desfa

RAAEY reaches decisions on WACC levels for IPTO, HEDNO

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Following months of deliberation, RAAEY, the Regulatory Authority for Waste, Energy and Water, has reached decisions on WACC levels for power grid operator IPTO and distribution network operator DEDDIE/HEDNO, setting the former’s at 7.51 percent, for 2023 to 2025, and the latter’s at 7.66 percent for 2023 and 2024, energypress sources have confirmed.

Based on these decisions, IPTO’s average WACC level for the four-year regulatory period, covering 2024 to 2027, works out to 7.16 percent, while the four-year regulatory period average for DEDDIE/HEDNO is 7.11 percent.

The discrepancy in 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.

IPTO initially sought a higher WACC rate, pushing for its cause from as far back as last year, citing unfavorable changes in the economic environment, including inflation and interest rate increases.

Just recently, RAAEY set a WACC rate of 7.85 percent for gas grid operator DESFA, covering the entire four-year regulatory period (2024-2027), and an 8.57 percent WACC rate for DEPA Infrastructure, limited to 2023.

DESFA tender for gas pipeline to North Macedonia imminent

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Greek gas grid operator DESFA is set to announce a tender offering an EPC contract for a natural gas pipeline linking Greece and North Macedonia within the next few days, no later than the end of this month, energypress sources have informed.

DESFA aims to complete the tender by the end of September so that it may reach a final investment decision before the year is out, the sources noted.

In addition, the operator plans for work on the project to begin mid-way through next year and be completed in the second half of 2025, the sources added.

Corinth Pipeworks has been appointed provisional contractor for the project’s pipes. A tender for their procurement was held in May.

The gas pipeline will cover a total distance of 125 kilometers. Its Greek segment will stretch 57 kilometers, beginning from Nea Mesimvria in the country’s north, while the North Macedonian segment’s 68 kilometers will reach Negotino.

DESFA has also taken on the project management role for the pipeline’s North Macedonian segment, after emerging victorious from a tender staged by the neighboring country’s state-run NOMA Gas company.

DESFA decision on CO2 capture and transport project in 2024

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Gas grid operator DESFA expects to have completed its feasibility study for Prinos CO2, a carbon capture, transport and storage synergy with Energean by autumn ahead of an investment decision within 2024, followed by possible development of the project, energypress sources have informed.

Prinos CO2 has successfully passed a technical assessment for inclusion on the European Commission’s sixth PCI list, making the project eligible for inclusion on a preliminary list that is expected to be finalized in November.

The project is budgeted at 1.4 billion euros. DESFA’s share of the budget total is estimated at 500 million euros.

Irrespective of the possible synergy between DESFA and Energean for a single project concerning the capture, transport and storage of CO2 quantities, DESFA is also considering developing its share of the project at infrastructure other than Prinos, if Prinos CO2 does not proceed.

DESFA aspires to develop an entire CO2 transport chain to collect pollutants from the facilities of polluters and, through its own infrastructure, transport these quantities into storage.

This system is planned to cover Viotia, northwest of Athens, the wider Athens area, as well as Corinth, west of the capital. These areas host cement industries, refineries and power plants.

Greek gas hub potential now realistic, DESFA actions show

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Greece, for the first time, has shown true potential to soon establish itself as a regional gas hub and gateway for southeast Europe, judging by the results of gas grid operator DESFA’s recent auctions offering grid capacity reservations, as well as the operator’s non-binding market test for a prospective expansion of the country’s gas transmission network.

DESFA has prepared an extensive ten-year development plan that is fully aligned with the new market conditions taking shape, as well as with the company’s efforts to achieve energy-transition objectives, the operator’s administration has underlined at a news conference.

Greek gas exports increased by 15.09 percent in the first half of 2023, compared to the equivalent period last year, according to DESFA data presented at the news conference.

Also, DESFA’s non-binding market test for a prospective expansion of the country’s gas transmission network drew the participation of 27 companies, 17 of these from abroad, primarily central and southeast Europe, such as Bulgaria, Romania, Austria, Hungary, Slovakia, Germany, Cyprus, North Macedonia, as well as the USA.

Forty percent of the market test’s participants have never before been active in Greece’s natural gas market, DESFA announced.

Participants expressed interest for all the country’s gas grid entry points (Sidirokastro, Nea Mesimvria, Kipoi and Agia Triada), as well as for connections to Greece’s prospective FSRUs (Gastrade, Argo, Dioryga Gas, Elpedison).

