Enaon Eda: 13 cities to be linked with gas network in ’24

Enaon Eda – formerly the gas distributor DEDA – as the new single distribution network operator under the umbrella of the Italian energy group Italgas has been named, plans to broaden natural gas usage in Greece by expanding the country’s gas distribution network to an additional 13 cities in 2024.

The 13 cities are: Grevena, Giannitsa, Veria, Florina, Kastoria, Argos Orestiko, Amfissa, Alexandreia, all in the north, Orestiada, in the northeast, Ioannina, in the northwest, Livadia and Karpenissi, both in central Greece, as well as western port city Patras.

Work on the distribution network’s development in Patras, an initiative aiming to attract 38,000 new customers in 2024, is already underway.

The effort is set to continue at Grevena, commissioning here planned for March, and will be followed by Florina and Kastoria, Enaon Eda officials informed media yesterday.

The Italian company’s gas network expansion plan for 2024 will entail development of over 650 km in low-pressure pipelines and roughly 50 km in medium-pressure pipelines. In the wider Athens area, alone, an additional 30 km is planned to be added to the city’s gas network this year.

Also, the network’s digitization with the integration of smart meters and advanced technological systems for cyber security are central to the company’s immediate plans.

The Italgas group’s management informed that its strategic plan for Greece will be updated in the summer and include details for 2025.

Italgas unveils new identity of Greek companies within group

Athens,  February  14th, 2024  –  Italgas  has  officially  introduced  the  new  identity  of Greek companies, which  are now named “Enaon”, the  holding  company, and “Enaon Eda”,  the operating company.

The announcement was made by Italgas CEO Paolo Gallo during the inauguration of the new Athenian headquarters of the companies, in the presence of Italgas Chairperson, Benedetta Navarra, the Minister of Environment and Energy, Mr. Theodoros Skylakakis, the Minister of  Economy  and  Finance,  the  Minister  of  Development,  Kostas  Skrekas,  the  Italian Ambassador to Greece, Paolo Cuculi. Sia Kossioni, journalist, moderated the event.

The establishment of Enaon and Enaon EDA, which will be responsible for the development and management of services, represents a further step forward in the reorganization process undertaken by Italgas, marked by the merger of the previous three DSOs into one, which occurred in 2023.

“Just over a year ago,” stated Paolo Gallo “we successfully concluded the acquisition of Depa Infrastructure. Today, with the presentation of Enaon, we inaugurate a new chapter in our journey. The  launch of  the  new  corporate  image comes at a time  when  we  have already successfully achieved significant goals that will enable us to work better and more efficiently. I refer to the migration of the IT system to the Cloud, the unification of the three companies into a single operator, the selection of a new headquarters where people, previously spread across multiple locations, have more space and greater comfort. Italgas confirms itself as the ideal technological and industrial partner to support Greece in the phase-out from coal and lignite  towards  EU  decarbonization  goals.  Our  experience  in the digital  transformation  of networks, an enabling factor for the decarbonization of consumption, has already been made available  to  our  colleagues  and  will  also  allow Greek  distribution  networks  to  soon accommodate biomethane, green hydrogen, and other renewable gases”.

“Today’s presentation of ENAON and the reorganizational process carried out by the company in recent months are concrete signs of Italgas’ commitment to the Greek market and further contribute to the strengthening of the partnership between our two countries. Italy and Greece indeed boast strong bilateral relations, which continue to grow thanks to the contribution of companies  like  Italgas  that  have  decided  to  invest  in  this  market”  –  stated  the  Italian Ambassador to Greece, Paolo Cuculi, who emphasized the role of the Italian company in a crucial sector for the development of bilateral relations.

“The initiatives being taken with a focus on Greece through the Italgas Group  -several of which were presented in detail today- are helping us to gain access to technical knowledge that  will  enable  Greek  distribution  networks  to  be  upgraded  in  a  way  that could  soon accommodate  biomethane  and  other  renewable gases” stated the Minister of Environment and Energy, Mr Theodoros Skylakakis.

MEMORANDUM OF UNDERSTANDING BETWEEN ENAON AND HABIO

On the occasion of the unveiling of the new brand, Enaon has signed a Memorandum of Understanding with HABIO, the Hellenic Biogas Association, which today represents  the operators of 48 production plants who have already shown great interest in converting their production into biomethane to be injected into distribution networks.

The agreement, signed by Barbara Morgante, CEO of Enaon, and Alexandros Yfantis, President of HABIO, will last for 2 years and will focus on various topics: from the development of regulatory proposals to the definition of connection parameters to the networks, from the determination of costs for the expansion and connection of plants to the promotion of sustainable biomass collection and the use of digestate as fertilizer.

The collaboration between Enaon and HABIO is strategic to accelerate the development of biomethane, in line with the objectives of the EU and the Greek government. As a renewable gas, biomethane represents an energy source that reduces dependence on foreign supplies and improves energy security. It also contributes to the circular economy and sustainable development of rural areas, generating positive impacts on local communities.

THE MEANING OF ENAON

Enaon takes inspiration from the Greek word “Αέναος”  (Aenaos), which translates  to “perennial” and “renewable” and, when associated with the energy sector, aims to represent a long-lasting offer capable of meeting current needs and the well-being of future generations.

By simplifying its spelling to Enaon, the new brand becomes distinctive, versatile, and with a universal meaning.

Moreover, “Ena” is the Greek word for “one” and recalls the union of the 3 previous DSOs –Eda Thess,  Deda, and Eda  Attikis  –  into a single  Company;  “On”  represents  the  idea  of something being active, operational. Enaon, therefore, embodies the commitment to keep energy in constant flow, providing gas continuously and working to equip the country with cutting-edge, smart, and flexible infrastructure.

