline needed to facilitate a gas network expansion in northern Greece’s west Macedonia region, energypress sources have informed.

DESFA is awaiting approval by RAE, the Regulatory Authority for Energy, for its ten-year development plan, worth more than 545 million euros, including the gas pipeline project.

The talks between DESFA and the energy ministry officials are focused on public funding possibilities, primarily European, to cover part of the cost of the gas pipeline, which would ultimately help contain the level of network usage tariffs to be covered by consumers.

Local officials anticipate this network expansion plan should qualify for EU development fund support, even though EU policy generally does not favor gas projects, as it clearly represents a development project that promises multiple regional benefits, including replacement of lignite-based energy, on the way out as a result of the country’s decarbonization strategy.

Besides the EU recovery fund, officials in Greece are also considering the prospects of financial support from the EU’s National Strategic Reference Framework or a number of regional development programs.

The gas network expansion plan in the country’s west Macedonia region will require the development of a 130-km gas pipeline from Trikala, in the mainland’s mid-north, a project budgeted at 110 million euros.

According to sources, DESFA has revised an original pipeline route plan, bringing the pipeline closer to cities where medium and low-pressure networks for households and businesses are to be developed by gas distributor DEDA.

PPC seeks IPTO support for EC lignite compensation request

Power utility PPC wants power grid operator IPTO to provide a statement declaring whether the power utility’s lignite-fired power stations, nowadays loss-incurring units as a result of elevated carbon emission right costs, are still necessary for the achievement of grid sufficiency, the utility’s objective being to gain support for a lignite compensation request submitted to the European Commission, not to immediately shut down its lignite units, sources have informed.

Brussels has been examining the PPC compensation request for months, initially as part of a package incorporating the European Commission’s lignite antitrust case against Greece, and more recently, following settlement of the latter, as a separate issue that has dragged on.

Throughout the entire period, officials in Greece have needed to respond to extensive Brussels questioning over PPC’s compensation request. Most recently, the European Commission is reported to have informed PPC, by email, that it would deliver a decision as soon as possible, once all information has been processed.

PPC, in its letter to IPTO, informs that it would be prepared to shut down the lignite units now if the operator considers them unnecessary for grid sufficiency as they are the cause of losses on a daily basis.

The power utility has planned a phaseout of its lignite facilities over the next three years, as part of the country’s decarbonization effort.

IPTO, in a grid-sufficiency study covering 2020 to 2030, conducted within the framework of the National Energy and Climate Plan, has stressed the period between 2021 and 2024 will be crucial as a result of PPC’s planned phaseout of lignite-fired power stations.

Subsequently, the grid’s sufficiency will depend on how soon three new gas-fueled power stations with a capacity totaling 2,150 MW – PPC’s Ptolemaida V, and units being developed by Mytilineos and TERNA – will be ready for launch, IPTO’s NECP-linked study noted.

Talks continue for EU recovery fund energy projects package

Electricity network upgrades, including restricted underground cable installations – due to limited funds – at areas presenting serious energy security problems; decarbonization; as well as spatial planning and redevelopment for carbon-neutral cities feature as plans in an initial energy-projects package, worth over one billion euros, linked to the EU’s recovery fund, Brussels sources have informed.

Brussels authorities are currently appraising these projects, a procedure expected to be completed by the end of March. The Greek government will then need to immediately incorporate approved plans into a National Recovery and Resilience Plan and submit it to Brussels by early April.

Energy minister Kostas Skrekas and European Commission officials discussed the ministry’s proposals during a virtual conference yesterday.

Besides decarbonization, energy efficiency upgrades of buildings, as well as energy-related town and spatial planning, the government is also addressing the need to modernize infrastructure, especially networks, as was highlighted by problems encountered in many parts of Greece during recent snowstorms.

The installation of underground transmission cables will be restricted to between 2,000 and 2,500 kilometers of medium and low-voltage networks, given the amount of recovery funds available for this project, estimated at 200 million euros, according to energypress sources.