Highlighting the Greek natural gas market’s export orientation, exports to Bulgaria totaled approximately 2.4 bcm in 2022, roughly half of Greece’s annual gas consumption last year, 4.9 bcm.

Ministry approves compressor station additions for TAP boost

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The energy ministry has approved a compressor station upgrade plan for Kipoi, northeastern Greece as part of a plan to boost the capacity of the TAP gas pipeline, facilitating the delivery of Caspian gas to destinations throughout southeastern, central and western Europe.

Trans Adriatic Pipeline AG, the TAP pipeline operator, has been granted a five-year license to expand the Kipoi compressor station facility through the installation of three new compressor stations, which will enable simultaneous operation of five gas compressors, with a sixth unit on standby.

The compressor station upgrade promises to offer an overall capacity of 90 MW, comprised of six 15-MW units.

Meanwhile, just days ago, gas grid operator DESFA launched a non-binding market test for the TAP gas pipeline’s increased capacity plan. Interested parties face an August 28 deadline to submit bids.

Major grid capacity reservation interest expressed at DESFA auctions

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Gas grid operator DESFA’s auctions offering grid capacity reservations, held last week, have confirmed an increase in interest from Greek and foreign companies, energypress sources have informed.

Capacity reservations for the Greek gas grid’s Sidirokastro exit point and Nea Mesimvria entry point – both are in the north – reached 98.5 percent and 100 percent, respectively.

The Nea Mesimvria entry point, it should be noted, is the interconnection point linking the country’s gas grid with the TAP pipeline for import of Azeri natural gas.

An auction is still in progress for the Greek grid’s Amfitriti entry point, in the northeast. Five rounds of auctions are being held daily, in accordance with EU rules. This ongoing procedure, sources noted, comes as confirmation of the heightened interest of users for this specific entry point.

The Amfitriti entry point is planned to receive natural gas from the prospective Alexandroupoli FSRU for transmission into the Greek grid before gas quantities are redirected north of the border, via the Greek-Bulgarian IGB pipeline.

Participants at DESFA’s auctions last week showed minimal interest for long-term grid capacity reservations. DESFA launched 15-year offers at these auctions. Most system users focused on agreements for the next gas year, covering October 1, 2023 to September 29, 2024.

New minister outlines sector issues ahead of policy speech

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The reelected conservative New Democracy party government’s newly appointed energy minister Theodoros Skylakakis has, in recent days, been preparing a list of energy market problems and pending matters, with emphasis on major issues, such as new tariffs, RES production cuts – needed during periods of low demand to avoid grid overloading – as well as development plans for offshore wind farms and hydrocarbon exploration, ahead of his parliamentary speech in Parliament tomorrow, when key policies by the new government will be outlined by Prime Minister Kyriakos Mitsotakis and his associates.

In the lead-up, Skylakakis has held meetings with top officials representing key market players such as RAAEY, the Regulatory Authority for Waste, Energy and Water; power utility PPC; power grid operator IPTO; distribution network operator DEDDIE/HEDNO; gas grid operator DESFA; RES market operator DAPEEP; and EDEYEP, the Hellenic Hydrocarbons and Energy Resources Management Company, to discuss and take note of energy-sector problems and pending issues ahead of tomorrow’s speech in parliament.

The energy minister has also noted views expressed by RES sector officials on the new National Energy and Climate Plan. According to sources, Skylakakis’ predecessor, Pantelis Kapros – who served a short stint as energy minister in the caretaker government that held office between two rounds of voting, in May and June – has passed on a RES mix plan entailing a 60-40 share between wind and solar energy units, respectively.

Also, the new energy minister prefers to stick to a schedule that would terminate energy-crisis support measures at the end of September, rather than offer extensions, sources added.

 

Italy gas storage injections of no use, DESFA auctions show

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Gas grid users have fully reserved the capacity offered at the country’s Nea Mesimvria entry point in the north after expressing great interest in gas grid operator DESFA’s annual auctions, staged on July 2 and requiring over 24 hours to be completed as a result of the big turnout.

The capacity reservation level at the gas grid’s Nea Mesimvria entry and exit point is crucial for gauging, with clarity, natural gas amounts Greece should store away at Italian storage facilities ahead of next winter as, in the event of disruptions to Greece’s gas import schedule, the stored quantities could only be used if free capacity exists at the aforementioned entry point.

