disruption management plan

EC report paves way for industry’s ‘demand response’ extension request

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A request by Greece’s industrial sector for an extension, beyond November, 2017, of its “disruption management” (demand response) measure, an energy cost-saving scheme, appears likely to be approved, judging by the encouraging findings of a European Commission study on capacity availability mechanisms, published just days ago.

The ‘demand response’ mechanism enables major industrial enterprises to benefit from electricity cost savings in exchange for shifting energy usage to off-peak hours whenever required by the operator.

The report noted that real-time response to electricity demand is crucial as this may smoothen out demand peaks and reduce the need for additional grid capacity.

Demand response service providers continue to face major market obstacles, while they are not permitted entry into certain markets, the report noted.

The European Commission expressed concerns that energy consumer demand will remain inelastic despite the importance of elasticity and market equilibrium in markets where wholesale electricity prices fluctuate considerably as a result of the inconsistencies of renewable energy production.

EU member states may be led to introduce demand response measures as a result of such concerns, the report noted.

The total of nine demand response plans implemented in seven of eleven EU member states examined may be justified based on their contribution to short and long-term energy supply, according to the report.

 

 

EC officially endorses German ‘demand response’ plan

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The European Commission has officially announced its endorsement of Germany’s existing “demand response” plan, an energy cost-saving mechanism for major-scale industrial enterprises. This comes as a significant development that could lead to the implementation of similar measures in other EU member states.

Greece’s equivalent, the “disruption management” auctions, already introduced, are scheduled to end in November, 2017. The country’s industrial sector recently submitted a request for the measure’s extension.

This system enables major industrial enterprises to benefit from electricity cost savings in exchange for shifting energy usage to off-peak hours whenever required by the operator in order to maintain the grid’s stability.

Germany’s “demand response” system had already been put to use but had not been officially approved in Brussels.

Greek industry has already warned of grave consequences in the sector if left without the support of the “disruption management” system.

Industry spurred on by energy cost-saving ‘disruption’ plan

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Steel, cement and paper producers, just some of the country’s industries that have participated in the recently introduced energy cost-saving “disruption management” mechanism, are already enjoying benefits, as highlighted by their increased production, export and employment figures, energypress sources have informed.

The ‘disruption management’ mechanism enables major industrial enterprises to benefit from electricity cost savings in exchange for shifting energy usage to off-peak hours whenever required by the operator.

Production at one major steel producer has increased by roughly 40 percent this year. This unit operates 13 to 15 hours per day on weekdays and makes up with round-the-clock output on weekends. Its employment level has increased. Given the ongoing subdued demand in Greece, the enterprise’s additional production is primarily being exported.

The local cement industry has also provided good news. The Titan group, for example, has announced that the maority of production at its Kamari plant in the Viotia prefecture; slightly northwest of Athens, is being exported.

Smaller producers, which, until recently, had struggled to remain afloat, are also benefiting from the energy cost reductions brought about by the ‘disruption management’ mechanism and other measures. These include producers in the paper and textile industries.

Just days ago, EVIKEN, the Association of Industrial Energy Consumers, forwarded a written request to the energy ministry seeking an extension to the energy cost-saving “disruption management” mechanism, expiring in slightly less than a year.

The European Commission has just endorsed an equivalent German “demand response” plan, bringing the issue to the fore. The German system will be valid until July, 2022.

 

 

Industry requests ‘disruption management’ measure extension

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EVIKEN, the Association of Industrial Energy Consumers, has forwarded a written request to the energy ministry seeking an extension to the energy cost-saving “disruption management” mechanism, expiring in slightly less than a year.

The European Commission has just endorsed an equivalent German “demand response” plan, bringing the issue to the fore. The German system will be valid until July, 2022.

Greece’s industrial sector has highlighted that the measure’s extension is essential to prevent a void that could prompt unpredictable repercussions for Greek industry, already lacking a competitive edge in terms of energy costs.

The ‘disruption management’ mechanism enables major industrial enterprises to benefit from electricity cost savings in exchange for shifting energy usage to off-peak hours whenever required by the operator.

The government’s new Environment and Energy Minister Giorgos Stathakis, appointed last Friday, will be the recipient of the request, forwarded to his predecessor Panos Skourletis, who now heads the Ministry of Interior Affairs.

