Directorate-General for Energy

PCI/PMI list preliminary ratings out, GREGY a borderline case

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The European Commission’s Directorate-General for Energy, preparing a shortlist of electricity projects for a sixth PMI/PCI list, including Projects of Mutual Interest and Projects of Common Interest, has just staged a teleconference with representatives of projects vying for a place on the list.

As for the PMI list, the Brussels officials, in addition to preliminary ratings for candidate projects, also presented their criteria and formula applied for appraisals.

The presentation of these details was necessary as, under the revised TEN-E Regulation, new PMI selection criteria are being used for the first time for projects also involving non-EU members.

According to energypress sources, the GAP Interconnector, an Egyptian-Cretan power grid interconnection project plan been promoted by the Eunice group, was not appraised, as had been expected, because it has not secured Letters of Support from the Greek state.

GREGY, another Greek-Egyptian grid interconnection plan, which is being promoted by the Copelouzos group, was given a preliminary rating of 9.3, just below the 10-level score required for inclusion on the PMI list.

GREGY project officials have until June 30, when the PMI shortlist will be announced, to enhance their project’s dossier with additional details that could boost its rating and secure a place on the PMI shortlist. Copelouzos group officials are confident this can be achieved.

The Euroasia Interconnector, planned to link the Israeli, Cypriot and Greek power grids, has amassed the points needed to secure its inclusion on the PMI shortlist.

A total of five European projects, two of these with Greek interests, have achieved preliminary scores offering places on the PCI shortlist.

One of the two Greek projects, Terna Energy’s pumped-storage station project plan for Amfilohia, northwestern Greece, was included on the EU’s PCI list in 2013, while all indications suggest it will retain its place on the list’s sixth edition.

The Eunice group’s Ptolemaida BESS, a 250-MW energy storage facility planned for Ptolemaida, northern Greece, has scored highly for a place on the revised PCI shortlist.

SPEF: RES tariffs need to be adjusted to inflation annually

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RES unit tariffs need to be adjusted annually in accordance with inflation rate changes, Stelios Loumakis, president of SPEF, the Hellenic Association of Photovoltaic Energy Producers, has told the European Commission’s Directorate-General for Energy Ditte Juul-Joergensen, who held a meeting with key domestic market players as part of her visit to Greece to take part in the ongoing Delphi Economic Forum.

A system annually adjusting guaranteed RES tariffs needs to be applied to projects from 2016 onwards, as a percentage of annual inflation, as was the case up until 2014, the SPEF chief pointed out.

This need has arisen as a result of drastically increased interest rates on loans and project development costs, as well as the impact of higher inflation, Loumakis noted.

The SPEF official also noted that power grid operator IPTO must pause issuing new RES connection offers until grid energy storage installations have commenced. RES connection offers need to be issued proportionately with the development of energy storage unit installations, Loumakis added.

To date, IPTO has issued RES connection terms totaling 25 GW, including projects already in operation, a level that already meets the country’s goal for 2030.

Loumakis also called for the removal of a cap on the remuneration of RES producers, noting its level of 85 euros per MWh, under current market conditions, is depriving the Energy Transition Fund of cash inflow.

Market players call for end to measures in DG Energy meet

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Key local energy market players, meeting yesterday with the European Commission’s Directorate-General for Energy Ditte Juul-Joergensen, in Greece to take part in the ongoing Delphi Economic Forum, have called for emergency energy crisis measures implemented in the wholesale and retail electricity markets to be lifted.

The European Commission official informed that the Directorate-General for Energy plans to publish an impact assessment of temporary energy crisis measures adopted throughout the EU by the end of the month.

Juul-Joergensen asked her meeting’s participating energy market officials to name existing problems and challenges resulting from the energy crisis, discuss how these have been countered, and propose two to three energy policy priorities for Greece and the EU over the next few years.

Besides calling for an end to emergency energy crisis measures implemented in electricity markets, or more specifically, a cap on electricity producer earnings, representatives of ESAI, the Hellenic Association of Independent Power Producers, requested the establishment of a new availability market, either for available capacity or available flexibility capacity.

Representatives of ESPEN, the Greek Energy Suppliers Suppliers Association, who also took part in the meeting, noted that temporary energy subsidies provided in Greece have proved effective in protecting consumers from unprecedented electricity price increases, adding, however, that emergency measures implemented in the wholesale and retail markets have greatly impacted competition.

The pros and cons of measures adopted need to be carefully assessed before any extensions are granted, ESPEN officials noted.