Last year, Greece had resorted to an uncommitted capacity at the Nea Mesimvria entry point in its negotiations with the European Commission for a gas-storage rule exception. It enables EU member states with a shortage of gas storage facilities, such as Greece, to keep storage requirements at 15 percent of the average consumption level over the past five years.

Uncommitted capacity at the Nea Mesimvria entry point last year worked out to 7,522 MWh per day, which resulted in a viable gas storage total in Italy of 1.14 TWh, from the start of November until the end of March.

This year, given the country’s fully reserved capacity at Nea Mesimvria, the prospect of storing gas in Italy would offer Greece no help in meeting domestic needs in the event of disruptions to the country’s gas supply.

Motor Oil: DESFA formula for tariffs should be maintained

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Motor Oil and Edison, offering views as well as objections for gas grid operator DESFA’s allowed revenue and tariff formulas for 2024 in consultation staged by RAAEY, the Regulatory Authority for Waste, Energy and Water, have both stressed support for an existing CWD-type formula applied by the operator but oppose a proposed a stamp-duty formula for setting capacity charges.

Motor Oil noted that such a change would burden entry points in the national gas grid’s southern part and benefit the northern entry points.

Motor Oil also contended that DESFA should not maintain a floating LNG tank at its Revythoussa terminal just off Athens as this does not offer a permanent solution and unjustifiably burdens system users.

The energy group also stated that financial support is not needed exclusively for the Revythoussa terminal, as proved by the most recent annual auctions and their results.

Also, Motor Oil noted that DESFA’s ten-year development plan includes big budget increases of over 50 percent that are not justified by the extent of related price increases for materials. As such, Motor Oil believes greater transparency is needed.

 

DESFA gas auctions pivotal for winter’s storage requirements

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Gas grid operator DESFA’s annual gas auctions, taking place today to offer capacities at the grid’s entry and exit points, will play a pivotal role in clarifying and determining to what extent Greece could reduce gas quantities that will need to be stored away at Italian and Bulgarian facilities between November and March for energy security next winter.

The outcome of the auctions will shape Greece’s negotiating position in talks with the European Commission for the country’s gas storage needs.

If the vacant grid capacity left over from today’s auction process is small, then Greece will seek a smaller gas-storage requirement from Brussels authorities.

Greece’s gas storage requirement last winter was limited to 1.14 TWh, based on the country’s vacant capacity at the Nea Mesimvria grid entry point, in the north.

An exception offered by the European Commission to EU member states with a shortage of gas storage facilities, such as Greece, enables storage requirements to be kept at 15 percent of the average consumption level over the past five years.

 

RAAEY decides on WACC levels for DESFA, DEPA Infrastructure

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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.

‘South Kavala’ UGS fails to make PCI shortlist as hydrogen facility

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TAIPED, Greece’s privatization fund, has failed to have reinstated, on the EU’s project-supporting PCI list, “South Kavala”, an almost depleted natural gas field in the Aegean Sea’s north planned to be transformed into an underground natural gas storage facility (UGS) equipped, with additional features, as a hydrogen storage unit.

The “South Kavala” UGS failed to make a shortlist of hydrogen-related projects to be considered for inclusion on an updated 6th edition of the PCI list.

According to sources, all projects that had not been originally designed for hydrogen-related purposes were disqualified from the PCI shortlist.

The “South Kavala” UGS project’s original plan envisioned its development as a natural gas storage facility before local authorities decided to revise the plan so that the unit could be equipped to also store hydrogen.

The project’s PCI-list exclusion means that gas grid operator DESFA’s bid for inclusion, onto the same list, of a connecting 540-km hydrogen pipeline will also prove fruitless. This pipeline was planned to run from Nea Mesimvria, west of Thessaloniki, to the “South Kavala” UGS.

 

Temporary solution for DESFA tariffs, new WACC level still not set

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Gas grid operator DESFA’s WACC figure for the next regulatory period, covering 2024 to 2027, remains undetermined, while, furthermore, a final decision by the operator on its tariffs for this four-year period will be subject to two outstanding issues, DESFA’s operating expenses and the socialization cost-coverage percentage at its Revythoussa LNG terminal.

RAAEY, the Regulatory Authority for Waste, Energy and Water, has requested additional information from DESFA concerning its operating expenses for the next regulatory period in order to calculate the operator’s allowed revenue.

