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.

Legislative revisions to unblock DEPA Infrastructure sale

The energy ministry is planning to soon submit to Parliament legislative revisions designed to resolve pending issues that have held back the final stage of a privatization concerning gas company DEPA Infrastructure, sources have informed. The ministry will aim for the submission of binding offers by July.

Issues that have held back the sale, offering suitors 100 percent of DEPA Infrastructure, include a pending unification of the asset base of DEPA Infrastructure’s trio of EDA gas distribution subsidiaries and the establishment of a sale procedure for Eni Gas e Luce’s 49 percent stake in EDA THESS.

DEPA Infrastructure, EDA THESS’s parent company, holds a 51 percent stake in the gas distributor covering the Thessaloniki and Thessaly areas, while Italy’s Eni gas e Luce, maintaining the management rights with its 49 percent share in the gas distributor, wants to sell its stake.

Eni gas e Luce’s involvement in distribution has remained secondary to retail energy, the company’s primary focus, on an international scale.

The ministry’s anticipated legislative revisions promise to unify the asset bases of EDA Attiki, distributing to the wider Athens area, EDA THESS (Thessaly and Thessaloniki), as well as DEDA, covering the rest of Greece.

This asset base unification concerning the three distributors will lessen DEDA’s cost burden resulting from its network expansion projects as small distribution surcharge hikes by the two other EDA companies will hasten DEDA’s recovery of investment costs.

EP INVESTMENT ADVISORS; FIRST STATE INVESTMENTS (European Diversified Infrastructure Fund II); ITALGAS SpA; KKR (KKR Global Infrastructure Investors III L.P.); MACQUARIE (MEIF 6 DI HOLDINGS); and a consortium comprising SINO-CEE FUND & SHANGHAI DAZHONG PUBLIC UTILITIES (GROUP) Co., Ltd are the qualifiers through to the final round of the DEPA Infrastructure privatization.

RAE incentives-based plan for IPTO as part of new policy for operators

RAE, the Regulatory Authority for Energy, is set to forward a package of incentives for power grid operator IPTO designed to influence the operator’s annual earnings when specific objectives are achieved or missed.

This move by the authority comes as part of its wider effort offering incentives to electricity and gas market operators.

RAE, at its latest board meeting, approved a first set of incentives proposed for IPTO by an external consultant, energypress sources have informed. This set of incentives is expected to be forwarded to IPTO within the next few days for observations and comments.

The regulatory authority is aiming to forward the package of IPTO incentives for public consultation towards the end of this month, before it is endorsed by the board and published in the government gazette by the end of June, and implemented six months later.

The authority is essentially aiming for the package to be implemented by January 1, 2022, as part of a new framework covering 2022 to 2025.

The same external consultant was hired for a similar-minded set of incentives concerning the electricity distribution network operator DEDDIE/HEDNO.

RAE’s chief executive Thanassis Dagoumas recently told a news conference that the authority intends to adopt an incentives-based strategy for all operators with the aim of improving their services.

The authority will intensify its monitoring of operator projects in development and ultimately hand out bonuses or penalties, depending on the degree of progress, he noted.

For the time being, the incentives-based strategy applies for DEDDIE/HEDNO, as well as the gas distribution operators (DEDA, EDA Attiki, EDA THESS), offering extra WACC for the achievement of objectives concerning gas market penetration and distribution cost reduction for consumers.

 

RAE to intensify its operator monitoring, starting with gas

RAE, the Regulatory Authority for Energy, is gearing up to intensify its monitoring of the Greek energy market’s gas and electricity operators with the aim of minimizing operator surcharges for consumers and helping improve operator services, the authority’s chief executive, Thanassis Dagoumas, has told a news conference, reiterating the intention, also stressed during a recent presentation of its annual report.

The regulatory authority’s plan includes commissioning certified auditors to inspect the financial data of market operators.

Gas grid operator DESFA, gas distributors EDA Attiki, EDA THESS and DEDA, as well as the power grid operator IPTO and electricity distribution network operator DEDDIE can, as a result, expected closer inspections.

The authority intends to commence its intensified monitoring effort with the natural gas sector, where numerous new projects are planned for development, in an effort to ensure fair surcharge costs for consumers.

Dagoumas, at the news conference, reiterated that the operators, whose revenues are regulated, cannot enjoy wider profit margins than other market players.

Operators will be offered incentives for swifter completion of projects, which, combined with the stricter monitoring effort, will result in either bonuses or penalties, depending on the degree of progress made, the RAE chief highlighted once again.