THE NEW HEADQUARTERS

The Enaon offices in Athens are located at the Politia Business Center:

The new Greek headquarters of the Group offers the opportunity to concentrate in one place many of the people who were previously scattered in various offices and locations across the city, thus enhancing interaction between people, exchanging professionalism and skills, and ensuring greater comfort for workers.

In the new offices, spread over 7 floors, people have access to modern, functional, and flexible spaces for a more effective balance between individual activities and group work. Overall, the architectural  project  aims  to  ensure  bright,  quiet  environments  away  from sources  of distraction, as well as areas equipped with tools for remote collaboration.

One of the distinctive features of the new headquarters is the complete overhaul of the ICT infrastructure, aimed at further enhancing cybersecurity.  This  revision, implemented with significant improvements, has aligned the Greek headquarters with the Group’s rigorous standards and best practices, effectively reducing risks associated with information and communication technologies.

 

 

DEPA Infrastructure joins Oil & Gas Methane Partnership

Athens, 26th of January 2024 – DEPA Infrastructure, adopting parent group Italgas’ strategic commitment to building a carbon-neutral future, has joined the Oil and Gas Methane Partnership (OGMP) 2.0.  This strategic initiative aligns DEPA Infrastructure’s ambition with its shareholder, further reinforcing its objective to minimizing methane emissions. Italgas, among the original members of OGMP 2.0 back in 2020, has consistently been awarded the “Gold Standard” Pathway status on the basis of a credible and granular implementation plan for the consecutive years 2021, 2022, and 2023.

OGMP 2.0 stands as the industry’s sole comprehensive, measurement-based, voluntary reporting framework, enhancing the accuracy and transparency of methane emissions reporting in the Oil and Gas sector. The partnership brings together over 120 leading oil and gas companies worldwide, spanning the upstream, midstream, and downstream sectors, in collaboration with government and civil society entities.

OGMP 2.0 member companies, including DEPA Infrastructure, commit to a detailed process that involves listing all emitting assets, determining their materiality, defining a methane emissions reduction target, and designing an implementation plan for improved emissions reporting. Methane emissions are reported annually at different levels (1 to 5) on the pathway to the Gold Standard, reflecting the quality of the estimate. This journey moves from generic emissions factors to robust quantification methodologies, including direct measurement on a representative sample of facilities.

In addition to providing a standardized reporting framework, OGMP 2.0 serves as a platform for knowledge exchange and collaboration among industry stakeholders. Periodical technical workshops facilitate the sharing of insights, experiences, and best practices, contributing to a deeper understanding of potential emissions sources, quantification methods, mitigation strategies, and overcoming associated challenges.

DEPA Infrastructure, as an Italgas Group company, remains deeply committed to minimizing fugitive methane emissions. Leveraging advanced leak detection solutions with its Subsidiary Distribution Network Operator DEDA, successfully utilizes a cutting-edge Cavity Ring-Down Spectroscopy technology, the Picarro Surveyor, introduced by Italgas already by 2018. This sophisticated sensing technology enhances the speed of action, sensitivity in detection, and the scope of areas under control. In 2023 more than 100% of the distribution network has already been investigated with Picarro by DEDA in Greece, reaching the  120% goal by the end of the year.

The adoption of this technological innovation, combined with Italgas’ digitization initiatives in Greece, enhances safety, optimizes emissions monitoring and overall network management and improves the quality of services provided. It also enables smart and predictive maintenance activities, prioritizing leaks based on a materiality assessment, which allows for the implantation of the most cost-efficient solutions that benefit both the consumers and the environment.

The inclusion of DEPA Infrastructure to OGMP 2.0 leveraging on the foundations set by Italgas, extends its dedication to environmental sustainability and continuous improvement in methane emissions management beyond the regulatory thresholds set in Greece. This commitment aligns with the Group’s Sustainable Value Creation Plan (SVCP), which includes a target of 42% reduction of Scope 1 and 2 emissions by 2030 and reaching net-zero carbon by 2050 also applied in the Greek Perimeter.

 

DEDA’s 9.99% WACC proposal for 2024-26 above RAAEY goal

Italgas, the Italian buyer of gas company DEPA Infrastructure and distribution subsidiaries EDA THESS, EDA Attiki and DEDA, has proposed a 9.99 percent weighted average cost of capital (WACC) level for DEDA in negotiations with RAAEY, the Regulatory Authority for Waste, Energy and Water, for the rest of a four-year regulatory period covering 2023 to 2026, well above the level envisaged by the regulatory authority, expected to push for a rate below 8.57 percent.

A ratified legislative revision that had been forwarded by the energy ministry on the WACC level of the then-DEPA Infrastructure company, now reorganized, had set a WACC level of 8.57 percent for the current year, leaving the rest of the four-year regulatory period pending until the corporate reorganization of the gas company was completed.

The process has now been completed, as officially announced by Italgas, through a merger of gas distributors EDA THESS and EDA Attiki, both subsidiaries of the former DEPA Infrastructure Group, and absorption by DEDA.

In its DEDA negotiations with Italgas, RAAEY is pushing for a WACC level, for 2024 to 2026, below the 8.57 percent level set for 2023.

RAAEY will propose the precise WACC level it desires after DEDA has provided the authority with data on its borrowings and leverage. RAAEY aims to finalize the matter by the end of the year, so that tariffs can be set immediately afterwards.