As for the socialization rate at DESFA’s Revythoussa LNG terminal, RAAEY has proposed keeping it unchanged at 50 percent for the 2024-2027 regulatory period.

Based on EU terms, DESFA’s tariffs ought to have been set by June 5, ahead of international tenders, on July 3, to offer capacities at three gas grid interconnections.

Consequently, in order to meet this deadline, DESFA has set provisional tariffs based on the WACC level it has proposed, 9.14 percent.

These tariffs have been uploaded onto the platform for national grid users so that they can have a rough idea on network usage fees when preparing bids for capacity reservations.

RAAEY, DESFA still far apart on 2024-2027 WACC agreement

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RAAEY, the Regulatory Authority for Waste, Energy and Water, and gas grid operator DESFA still need to bridge a wide gap for an agreement on the latter’s WACC figure for the next four-year regulatory period covering 2024 to 2027, energypress sources have informed.

As a result, a final decision by the operator on its gas network usage fees for the next regulatory period, which had been scheduled to be set by June 5, remains pending.

This deadline results from a European regulation on interconnection auctions. The delay will impact the procedure for capacity reservations by Greek and foreign players concerning the Greek transmission system’s gas entry and exit points.

Though the delay in determining tariffs is definitely an unfavorable development, the issue could be resolved by staging capacity reservation auctions with existing gas grid network usage levels, sources noted.

RAAEY has determined that DESFA’s proposed WACC figure for 2024 to 2027, at 9.14 percent, is unjustifiably high and above the corresponding figures of all other market operators. RAAEY has proposed a WACC figure of just over 7.44 percent, DESFA’s level at the end of 2022.

 

DESFA market test for network expansion draws 27 bidders

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The first round of a market test staged by gas grid operator DESFA for a prospective expansion of the country’s gas transmission network has attracted 27 non-binding bids, deemed, by the operator, as a satisfactory level of participation that includes high-profile players, energypress sources have informed.

The procedure’s participants include a wide range of major Greek and foreign players, from large-scale consumers to gas transit companies and traders who view the Greek system as a gateway for the transportation of gas to central Europe. A considerable number of companies operating in the Balkan market are among the DESFA market test’s first-round participants.

It remains to be seen if this high level of first-round interest will develop into binding second-round bids.

Initial bids will soon be assessed over a three-stage process, beginning with an evaluation of bid levels, followed by technical analysis, expected to take two months until mid-July, and, finally, tariff plan feasibility, based on infrastructure to be deemed as necessary by DESFA.

The market test’s second round of binding bids is expected to start around September and run until late spring in 2024, as originally scheduled by DESFA when it launched the procedure last March.

DESFA market test for network expansion offers positive signs

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A market test staged by gas grid operator DESFA for a prospective expansion of the country’s gas transmission network has delivered positive first signs, attracting, according to energypress sources, a satisfactory level of participants for its first round of non-binding bids.

The market test is being conducted with the aim of shaping a list of projects to cover existing and future needs of gas network users, as the system’s capacity at present is well below levels required by current demand.

The process will be used by DESFA to gauge the level of interest of international and domestic players for the development of projects facilitating greater gas transmission within and beyond Greece.

The first round of the market test ends tomorrow. Barring unexpected developments, an extension is not on the cards.

DESFA will then assess first-round bids submitted before launching a second round in September, a binding stage expected to last until the end of spring in 2024.

Market trends have indicated that, in the forthcoming years, the country’s gas transmission system will need to supply new residential areas (western Macedonia in the north as well as Greece’s west) and also serve new interconnections with neighboring countries (North Macedonia, Bulgaria and, via TAP, Albania and Italy.

DESFA, RAAEY apart on tariff agreement as deadline nears

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Gas grid operator DESFA and RAAEY, the Regulatory Authority for Waste, Energy and Water, still far apart on the operator’s WACC figure for the next regulatory period covering 2024 to 2027, are engaged in tough negotiations as a June 5 deadline for new tariffs approaches.

DESFA set a WACC figure of 9.14 percent in a proposal put through consultation in mid-March. It has been firmly opposed by RAEEY, believing this figure is unjustifiably high.

DESFA ended 2022 with a WACC figure of 7.44 percent, a starting point for RAEEY in its negotiations. The authority, viewing DESFA’s new WACC figure as pivotal as it will serve as a guide in the levels to be set for other operators, believes the operator’s new level should be a little over last year’s 7.44 percent level, and certainly under 8 percent.