RAE intends to introduce incentive-based policies, standard practice around Europe, for all energy market operators active in transmission and distribution.

 

Guaranteed revenues for operators ‘must not breed complacency’

Operators must not become complacent as a result of their guaranteed revenues but, instead, strive to keep improving their services, RAE (Regulatory Authority for Energy) chief executive Thanassis Dagoumas has stressed.

High yields secured by electricity and gas market operators active in Greece’s transmission and distribution networks are breeding complacency and prompting these companies to skip crucial investments needed for upgraded consumer services, the RAE chief has suggested.

The regulatory frameworks these operators are subject to, offering natural monopolies, result in considerable advantages compared to other sectors of the economy, Dagoumas noted.

It must be widely accepted, as a matter of principle, that perpetually high profit margins resulting from activities free of competition, without improved services in return, is not reasonable, the RAE chief noted.

Fair competition is a fundamental component of the EU itself, Dagoumas pointed out.

RAE plans to implement incentives for all operators, not just the electricity distribution network operator DEDDIE/HEDNO, and the gas distributors DEDA, EDA Attiki and EDA THESS, as is the case at present, Dagoumas disclosed.

DEDA, EDA Attiki and EDA THESS have been offered extra WACC returns for meeting gas penetration objectives and reducing overall distribution costs for consumers.

Tenders for west Greece gas networks expected next month

Gas distributor DEDA is preparing to launch tenders next month for the construction of distribution networks covering the provincial cities of Patras, Pyrgos and Agrinio, all in the country’s west.

Approval of a technical bulletin by regional authorities in western Greece is now all that remains pending before these tenders can be launched.

Development of the distribution networks for all three cities is scheduled to commence in September or October.

Projects in Greece’s western region are co-funded by the EU’s National Strategic Reference Fund (NSRF) for 2014 to 2020, meaning the aforementioned networks will need to be completed by December, 2023, when this funding program expires.

These networks, promising to introduce natural gas to western Greece, are planned to cover a distance of 208 kilometers. The network in the wider Patras area will consist of a 120-km network, 72 km will concern Agrinio, while the Pyrgos system will total 16 km.

Once launched, at least 10,300 households, 560 businesses and 23 industrial consumers are forecast to connect with the three networks within a five-year period.

The majority of these consumers are in Patras, Greece’s third most populous city, expected to number at least 6,670 households, 218 businesses and 20 industrial consumers by 2025.

Households in western Greece are seen reaching gas consumption levels of 73,940 MWh, businesses are forecast to consume 36,307 MWh and industrial consumers 111,757 MWh.

DEDA, Hengas vying for Peloponnese network projects

A decision by RAE, the Regulatory Authority for Energy, to approve gas distributor DEDA’s development plan covering 2021 to 2025 further complicates matters for gas network development projects in four provincial cities of the Peloponnese as two companies are now vying for the same projects.

Hengas, a successor to the firm Edil seeking to develop and operate the gas networks of the same four cities, Argos, Nafplio, Sparti and Kalamata, has applied for a gas distribution license covering these locations.

RAE, which reached its decision to approve gas distributor DEDA’s development plan covering 2021 to 2025 on December 17, published the decision yesterday, noting requirements have been met for a re-inclusion of the four cities in DEDA’s development plan. This re-inclusion could restore DEDA’s rights for the four cities, according to the authority.

The authority had removed the entire Peloponnese region from DEDA’s five-year development plan a year earlier as related time limits were exceeded.

Following this removal, RAE approved distribution license applications submitted by Hengas for two other cities of the Peloponnese, Korinthos and Tripoli, both previously represented by DEDA.

RAE must now decide on how it will grant gas distribution licenses for the four cities in question.

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.

DEPA Commercial, Infrastructure sales delayed, new June bids deadline seen

The privatization schedule for gas utility DEPA’s two offshoots, DEPA Commercial and DEPA Infrastructure, appears headed for further delay as a result of four main issues holding back procedures, sources closely monitoring these sales have informed.

The privatization fund TAIPED had initially planned to accept financial offers for DEPA Commercial and DEPA Infrastructure this month but has since unofficially extended these offer deadlines to April. Further revisions cannot be ruled out, the most likely outcome being a deferral of these deadlines to the end of June.

As for the DEPA Commercial sale, lockdown restrictions have made it difficult for potential buyers to visit the company facilities for on-the-spot technical and financial appraisals as well as clarification on vague points. This has delayed the accumulation of information needed by possible buyers for a complete picture on the gas company’s financial standing.