The cost of installing underground medium-voltage power lines is estimated at 100,000 euros per kilometer, compared to 30,000 euros for overhead lines. Installation costs for low-voltage power lines are estimated at 70,000 euros per kilometer, compared to 25,000 for overhead lines.

The overall effort is also expected to include an upgrade of ageing overhead transmission lines around Greece, dating back to the 70s and 80s.

Key issues in new minister’s first session with EC officials

Today’s first meeting, via teleconference, between Greece’s recently appointed energy minister Kostas Skrekas and European Commission authorities, as part of Brussels’ ninth post-bailout review, will focus on four key issues: power utility PPC’s lignite monopoly; the proper functioning of target model markets; energy-sector privatizations, and the decarbonization plan for west Macedonia, a lignite-dependent area in the country’s north.

The four issues were addressed in preliminary talks last week between Alexandra Sdoukou, secretary-general of Greece’s environment and energy ministry and Brussels technocrats.

It remains to be seen if the European Commission will again commend Athens, and to what extent, for the target model’s functioning, as Brussels had done last November, when the model’s new markets in Greece were launched as a step to harmonize EU energy markets.

However, weeks into the launch, balancing market costs skyrocketed, leading to sharply increased wholesale electricity prices. RAE, the Regulatory Authority for Energy, is now considering to introduce an adjustable price-containing measure to be set as a percentage of day-ahead market prices.

The European Commission, in the latest talks, can also be expected to push for the launch of a market test concerning an agreement offering independent players access to PPC’s lignite-based electricity production.

Though the interest of independent players for lignite-based electricity may have diminished given its increased cost, this antitrust case, unresolved for years, remains a big concern for the government as Brussels could associate it with pending Greek issues.

The complexity of PPC’s lignite monopoly case was deepened following a decision by the previous energy minister, Costis Hatzidakis, to bundle the matter with a Greek compensation request based on the utility’s need to keep running lignite-fired power stations for energy sufficiency. According to reports, his successor, Skrekas, will not sway from this policy.

As for energy-sector privatizations, a sale plan for gas supplier DEPA Commercial has attracted considerable interest but officials are concerned as parent company DEPA is embroiled in an ongoing lawsuit with ELFE (Hellenic Fertilizers and Chemicals).

DEPA has appealed a verdict awarding the producer a compensation amount of 60 million euros following overcharging claims. The case could be deferred until September, meaning binding bids by possible DEPA Commercial buyers may need to be delayed.

Greece’s decarbonization master plan features 16 key investment proposals that are expected to create over 8,000 jobs, directly and indirectly, in lignite-dependent areas. However, numerous complex matters need to be resolved, including the transfer of related property controlled by PPC, Brussels’ approval of a series of incentives for new investments, and scores of licensing issues.

Preliminary talks for 9th post-bailout review begin today

Power utility PPC’s lignite monopoly ordeal, the effort to ensure proper functioning of target model markets, the progress of privatization plans, and Greece’s decarbonization master plan for the lignite-dependent local economies of west Macedonia, in the country’s north, and Megalopoli, Peloponnese, are the key issues on the agenda of the ninth post-bailout review set to be conducted by the European Commission.

Preliminary review talks are scheduled to commence today between energy ministry officials and Brussels technocrats. These will be followed by higher-level talks involving technocrat chiefs and Greece’s newly appointed energy minister Kostas Skrekas.

Though his predecessors faced plenty of pressure, especially over PPC’s dominance, the new minister could be in for a hard time if pending energy-sector issues are not directly dealt with.

RAE, the Regulatory Authority for Energy, and power grid operator IPTO are still seeking solutions to tackle problems faced by the target model’s new markets. They got off to a problem-laden start in November, prompting a sharp rise in balancing market costs during the first few weeks.

As for energy-sector privatizations, the plan to offer a 49 percent stake in distribution network operator DEDDIE/HEDNO appears to be making sound progress and attracting strong interest, as exemplified by the participation of 19 participants in December’s market test.

On the contrary, the privatization plan for gas supplier DEPA Commercial could be destabilized by the company’s ongoing legal battle with ELFE (Hellenic Fertilizers and Chemicals) over an overcharging claim made by the latter. This battle could delay and affect the DEPA Commercial sale.