The WACC level to be applied by DESFA over the next regulatory period from 2024 to 2027 is one of four aspects that need to be resolved before gas transmission network usage tariffs are set.

DESFA also needs to finalize its operational expenditure figure for the next regulatory period so that an allowed revenue for the operator may be set. The operator has yet to send this data to RAAEY and, consequently, appears likely to miss the June 5 deadline on this matter.

DESFA’s socialization percentage concerning the operating cost of its Revythoussa LNG terminal just off Athens is another unresolved matter. DESFA has proposed that it be maintained at the current level of 50 percent for the next regulatory period.

However, Gastrade and Motor Oil, both developing new floating LNG terminals in other parts of Greece, have protested, contending this figure is excessive and would offer DESFA’s Revythoussa facility an unfair advantage and undermine the financial viability of their investments. ACER, Europe’s Agency for the Cooperation of Energy Regulators, has backed the two companies on this issue.

DESFA’s ten-year development plan covering 2023 to 2032, a fourth prerequisite needed before its new gas transmission network usage tariffs are set, has already received RAAEY’s approval.

 

Gas-sector companies under pressure as a result of low demand

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Companies linked to the natural gas sector, from power producers to gas traders and suppliers, are expected to be seriously impacted by a decline in natural gas demand, down 15.29 percent in the first quarter compared to the equivalent period last year, according to data provided by DESFA, Greece’s gas grid operator.

Gas usage dropped off significantly in the first quarter, down 33.92 percent to 12.39 TWh, from 18.74 TWh in the equivalent period last year.

According to gas market experts, gas usage has been just as flat in the Balkans, not a good prospect for Greece’s gas exports.

This overall decline in gas trading activity, despite signs of some recovery ahead of the summer, is placing gas-linked companies under increasing financial pressure.

The current market conditions are particularly adverse for gas-focused enterprises such as DEPA Commercial, a gas wholesaler, exclusively, as opposed to companies with more diverse portfolios.

Gas consumption in the retail market – covering residential, professional small-scale industrial and industrial usage – had fallen by as much as 50 percent at the beginning of the year, according to market officials.

The mild winter, increased caution by consumers amid the energy crisis, as well as the switch, by many companies, from gas to lower-cost fuels such as diesel, all contributed to this sharp decline.

 

RAAEY, DESFA need to bridge gap for four-year WACC figure

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RAAEY, the Regulatory Authority for Waste, Energy and Water, has determined that gas grid operator DESFA’s intended WACC figure for 2024 to 2027, planned to be set at 9.14 percent, is unjustifiably high and above the corresponding figures of all other operators.

At this stage, RAAEY and DESFA have work to do to converge for an agreement on the operator’s WACC figure concerning the aforementioned four-year period. Even so, both sides are confident an agreement will be achieved.

RAAEY is expected to deliver decisions on DESFA’s WACC level, allowed revenue and tariffs for 2024 to 2027 within the first ten days of June.

DESFA has set itself an allowed revenue of 201 million euros for 2024, with slight rises over the ensuing three years, to 218 million euros in 2025, 233 million euros in 2026, and 247 million euros in 2027.

Meanwhile, a ministerial decision paving the way for the country’s three gas distribution network operators to replace conventional gas meters with smart meters is believed to be just days away.

DESFA assessing action needed for hydrogen-ready network

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Gas grid operator DESFA is conducting a technical study examining interventions that will be needed to the country’s grid so that it may facilitate hydrogen’s entry into the energy mix. The operator aims to have completed and submitted this study to RAAEY, the Regulatory Authority for Waste, Energy and Water, by the end of the year, energypress sources informed.

The operator’s study is planned to include the cost of all actions needed for a hydrogen-ready grid, a substantiated proposal specifying an optimal hydrogen proportion for the country’s gas network, as well as feasibility studies on the connection, to the network, of individual hydrogen-related pilot projects.

These studies, DESFA anticipates, will also get authorities working on a hydrogen-related regulatory framework, currently non-existent.

A committee established to prepare a national strategy for hydrogen completed its task and delivered its findings to the energy ministry in 2021.

However, revisions made to the National Energy and Climate Plan, resulting in more ambitious targets, may prompt the energy ministry to seek an updated national strategy on hydrogen.