In addition, an ongoing legal battle between DEPA Commercial and ELFE (Hellenic Fertilizers and Chemicals) has also unsettled potential buyers. According to sources, investors are demanding protection in the form of guarantees should any court verdict require DEPA Commercial to compensate ELFE over a gas-pricing dispute.

Two issues are also obstructing the DEPA Infrastructure sale. Firstly, Italy’s Eni, currently holding a 49 percent stake in EDA THESS, a DEPA Infrastructure subsidiary distributing to the Thessaloniki and Thessaly areas, wants to sell its stake. As a result, two options are being examined. One entails DEPA Infrastructure buying Eni’s 49 percent stake in EDA THESS. The other involves incorporating EDA THESS into the DEPA Infrastructure sale.

The other concern holding back proceedings for the DEPA Infrastructure sale has to do with pending appraisals, by the possible buyers, of new distribution network development plans prepared by the gas company’s three distribution subsidiaries, which, besides EDA THESS, include EDA Attiki, covering Athens, and DEDA, covering the rest of Greece. Suitors may require as much as two months to complete their respective appraisals.

DEDA appeals Peloponnese gas network plan exclusion

Gas distributor DEDA’s effort for a reversal of decision removing the Peloponnese from the company’s gas network development plan has been rejected by RAE, the Regulatory Authority for Energy.

In response, DEDA, a subsidiary of gas utility DEPA distributing to areas in Greece not covered by the group’s other distributors, has already taken its case to an appeals court.

RAE has granted gas distribution licenses for three Peloponnesian cities, Tripoli, Korinthos and Megalopoli, to Hengas, a successor of the firm Edil.

The Peloponnese was excluded by RAE from DEDA’s five-year network development plan covering 2020 to 2024 as time limits were exceeded, according to the authority.

RAE, however, has approved DEDA’s five-year development plan for 2021 to 2025, outlining the distributor’s development plan for natural gas networks in 34 provincial cities around Greece, Europe’s biggest gas network plan at present.

Networks representing a total length of 1,860 km and budgeted at 270 million euros are planned to be developed by DEDA, prospectively offering over 68,000 connections for consumers in the household, business and industrial sectors.

Distributor DEDA wants swifter delivery of operator projects

Gas distributor DEDA, covering all areas around Greece except for wider Athens, Thessaloniki and Thessaly, wants gas grid operator DESFA to complete key grid projects six months sooner so that the distributor may proceed with tenders for distribution network expansion projects.

DESFA needs to construct metering/regulating stations in Livadia, central Greece, as well as the Kastoria and Kozani regions in northern Greece.

DEDA called for a swifter delivery of these stations in public consultation staged for DESFA’s ten-year development plan covering 2021 to 2030.

DESFA plans to complete work on the Livadia metering/regulating station in March, 2022. However, DEDA has requested the station’s completion six months earlier, explaining it will not be able to distribute to consumers in the area until the station’s construction has been completed.

DEDA also called for the Kastoria and Kozani stations to be complete six months earlier, citing the same reasons.

In addition, DEDA requested the development of a natural gas compressor station close to the areas of Karpenisi, central Greece, and Amfissa, slightly southeast, to facilitate CNG supply to these regions.

DEDA gas network expansion plan for northern Greece areas approved

A revised five-year plan by gas distributor DEDA, now also incorporating northern Greece’s provinces of Ptolemaida, Kozani and Amynteo into the company’s network expansion plan, has been approved by RAE, the Regulatory Authority for Energy.

The three areas were included in DEDA’s original plan but later withdrawn as a result of company decisions on telethermal planning.

The new networks, all medium-pressure systems, will be expanded at towns within the three provinces and their industrial zones but not in the capital cities of Ptolemaida, Kozani and Amynteo, where telethermal systems will operate.

DEDA, now under the wings of DEPA Infrastructure, a new entity formed by gas utility DEPA ahead of its privatization, covers areas not served by EDA Attiki (wider Athens) and EDA Thess (Thessaloniki and Thessaly).

Meanwhile, gas grid operator DESFA’s ten-year development plan covering 2021 to 2030 envisages the construction of a metering and regulating (M&R) station in the Eordaia municipality’s Perdikkas area to secure its access to natural gas and telethermal systems.

Solid bidder turnout for DEDA east Macedonia, Thrace gas network tenders

Five construction companies and one consortium have taken part in the first two tenders staged by gas distributor DEDA for the development of gas distribution networks in Xanthi/Drama and Alexandroupoli/Komotini, respectively, in Greece’s north and northeast.