As one of its arguments, EVIKEN, in its request, noted that Greece’s ‘disruption’ mechanism was approved back in October, 2014, but not implemented until March, 2016. It expires on October 15, 2017.

The association noted that the Greek mechanism was endorsed by Brussels for a maximum period of three years, a time period that cannot be fully utilized as a result of the delay, caused by a lack of framework.

 

‘Disruption’ plan extension quest gains German support

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The country’s industrial sector, seeking an extension to the validity of energy cost-saving “disruption management” auctions, has gained unanticipated support for its quest as a result of a pivotal decision made by the European Commission that endorses an equivalent German “demand response” plan, thereby setting a precedent.

This system enables major industrial enterprises to benefit from electricity cost savings in exchange for shifting energy usage to off-peak hours whenever required by the operator in order to maintain the grid’s stability.

The “demand response” system applied in Germany was approved in Brussels as recognition of the benefits it offers – improved energy supply security and protection of energy market competition.

Greece’s equivalent “disruption management” auctions are scheduled to end in November, 2017.

Local industrial sector representatives have already sought an extension to the plan and have requested backing from the Greek government.

During the European Commission’s examination of the German plan, the country’s industrial representatives contended that services offering support to grid stability are essential as a result of increased RES penetration in Germany’s electricity market. This development requires grid operators to be provided support through services offering flexibility, such as the “demand response” plan, to cover fluctuations, the German officials successfully argued.

Authority’s fixed CAT plan headed in right direction, EVIKEN notes

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A proposal made by RAE, the Regulatory Authority for Energy, for the country’s fixed CAT mechanism to compensate electricity producers is headed in the right direction as, compared to the current temporary CAT model, it factors in a wider range of selection criteria for producers, EVIKEN, the Association of Industrial Energy Consumers, has noted in letter sent to the authority. A public consultation procedure for the mechanism is now in progress.

In its letter, EVIKEN also pointed out that the fixed CAT mechanism needs to take into account the electricity market’s imminent restructuring.

In addition, the association noted that the “disruption management” plan – enabling major industrial enterprises to benefit from electricity cost savings in exchange for shifting energy usage to off-peak hours whenever required by the operator – which is scheduled to remain valid until October, 2017, will need to be extended until the target model, Greece’s series of adjustments needed to meet the EU’s wider plan for an integrated energy maket, is fully implemented.

Industry troubled by sizeable ‘disruption plan’ amount cuts

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IPTO, the power grid operator, has decided to reduce the electricity amounts to be offered through the next “disruption management” auction scheduled for next Tuesday, a move that has troubled the industrial sector, depending on the measure as an energy cost-cutting tool.

The combined total to be offered for long-term and short-term services will be reduced from 1,650 MW to 1,200 MW.

More specifically, the long-term service to be offered will measure 550 MW, down from 750 MW at an auction last May, while the short-term service amount to be offered on Tuesday will be reduced to 650 MW from 900 MW.

Though necessary considering the electricity grid’s needs, the “disruption management” plan, enabling major industrial enterprises to benefit from electricity cost savings in exchange for shifting energy usage to off-peak hours whenever required by the operator, has also stood as a key part of the government’s drive to reduce energy costs for the industrial sector.

Besides serving the needs of IPTO, the power grid opearator, the measure also doubles as energy-cost relief for the industrial sector.

IPTO cited a reduced grid load for the reduced amounts to be offered at next week’s auction.

 

Busy auction month, covering gas and electricity, for industry

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The current month is an active one for the country’s industrial sector as major-scale energy consumers prepare for a DEPA (Public Gas Corporation) auction next week, to ensure their gas needs, as well as the next “disruption management” auction, expected late September.

The “disruption management” auctions, introduced earlier this year, offer capacities to major industrial enterprises, enabling them to benefit from electricity cost savings in exchange for shifting energy usage to off-peak hours whenever required by the operator.

The upcoming DEPA auction, covering the year’s fourth quarter and scheduled for September 13, will offer a natural gas amount of 310,815.258 MWh in 50,000 units, each measuring 6.216 MWh. Participants need to have settled outtanding debt or made payback arrangements. The DEPA gas auctions are included in the list of gas market bailout requirements.

The “disruption management” auction, staged by IPTO, the power grid operator, is scheduled for September 26. The previous session, covering May 1 to September 30, was held in late April.