The Greek government has submitted a request to Brussels for an extension of emergency energy market measures until the end of the year. The request is being assessed, Juul-Joergensen informed, without specifying when a decision could be reached.

 

DG Energy chief in Athens this week, talks with minister, company officials

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Ditte Juul-Joergensen, the European Commission’s Directorate-General for Energy, will be in Athens this week, as part of a visit to participate at the annual Delphi Economic Forum, whose latest edition is scheduled to take place April 26 to 29.

Jorgensen is expected to hold a series of talks with Greek authorities, including energy minister Kostas Skrekas, as well as Greek energy company representatives, most probably on Thursday, sources informed.

The European Commission official is expected to present her view of the Greek energy market and also make note of issues and challenges raised by market participants.

Energy company representatives are expected to request the termination of a wholesale market cap, as well as other energy crisis-related measures applied to the retail market.

Contrary to demands by Greek market players, the energy ministry has forwarded an official request to Brussels for an extension of emergency energy crisis measures until the end of the year.

These emergency measures are set to expire in June but the Greek government wants them extended as protection against any further market turmoil that could lead to a new rise in energy costs.

 

Officials fear local infrastructure impact of Turkish-Bulgarian gas deal

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A Turkish-Bulgarian gas supply agreement reached last month is troubling Greece’s energy players at institutional and market levels as its impact could affect the role of Greek infrastructure, officials have told energypress.

Local officials are mostly concerned about the deal’s gas supply quantity eventually growing in size rather than the small gas quantities it currently involves, as they only cover a small percentage of Bulgaria’s gas needs.

The majority of Bulgaria’s gas needs are still planned to be covered by LNG shipments coming in through the LNG terminal at Revythoussa, close to Athens, while the prospective Alexandroupoli FSRU in Greece’s northeast will, no doubt, contribute to cover Bulgarian gas demand, once the project is launched.

Turkey and Bulgaria, represented by their respective state energy companies, Botas and Bulgargaz, signed a 13-year gas supply agreement on January 3, according to which Turkey is required to supply Bulgaria an annual gas quantity of 1.5 bcm.

EFET, the European Federation of Energy Traders, wants the Turkish-Bulgarian agreement investigated by the European Commission’s Directorate-General for Energy and Directorate-General for Competition, contending European regulations and the overall institutional framework defining the operation of gas infrastructure within the EU and access to interconnection points have been breached.

DG Energy chief in Athens for talks on range of key projects

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The European Commission’s Director-General for Energy Ditte Juul-Joergensen will be discussing a range of issues with the energy ministry’s leadership at a meeting in Athens today, including Greece’s role in the Balkans, western Balkan interconnection projects, natural gas reserves ahead of next winter, as well as Greece’s list of projects related to REPower EU, Europe’s plan for an end to the continent’s reliance on Russian energy sources.

Athens’ plan for wholesale electricity market intervention through a mechanism designed to subdue price levels is also expected to be discussed. It still needs to be approved by the European Commission, according to government sources.

The energy ministry is confident this mechanism will be approved by Brussels following a related agreement reached by its leadership during a visit to Brussels in late May. Market officials have remained uncertain.

Greece is expected to seek funding support estimated between 7 and 8 billion euros through the REPower EU initiative for a total of 14 projects supporting energy efficiency and security.

These projects include an upgrade of the gas grid; installation of a new floating storage unit at the islet Revythoussa, just off Athens; the Dioryga Gas FSRU in Corinth, west of Athens; an FSRU at Alexandroupoli, in Greece’s northeast; the Blue Med hydrogen project; the prospective underground natural gas storage facility (UGS) at the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north; IGB and TAP capacity boosts; as well as Greek-Egyptian and Greek-Bulgarian electricity grid interconnections.

Ministry sees swift approval for wholesale market intervention

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The energy ministry has forwarded a draft bill to the European Commission’s Directorate-General for Energy for wholesale electricity market intervention and believes the plan’s new mechanism will be swiftly approved for implementation as of July 1, energypress sources have informed.

The ministry’s proposed plan entails deducting windfall profits earned by electricity producers under the current conditions and compensating them based on respective caps to be set for energy production technologies.

Details of the mechanism have already been submitted to the Brussels energy authority, which has unofficially approved the plan, the sources added.

The plan’s introduction at the beginning of July would enable August electricity prices for consumers to be shaped in accordance with July’s price levels.

Once an agreement with the Directorate-General for Energy has been reached, the Greek government will need to ratify the plan and issue a related ministerial decision enabling a temporary revision of wholesale electricity market regulations.