DESFA has already prepared a study assessing the degree of hydrogen mixing with natural gas over two stages, as proportions of 5 and 10 percent, and what these proportions would entail in terms of investments needed, Panagiotis Panousos, Energy Transition Manager at DESFA, told the recent RENPOWER conference.

 

Energy exchange, DESFA considering broader platform, simpler trading

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The Greek energy exchange and gas grid operator DESFA are looking to expand the exchange’s number of trading participants by introducing registration process revisions that would make it easier to conduct transactions, energypress sources have been informed.

At present, the exchange hosts a total of 20 participants, while talks are in progress for the addition of a further nine companies, mostly from abroad.

DESFA and Greek energy exchange officials are seeking to determine whether it is possible for balancing market responsibilities to be covered by third parties rather than participating traders, themselves, a challenging task.

At the same time, the energy exchange is working on the prospect of introducing new products to the trading floor as a longer-term plan. Any new products that appear on the exchange’s trading platform would have to correspond to real market needs as, otherwise, they would not produce desired results and potentially affect the market as a whole.

For the time being, energy exchange officials have begun exploratory talks with market participants to accurately gauge their level of interest for new products.

Energy exchange officials are looking at beginning with shorter-term products, such as D+2, D+3, week-ahead, balance-of-month, and month-ahead products, before progressively moving on to longer-term products.

 

DESFA opts to not extend expiring FSU deal for LNG terminal

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Gas grid operator DESFA will not make use of an option to extend its expiring one-year lease agreement for an additional floating storage unit installed at the operator’s LNG terminal on the islet Revythoussa last summer as an energy security measure, the operator’s head official has informed.

“We have already agreed with RAE, the Regulatory Authority for Energy, that it [agreement] will not be renewed and the tanker will be released as it was a temporary solution that served the need to maintain strategic LNG stocks for power generators during the winter period,” Maria Rita Galli, CEO at DESFA, told Greek daily business newspaper Nafteboriki.

The current one-year FSU agreement, worth 20 million euros, expires in June. It ended up being a high-cost solution for DESFA as a result of the mild winter conditions as well as LNG quantity loss resulting from evaporation issues at the upper level of the FSU, a situation that could have been greatly restricted had a decision been reached to connect this unit to the Revythoussa terminal for direct transmission into the grid.

DESFA is believed to be examining the prospect of renting a new tanker for a shorter duration of five months, which would entail far lower cost, energypress sources have informed. If so, DESFA is expected to stage a tender within the upcoming summer for a new LNG tanker lease agreement.

Market officials anticipate the installation of a replacement LNG tanker will probably be needed to cover natural gas storage needs ahead of next winter.

The additional FSU currently in use increased the Revythoussa LNG terminal’s capacity by 70 percent, to approximately 370,000 cubic meters.

PCI listing sought for ‘South Kavala’ UGS after failed tender

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TAIPED, Greece’s privatization fund, is seeking to reignite investor interest in “South Kavala”, an almost depleted natural gas field in the Aegean Sea’s north, through inclusion in the European Commission’s project-supporting PCI list, as a prospective underground natural gas storage facility (UGS) that would now also be equipped to store hydrogen.

This move by TAIPED comes following a recently-expired tender’s failure to attract binding bids for the UGS’ development and operation over a 50-year period.

According to sources, the privatization fund submitted its PCI application to Brussels last week, in an effort to keep this UGS project alive. PCI listings promise financial support for EU projects of common interest.

TAIPED, through this latest initiative, aims to rekindle the interest of investors, especially domestic and international business groups moving to develop projects for production and transmission of hydrogen.

Industry experts believe a new “South Kavala” tender could be launched next year if the facility secures a PCI listing.

The just-ended tender, which failed to attract binding bids from two final-round qualifiers, Energean and a partnership that brought together gas grid operator DESFA and construction company GEK Terna, was launched in June, 2020 and expired last month, on March 31.

Unchanged 50% socialization rate for LNG terminal proposed

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Gas grid operator DESFA, in a proposal forwarded to RAE, the Regulatory Authority for Energy, has suggested that the socialization cost-coverage percentage at its Revythoussa LNG terminal remain unchanged at the present level of 50 percent over the next four-year regulatory period running from 2024 to 2027.

DESFA delivered its proposal after conducting a cost-benefit analysis whose results showed that the net benefit of the socialization of the Revythoussa LNG terminal just off Athens increases with the utilization of other LNG terminals in Greece.