As a result of DEPA’s restructuring, DEDA has undertaken the development and operation of the gas distribution network in all areas of Greece where DEPA Infrastructure, now a full-owned subsidiary of Italgas, is active. The company currently manages around 7,700 km of network and serves over half a million customers.

 

DEDA, RAAEY, entering WACC, tariff talks, with gap to cover

Gas distributor DEDA and RAAEY, the Regulatory Authority for Waste, Energy and Water, are entering negotiations to determine gas distribution network weighted average cost of capital (WACC) and tariff levels for the regulatory period covering 2023 to 2026 with some distance between them to cover, energypress sources have informed.

A ratified legislative revision that had been forwarded by the energy ministry on the WACC level of the then-DEPA Infrastructure company, now reorganized, had set a WACC level of 8.57 percent for the current year, leaving the rest of the four-year regulatory period pending until the corporate reorganization of the gas company was completed.

The process has now been completed, as officially announced by Italian buyer Italgas, through a merger of gas distributors EDA THESS and EDA Attiki, both subsidiaries of the former DEPA Infrastructure Group, and absorption by DEDA.

The Italian group recently acquired DEPA Infrastructure and its three gas distribution subsidiaries, EDA Attiki, EDA Thess and DEDA.

According to energypress sources, DEDA will soon forward to RAAEY its proposal for WACC and tariff levels concerning 2024 to 2026, thereby setting in motion negotiations between the two sides. Finalized decisions are expected by the end of the year.

Italgas will propose a WACC level of more than 9 percent, expected to prompt a reaction from RAAEY, which is determined to subdue WACC and tariff levels to limit, as much as possible, the burden on consumers, sources said.

 

DESFA launches LNG truck loading service, suppliers keen

Gas grid operator DESFA launched its LNG truck-loading service at Megara, 45 kilometers west of Athens, earlier this week, finally enabling refueling of consumption points located at a distance from the country’s gas network.

The launch, on Monday, was preceded by an extensive performance test of the LNG truck-loading infrastructure last March. Three companies, Blue Grid, DEPA Commercial, and Motor Oil Hellas, took part in the testing with LNG trucks.

Interest in the new service is already strong as gas suppliers appear keen to utilize its flexibility to expand their customer base.

Transportation of LNG via specially designed trucks promises gas supply to industrial consumers, vehicle refueling stations selling gas, areas not connected to Greece’s gas network within Greece, as well as neighboring countries.

Plans are already underway for LNG delivery to distribution networks being developed by gas distributor DEDA in western Greece – in Patras, Agrinio and Pyrgos.

The first LNG station designed to facilitate gas distribution to remote areas was installed in September, 2022 by gas distributor EDA THESS at Elassona, towards Greece’s north. It will supply the local network. The DEPA Infrastructure subsidiary plans to do likewise for gas supply covering other areas, including the Greek islands Skiathos, Skopelos, and Alonissos.

DESFA’s LNG truck-loading initiative represents the first segment of a small-scale LNG supply chain, to be complemented by a small-scale LNG jetty under development at DESFA’s Revithoussa LNG terminal.

This infrastructure will enable bunker vessels to supply LNG-powered vessels, such as cargo ships and container ships, at Piraeus port. It will also allow for ship-to-ship refueling, supporting larger vessels, such as cruise ships.

RAEEY approves development plans of 4 gas distributors

RAAEY, the Regulatory Authority for Waste, Energy and Water, has approved five-year development plans, covering 2023 to 2027, by the country’s four natural gas distribution companies. They are comprised of investments worth a total of 840 million euros for new networks covering 3,500 kilometers of low and medium-pressure infrastructure.

The authority’s approval of the plans presented by the four gas distributors paves the way for their development. The network expansions, the distributors anticipate, will result in 370,000 new customer connections by the end of 2027.

Of the 840 million-euro total, 788 million euros concerns projects planned by DEPA Infrastructure’s three subsidiaries, the gas distributors EDA Attiki, EDA Thessaloniki-Thessaly and DEDA, all now controlled by Italy’s Italgas. Furthermore, Hengas has prepared a five-year, 50 million-euro investment plan for distribution network development.

EDA Attiki, covering the wider Athens area, plans to invest 159.9 million euros to add 484 kilometers to its distribution network. The distributor is active in 52 municipalities. It possessed a low and medium-pressure network totaling 3,981 kilometers at the end of 2022.

EDA Attiki expects to reach an additional 92,400 customers by the end of 2027 as a result if this network expansion.

EDA Thessaloniki-Thessaly plans investments worth 136.6 million euros for a 400-km network expansion and a rise in customers to 375,000 from 275,172 over the five-year period for the Thessaloniki area.

As for the Thessaly region, the distributor plans investments worth 113.9 million euros for a 400-km network expansion.

DEDA, the DEPA Infrastructure subsidiary covering other parts of Greece – eastern Macedonia-Thrace, central and western Macedonia, Epirus, western Greece and the Peloponnese, plans to invest 378.2 million euros for over 1,826 kilometers in low and medium-pressure networks.

Hengas plans to invest 50.6 million euros between 2023 and 2027 for the construction of a network covering 390 kilometers in central and western Macedonia as well as the Peloponnese.

 

RAAEY decides on WACC levels for DESFA, DEPA Infrastructure

RAAEY, the Regulatory Authority for Waste, Energy and Water, has decided, after lengthy consideration, on WACC levels for two gas companies, DESFA, Greece’s gas grid operator, and DEPA Infrastructure.

The WACC level set for DESFA, 7.85 percent, will apply for a four-year period covering 2024 to 2027, while DEPA Infrastructure’s rate, 8.57 percent, applies for 2023.