 

Gov’t confident Brussels will approve wholesale market plan

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Government officials are confident the administration’s two-pronged intervention plan for the wholesale and retail electricity markets will soon be approved by the European Commission, enabling implementation as of July 1, despite some reservations expressed over the past few days, government sources involved in the process have told energypress.

Athens’ plan was forwarded to the European Commission’s Directorate-General for Energy and Directorate-General for Competition last Friday, following consultation on technical details between Greek government officials and Brussels.

Details of the Greek proposal are expected to be discussed over the next few days through a teleconference meeting involving technocrats , sourced noted.

Energy minister Kostas Skrekas could also hold talks this week with the head officials of the Directorate-General for Energy and Directorate-General for Competition, to elevate the effort to a political level. A written response to the Greek plan from these Brussels bodies is believed to be imminent.

The Greek government is confident its energy-crisis plan will be approved by Brussels for two reasons. Firstly, Athens’ decision to eliminate, through a related tax, windfall profits earned by electricity producers during the energy crisis is one of the tools proposed by Brussels. Secondly, the Greek plan is not expected to affect transboundary trade as import-export prices will continue to be shaped by wholesale market forces.

 

Italgas, Czech Republic’s EPH bid for DEPA Infrastructure

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Italy’s gas network operator Italgas and the Czech Republic’s EP INVESTMENT ADVISORS (EPH) met yesterday’s deadline to submit binding bids for the 100 percent sale of gas company DEPA Infrastructure, bringing this privatization to its final stretch.

TAIPED, Greece’s privatization fund, will now need to check if the files submitted by the suitors are complete before opening up their respective financial offers.

The privatization fund’s board will inspect the first-stage files, carrying legal documents, at its next meeting, sources informed. If the files are complete, TAIPED will proceed to the next step of opening up the financial offers, but not before some time has elapsed to allow for possible objections.

If the price difference in the financial offers is no more than 15 percent, TAIPED will request improved follow-up bids from both bidders.

The preferred bidder is expected to be announced by the end of August or early September. DG Comp and DG Energy approval will then be required before an agreement can be signed for the transfer, to the winning bidder, of TAIPED’s 65 percent stake control of DEPA Infrastructure and the 35 percent stake held by Hellenic Petroleum (ELPE).

The sale of DEPA Infrastructure, controlling the distribution networks of EDA Attiki, covering the wider Athens area, EDA Thess, covering Thessaloniki and Thessaly, as well as DEDA, covering the rest of Greece, will spell the end of the Greek State’s control of the country’s low and medium-pressure natural gas pipelines.

Recovery fund subsidies worth €400m for energy storage units

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The energy ministry plans to allot 400 million euros of EU recovery fund money to the development of central electrical energy storage units. A related proposal by the ministry is headed for inclusion into the national recovery plan.

The aforementioned sum will be used to subsidize energy storage projects and will be made available to investors through a mechanism whose details are still being negotiated by government and European Commission officials.

Once the mechanism has taken final shape it will be forwarded to Brussels’ Directorate-General for Competition and Directorate-General for Energy for approval from both, necessary ahead of its implementation.

Though further details on the prospective support mechanism remain unknown, its subsidies are expected to be offered through a competitive procedure promoting selected projects.

At this point, developments have indicated both central energy storage technologies – pumped hydroelectric energy storage and accumulators (battery units) – will be eligible for subsidy support.

A study on central energy storage conducted by the National Technical University of Athens (NTUA) for RAE, the Regulatory Authority for Energy, has shown that a combination of these two technologies is the optimal solution, as each covers different needs.

Crete’s small-scale grid link headed for April completion

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A second subsea cable needed for the grid interconnection to link Crete and the Peloponnese has been installed, with just a trial run by power grid operator IPTO now required for the completion and launch of the project, to cover approximately 30 percent of the island’s electricity transmission needs.

IPTO is aiming to conduct its trial run by the end of April. The Cretan interconnection project will eventually be complemented by a larger-scale link to Athens.

A trial run of the Crete-Peloponnese project’s first subsea cable has already been completed with success.

Despite various obstacles raised by the pandemic, work on this project has progressed swiftly, promising to soon end Crete’s energy isolation.

A variety of records have been set along the way. The Crete-Peloponnese subsea link, covering a 174km distance, is now the world’s longest subsea AC power connection, as well as the longest underwater high-voltage cable connection. Reaching up to 1,000 meters in depth, this subsea installation is also the world’s deepest high-voltage link.