To date, three “disruption management” auctions have been staged since the measure’s late-February launch. A second session was held in late March and a third in May.

The measure has proven effective to date as many industrial enterprises have been able to offer “disruption management” services to the country’s grid, reducing their energy costs.

Virtually all of the market’s main players took part in the previous auction. The auction prices reached 47,600 MW for short-term services and 48,600 MW for long-term services.

Five-month ‘disruption plan’ auction produces positive results

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Yesterday’s two “disruption management” plan auctions, covering a five-month period from May 1 to September 30, drew solid participation and ran smoothly.

It seems lessons were learnt from disputes and complaints generated at the two preceding auctions, leading to a more successful session.

The “disruption management” auctions offer capacities to major industrial enterprises, enabling them to benefit from electricity cost savings in exchange for shifting energy usage to off-peak hours whenever required by the operator.

The auction for the long-term service, during which a capacity of 750 MW was auctioned off, reached a price of 48,600 euros per MW. The opening bid was made at a price of 2,000 euros per MW. A total of 110 bids were placed, of which 103 were satisfied.

Larco, the state-controlled general mining and nickel producer, captured the biggest share in the auction offering long-term services, this being 129.8 MW, followed by the steel industries Sovel and Sidenor, which secured respective amounts of 111.5 and 71.5 MW. Considerable amounts were also secured by Hellenic Halyvourgia, three Titan cement production facilities, two Heracles cement production units, five lignite mines owned by the main power utility PPC, as well as the industrial enterprises Epilektos, Mel, Fibran, Halyps, and Pako paper mills. The bids of three enterprises, Solk, Elka, and Fulgor, failed to secure amounts.

As for the auction offering short-term services, during which a total capacity of 900 MW was auctioned off, the price reached 47,600 MW. An opening bid of 1,100 euros per MW was placed, while a total of 125 bids were made. Of these, 91 were satisfied. The biggest amounts were secured by Aluminium of Greece (250 MW) and Larco (161.3 MW), while considerable amounts were also secured by Sidenor, Sovel, Hellenic Halyvourgia, Titan, PPC, Heracles, MEL, Epilektos, Yioula, Fibran, Halyps, and PAKO. Solk, Halkor, Elval, Elka, and Fulgor failed to secure amounts.

New five-month ‘disruption plan’ auction to be staged

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IPTO, the power grid operator, has scheduled two “disruption management” plan auctions for today, the biggest to date, to cover a five-month period from May 1 to September 30.

The operator will auction off 750 MW in the first auction (long-term service) and 900 MW in the second auction (short-term service).

IPTO has announced that 26 prospective bidders have expressed an interest to take part in the first auction, while 30 participants intend to bid in the second auction.

Some of the prospective bidders will be taking part in the “disruption management” auctions for the first time. These include PAKO paper mills, Hellenic Cables and its subsidiary firm Fulgor. They will be able to take part as IPTO has lowered the lower capacity limit to 3 MW.

Other participants include ELPE, Titan, Aluminium of Greece, Sovel, Sidenor, Halkor, Solk, Yioula, Hellenic Halyvourgia, MEL, Fibran, Epilektos, Halyps, the main power utility PPC, Iraklis, Flexopack and Larco.

The “disruption management” plan is intended to enable energy cost savings for major-scale industry in exchange for shifting energy usage to off-peak hours whenever required by the operator.

PPC, responding to EVIKEN, defends ‘disruption plan’ auction rights

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The main power utility PPC has defended its right to participate in the “disruption management” plan’s auctions – intended to enable energy cost savings for major-scale industry in exchange for shifting energy usage to off-peak hours whenever required by the power grid operator – in a letter forwarded yesterday to EVIKEN, the Association of Industrial Energy Consumers. EVIKEN had recently reacted against the utility’s involvement in the “distruption plan” auctions.

PPC undermined the recently introduced “disruption management” plan’s second auction session late last month by submitting extremely low offers intended to flatten session prices, sparking protest by disgruntled energy-intensive industry officials.

In its letter, PPC noted that it was surprised by EVIKEN’s intervention, adding that the initiative created a “particularly unfavorable impression.”

EVIKEN has created an impression that it does “not recognize the efforts and sacrifices made by PPC to supply electricity to [industrial] enterprises – members of the association – at the lowest possible prices, based on current conditions,” PPC noted in its letter. Both the association and high-voltage consumers have previously acknowledged PPC’s efforts, the utility added.