The discrepancy between the two WACC levels resulted from different borrowing-cost coefficients applied to a WACC formula used by RAEEY. All other factors that were taken into account, including country risk and cost of capital, were identical.

DESFA is now expected to set tariffs ahead of tenders for three grid interconnection projects.

As for DEPA Infrastructure, the company’s new owner, Italgas, Europe’s second largest gas distributor, was expecting a WACC level of between 8 and 9 percent over the next four-year regulatory period in order to carry out its Greek investment plan through DEPA Infrastructure and its three gas distribution subsidiaries, EDA Attiki, EDA Thess and DEDA.

Decisions on WACC levels for power grid operator IPTO and distribution network operator DEDDIE/HEDNO are expected by the end of July.

IPTO has requested a revised WACC level for the regulatory period covering 2022 to 2025, while DEDDIE/HEDNO is awaiting a revision for 2023 and 2024.

Athens court orders gas distribution operators to return €8m to industries

The Athens Administrative Court of Appeals has given industrial enterprises the green light to recover just over 8 million euros in compensation fees for 2015 and 2016, validated by RAAEY, the Regulatory Authority for Energy, from the country’s three gas distribution network operators, EDA Attiki, EDA THESS and DEDA, after they had appealed the authority’s decision.

RAAEY has approved specific amounts compensating industrial enterprises for universal charges imposed on them by the three gas distribution network operators between August 14, 2015 to December 1, 2016.

However, the gas distribution network operators have failed to make the specified compensation payments, resorting, instead, to legal action disputing RAAEY’s decision.

Three of metal group Viohalco’s companies, Elvalhalkor, Sidenor and Sovel, are entitled to compensation amounts.

According to the RAAEY decision, gas distributor EDA Attiki, covering the wider Athens area, must return a total of 1.44 million euros to industrial consumers, EDA THESS, covering Thessaloniki and Thessaly, owes 3.26 million euros to industrial players, and DEDA, responsible for gas distribution to all other parts of Greece, must return 4.13 million euros to industrial customers.

The 8.83 million-euro sum is expected to be paid by the three gas distribution network operators over 36, interest-free installments, from November, 2021 to October, 2024.

Should the operators appeal the Athens appeals court verdict, the case will need to be taken to the Council of State, Greece’s Supreme Administrative Court.

Italgas seeking WACC of 8-9% to carry out Greek investments

Italgas, Europe’s second largest gas distributor, is seeking a WACC level of between 8 and 9 percent over the next four-year regulatory period in order to carry out its Greek investment plan through the Italian group’s recently acquired DEPA Infrastructure and its three gas distribution subsidiaries, EDA Attiki, EDA Thess and DEDA.

Italgas has submitted three related studies to RAAEY, the Regulatory Authority for Waste, Energy and Water, as support for what the energy group believes to be the necessary WACC level for the regulatory period starting this year and running through 2026, its CEO, Paolo Gallo, noted during a London presentation last week of the company’s strategic plan for 2023 to 2029.

RAAEY will initially reach a decision, expected early in July, on Italgas’ WACC level for 2023, given priority through a legislative revision ratified just months ago.

Prioritizing the 2023 WACC level for DEPA Infrastructure will enable Italgas to reassess its investment plans for the year concerning its three gas distribution subsidiaries, EDA Attiki, EDA THESS and DEDA.

DEPA Infrastructure’s allowed revenues and tariffs for 2023 will be determined at a latter date.

 

 

Italgas’ Greek EBITDA goal for ’23, €106m, highlights local importance

Italian energy group Italgas’ 2023 EBITDA target of 106 million euros for its Greek portfolio, representing 9 percent of the group’s overall EBITDA objective this year, highlights the strategic importance of the group’s business plan in Greece.

Italgas’ CEO, Paolo Gallo, highlighted this importance during his presentation yesterday of the Italian company’s strategic plan for 2023 to 2029 to investors and analysts in London.

According to Italgas’ seven-year strategic plan, the Greek portfolio’s EBITDA will contract slightly to 8 percent of the group’s overall EBITDA in 2029.

Italgas plans to greatly increase the group’s activities in the Greek market and subsequently boost their value from 700 million euros in 2022 to 1.2 billion euros by 2029, at an annual growth rate of 7.3 percent.

A key objective for the group in the Greek market is to expand natural gas distribution to new areas through the addition of 42 municipalities to the network, either through pipeline distribution or LNG stations.

Italgas has acquired DEPA Infrastructure and its three gas distribution subsidiaries, EDA Attiki, EDA THESS and DEDA.

The Italian group is currently working on a plan to merge its three Greek gas distribution subsidiaries, a development expected to offer significant benefits in terms of efficiency, effectiveness and transfer of know-how. According to Italgas officials, this procedure is expected to be completed by the end of the year.

 

Amendment to prioritize DEPA Infrastructure WACC level for ’23

The energy ministry has prepared a legislative amendment to prioritize the setting of a WACC level for gas company DEPA Infrastructure in 2023, and, at a latter date, determine its allowed revenues and tariffs for the same year.

This legislative revision, ultimately covering DEPA Infrastructure’s latest four-year regulatory period from 2023 to 2026, will initially be applied to set levels for the aforementioned three parameters in 2023, an urgent need that has arisen as a result of the volatility in energy markets, especially the gas market, due to Russia’s ongoing war in Ukraine.

Prioritizing the 2023 WACC level for DEPA Infrastructure will enable Italgas, the company’s Italian buyer, to reassess its investment plans for the year concerning its three gas distribution subsidiaries, EDA Attiki, EDA THESS and DEDA. According to sources, Italgas is inclined to limit its investment plans for these subsidiaries in 2023.