A transitional hybrid model for Crete’s participation in target model energy markets – covering production and consumption and to be applied until the island’s full-scale grid interconnection to Athens is completed – is expected to be approved by the European Commission’s Directorate for Energy. The hybrid model’s regulatory framework is now ready and will soon be delivered to Brussels by the energy ministry.

Industrial consumers rebated for gas network usage surcharge

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RAE, the Regulatory Authority for Energy, has delivered an official decision vindicating the industrial sector, after a four year wait, in a dispute concerning temporary natural gas distribution surcharges imposed on consumers by ordering offsetting measures leading to rebates for the period in question, between August 14, 2015 to December 1, 2016.

EVIKEN, the Association of Industrial Energy Consumers, challenged the introduction of this temporary gas distribution surcharge for industrial gas consumers, deemed as a breach of EU rules. It burdened industrial gas consumers at a rate of 4 euros per MWh.

Industrial consumers will receive rebates, based on a specific formula, covering the aforementioned period, according to the RAE decision, published in the government gazette yesterday.

According to industrial sector estimates, the surcharge sum to be returned to industrial consumers is estimated between 2.5 million and thee million euros. The rebate may be distributed in installments over a period of up to five years.

This surcharge did not reflect the costs of operators, arrived as a disproportionate cost for certain consumer categories using the network, and should have been determined and introduced by RAE, not through a legislative procedure, EVIKEN argued in its case before being vindicated by RAE as well as the European Commission’s Directorate-General for Energy.

Discrepancies observed exceeded 100 percent for most energy-intensive industrial enterprises.

The industrial sector will not tolerate any breach of EU rules concerning the new market’s framework, Antonis Kontoleon, the head official at EVIKEN, stressed.

Brussels’ Directorate-General for Energy had supported EVIKEN on all aspects of the dispute through a surveillance report delivered in November, essentially preannouncing the RAE decision.

 

 

 

Flexibility surcharge improper, suppliers complain to Brussels

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A CAT surcharge imposed on electricity suppliers to support the flexibility mechanism was adopted without proper consultation via a procedure that was not fully substantiated, ESEPIE, the Hellenic Association of Electricity Trading and Supply Companies, has charged in a letter forwarded to the European Commission’s Directorate-General for Competition and Directorate-General for Energy.

Consultation on the matter lacked a detailed study by power grid operator IPTO on current flexibility needs, the association protested in the letter, forwarded to the Brussels authorities just weeks ahead of the launch of target model markets in Greece.

The flexibility mechanism’s details are based on a study conducted years ago but current flexibility needs concerning production and demand have since changed drastically, the association noted.

A transitional mechanism is not needed given the current conditions in Greece’s energy market, especially if the pandemic-related drop in electricity demand is taken into consideration, ESEPIE noted. State aid or any other form of support for energy producers offering flexibility is unnecessary, the association stressed.

Suppliers have been asked to cover flexibility-related surcharges, beginning August 15, at a rate of approximately 3 euros per MWh. This is burdening their finances, especially in the mid-voltage market, where heightened competition has severely narrowed profit margins.

Flexibility CATs, it should be noted, do not impact independent, vertically integrated suppliers as the corporate groups they belong to collect the flexibility surcharge payments for their production.

Energy companies actually benefit from the surcharge if their retail electricity market shares are smaller than their shares of production. This is not the case for PPC, whose retail market share is considerably bigger than its share of electricity generation.

 

Brussels recognizes EVIKEN case on excess distribution surcharges

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An ongoing effort by EVIKEN, the Association of Industrial Energy Consumers, calling for natural gas distribution operators to return excess surcharges to industrial consumers has – for the first time since the case’s launch four years ago – been recognized by the European Commission and included in its latest report on the Greek economy.

RAE, the Regulatory Authority for Energy, will reach a decision imminently, within May, according to the Brussels report.

EVIKEN launched its case in June, 2016. Industrial consumers were charged excess gas distribution surcharges for a 16-month period beginning in August, 2015.

EU law was breached by legislation ratified to enable the excess surcharge, upped to 4 euros per MWh, universally, regardless of company profile. This placed major-scale industrial producers under pressure.

A decision on this overcharging case has remained pending since 2016 despite wide recognition of the violation authorities at all levels, from RAE to the European Commission’s Directorate-General for Energy.

RAE, over an extended period, has needed to respond to rigorous questioning from the DG-Energy on various aspects concerning the matter.

RAE is now expected to calculate the precise excess surcharge amount that needs to be returned by operators to industrial consumers through an offsetting of accounts.