The Just Transition Plan for Greece’s decarbonization effort is now beginning to make some progress, but this unprecedented endeavor’s degree of complexity cannot be overlooked. Vast amounts of land controlled by PPC need to be repurposed, Brussels must approve investment incentives, and licensing matters need to be resolved, amongst other matters.

PPC, RWE agreement near, aiming for RES joint venture by summer

PPC Renewables, a power utility PPC subsidiary, and RWE, Germany’s biggest power producer, are striving to launch a joint venture by next summer for RES investments in Greece.

The two companies, which signed a Memorandum of Understanding last March in Berlin for exchange of technical knowhow and RES development in Greece, are looking to equally contribute for the establishment of a joint RES portfolio totaling 2 GW.

State-controlled PPC is expected to offer its approval of the agreement between the two companies within the next few days, development and investment minister Adonis Georgiadis told an online New Year event staged yesterday by the Hellenic-German Chamber of Commerce and Industry.

However, the details of the PPC Renewables-RWE joint venture deal are not expected to be finalized until early February, according to sources.

The two sides have already agreed on the fundamentals of their partnership agreement, RWE’s local representative Giorgos Paterakis confirmed at the aforementioned event, adding that the two companies will soon have further, and more specific, details to announce.

Georgiadis, the development and investment minister, described the forthcoming partnership as one of the country’s two biggest green-energy developments, also naming a pilot electromobility investment planned by another German company, VW, on the Greek island Astypalea.

The two companies are also looking to collaborate on decarbonization.

Decarbonization compensation effort locked in bureaucracy

A Greek decarbonization compensation request forwarded to the European Commission for power utility PPC’s need to keep operating lignite-fired power stations, nowadays loss-incurring units, from 2021 to 2023, has developed into a slow-moving ordeal locked in Brussels bureaucracy.

Though, until recently, the Greek request appeared to be headed towards approval, Brussels officials have since slowed down the case, extensively questioning the claim through a stream of emails to the energy ministry.

State-run PPC is seeking respective compensation amounts of 180, 150 and 200 million euros for the three-year period.

The European Commission has been relentless with its questioning despite appearing to recognize the validity of the Greek compensation request.

The Netherlands and Germany have both received similar decarbonization compensation amounts.

Greece, according to some sources, has not pursued the right strategy as it should have delayed the decarbonization compensation request case until the finalization of an older antitrust case concerning PPC’s lignite monopoly.

Though Greece and the European Commission reached an agreement last October, according to which 40 percent of PPC’s lignite-generated electricity production must be exclusively made available to independent suppliers at a pre-determined price, not below cost, the decision has yet to be implemented.

A market test still needs to be conducted to measure the market’s level of interest in this offer. Given the cost of lignite, independent players may not be interested.

PPC set for solid start in 2021, €400m inflow in coming days

Power utility PPC, in a positive start to the new year, expects to receive, in January, approximately 200 million euros linked to its large-scale securitization agreement reached last summer with international investment company Pimco for unpaid receivables of over 90 days, and, in addition, a 200 million-euro advance payment from the Greek State, by December 31, for public sector electricity consumption throughout 2021.

The amount to be received by PPC from Pimco represents the bulk of a 300 million-euro agreement.

The power utility intends to utilize this amount, along with a 150 million-euro sum received in November for a smaller-scale securitization agreement with JP Morgan, to initiate its investment plan for 2021.

PPC’s securitization deal with JP Morgan, for unpaid receivables of up to 60 days, is worth a total of 200 million euros.

Overall, PPC stands to receive 500 million euros from the two securitization packages. This sum will be reinforced by a 160 million-euro loan secured from the European Bank for reconstruction and Development (EBRD) last month, as well as a portion of the current year’s profit, once older arrears to market operators have been covered.

PPC’s expected collection of 200 million euros by December 31 from the Greek State as an advance payment – at a discount rate – for public sector electricity consumption in 2021 at the country’s ministries, public enterprises, hospitals and local government buildings, represents the first of two installments, or less than half the agreed sum for the year.