Italgas is working on reviewing its overall corporate plan for DEPA Infrastructure in the light of an apparent downward revision of gas penetration targets for the end of the decade.

DEPA Infrastructure to gain investment clarity with revision

The energy ministry is planning to allow Italgas, the Italian buyer of DEPA Infrastructure, through an acquisition completed last year, to adjust the gas infrastructure company’s investment and corporate plan in accordance with an anticipated downward revision of gas penetration targets to be set for the end of this decade.

The ministry plans to submit a related amendment to Greek Parliament, possibly as part of a multi-bill currently being discussed by a parliamentary committee ahead of its imminent tabling for ratification.

According to energypress sources, the amendment will remove an existing parameter simultaneously determining the WACC levels and allowed revenues of DEPA Infrastructure’s three gas distribution subsidiaries, EDA Attiki, EDA THESS and DEDA, for the next regulatory period, covering 2023 to 2026.

This revision would pave the way for the average cost of capital concerning the four-year period to be determined first before regulated income is also determined.

The energy ministry’s legislative initiative, the same sources noted, comes following a request made by Italgas, so that the company may examine and establish its investment plan for the new four-year regulatory period based on WACC levels to be set until 2026.

The company’s investment plan will, as a result, be tailored to generate allowed revenues and lead to the creation of new assets.

 

Gas distribution operator 5-year investment plans worth €788m

The country’s three gas distribution operators, EDA Attiki, EDA Thess and DEDA, covering Athens, Thessaloniki-Thessaly and the rest of Greece, respectively, have proposed investments totaling 788 million euros for the network’s development over a five-year period between 2023 and 2027.

Italgas, the new owner of the EDA companies, has set ambitious objectives to expand Greece’s existing gas distribution network in order to facilitate further market penetration of gas around the country.

The three gas distribution operators have been forwarded their network development plans to RAE, the Regulatory Authority for Energy, for consultation.

DEDA, covering the country’s north, northwest, west, as well as the Peloponnese, has forwarded the biggest investment plan of the three gas distribution operators. It is worth 378.3 million euros and aims to increase the number of customers in these regions to 103,127 by 2027.

During this same five-year period, DEDA aims to develop low and medium-pressure distribution networks of more than 2,600 kilometers. This extension is expected to enable gas quantity distribution quantities of 4.7 million MWh for households and businesses in five years’ time.

EDA Attiki, covering the wider Athens area, has submitted a five-year network development plan budgeted at 159.59 million euros, its aim being to increase the number of customers to 531,939 from 430,147 at present.

EDA Thess has proposed a five-year network development plan for Thessaloniki worth 136.6 million euros for projects to include an additional 359.7 kilometers to the city’s distribution network, enabling an increase in the number of customers to more than 331,818 from 275,172 at present.

The EDA Thess network development plan for Thessaly is worth 113.9 million euros and expected to enable the number of customers in this region to reach 147,177 by 2027 from 118,512.

 

RAE approves EDA development programs covering 2022 to 2026

RAE, the Regulatory Authority for Energy, has approved five-year development programs submitted by Greece’s three gas distribution operators, EDA Attiki, EDA Thess and DEDA, covering Athens, Thessaloniki-Thessaly and the rest of Greece, respectively, energypress sources have informed.

RAE is expected to soon publish these development programs, the sources noted.

The three operators have already submitted their ensuing five-year development plans, covering 2023 to 2027, to the authority, expected to offer its approval within the next two to three months, after two pending issues are settled.

Italgas, the new owner of the EDA companies, has set ambitious objectives to expand Greece’s existing gas distribution network in order to facilitate further market penetration of gas around the country.

Italgas aims to increase total gas connections in Greece to a level of one million by 2028, from roughly 600,000 at present.

However, RAE has maintained a cautious stance as it wants to ensure these investments do not end up becoming an excessive burden for consumers.

 

RAE, operators far apart on WACC levels for 2023-2026

RAE, the Regulatory Authority for Energy, and the country’s gas distribution network operators appear to be far apart on WACC (weighted average cost of capital) figures for the next regulatory period covering 2023 to 2026, energypress sources have informed.

The authority is expected to set its levels early in 2023, the sources noted. Locking in the WACC level for the four-year period will enable Required Income levels to be determined along with tariffs for each of the operators.

The distribution network operators, EDA Attiki, EDA Thess and DEDA, have yet to announce their desired WACC levels for 2023 to 2026, but it is believed they want a significant increase on the current levels.

The current regulatory period is ending with a WACC level of 7.03 percent, the level recorded in 2021, following levels of 8.18 percent in 2019 and 7.45 percent in 2020.

RAE contends there is no reason to deviate from the current WACC formula, which, it has noted, includes all the factors that reflect the economic environment in which EDA Attiki, EDA Thess and DEDA operate, including inflation and country risk.

Given its approach, RAE appears likely to set just marginally higher WACC figures for the next four-year regulatory period.

RAE reserved about Italgas’ network expansion plan

RAE, the Regulatory Authority for Energy, is deeply concerned about the prospect of gas distribution network expansions into new geographical territories as, at present, amid the energy crisis, it remains unclear whether an expanded network would result in a greater number of overall gas users in Greece or, on the contrary, excessively increase the cost of this fuel for existing gas users through higher charges on regulated tariffs.

Italgas, following up on its recent 733 million-euro acquisition of DEPA Infrastructure, one of Greece’s biggest energy-sector privatizations, is keen to expand the country’s gas network through three DEPA Infrastructure subsidiaries, EDA Attiki, EDA THESS and DEDA. The expansion project is included in their investment plans for 2022 to 2026.