“Our case may have been forgotten if it weren’t for the DG-Energy leadership’s decisive intervention that prompted RAE to overturn all the unsubstantiated legal interpretations by natural gas distribution operators,” noted Antonis Kontoleon, the head official at EVIKEN.

PPC chief informs Brussels of crucial factors in lignite units sale

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The main power utility PPC’s chief executive Manolis Panagiotakis has provided the European Commission with a series of a factors he sees as crucial to the success of the utility’s follow-up sale attempt of lignite units following a failed initial effort.

EU law limiting investment activity of non-EU investors is indirectly yet quite clearly presented as an obstacle that should not restrict the PPC sale, the utility’s chief official pointed out in his letter, forwarded to Brussels competition and energy authorities.

According to Panagiotakis, Russian, Chinese and American players of repute have obtained the sale’s necessary data and are considering participating in the sale. The relaunch of the sale, a bailout requirement, is expected to feature improved terms for investors.

The PPC boss also lists CAT remuneration eligibility for the lignite-fired power stations included in the sale package as pivotal.

Staff reductions at the Megalopoli and Meliti power stations, both believed to be loss-incurring, are also crucial for the sale, according to the PPC chief. A voluntary exit plan offered by PPC is currently in progress and leading to payroll cost reductions, he informed. Savings at the Megalopoli plant are expected to reach approximately 25 million euros a year, Panagiotakis noted in his letter.

An existing lignite supply agreement between PPC and the license holder of Ahlada, a mine feeding PPC’s nearby Meliti lignite-fired power station in northern Greece, remains a problem as it does not secure price and quantity stability, the utility boss also pointed out, adding that legal pressure is being applied on the license holder.

The lack of a clear-cut national energy plan, or, more specifically, the ambiguity surrounding the future of the country’s lignite-fired power stations, is another issue that troubled investors in the previous sale effort, Panagiotakis noted.

Greek energy planning studies indicate the need for lignite-related output in the medium term, but at levels clearly below current levels, the PPC boss supported.

 

 

New Athens-Brussels standoff in Crete-Athens link talks

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Two teams of Greek energy ministry and European Commission Directorate-General for Energy technocrats have reached an impasse in negotiations held to resolve a dispute concerning control of the Crete-Athens grid link, planned as a segment of the wider Greek, Cypriot and Israeli interconnection.

The failure of the two teams to reach an agreement, needed to prevent a looming energy sufficiency threat on Crete as of 2020, will now elevate the negotiations to a higher political level for direct talks between Greece’s energy minister Giorgos Stathakis and European Commissioner for Climate Action and Energy Miguel Arias Canete.

Earlier this week, Canete made clear Greece will not be granted any further deadline extensions beyond December 31, 2019 for diesel-fueled power stations operating on Crete.

Commenting yesterday, Klaus-Dieter Borchardt, Director at the European Commission’s Directorate B on the Internal Energy Market, declared all negotiating efforts at the current level of talks have now been exhausted.

Greek power grid operator IPTO and Euroasia Interconnector, a consortium of Cypriot interests heading the Greek, Cypriot and Israeli PCI-status interconnection project, have fought for control of the Crete-Athens segment.

The European Commission this week declared that Euroasia Interconnector, the project promoter of the wider Greek, Cypriot and Israeli link, also remains in charge of the Crete-Athens segment. RAE, Greece’s Regulatory Authority for Energy, has placed an SPV named Ariadne, an IPTO subsidiary, at this segment’s helm.

DG Energy expresses concerns over more ambitious RES target

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Despite agreeing to an even more ambitious RES energy mix target of 32 percent, compared to the European Commission’s 30 percent, by 2030 at an EU energy ministers meeting in Luxembourg three months ago, Greece’s energy minister Giorgos Stathakis has yet to specify on policies that will need to be adopted.

EU member states need to submit their plans by the end of December and concerns in Brussels are growing.

Just days ago, at a meeting between national representatives and Directorate-General for Energy officials, a number of EU member countries, including Greece, were told that they have yet to set clear plans on policies needed for the more ambitious RES target. National representatives were asked to apply greater pressure on their governments.

The Greek energy ministry’s secretary general Mihalis Veriopoulos has, for quite some time now, assembled a special committee to focus on the issue but has not followed up with a public consultation procedure with industry figures as has been expected.

DESFA buyers agreement soon, RAE certification the sale’s final step

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An endorsement by the European Commission’s Directorate-General for Energy of the winning bidding scheme’s offer in an international tender offering a 66 percent stake of DESFA, Greece’s natural gas grid operator, paves the way for the signing of a shareholders agreement, which, according to sources, could take place by the end of this week at the state privatization fund TAIPED’s Athens headquarters.