PPC also noted that EVIKEN will need to offer a “reasonable response as to why an administration representing shareholders of an enterprise listed on the bourse, and appointed to protect their interests…should be barred from the ‘distruption plan’ auctions.”

In its letter to EVIKEN, PPC noted that the industrial association knows very well that no such agreement or obligation was made, or could be made.

The utility also pointed out that it had not made full use of the capacity it is entitled to for the auctions when it registered with IPTO, the power grid operator, to take part.

PPC is interested in favorable and constructive cooperation with EVIKEN and all high-voltage consumers, the power utility stated in the letter, adding that it intends to contribute to the maximization of benefits offered to all sides by the “disruption plan”.

Yesterday, EVIKEN, in a letter forwarded to IPTO – ahead of public consultation procedures for revisions to two articles of the “disruption plan” auction regulations – asked the operator to examine whether PPC has the right to partipate in the auctions.

PPC shunning mine cost-cut potential, professional advice

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The participation of main power utility PPC’s lignite mines in the “disruption management” plan’s two recent auctions prompted a reaction from disgruntled industrialists as a result of the limited capacity amount that was left over for industrial enterprises, and the consequent flattening of prices caused by the utility’s involvement in the auction process.

PPC’s decision to seek “disruption” plan capacities through the auctions linked to the “disruption management” plan – introduced to enable energy cost savings for major-scale industry in exchange for shifting energy usage to off-peak hours whenever required by the operator – clearly indicated that the utility is not at all interested in reducing its operating costs.

PPC submitted bids worth 5 euros per MW at these auctions, a long way off the nearest bid of 1,000 euros per MW.

PPC’s complete disinterest for more efficient cost-related management of its mines was made all too clear at the “disruption” plan auctions. The approach, however, did not come as a surprise for energy market officials who have closely monitored how PPC has managed its mines over the years. The strategy has been to bloat expenses with disregard for the effects on operating costs.

A cost study conducted by the multinational professional services company Ernst & Young noted that PPC’s mines paid 78.2 million euros for 924,288 MWh of electricity supply in 2012, or an average supply price of 84.6 euros per MWh. The study stressed that the utility’s mines, as a high-voltage electricity consumer, had the potential to pay 65 euros per MWh, or 23.1 percent less. This, alone, would have saved the mines 18 million euros in operating costs.

 

IPTO change opens ‘disruption’ plan auctions to smaller units

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IPTO, the power grid operator, has accepted a request made by EVIKEN, the Association of Industrial Energy Consumers, to include smaller industrial enterprises consuming up to 3 MW into the “disruption management” plan.

The “disruption management” plan enables energy cost savings for major-scale industry in exchange for shifting energy usage to off-peak hours whenever required by the operator.

The operator has announced that, as of the next “disruption management” auction, offering capacities to participants, the minimum electricity consumption level, as a requirement per participant, will be lowered from 5 MW to 3 MW.

This revision will open up the “disruption management” auction process to smaller industrial units such as the Pako and Konotini papermills, as well as energy-intensive production facilities consuming smaller amounts of electricity. It is estimated that industrial enterprises with a combined total consumption level of between 17 to 20 MW will be drawn, meaning that no drastic changes to the overall scene can be expected.

At the previous auction, held last week, the main power utility PPC submitted low offers which subsequently flattened the session’s price levels, prompting criticism from market officials.

A total of 15 offers by participants seeking a total capacity of 137 MW were excluded from the auction’s longer-term agreements category, while 34 bids seeking a total capacity of 175.1 MW did not make the cut for the short-term agreements category.

PPC undermines ‘disruption’ auction with flattening bids

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Yesterday, while the energy minister Panos Skourletis was trumpeting the “disruption management” plan – enabling energy cost savings for major-scale industry in exchange for shifting energy usage to off-peak hours whenever required by the operator – as a beneficial pricing tool policy for the industrial sector, the main power utility PPC was undermining the recently introduced initiative’s second auction session by submitting extremely low offers intended to flatten the session, disgruntled energy-intensive industry officials have protested.

In comments offered to energypress, industrial sector officials expressed their discontent, adding that the events at yesterday’s auction could have a domino effect and negatively impact negotiations between PPC and industrial enterprises for new tariff deals.