RAE will soon need to decide on whether to approve these gas network expansion plans.

Italgas has made clear it views geographical expansion of the country’s gas network as am approach that will increase gas usage in the Greek energy market.

Italgas aims to increase the number of gas users in Greece from approximately 600,000 at present to one million by 2028.

 

Distributors bent on network expansion despite crisis

Gas distributors EDA ATTIKI, EDA THESS and DEDA, unperturbed by the energy crisis, plan to expand the country’s gas network through the development of more than 3,000 kilometers of medium and low-pressure networks over the next four years, as well as digitization upgrades, investments worth a total of 740 million euros. RAE, the Regulatory Authority for Energy, has just forwarded the operators’ gas network expansion plans for consultation.

These investment plans demonstrate the willingness of all three gas operators to push ahead with their business plans for expanded gas usage as a key part of the country’s decarbonization effort, despite the sharp rise in gas prices.

Highlighting this intention, Italgas, whose acquisition of DEPA Infrastructure, the parent company of EDA ATTIKI, EDA THESS and DEDA, was completed one month ago, has just announced a loan of 580 million euros to be primarily used to help finance the gas network expansion plans of the three gas operators.

EDA ATTIKI, EDA THESS and DEDA cover the regions of wider Athens, Thessaloniki-Thessaly and the rest of Greece, respectively.

EDA THESS plans investments worth 233 million euros for new gas networks in the Thessaloniki and Thessaly regions.

EDA Attiki’s expansion plan for Athens, 570 km of low and medium-pressure networks by 2026, worth 122.23 million euros, will aim for 85,500 new connections by the end of 2026, taking the company’s total to 260,000 links.

DEDA Athens is planning over 2,000 km of new networks in seven regions, the biggest of the three initiatives, budgeted at 396 million euros.

 

Copelouzos in talks with Italgas for Depa Infrastructure stake of 10-20%

Greece’s Copelouzos Group is interested in joining a new company founded by Italgas after acquisition of gas company DEPA Infrastructure was officially completed, the Italian buyer’s chief executive Paolo Gallo has informed media.

Italgas and Copelouzos Group are currently involved in talks concerning a stake of between 10 and 20 percent for the latter in the new DEPA Infrastructure company, a stake closer to the lower level being likeliest, Italgas’ CEO noted.

The negotiations between the two sides could last anywhere between weeks and months, while there is no definite outcome, Gallo informed.

Italgas intends to offer an overall stake of as much as 49 percent in the new DEPA Infrastructure company. No other potential partners or initiatives have been revealed.

Gallo, responding to journalist questions, said it is too early to tell if there will be any organizational changes at DEPA Infrastructure.

However, he did confirm that the current CEOs at DEPA Infrastructure’s distribution subsidiaries EDA Attiki and DEDA, two of three in total, would remain at their posts.

As for EDA THESS, DEPA Infrastructure’s other distribution subsidiary, Italgas is still in the process of completing its purchase of a 49 percent stake held in this company be Eni. Price and terms have been agreed.

Italgas will aim for further gas penetration in parts of Greece where natural gas networks already exist, the CEO noted.

 

DEDA awaiting biothemane operator license 7 months on

Gas distributor DEDA is still awaiting a license that would establish the company as a biomethane operator seven months it submitted a related application to RAE, the Regulatory Authority for Energy.

DEDA lodged its license application to RAE on December 6, 2021 as part of its effort to move ahead with the country’s first biomethane distribution pilot projects.

Over the past two years, DEDA has been working on procedures for the establishment of legal and regulatory frameworks needed for commercial utilization of biomethane through the distribution networks it operates.

DEDA has already signed memorandums of cooperation with two biogas producers entailing upgrades of their facilities for production of biomethane, to be injected into networks and distributed as a mix with natural gas.

The first biomethane distribution pilot project is planned for the Nigrita area in Serres, northern Greece, to primarily supply household and business consumers. A second project, in Alexandria, Imathia, also in the country’s north, is planned to supply mostly industrial consumers.

Furthermore, on July 4, DEDA submitted a complete proposal to the energy ministry for the development of a biomethane market in Greece, based on revisions to laws concerning biogas, renewables and natural gas distribution. This proposal puts the price of biomethane below that of natural gas.

DEPA Infrastructure sale hurdle overcome by ministry revision

The energy ministry has incorporated provisions into a RES licensing simplification draft bill in order to overcome obstacles that have delayed the completion of gas company DEPA Infrastructure’s sale to Italian company Italgas.

The ministry’s provisions, now paving the way towards this sale’s finalization, separate certification requirements set by RAE, the Regulatory Authority for Energy, for the gas company’s distribution subsidiaries from the DEPA Infrastructure sale procedure.

RAE recently set terms that would essentially nullify certification for DEPA Infrastructure’s three gas distributors, EDA Attiki, EDA THESS and DEDA, if the buyer proceeds with an equity capital increase within three years of the sale’s completion.

Italgas officials have been in Greece since December, when the sale and purchase agreement was signed by the sellers, the Greek State and Hellenic Petroleum (ELPE), holding a stake, and the Italian buyer.

During this period, the Italgas officials have been collecting financial and other data concerning DEPA Infrastructure’s subsidiaries.

DEPA Infrastructure sale certification obstacles cleared

Italgas, the Italian buyer of gas company DEPA Infrastructure, a deal yet to be finalized, has accepted certification terms set by RAE, Greece’s Regulatory Authority for Energy, for the gas company’s three subsidiaries, the gas distributors EDA Attiki, EDA THESS and DEDA, a development that paves the way for the finalization of the sale, worth 733 million euros.