A greater cost socialization rate for the Revythoussa LNG terminal helps further reduce wholesale gas prices in Greece as the price of LNG, which is the marginal fuel determining the marginal price, is reduced.

On a wider scale, this price reduction enables lower gas supply prices for the Greek market as well as neighboring markets.

DESFA, which last carried out a similar study in 2020, is required to do so every two years based on socialization cost rules for infrastructure set by ACER, Europe’s Agency for the Cooperation of Energy Regulators.

 

 

 

 

Dioryga Gas FSRU investment decision by Motor Oil in 3Q, clarity needed

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Energy group Motor Oil is expected to wait until the end of summer or early autumn before making an investment decision on the development of its Dioryga Gas FSRU project in Corinth, west of Athens, budgeted at approximately 340 million euros, sources have informed energypress.

Though a market test, staged recently by the petroleum group, proved successful, unclear factors still need to be considered before Motor Oil makes decisions, the sources noted.

Motor Oil requires further clarity on gas grid operator DESFA’s plans for an upgrade of a high-pressure gas pipeline segment from Patima to Livadia, mainland Greece.

During recent consultation on DESFA’s ten-year development plan covering 2023 to 2032, Motor Oil disagreed with this upgrade’s timing, scheduled by DESFA for October, 2027, pointing out the Dioryga Gas FSRU, if developed, is planned to be launched prior to this date, in May, 2025.

Doubled pipeline capacity at the Patima-Livadia segment, unjustifiably delayed, according to Motor Oil, will be needed by the company’s Dioryga Gas FSRU in Corinth.

Furthermore, Motor Oil has reacted against DESFA’s doubled cost, to 19.5 million euros, for the development of a related metering station required for the FSRU’s connection to the gas pipeline network. Motor Oil submitted a request, to the consultation procedure, for this part of the project to be taken on by Ellaktor – a construction company in which Motor Oil holds a stake – under the supervision of DESFA.

Last January, state authorities classified the Dioryga Gas FSRU project as an investment of strategic importance, status offering fast-track licensing.

IPCEI support sought by DESFA, Bulgartransgaz for hydrogen projects

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Greek gas grid operator DESFA and its Bulgarian counterpart Bulgartransgaz, which have strengthened ties in recent years, aim to secure development support for two common hydrogen-related projects via IPCEI (Import Projects of Common European Interest) status, which, if obtained, would pave the way for EU funds stemming from the Connecting Europe Facility (CEF).

One of the two projects concerns an upgrade of existing gas infrastructure belonging to the two operators so that – in the future, when the technology is ready – they may also transmit renewable gas, in other words, hydrogen made using renewable energy or biomethane produced from organic waste such as human or animal sewage or food.

The second of the two DESFA-Bulgartransgaz projects eyeing CEF funding support entails developing a brand new main system of pipelines, exclusively for renewable gas transmission, between Greece and Bulgaria.

This project would serve as a key decarbonization tool for the two countries, as well as the wider region, aiding climate-neutrality efforts by incorporating hydrogen into the energy mix.

New deadline extension likely for South Kavala UGS tender

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A tender being staged by privatization fund TAIPED for the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north, being offered for development and operation of a prospective underground natural gas storage facility (UGS) over a 50-year period, is in danger of ending without a result.

The tender expires tomorrow, following a four-month extension, but its final-round qualifiers do not appear likely to submit binding bids.

A fruitless tender for what is viewed as vital energy-sector infrastructure would blemish the government’s pre-election campaign, so a further deadline extension of a few months is possible for the procedure, launched in June, 2020.

If so, the tender’s two final-round qualifiers, Energean and a partnership bringing together gas grid operator DESFA and construction company GEK Terna, will have more time to evaluate the terms and conditions.

A 50 percent socialization rate set by RAE, the Regulatory Authority for Energy, concerning the project’s regulated tariffs has been deemed as unsatisfactory by the suitors and is the key factor subduing their interest.

 

Top energy sector officials taking part at Power & Gas Forum, March 22-23

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The government’s top-ranked energy sector officials as well as a host of other leading figures from political, institutional, academic and business domains will be talking part in the Power & Gas Forum on March 22 and 23 at the Wyndham Grand Athens Hotel, an event being staged by energypress for a fourth time. Conference speakers and attendees will participate in person.