Key Greek construction firms such as Aktor, Avax and Intracom were among the bidders, sources informed. Newcomers and older companies also took part in the tenders, totaling 33.4 million euros, including Edil Hellas, Ergo ATE and Vermion ATEE-Sourla Bros ATEBE.

The level of participation on the two tenders was described as satisfactory by DEDA’s managing director Marios Tsakas and a vote of confidence for the gas company’s ambitious plans to broaden the coverage of networks in provincial Greece.

DEDA covers all parts of Greece not represented by fellow DEPA Infrastructure subsidiaries EDA Attiki, covering the wider Athens area, and EDA THES, covering Thessaloniki and Thessaly.

Project contracts with winning bidders could be signed by the end of the year so that construction work of the new networks can begin early in 2021 in all four provincial cities, sources said.

Avax, Aktor, Ergo ATE, Edil Hellas, Vermion ATEE-Sourla Bros ATEBE and Intracom took part in the DEDA tender for the development of gas networks in the Xanthi and Drama areas, budgeted at 17.1 million euros.

Avax, Aktor, Ergo ATE, Edil Hellas and Intracom also took part in the Alexandroupoli/Komotini tender, budgeted at 16.3 million euros.

The two regional projects are being funded by own funds, loans and business development funds for the east Macedonia and Thrace regions.

Gas distribution networks totaling at least 200 kilometers for 4,066 connections concerning all gas consumer categories by 2024 are planned for the Xanthi and Drama areas.

As for the Alexandroupoli and Komotini areas, the DEDA plan entails construction of gas distribution networks totaling 170 kilometers for at least 5,279 connections by 2024.

DEDA plans to launch new tenders next month for construction of gas networks in Orestiada and Kavala, northern Greece, sources said.

Overall, the new gas distribution networks planned by DEDA in the six provincial cities are budgeted at 56.6 million euros, plus 24% VAT, and will provide a total of 496,000 kilometers of mid and low-pressure gas supply lines for at least 15,000 consumer connections of all categories.

DEDA is also planning tenders next month for gas network projects in central Greece and the central Macedonia region.

RAE set to permit gas link fee discounts after initial hesitation

Following initial hesitation, RAE, the Regulatory Authority for Energy, appears set to permit distribution network connection fee discounts offered by natural gas distributors to attract new customer. But this approval will only apply to areas where gas market penetration levels remain low.

RAE has hesitated to approve such discounts offered by gas utility DEPA’s subsidiaries EDA Attiki, EDA Thess and DEDA – the three gas distributors covering the wider Athens area, Thessaloniki-Thessaly and rest of Greece, respectively – fearing the special offers could be regarded as a form of state aid by the European Commission’s competition officials.

However, DEPA Infrastructure, a new DEPA entity now controlling these three gas distribution subsidiaries, recently warned that RAE’s delays are undermining its privatization procedure. This warning was highlighted in a letter to the authority that was also shared with privatization fund TAIPED and the energy ministry.

RAE’s delay in endorsing EDA tariffs for 2019 to 2022 has consequently also placed the gas company’s development plan in turmoil, DEPA Infrastructure pointed out in the letter.

RAE has overcome its concerns and is now preparing to endorse the tariffs. The authority will also permit connection fee discounts in areas where natural gas market penetration levels do not exceed 25 percent.

In areas where natural gas market penetration levels are exceeded but not greater than 75 percent, RAE will permit connection fee discounts of up to 90 percent in 2022, 80 percent in 2023, 70 percent in 2024 and 60 percent in 2025.

The authority will not endorse any connection fee discounts for municipalities where natural gas market penetration levels exceed 75 percent.

 

RAE issues undermining DEPA Infrastructure privatization

Delays, instability and flawed intervention by RAE, the Regulatory Authority for Energy, on important operating issues concerning gas utility DEPA’s subsidiaries EDA Attiki, EDA Thess and DEDA – the three distributors covering the wider Athens area, Thessaloniki-Thessaly and rest of Greece, respectively – are undermining the privatization procedure for DEPA Infrastructure, a new DEPA entity placed for sale, DEPA Infrastructure has warned in a letter to the authority.

In the letter, also forwarded to privatization fund TAIPED and the energy ministry, DEPA Infrastructure complains of a RAE delay in endorsing EDA tariffs for 2019 to 2022, which has consequently placed the gas company’s development plan in turmoil.