RAE has forwarded its decision on certification conditions for publication in the government gazette after clarifying terms, accepted by Italgas, Europe’s second largest gas distributor.

Italgas officials have been in Greece since December, when the sale and purchase agreement was signed by the sellers, the Greek State and Hellenic Petroleum (ELPE), holding a stake, and the Italian buyer.

During this period, the Italgas officials have been collecting financial and other data concerning DEPA Infrastructure’s subsidiaries.

DEPA Commercial sale over, DEPA Infrastructure completion June

Privatization fund TAIPED’s attempted sale of gas company DEPA Commercial is officially over, the European Commission admitting that the procedure cannot proceed as a result of an ongoing legal battle between the company and fertilizer producer ELFE, which, Brussels noted, in a report on the Greek economy, is expected to take two to three years to be resolved.

ELFE is seeking compensation from DEPA, claiming overpriced gas supply between 2010 and 2015, while DEPA has filed a legal case seeking overdue amounts from the fertilizer producer, based in Kavala, northern Greece.

TAIPED is now examining alternative sale solutions, according to the Brussels report.

As for the yet-to-be-finalized sale of gas company DEPA Infrastructure, acquired by Italgas, Europe’s second largest gas distributor, it is expected to be finalized in mid-June, the European Commission’s report noted.

The Brussels report made no mention of recent certification issues raised by RAE, the Regulatory Authority for Energy, which has changed its stance on the certification conditions for DEPA Infrastructure’s three subsidiaries, the gas distributors EDA Attiki, EDA THESS and DEDA.

DEPA Infrastructure sale facing hurdle on final stretch

The yet-to-be-finalized sale of gas company DEPA Infrastructure, acquired by Italgas, Europe’s second largest gas distributor, has encountered a hurdle on the final stretch as a result of certification issues raised by RAE, Greece’s Regulatory Authority for Energy.

The unexpected issues faced by this privatization, promising to provide 733 million euros to TAIPED, the country’s privatization fund, are serious and threaten to derail a sale and purchase agreement signed last December by the two sellers, the Greek State and Hellenic Petroleum (ELPE), and the Italian buyer.

The sale’s procedure had progressed swiftly, leading to competition committee approval, but events over the past few days, instigated by RAE’s change of stance on the certification conditions of DEPA Infrastructure’s three subsidiaries, the gas distributors EDA Attiki, EDA THESS and DEDA, have suddenly led to confusion, bringing the sale to a standstill.

RAE has offered conditional certification for the three subsidiaries, setting terms that did not exist in the lead-up to the sale and its conditions, according to sources.

Consequently, certification offered to the subsidiaries will not be considered valid if the buyer proceeds with an equity capital increase within three years of the DEPA Infrastructure sale’s finalization. Also, the agendas of all three subsidiaries will need to remain unchanged for their certification to remain valid, according to the sources.

TAIPED officials are believed to have been angered by these initiatives, considering them to be beyond RAE’s authority. Officials at Greece’s finance and energy ministries, as well as Italgas, have also been annoyed by RAE’s decision.

TAIPED and Italgas officials are believed to be engaged in talks in search of a compromise solution.

 

DEDA: Framework ‘pending’ for biomethane, hydrogen

Procedures leading to the establishment of legal and regulatory frameworks needed for commercial utilization of biomethane and hydrogen need to be accelerated by the government and the regulatory authority, Marios Tsakas, chief executive of gas distributor DEDA, has stressed in an interview with energypress.

Greece, from a technical and technological point of view, is ready to move ahead in the biomethane and hydrogen domains, the DEDA official pointed out.

Two pilot projects carried out by the company could develop into twenty mass-production projects if the pending legal and regulatory frameworks are completed and authorities give the green light, Tsakas noted.

The DEDA chief executive expressed optimism on the prospects of natural gas, noting that wild price fluctuations amid the energy crisis do not diminish the strategic advantages offered by this fuel, which can contribute significantly to reduced energy cost.

DEDA is preparing for the Greek market entry of sector giant Italgas, which has acquired gas company DEPA Infrastructure, Tsakas noted, adding that the arrival of this new investor, possessing enormous expertise of over 100 years in the natural gas sector, will lead to further growth that will benefit DEDA.

“We are network operators and, therefore, must be able to respond efficiently and responsibly, whether we are talking about pure gas networks or a mixture of gas and hydrogen, or biomethane,” Tsakas remarked.

 

Producers expecting €8.83m surcharge return from gas distributors

RAE, the Regulatory Authority for Energy, has determined the size of network usage surcharges all large-scale consumers stand to be handed back by natural gas distributors to offset across-the-board surcharges imposed on industrial enterprises between August 14, 2015 to December 1, 2016. The amount to be returned by the gas distributors totals 8.83 million euros.

Gas distributor EDA Attiki, covering the wider Athens area, will need to return to large-scale consumers a total of 1.44 million euros, EDA Thess, covering the Thessaloniki and Thessaly areas, must return 3.26 million euros, and DEDA, covering the rest of Greece, needs to return 4.13 million euros.

The 8.83 million-euro amount that will need to be returned by the three gas distribution companies is expected to be offered in 36 monthly installments from November, 2021 to October, 2024.

Large-scale consumers were universally charged a network usage surcharge of 4 cents per MWh over a 16-month period, based on a bailout term from 2015, which prompted EVIKEN, the Association of Industrial Energy Consumers, to forward an official complaint to the European Commission.