An all-European investment team comprising Italy’s Snam, Spain’s Enagás Internacional and Belgium’s Fluxys emerged as the tender’s winning bidder last summer with a 535 million-euro offer.

Once the shareholders agreement has been signed, RAE, Greece’s Regulatory Authority for Energy, will need to offer its certification for the new owners. This step, the last in the overall sale procedure, is expected soon.

This privatization effort, which has so far lasted over five years, was launched in 2013 with an unfinished initial tender won by Azerbaijan’s Socar.

The Greek State, offering 31 percent of DESFA’s 66 percent being sold, stands to receive 251.3 million euros of the 535 million-euro total. ELPE (Hellenic Petroleum), selling the other 35 percent, will receive 283.7 million euros.

The Snam-Enagás-Fluxys team will be entitled to appoint six of the new DESFA board’s eleven members, the Greek State, to hold a 34 percent stake of the gas grid operator, will be given three board seats, while a further two board members will be appointed based on agreements between the Greek State and the investors.

The Greek State, which will reserve the right to appoint the board’s president, will also hold veto rights for matters such as capital increases and international projects.

The incoming investment team will not be permitted to operate other rival ventures in Greece, will be expected to carry out a 330 million-euro investment program, and will not be able to transfer shares to third parties during the first two-year period and until the investment program has been completed.

 

DG Energy boss in Athens to inspect on reforms, wider EU commitments

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Klaus-Dieter Borchardt, Director of the European Commission’s Directorate-General for Energy, is currently in Athens for a series of meetings with local authorities to inspect on energy-sector reforms included in the bailout agreement, and, beyond the Greek progam, ensure the country is on the right track for EU energy policy commitments leading to the European energy market’s unification, as presented in the target model.

The DG Energy top official’s two-day agenda, concluding today, includes meetings with officials at IPTO, the power grid operator, RAE, Regulatory Authority for Energy, the main power utility PPC, and the Athens Energy Exchange.

Borchard is focused on ensuring the country’s ongoing and prospective energy-sector reforms will be implemented following the Greek program’s conclusion next month, according to certain local officials who have held talks with the visiting authority.

The DG Energy boss also appears to be applying pressure for the maintenance of schedules, by all local energy institutions, as presented in a binding road map resulting from the country’s EU membership, which stretches beyond the Greek bailout agreement.

Prior to his arrival in Athens, Borchard was in Bulgaria.

 

Six steps to DESFA sale completion, expected towards end of year

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The sale agreement for DESFA, the natural gas grid operator, is expected to be completed towards the end of the year, pundits believe, enabling the international tender’s winning bidder – a consortium comprised of Italy’s Snam, Spain’s Enagás Internacional and Belgium’s Fluxys – to take control of a 66 percent stake acquired for 535 million euros.

Until then, six steps are needed. The first of these was taken yesterday at an ELPE (Hellenic Petroleum) meeting, during which company shareholders approved the firm’s 35 percent stake of DESFA contributed to the sale. TAIPED, the state privatization fund, offered the other 31 percent on behalf of the Greek State.

The second step will entail the submission of the sale’s dossier to Greece’s Court of Auditors with all documents translated into Greek. This step is expected to be taken within May, sources informed. The Court of Auditors should offer its approval in June or July, which would enable the deal to be finalized by the end of December.

Then, for the third step, a share purchase agreement (SPA) needs to be signed by the buying consortium and TAIPED. This will be immediately followed by RAE (Regulatory Authority for Energy) certification of DESFA with the new owners on board. The certification process will essentially provide RAE with the opportunity to inspect the incoming consortium’s members for any irregularities.

This part of the overall process should be completed swiftly. It proved more complicated in the recent sale of a 24 percent of IPTO, the power grid operator, to China’s SGCC, as the incoming strategic investor was a non-EU firm.

The fifth step, once the new-look DESFA has been certified by RAE, will involve submitting the sale’s dossier to the European Commission’s Directorate General for Competition and Directorate General for Energy. The former will need to endorse the sale and the latter must provide certification.

Once these five steps have been taken, TAIPED and the three-member consortium will be able to sign a finalized agreement for the transfer of a 66 percent stake of DESFA to the strategic investors and a concurrent payment of 535 million euros to TAIPED.

As all three consortium members are European firms, the overall process is expected to proceed swiftly, pundits anticipate.

The DESFA board will not be permitted to contact the buyers and inform on any company activities until the sale has been completed.