Detailed data provided by IPTO, the power grid operator, for yesterday’s auction showed that PPC’s five mines were the first to submit offers, at a level of five euros per MWh. Market officials condemned PPC’s behavior as undesirable and provocative, noting that the utility’s sole intention was to keep prices low and not be credited with money from the process.

Interestingly, yesterday’s session for short-term agreements ended up offering subsidized support to PPC’s mines while excluding bids from active major factories and industries such as Corinth Pipeworks from the process and offering smaller-than-expected capacities to others. A total of 15 offers totaling 137.6 MW were not accepted.

The situation was worse for longer-term agreements. A total of 34 offers totaling 175.1 MW were left out, including Solk, MEL (Macedonian Paper Mills), and Halkor.

Prices for short-term agreements reached 30,000 euros per MWh and a total capacity of 650 MW was provided to Titan Cement, Sidenor, Sovel, PPC, Iraklis, Epilektos, MEL, Yioula, Fibran, Halyps, Hellenic Halyvourgia, ELPE (Hellenic Petroleum), and Larco.

In the longer-term agreement category, the auction’s price level reached 21,900 euros per MWh and a total capacity of 850 MW was provided to Titan Cement, Aluminium of Greece, Sidenor, Sovel, PPC, Epilektos, Yioula, Halyps, Hellenic Halyvourgia, ELPE (Hellenic Petroleum), and Larco.

 

 

 

‘Disruption plan’ electricity amounts at auctions increased

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IPTO, the power grid operator, has increased the electricity amounts to be offered at the “disruption management” auctions to 650 MW for short-term agreements and 850 MW for longer-term agreements, both up from 500 MW each in the first auction, held at the end of February. The next auction, offering the increased amounts, is scheduled for next Thursday.

The increased amounts for the auction, covering April 1 to 30, were made to meet increased demand expressed in the first auction and satisfy participant needs.

The “disruption management” measure was introduced to enable energy cost savings for major-scale industry in exchange for shifting energy usage to off-peak hours whenever required by the operator.

Besides the increased electricity amounts to be offered at next week’s auction, the operator has also announced new regulations that exclude production units that are currently not active from participating. Prior to the revision, facilities could take part in the auction based on preceding production levels.

Despite the new auction rules, Larco, the troubled state-controlled general mining and nickel producer, has registered to take part in both auctions, for short-term and longer-term agreements. Larco, which ranks as the country’s second biggest electricity consumer, will seek roughly 160 MW.

EVIKEN, the Association of Industrial Energy Consumers, in a letter forwarded to IPTO during recent public consultation procedures for the revisions to the “disruption management” measure, questioned a position adopted by one consumer during the process, who, according to the association, equated consumers who have disrupted their basic production activity with ones who do not operate at full capacity during peak-demand periods.

 

 

PV legal challenge against ‘disruption’ plan in October

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A legal case filed by SPEF, the Hellenic Association of Photovoltaic Energy Producers, seeking the nullification of a ministerial decision for the “disruption management” measure, will take place on October 26, 2016, at the Council of State, the Supreme Administrative Court of Greece, according to reports.

The association, in its case, notes that it is seeking the annulment of the disputed ministerial decision for a large number of technical, economic and legal reasons concerning the measure with regards to proportionality and conditions for the photovoltaic sector.

The “disruption management” measure was recently introduced to enable energy cost savings for major-scale industry in exchange for shifting energy usage to off-peak hours whenever required by the operator.

 

Disruption plan revision would exclude closed units from auctions

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IPTO, the power grid operator, has proposed a revision to the “disruption management” measure, which, if implemented, will not permit industrial facilities to take part in auctions for capacities if they are not operating at the time of the auctions. Public consultation procedures for the revision were launched yesterday.

The “disruption management” measure, recently introduced to enable energy cost savings for major-scale industry in exchange for shifting energy usage to off-peak hours whenever required by the operator, did not fully meet the desired results at a recent first auction.

The IPTO proposal notes that auction participants should place bids based on maximum electricity amounts they expect to use during time periods covered by each auction. This essentially boils down to meaning that productions units which may be closed at the time of auctions will not be able to participate.

Demand at the first auction, held at the end of February, far outweighed two 500 MW amounts offered over two sessions, one for short-term agreements, the other for longer-term agreements.