The Greek State’s second and final installment for 2021, to PPC, a 390.5 million-euro installment, is due on February 28.

In the previous two years, PPC had received full advance payments from the Greek State covering the entirety of public sector electricity costs for the respective years ahead.

Furthermore, PPC will achieve a cost reduction in 2021 through its closures of three lignite-fired power stations, Kardia III and IV and Megalopoli III.

The company’s anticipated return to capital markets with a bond issue, expected within the first half of 2021, should provide even greater support for the financing of its investment plan.

Decarbonization strategy’s spatial planning enters crucial stage

The country’s decarbonization master plan is entering one of its most crucial stages, the establishment of spatial planning for a just transition, or establishment of new commercial activity in regions to be financially impacted by the country’s withdrawal of lignite units, now underway.

These spatial plans, which will need to be submitted to the European Commission for approval, will determine the speed and success of the overall effort as just transition mechanism funding approval will be based on them.

A just transition mechanism sum of 5 billion euros is expected to be utilized. However, Greek officials will need to present analytical spatial plans detailing the transitions in accordance with the National Energy and Climate Plan. These plans will be incorporated into the EU’s National Strategic Reference Framework funding program.

Power utility PPC, monopolizing the country’s lignite facilities, will obviously be involved in the process. The utility will keep some of the land hosting lignite mines to develop its own investment plans, including solar energy parks.

The lignite-dependent economies of west Macedonia, in the country’s north, and Megalopoli, in the Peloponnese, will need to be completely redeveloped as part of the decarbonization plan.

It remains unclear when Greece’s spatial redevelopment plans will be ready to be submitted to the European Commission. They are not expected to be ready any time before the new year.

Government committee meets for decarbonization master plan

A government committee overseeing the country’s decarbonization master plan is scheduled to meet tomorrow to discuss and approve a funding mechanism concerning the new National Strategic Reference Framework’s just development transition.

The funding mechanism will be applied to manage funds and facilitate investment plans for lignite-dependent areas.

Consultation for the just development transition of Greece’s lignite-dependent area, west Macedonia, in the north, and Megalopoli in the Peloponnese, has been completed. Officials are currently processing the procedure’s comments and observations.

The government’s decarbonization master plan will aim for investments totaling 5 billion euros – both national and EU funds – to restructure the production models of Greece’s lignite-dependent areas and protect their respective employment markets.

The decarbonization plan’s coordinating committee is preparing a draft bill for the implementation of the master plan, whose features include incentives for investment, expected to be ready for Parliament in the first quarter of 2021.

PPC’s upcoming Investor Day event on strength of good news

Power utility PPC plans to go into early December’s rescheduled Investor Day, an online event organized by the corporation for its presentation of an updated 2021-2023 business plan to international analysts, on the back of favorable developments, including yet another profitable quarter, the fourth in a row, as well as new business openings.

PPC had originally planned Investor Day for last March, in London, but was forced to postpone and reshape for an online version as a result of the pandemic’s outbreak.

A year earlier, PPC was struggling, but the succession of positive quarters has lifted the company into a confident higher flyer.

Its updated business plan will feature more specific goals of greater ambition for the three-year period. They are expected to include a RES market share target of between 15 and 20 percent and capacity of over 1 GW, as well as fresh news on the company’s digital transformation, electromobility effort, commercial policy, and, possibly, an even swifter withdrawal plan for the company’s lignite-fired power stations.

Just days ahead of the Investor Day event PPC will announce a series of favorable developments, namely an initial securitization deal collection of 150 million euros; a higher EBITDA figure for yet another quarter; the launch of a privatization procedure to offer 49 percent of distribution network operator DEDDIE/HEDNO, a subsidiary; and, on December 1, financial results for the nine-month period, including a profitable third quarter.

PPC is also expected to announce a further workforce reduction plan and employee shifts from lignite units headed for closure. Earlier this year, the power utility reported a 10 percent payroll cost reduction for the first half.