Besides not having reached a decision on gas distribution pricing policy, the authority has changed the WACC level three times since last year, including recently, which has negatively impacted the yields of DEPA subsidiary investments, sources noted.

Also, RAE regards initiatives taken by the three gas distributors to attract more consumers to the natural gas market as a form of state aid, DEPA Infrastructure protests in the letter, referring to distribution network connection fee discounts offered by the distributors, as well as subsidy support for natural gas system installations.

Any moves to curb these initiatives promoting gas usage would derail the natural gas sector’s energy-mix penetration target for 2030, as specified in the National Energy and Climate Plan, DEPA Infrastructure contends.

These unfavorable conditions threaten to delay the DEPA Infrastructure privatization, company sources stressed.

The sale procedure’s video data room is still lacking vital information for prospective bidders, who could begin seeing the DEPA Infrastructure privatization as a high-risk investment, the sources noted, adding that WACC level reductions will ultimately reduce the market value of DEPA Infrastructure and the subsidiaries.

Clearer framework needed for new gas distribution networks

RAE, the Regulatory Authority for Energy, has identified the need for clear-cut, objective terms, based on technocratic criteria, for an improved strategy to help take natural gas to regions around the country without distribution network access at present.

Approval procedures for development plans submitted by gas distribution companies are currently in progress, and, in addition, the distribution sector is being restructured.

The energy ministry has made clear it wants a consistent and modern framework to facilitate the development of new distribution networks in as many parts of Greece as possible, a government objective.

Gas sector conditions also need to be made as clear as possible ahead of the privatization of DEPA Infrastructure, owning gas distributor EDA Attiki, servicing the wider Athens area; 51 percent of EDA Thess, covering the Thessaloniki area; and DEDA, distributing to all other regions not serviced by the two aforementioned firms.

RAE is now preparing a new framework concerning the appraisal and approval of development plans by gas distribution companies, as well as a formula for their earnings.

 

 

 

DEDA tenders for gas networks in east Macedonia, Thrace

Gas distributor DEDA, representing areas in Greece beyond Athens, Thessaloniki and Thessaly, is expected to launch tenders over the next few days for pipeline infrastructure construction in northeastern Greece’s east Macedonia and Thrace region, totaling 484.6 kilometers, by 2022.

This upcoming round of tenders, for network projects budgeted at over 51 million euros in east Macedonia and Thrace, will focus on the provincial cities Alexandroupoli, Komotini, Drama, Xanthi, Orestiada and Kavala.

DEDA’s chief executive Marios Tsokas is likely to visit Greece’s east Macedonia and Thrace region during the week.

Some 12,500 households, 2,300 businesses and 34 industrial consumers are expected to be connected to the east Macedonia and Thrace region’s resulting gas distribution network.

Additional tenders are planned in September for networks in the central Macedonia and central Greece regions, as part of DEDA’s wider plan for a network totaling 1,830 kilometers in 34 provincial cities by 2024, included in the gas distributor’s five-year plan.

DEDA plans to open retail outlets in areas where networks will be developed.

DEDA set to launch tenders for gas networks in north, central Greece

Gas distributor DEDA, covering all areas around Greece other than wider Athens, Thessaloniki and Thessaly, is set to launch three separate tenders for the construction of natural gas distribution networks servicing east Macedonia and Thrace in the northeast, central Macedonia, in the north, as well as central Greece.

DEDA is discussing final details with regional authorities before its launches the tenders, expected within the next few days.

A consultation procedure staged in the lead up generated considerable feedback from construction and technical companies, engineers, as well as a range of technical associations.

Consultation was followed by meetings with interested parties for further exchange of ideas and to determine optimal ways to move forward with project details.

RAE’s WACC reduction for operators ultimately neutralized

A recent decision by RAE, the Regulatory Authority for Energy, reducing the WACC rate amid a fixed four-year period for energy market operators, as a result of the government’s corporate tax reduction from 29 to 24 percent, is ultimately expected to be neutralized as the authority has asked operators to submit updated data based on latest market conditions, including borrowing costs, all factors applied by the authority to its WACC formula.

Gas grid operator DESFA, power grid operator IPTO, as well as the country’s gas distributors EDA Attiki, EDA Thess and DEDA, initially reacted against RAE’s intention to reduce the WACC rate, determining earnings, within the preset four-year period. It is supposed to be adjusted every four years.

However, RAE’s latest call for updated data from operators and distributors, effectively promising to offset any WACC rate adjustment, has been well received.