 

 

 

 

Industrial ETMEAR plan sent to Brussels, minister informs

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A Greek proposal for RES-supporting ETMEAR surcharge model adjustments has been delivered to European Commission authorities, including the Directorate General for Energy, the country’s energy minister Giorgos Stathakis has informed industrialists, according to energpress sources.

Details of the adjustments, based on EU directives, include a request for the endorsement of a reduced ETMEAR surcharge for selected industrial sub-sectors, measuring 15 percent of the average surcharge level valid for all consumers.

The ETMEAR surcharge imposed on industrial enterprises is a key matter for energy-intensive producers. Last month, industrialists forwarded a letter to the energy minister warning of the industrial sector’s extreme concerns over energy costs and level of competitiveness. Time is running out, industrialists warned, fearing soaring energy costs.

Lower ETMEAR surcharge costs enjoyed by energy-intensive industries face the danger of being classified as illegal state aid if the adjustment plan is not endorsed in Brussels by January, 2019.

In addition, other support systems for selected industrial enterprises, such as a mechanism offsetting CO2 emission right costs, as well as the demand response mechanism (interruptability) could be blocked, industrialists have warned.

According to the Greek proposal, the ETMEAR surcharge for electro-intensity enterprises, defined as those whose electricity costs exceed 20 percent of gross added value, will be set at a maximum of 0.5 percent of their gross added value. Steel and cement producers may utilize this term as an energy-cost relief measure.

Energy-intensive enterprises whose electricity costs are less than 20 percent of their gross added value will be responsible for ETMEAR costs of no more than 4 percent of their gross added value, according to the adjusted terms. Few enterprises are expected to qualify for this category.

A minimum ETMEAR price of 0.3 euros per MWh will be offered for certain sectors such as the steel and aluminium industries, according to the plan.

The adjustments also include favorable terms for other sectors. ETMEAR levels for farmers, hospitals, ministries and public buildings will be set at 50 percent of the average surcharge level. A 30 percent level will be set for tram and railway companies. Lignite mining companies will be charged 20 percent of the ETMEAR average.

 

 

 

New wave of RES investments on way, DG Energy official tells

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A new wave of green energy investments throughout Europe, to be propelled by ambitious emission targets set by the European Commission, is on the way, Gerasimos Thomas, a highly ranked DG Energy official, has told a conference in Delphi, central Greece.

European Commission targets aiming for a 30 percent RES share of Europe’s energy mix by 2030 and 50 percent by 2050 are expected to provide the impetus for this wave of investments, the DG Comp official informed.

The RES sector is expected to attract a significant share of private-sector investments in the coming years, while RES auctions have already begun reducing prices, Thomas noted.

New types of investments and investors, including institutional investors and pension funds, as well as related bond market initiatives, can be expected, the DG Energy official told the conference.

In 2017, green energy investments surpassed petroleum and natural gas-related investments for the first time, a trend expected to continue in the years to come, Thomas stated.

Besides the RES production domain, a surge of related investments concerning transmission, industry, networks, digitization and building environmental upgrades, is also expected, he noted.

 

Brussels rejects Amynteo time extension, upgrade now urgent

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The European Commission appears to have rejected a Greek request for an operating hours extension of the main power utility PPC’s Amynteo lignite-fired power station, making the need to environmentally upgrade the facility extremely urgent.

Both the power utility and energy ministry are believed to have already accepted this position, according to energypress sources.

The Directorate-General for the Environment, in particular, has opposed a second request  made by Greek authorities, following an unsuccessful initial effort, calling for an extension of the ageing Amynteo facility’s remaining lifespan from 19,500 operating hours to 32,000.

A more positive stance on the prospect by the Directorate-General for Energy had raised the hopes of Greek officials, but it now appears the environmental authority’s position on the matter has prevailed.

This development means that PPC will need to act fast until the end of 2018 for a financing solution and assignment of the unit’s environmental upgrade so that the power plant can continue operating and, furthermore, ensure that the provincial city of Amynteo, in the country’s north, is not left without a telethermal facility as of 2019. Telethermal technology would cover the heating needs of Amynteo’s 10,000 or so inhabitants at an exceptionally low cost.

The Mytilineos group, GEK-TERNA, and the Copelouzos group, backed by China’s Shenhua, have all submitted upgrade proposals for the Amynteo facility.

As was disclosed yesterday by energypress, the energy ministry’s upgrade decision will be based on a series of critertia, key factors being the project’s assured financing as well as  assurance of low-cost electricity for major energy-intensive industries as a means of boosting their level of competitveness.