 

PPC awaiting Brussels verdict on lignite unit exit compensation

The European Commission could reach a decision by the end of November on an energy ministry request seeking compensation for state-controlled power utility PPC’s plan to withdrawal lignite-fired power stations ahead of schedule.

The ministry has requested a compensation package of 180, 150 and 200 million euros for 2021, 2022 and 2023, respectively, for the power utility.

European Commission officials are currently closely examining the data and information accompanying the Greek application, energypress sources informed.

At best, a decision could be delivered in approximately three weeks, the sources estimated, adding that the Greek request has been favorably received.

Last May, the European Commission released a 52.5 million-euro compensation package to the Netherlands for the country’s premature closure of its Hemweg coal-fired facilities.

Greek officials had initially sought, quite some time ago, the approval of a cost recovery mechanism for PPC’s lignite-fired units, implemented in Germany as a strategic reserve capacity.

This proved too complex, prompting Greek officials to shift their focus onto the current compensation request for the country’s effort to decarbonize.

The European Commissioner for Competition Margrethe Vestager declared, in May, when the Hemweg compensation bid was approved, that EU member states must be compensated for their decarbonization efforts, adding that the Dutch compensation amount does not cause European market distortions.

PPC’s lignite unit losses are reported to have reached 300 million euros last year. The utility is seeking to limit such losses by closing such units sooner than planned.

PPC has announced its Megalopoli III facility will be shut down six months earlier, in the first half of 2021 instead of early 2022. If accomplished, this closure will represent PPC’s second PPC lignite unit withdrawal following Amynteo, closed down in May.

The utility intends to push for a swifter withdrawal of all other lignite-fired units, except Ptolemaida V.

PPC awaiting first securitization deal cash injection this month

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

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

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

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

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

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

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

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

Enel boosts 2030 greenhouse gas emission cut target to 80% from 70%

Enel has committed to an 80% reduction in its direct greenhouse gas (GHG) emissions per kWh by 2030, from a 2017 base-year, up from the previous target of 70%, becoming the first major, global, integrated utility to set an emission reduction target consistent with the United Nations pledges to limit global warming to 1.5°C above pre-industrial levels and to achieve net zero emissions by 2050, as validated by the Science Based Targets initiative (SBTi), the company has announced in a statement.

“With our commitment to such a drastic reduction in our emissions, we are leading the way in the fight against global warming,” said Francesco Starace, Enel CEO and General Manager. “As we progress along this path, we are working relentlessly to maintain our leadership in the energy transition through an ever-increasing focus on carbon-free activities. We are increasing the share of renewables in our generation mix. We are working with our customers towards energy efficiency and electrification, enabling change through reliable, digitized and resilient grids. A truly innovative and sustainable company is one that does not hold back from embracing change, but strives to lead it.”

Enel’s new SBTi-approved target entails a reduction in the Group’s 2030 direct emission threshold to 82 gCO2eq/kWh from 125 gCO2eq/kWh corresponding to the previous 70% target, which was announced last year.

Enel is contributing to the energy transition by promoting a sustainable business model across its entire value chain. It was one of the first companies in the world to join the SBTi in 2015. The Group is making good progress towards the achievement of the SBTi target as in 2019 its direct GHG emissions per kWh were reduced by more than 36% compared to 2007, and it will continue this trend through major investments in renewables and thermal decommissioning. Through Enel Green Power, which is now the world’s largest private renewable player, Enel currently boasts over 47 GW of installed renewable capacity, exceeding that of thermal sources. Furthermore, the Enel Group is working towards phasing out its coal footprint by 2030. All these activities are expected to lead up to the Group’s full decarbonization by 2050.

Currently, Enel operates the largest private electricity distribution network globally with a grid of more than 2.2 million kilometers for over 74 million end users, of which more than 60% are already digitized. In addition, Enel’s advanced energy solutions business line Enel X is proactively contributing to decarbonize other sectors such as transport, with more than 140,000 public and private charging points for electric vehicles made available worldwide.