Italgas, DEPA Infrastructure’s top bidder, step from acquisition

Italgas, Italy’s biggest natural gas distribution company and the third largest in Europe, is now one step away from acquiring Greece’s DEPA Infrastructure as, according to energypresss sources, it has submitted the highest bid in the DEPA Infrastructure sale and is the only bidder to which the privatization fund TAIPED has extended a request for an improved offer, by September 8.

The Italgas offer is believed to be close to 700 million euros, a figure expected to rise further, and well above an offer submitted by rival bidder EPH from the Czech Republic.

The preferred bidder may be officially announced on September 9. The sale procedure is expected to be finalized by the end of the year as national and European authorities will need to re-certify DEPA Infrastructure as a natural gas network operator under its new ownership to emerge from the sale.

The 100 percent privatization of DEPA Infrastructure comprises 100 percent of gas distributor EDA Attiki, covering the wider Athens area; 100 percent of gas distributor DEDA, representing all other areas in Greece except for Thessaloniki and Thessaly; as well as a 51 percent stake in gas distributor EDA THESS, covering the Thessaloniki and Thessaly areas.

The preferred bidder will also submit an offer for the remaining 49 percent stake in EDA THESS, based on an agreement reached between TAIPED, the privatization fund, with Italy’s Eni Gas e Luce, the current holder of this minority stake.

As a result, DEPA Infrastructure’s winning bidder stands to become the sole stakeholder in the three gas distribution companies.

Gas network for west, expected in 2023, to be supplied LNG

A natural gas network to cover western Greece’s provincial cities Patras, Agrinio and Pyrgos and scheduled for completion in 2023 will carry LNG to be transported from gas grid operator DESFA’s Revythoussa islet terminal close to Athens.

Regional authority Nekatrios Farmakis has just authorized the project’s entry into the Regional Operation Program (2014-2020) for Western Greece, an important step for this gas network’s development. Work on the project is expected to begin within 2021.

The project, being co-funded by the European Regional Development Fund (ERDF), is budgeted at 21.3 million euros. The gas network will seek to attract business, industrial as well as household consumers.

To be developed by gas distributor DEDA, the new network will run a total distance of approximately of 208 kilometers and be equipped with a metering and regulation station (M/R) for its supply to Patras.

DEPA Infrastructure sale now a showdown for two, Italgas, EPH

With the deadline for binding bids in the 100 percent sale of gas company DEPA Infrastructure expiring tomorrow, a latest update from sources indicates that two suitors will submit offers, Italy’s gas network operator Italgas and the Czech Republic’s EP INVESTMENT ADVISORS (EPH). An additional bid by a third participant has not been ruled out.

Besides Italgas and EPH, four other bidders have qualified for the privatization’s final round, these being two Australian funds, FIRST STATE INVESTMENTS (European Diversified Infrastructure Fund II) and MACQUARIE (MEIF 6 DI HOLDINGS), international fund KKR and Chinese consortium SINO-CEE FUND & SHANGHAI DAZHONG PUBLIC UTILITIES (GROUP) Co., Ltd.

The Greek State is selling its 65 percent stake in DEPA Infrastructure, through the privatization fund TAIPED, and Hellenic Petroleum (ELPE) the other 35 percent.

Italgas’ chief executive Paolo Gallo, in an interview with Greek daily Ta Nea, has stated the company will be submitting a binding offer for the DEPA Infrastructure sale.

Italgas is Italy’s biggest natural gas distributor, holding a 34 percent market share, and also ranks as Europe’s third biggest network operator. Italgas operates 70,000 kilometers of networks serving over 1,800 municipalities.

Rival bidder EPH is a formidable energy group with vertically integrated investments in central Europe. It owns and utilizes assets in the Czech Republic, Slovakia, Germany, Italy, the UK, France, Hungary and Poland, covering a range of domains such as energy and heat production, natural gas transmission and storage, as well as distribution and supply of natural gas, heating and electricity.

DEPA Infrastructure controls gas distributors EDA Attiki and EDA THESS, both with 51 percent stakes, as well as DEDA.

DEPA Infrastructure buyer must also buy Eni 49% in EDA Thess

The winning bidder in a privatization offering gas company DEPA Infrastructure will be obligated to also purchase gas distributor EDA THESS’s 49 percent stake held by Italy’s Eni gas e Luce, wanting to sell, according to an agreement between the two sides, revealed by a European Commission post-bailout surveillance report, the 10th edition, on Greece.

DEPA Infrastructure, EDA THESS’s parent company, holds a 51 percent stake in the gas distributor covering the Thessaloniki and Thessaly areas, while Eni gas e Luce, holding 49 percent, wants to withdraw.

A total of six qualifiers through to the DEPA Infrastructure privatization’s final round have been informed of the condition requiring the eventual DEPA Infrastructure buyer to also purchase Eni gas e Luce’s 49 percent stake in EDA THESS.

Investors have also been informed on, and agreed to, a formula to be applied to evaluate the additional sum that will be required by the DEPA Infrastructure buyer for the 49 percent stake of EDA THESS.

The finalists face a July 15 deadline for binding bids in the DEPA Infrastructure privatization, according to the European Commission report.

Until then, the government has a series of pending issues to resolve, including legislative revisions to unify the asset bases of the DEPA Infrastructure subsidiaries EDA THESS, EDA Attiki, distributing in Athens, and DEDA, covering the rest of Greece.

These legislative revisions will be needed for both the sales of DEPA Infrastructure and Eni gas e Luce’s 49 percent stake in EDA THESS, sources informed.