The Mytilineos corporate group’s Amynteo upgrade proposal, forwarded just days ago by chief executive Evangelos Mytilineos, entails a 110 million-euro revamp and lifespan extension to 2030 in exchange for a favorable long-term electricity supply agreement concerning the group’s Aluminium of Greece industrial enterprise. This proposal called for electricity absorption of between 300 and 400 MW per year, from the unit’s total capacity of 600 MW. Mytilineos left open the possibility of other industrial enterprises also taking part in the agreement. The Viohalco industrial group is believed to be interested in such a project, but the prospect remains unconfirmed.

GEK-TERNA had forwarded its environmental upgrade proposal to the energy ministry in October in exchange for favorable electricity tariffs.

The Copelouzos group and China’s Shenhua have proposed upgrading the lignite-fired facility in exchange for a stake of the facility.

 

 

 

Flexibility mechanism delayed by insufficient market reforms

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The delivery of the country’s new flexibility remuneration mechanism plan by local authorities to the European Commission has been postponed until March, meaning its implementation, intended to compensate electricity producers for flexibility-related output, will be delayed accordingly, energypress sources have informed.

This rescheduling, included as a term in the bailout’s just completed third review, has been attributed to the lack of progress in local electricty market reforms.

Market reforms are expected as prior actions by the European Commission’s Directorate-General for Competition and Directorate-General for Energy before any remuneration mechanism may be applied to cover additional needs.

Officials in Brussels have obviously identified delays concerning electricity market reforms and, as a result, opted to delay the new flexibility remuneration mechanism’s introduction.

This delay will place even greater sustainability pressure on the country’s gas-fired electricity producers, left without CAT payments since April, and also pose a threat for the country’s energy supply security, especially amid the forthcoming winter period.

RAE, the Regulatory Authority for Energy, recently staged a public consultation process to shape the new flexibility mechanism’s details. It will be based on an annual auction procedure, as required by European law.

The plan entails offering producers three-hour-notice flexibility compensation for a maximum of 4,263 MW through one auction in 2018, not two as was initially considered.

Also, the starting remuneration price at flexibility mechanism auctions will be set at 30,000 euros per MW of output, slightly higher than the originally planned level of 25,000 euros per MW.

Hydropower and natural gas-fired electricity producers as well as Combined Heat and Power High Performance (CHP) stations will be entitled to take part in flexibility mechanism auctions. CHP units will have the right to seek payment for any output not remunerated through existing RES payment mechanisms.

Also, gas-fired electricity producing units will need to be able to run on alternative fuel (diesel) or possess natural gas reserves to be eligible for the flexibility mechanism’s auctions. This essentially means producers will need to hold additional supply contracts or be able to cover the cost of temporary LNG storage solutions, either directly or indirectly, as was proposed by DEPA, the public gas corporation.

PPC lignite sale list seems near, leading EC officials to visit

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Upcoming concurrent visits to Athens by two leading European Commission officials have raised speculation of a finalized plan for the main power utility PPC’s bailout-required sale of lignite units representing 40 percent of the utility’s lignite capacity.

Two leading European Commission officials, Maros Sefcovic, vice president responsible for Energy Union, and Dominique Ristori, director-geneal of the Directorate-General for Energy, will both in Athens at the same time.

It is believed that a finalized plan detailing the content of PPC’s lignite sale package could be endorsed today during an Athens-Brussels teleconference, currently being held almost on a daily basis. An announcement is possible today or tomorrow.

Officially, Sefcovic’s visit is being presented as part of the official’s second tour of European capitals for matters concerning Energy Union. Ristori, on the other hand, is heading energy-sector bailout negotiations.

Besides PPC’s Meliti unit, Megalopoli III and IV are also expected to be included on the finalized PPC sale list, which will undergo a market test, measuring the level of investor interest, this month.

Finalization of PPC’s sale list would complete the most fundamental part of Greece’s energy-sector negotiations with the counry’s lenders.

Sefcovic, during his Athens visit, is scheduled to meet with energy minister Giorgos Stathakis to discuss Energy Union issues, including an implementation package. It includes aspects concerning supply security; creation of regional markets; promotion of interconnection and pipeline projects; a long-term energy plan; incorporation of more RES units into electricity systems; as well as a decarbonization strategy. The further liberalization of energy markets is also on Sefcovic’s agenda.

Besides the energy minister, Sefcovic is also scheduled to meet with main opposition New Democracy party leader Kyriakos Mitsotakis.