The Intergovernmental Panel on Climate Change (IPCC), the United Nations body in charge of assessing the science related to climate change, has warned that, in order to limit some of the worst climate impacts, temperature rise must be held to 1.5°C above pre-industrial levels on the road to a net-zero future by 2050. Businesses have a critical role to play in order to tackle this global challenge and the SBTi is positioned as the world’s most recognized initiative to champion science-based target-setting as a way of boosting companies’ commitment to supporting the transition to a zero-emission economy.

The SBTi is a collaboration between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF).  It provides companies with a pathway to identify how much and how quickly they need to reduce their GHG emissions with the aim to curtail rising global temperatures. Furthermore, the SBTi enables companies to set emission reduction targets consistent with the most ambitious aim of the 2015 Paris Agreement on Climate Change: to limit global warming to 1.5°C above pre-industrial levels.

 

PPC to offer lignite-dependent area residents 5% stakes in solar farms

Power utility PPC intends to offer residents of lignite-dependent areas in Greece stakes totaling 5 percent in solar farm projects planned by the company as part of its decarbonization strategy, chief executive Giorgos Stassis disclosed in an interview published by Greek daily Kathimerini yesterday.

PPC plans to develop and operate solar farms with a total capacity of 2.5 GW in west Macedonia, northern Greece, and Megalopoli, in the Peloponnese, both lignite-dependent economies.

Besides creating jobs through these investments, PPC plans to offer locals the opportunity to invest in the power utility by acquiring shares for total stakes of 5 percent, Stassis noted.

Through this procedure, residents will join PPC in its investments and enjoy the exact same returns as the company, he said.

“I want to underline the annual investment return on these investments will range between 8 and 10 percent, at a time when deposit interest rates are almost negative,” Stassis said. The offer will be restricted to decarbonization-area residents, he added.

Commenting on local resistance against prospective RES installations, especially on islands, Stassis noted: “Islanders who, for years, have enjoyed low-cost electricity generated in Megalopoli and Ptolemaida at a cost for the environment and human lives, cannot object turbine installations on islands for production of electricity they will consume now that lignite-fired generation has become ultra-expensive and is being abandoned.”

PPC green plan includes pumped storage, hydrogen, old generator use

Power utility PPC’s green-energy plan represents a key part of the company’s new business plan, along with a newly adopted customer-oriented approach and the digital transformation of production and distribution networks, deputy chief executive Giannis Kopanakis has pointed out during a speech at the 3rd Athens Investment Forum.

PPC’s green energy plan will be based on decarbonization, through a gradual withdrawal of the corporation’s lignite-fired power stations, and RES market penetration, the deputy noted.

Telethermal need coverage, development of large-scale solar energy farms at former lignite mines, and investments in energy storage, biomass, hydrogen and other new technologies all feature in the transition plan for lignite-dependent local economies, Kopanakis told the conference.

As for energy storage, PPC, besides batteries, also intends to develop pumped-storage systems at depleted lignite sites, appropriate for use as small-scale reservoirs.

The development of hydrogen producing facilities, also included in the PPC plan, will greatly depend on decisions concerning the fuel mix the corporation’s new Ptolemaida V power station will run on beyond 2028.

PPC also plans to utilize existing mechanical equipment of lignite-fired power stations either closed or headed for closure through use at other company facilities. Generators at old power stations are planned to be converted into condensers for grid voltage stability. Such systems will be needed as a result of the sharp increase in RES stations.

PPC’s investment plan, budgeted at 2.2 billion euros, is expected to create at least 900 permanent jobs as well as 3,000 temporary positions, for the construction of new projects, Kopanakis said.

 

Roads, buildings, telethermal units among post-lignite ideas

Crucial road and building projects, as well as telethermal units for the Florina, Amynteo, Eordea and Kozani areas in northern Greece are among 116 project investment proposals worth 1.14 billion euros that have been submitted by municipalities, regional authorities and universities to the government’s special transition program for the decarbonization effort.

It is understood that out of the 116 proposals, only those corresponding to objectives set by the government plan, aiming to support employment, social cohesion, entrepreneurship and green energy, among other domains, and which can be completed within the next three years, will be approved.

Energy minister Costis Hatzidakis made reference to the number of investment proposals forwarded and their total worth at a conference last Friday, the Athens Investment Forum, without going into great detail.