Speakers at the event will include Greek energy minister Kostas Skrekas; the energy ministry’s secretary-general Alexandra Sdoukou; secretary-general of transport at the ministry of infrastructure and transport Ioannis Xifaras; RAE (Regulatory Authority for Energy) president Athanasios Dagoumas; EFET’s (European Federation of Energy Traders) Jerome Le Page; Tomás Llobet of European Energy Retailers (EER); two former Greek energy ministers, Giannis Maniatis and Giorgos Stathakis; Sokratis Famellos, a member of the main opposition leftist Syriza party; and Haris Doukas of the PASOK-KINAL socialist party.

Other conference participants will include power grid operator IPTO’s chief executive officer Manos Manousakis and his deputy Giannis Margaris; gas grid operator DESFA’s chief executive Maria Rita Galli; RES market operator DAPEEP’s president and CEO Giannis Giarentis; distribution network operator DEDDIE/HEDNO’s chief executive Anastasios Manos; EDEYEP (Hellenic Hydrocarbons and Energy Resources Management Company) president Aristofanis Stefatos; the Hellenic Energy Exchange’s newly appointed CEO Alexandros Papageorgiou; EDA THESS general manager and EDA ATTIKI CEO Leonidas Bakouras; the Greek prime minister’s special adviser for energy Nikos Tsafos; energy ministry adviser Theodoros Tsakiris; and energy markets guru Alex Papalexopoulos.

The academic community will be represented by professors Pantelis Kapros, Stavros Papathanasiou, Pantelis Biskas, Nikolaos Hatziargyriou and Antonis Metaxas.

As always, energy-sector authorities will also participate at the event. They include Loukas Dimitriou (ESAI/HAIPP – Hellenic Association of Independent Power Producers); Antonis Kontoleon (EVIKEN – Association of Industrial Energy Consumers); Giannis Mitropoulos and Miltos Aslanoglou (ESPEN – Greek Energy Suppliers Association); Irodotos Antonopoulos (ESEPIE – Hellenic Association of Electricity Trading & Supply Companies); Panagiotis Lostarakos and Panagiotis Papastamatiou (ELETAEN – Greek Wind Energy Association); Stelios Loumakis (SPEF – Hellenic Association of Photovoltaic Energy Producers); and Stelios Psomas (SEF/HELAPCO – Hellenic Association of Photovoltaic Companies).

Key sector entrpreneurs and executives who have so far confirmed their participation include: Ioannis Kalafatas (Mytilineos); Kyriakos Kofinas (PPC); Nikolaos Zahariadis (Elpedison); Anastasios Lostarakos (NRG); Dinos Nikolaou (Energean); Kostis Sifnaios (Gastrade); Nikolaos Satras (Dioryga Gas); Panos Nikou (Volterra); and Ioannis Kokkotos (ABB).

The forum’s full agenda will be finalized and announced in the coming days.

Greek-North Macedonian gas pipeline decisions imminent

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Greek gas grid operator DESFA and its North Macedonian counterpart NOMA Gas are believed to be nearing respective investment decisions for the construction of a natural gas pipeline linking the neighboring countries.

Company officials have been meeting more frequently of late, their most recent session held in Skopje for talks on how to better coordinate funding efforts for the gas pipeline project and to move ahead with tenders concerning its procurement and construction.

DESFA, sources informed, is expected to reach an investment decision by the end of summer, or early September, for the Greek segment of the gas pipeline project, a 55-km stretch starting from Nea Mesimvria in the country’s north.

The Greek gas grid operator is also preparing for tenders concerning pipeline procurement and the project’s construction.

This gas pipeline project promises to diversify the gas supply sources of North Macedonia, currently entirely dependent on its Bulgarian interconnection, experiencing congestion. It will also offer new gas supply routes to the western Balkans.

DESFA market test pivotal for gas network investment plan

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A market test to soon be announced by gas grid operator DESFA will be instrumental in shaping the operator’s investment plan intended to reinforce and expand the country’s gas network.

Final details of the market test are currently being worked on by DESFA’s legal team before its first round, a non-binding stage, is announced.

Interested parties will be invited to note gas network points of entry and exit they would like to use, as well as gas quantities they plan to transport through the system. This feedback will then be used by DESFA for the establishment of a demand assessment report.

To be divided into demand-related scenarios linked with specific investments for network infrastructure projects, this report will need to be approved by RAE, the Regulatory Authority for Energy, before a second-round market test can be staged.

DESFA plans to complete the market test’s first round by summer and the second round by the end of the year.