The special transition program, scheduled for 2021 to 2023, is being assembled based on the capabilities of the EU’s National Strategic Reference Framework (2014-2020); REACT-EU (Recovery Assistance for Cohesion and the Territories of Europe), contributing to a green, digital and resilient recovery of the economy; as well as other funds.

Projects worth a total of 250 million euros could be inducted into the special transition program, according to an initial estimate.

PPC’s second voluntary exit plan this year achieves 85% success rate

Power utility PPC’s second voluntary exit program offered to employees this year has achieved a success rate of 85 percent, convincing 465 staff members to sign up, from a target group of 550.

Applicants needed to meet two prerequisites for this latest PPC exit program. Firstly, applicants must be on the way to turning at least 55 years of age by December 31, 2020. Secondly, they needed to have already qualified for pension rights before applying for the exit plan.

Without the pension right criterion, the program would have applied to a far broader group of as many as 1,700 employees at PPC units around the country.

PPC is believed to be satisfied with the course of its voluntary exit plan this year. The tally of voluntary exits this year is seen reaching 1,200, over an initial estimate of 1,000.

Employees who sign up for the program each receive compensation packages totaling 35,000 euros.

The power utility is expected to keep downsizing. According to last year’s business plan, PPC is aiming for a workforce reduction of 4,500 employees by 2023.

PPC, turning to green energy, has scheduled to shut down its Kardia III and IV and Megalopoli III lignite-fired power stations in 2021, followed by Agios Dimitrios I and II in 2022. Megalopoli III could be withdrawn sooner than planned, the company recently announced.

JTF plan includes 16 post-lignite projects budgeted at €2.5bn

The total cost of sixteen investment proposals concerning the decarbonization of Greece’s lignite-dependent areas included in the country’s Just Transition Fund plan, just released by the energy ministry for public consultation until October 31, is estimated between 2.3 and 2.5 billion euros.

The plan, offering project description and cost details, includes eleven proposals for west Macedonia, in northern Greece, and five proposals for Megalopoli, in the Peloponnese.

The proposals for west Macedonia include 2-GW solar farm projects by power utility PPC.

The power utility is currently developing a 230-MW solar farm budgeted at 133 million euros.

A Solaris Bus & Coach project for a RES-based hydrogen unit budgeted at one billion euros is also among the eleven proposals for west Macedonia, as is a 250-MW energy storage project by Eunice, to cost 280 million euros.

The five Megalopoli proposals included in Greece’s JTF plan include PPC solar farms with a capacity of 50 MW and budgeted at 250 million euros; a pharmaceutical production facility to cost 90 million euros and create 400 jobs; a smart-technology livestock and animal feed farm budgeted at 40 million euros; a theme park for entertainment and educational purposes to cost 40 million euros; as well as other public-sector investments worth 30 million euros.

 

 

 

NSRF help for decarbonization until recovery fund is launched

Greece’s decarbonization effort will, for the time being, need to rely on the National Strategic Reference Framework for EU subsidy support until member state objections and disagreements over the pandemic-related Recovery Fund are resolved to enable its launch.

The European Commission and certain member states from eastern Europe, including Hungary and Poland, appear set for a new round of recovery fund negotiations following objections raised over terms set in July.

More affluent member states such as the Netherlands and Finland have made milder complaints, noting the summer agreement’s handout plan is too lenient.

A January 1 start for the recovery plan appears increasingly unlikely as a result of these disputes.

A delay would impact anticipated recovery-fund financial support for pivotal decarbonization efforts in Greece, including related public road projects. Company-funded projects such as solar energy farms to be developed by power utility PPC and Hellenic Petroleum ELPE will not be impacted.

In a worst-case scenario concerning the recovery fund’s date of launch, projects will need to entirely depend on the new National Strategic Reference Framework for subsidy support through a transitional program covering 2021 to 2023, well-informed sources told energypress.

Projects that would be eligible for subsidy support through this transitional program are budgeted at a total of 250 million euros, according to an initial estimate.

They include PPC and ELPE solar energy farm plans; PPC’s Ptolemaida V power station, currently under construction; as well as PPC’s post-lignite investments.

 

Energy ministry seeks recovery fund support for many domains

The energy ministry, seeking to ensure EU recovery-fund support for mature projects in key energy-related domains, has proposed their inclusion in a national plan whose first draft will be submitted by the government to the European Commission this month.

Greece is entitled to approximately 32 billion euros from the EU recovery fund, worth a total of 750 billion euros (390bn in subsidies and 360bn in loans) and established to counter the impact of the global pandemic.

Approximately 37 percent of the recovery funds will be used for green-energy development.

Energy efficiency upgrades of buildings; grid interconnections and RES initiatives, including energy storage; electromobility; nature protection; decarbonization; spatial planning for RES development; solid and liquid waste management; and smart power meter installations, a severely delayed project in Greece, are among the domains the energy ministry wants included in the national plan for EU recovery funds.

The energy ministry has previously sought support for some of these domains through the National Strategic Reference Framework.

A total of 130,000 efficiency upgrades of buildings have so far received subsidy support over a decade-long period through Greece’s Saving at Home program. The ministry is looking to significantly increase this rate to 60,000 upgrades per year through the recovery funds program.

Greece’s energy ministry will also seek recovery fund support for two major electricity interconnections – Crete’s major-scale interconnection,  to link the island’s grid with Athens; and the fourth phase of the Cyclades interconnection – both being developed by power grid operator IPTO.

 

GEK TERNA, Elpedison close to decisions on gas-fueled units

GEK TERNA and Elpedison are expected to announce finalized investment decisions for new gas-fueled power stations with total capacity over 1,400 MW within the next two months, energypress sources informed.

GEK TERNA plans to develop a 660-MW power station at the industrial zone of Komotini, northeastern Greece, while Elpedison, a joint venture involving Hellenic Petroleum ELPE and Italy’s Edison, intends to construct units with a total capacity of 826 MW at the ELPE facilities in Thessaloniki.

These project plans are estimated to be worth a total of at least 600 million euros.

The energy companies have already received energy production licenses as well as other licensing requirements, including environmental permits, for these prospective units, regarded as mature investment plans.

Both companies are awaiting new CAT mechanism details for gas-fueled power stations before finalizing their investment plans. The economic uncertainty caused by the pandemic, plus the anticipation of a second wave, are also crucial factors influencing the thinking behind these investment decisions.

Market capacity exists for new combined-cycle gas-fueled power stations during the energy transition over the next ten to 15 years, electricity market officials insist.

The planned withdrawal of power utility PPC’s lignite-fired power stations over the next three or so years combined with a lack of development in RES energy storage systems offers gas-fueled power generation an opportunity to cover capacity to be lost by lignite-fired power station closures.

A recent BloombergNEF report noted big natural gas-fueled power stations are not necessary. However, market officials point to the National Energy and Climate Plan as proof of the need for such units.

The Mytilineos group is developing an 826-MW CCGT in the Agios Nikolaos area of Boetia, northwest of Athens, with the aim of a launch in late-2021.

Energy transition to boost medium-term gas demand; 6 bcm total expected in ’20

The energy transition is boosting the prospects of an increase in Greek natural gas consumption, which could rise by 2.5 to 3 bcm in the medium term, market experts project.

Pundits expect total gas consumption in 2020 to reach 6 bcm, up considerably from levels registered in 2019, and stabilize at this level in 2021.

Electricity generation is a key factor in the anticipated rise of gas consumption as the withdrawal of lignite-fired power stations should increase the energy-mix share of natural gas to levels of between 30 and 40 percent.

The rise in gas consumption in the short term will greatly depend on the number of new gas-fired power stations to be introduced. For example, a gas-consumption increase of as much as 1.5 bcm is expected if three gas-fired power units with respective capacities of 800 MW are introduced to the system.

Exports are expected to add a further 1 bcm to the market’s size, while small-scale expansion covering the shipping sector and needs of detached areas should add another 500 million cubic meters to consumption.