Based on the proposed revision, a 56 MW capacity registered by steel company Hellenic Halyvourgia for its production facility in Aspropyrgos would be excluded from the auctions. So, too, would 71 MW linked to Halyvourgiki.

‘Disruption’ initiative, needing revisions, in jeopardy

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The “disruption management” measure, recently introduced to enable energy cost savings for major-scale industry in exchange for shifting energy usage to off-peak hours whenever required by the operator, is in jeopardy of being bogged down following an initial pilot auction offered for March.

Revenues raised through these were auctions were well below the expected levels, while the capacities offered did not meet the overall demand expressed by industrial enterprises, prompting a large number of firms to be left out.

Though industries have called for capacity increases that would help satisfy the excess demand, local authorities appear to be headed in the opposite direction. A reduced amount seems likely to be offered for the “disruption management” measure’s next auction.

Such a move would come as a setback for the industrial sector as it will delay the implementation of other measures, including ones concerning EU directives and the special consumption tax (EFK) imposed on industrial-sector electricity. The effort to revise tariffs in the electricity sector would also be delayed. Under current conditions, industrial enterprises seem unwilling to sign new power-supply supply agreements with PPC, the main power utility.

Industrial sector sources believe a lack of political will threatens to destroy the entire framework of measures and initiatives intended to support industry. The “disruption management” plan may have been introduced as a measure to bolster the grid’s security, but, in practical terms, it represents a key energy cost-reducing measure for industry.

 

Prices subdued by turnout at first ‘disruption plan’ auction

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Yesterday’s first local “disruption management” auction, offering industrial enterprises late-night capacity amounts for energy cost savings, produced surprises, strong demand, subdued prices as a result of the turnout, and dissatisfaction for a large number of participants.

Strong competition between bidders for one of the session’s two auctions, offering short-term agreements, meant that overall demand was not met. Auction prices were also driven down to extremely low levels.

Total demand for the auction offering short-term agreements exceeded the 500 MW total offered by 535.4 MW. The bids submitted by just ten of 26 industrial enterprises that participated were satisfied. These were: Aluminium of Greece (285.1 MW); Halyvourgiki (70.4 MW); Hellenic Halyvourgia (Aspropyrgos plant 56 MW and Volos units 49 MW and 8.5 MW); AGET (Volos 16.5 MW and Milaki 8.2 MW); Fibran (5.1 MW); Titan (1.2 MW for two facilities).

Industrial enterprises such as the entire Viohalko group, cement producer Halyps, the textile industry Epilektos, glassware producer Yioula, and Motor Oil Hellas were left out, while the main power utility PPC and its mines did not submit any bids, despite previous concerns that it would. The auction price for short-term agreements dropped to 10,000 euros per MWh.

As for the longer-term “disruption plan” agreements, the bids of most of the 23 participants were satisfied. Titana, Viohalko (Sovel, Sidenor, Solk), AGET, Hellenic Halyvourgia, Halyvourgiki, ELPE (Hellenic Petroleum), Motor Oil, Halyps, Epilektos, MEL (Macedonian Paper Mills), and Yioula all secured capacities. PPC’s five mines and Fibran did not participate.

Auction prices for longer-term “disruption plan” agreements reached a satisfactory level of of 30,000 euros per MWh. Sovel acquired the biggest amount, measuring 110.6 MW. Total demand exceeed the capacity offered by 258.1 MW.

The “disruption management” plan enables energy cost savings for major-scale industry in exchange for shifting energy usage to off-peak hours whenever required by the operator.

 

Excess demand for ‘disruption’ plan’s first auction next week

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The capacity to be offered by IPTO, the power grid operator, at an upcoming auction next Monday, marking the launch of the “disruption management” energy cost-saving plan for the industrial sector, will not cover demand judging by the overwhelming number of industrial enterprises that have registered to take part.

Two auctions will be staged next Monday, one covering longer-term agreements and the other short-term agreements. Total amounts of 500 MW will be offered through each auction. The session will begin with the auction for long-term deals.

The registrations made at IPTO’s registry indicate that demand by participants at the auction for longer-term agreements will exceed the capacity to be offered by 258.1 MW. Demand will exceed supply by 535.4 MW at the auction for short-term arrangements.

A total of 23 industrial enterprises interested in a total of 758.1 MW have registered for next Monday’s longer-term auction, while 27 industrial enterprises have registered for 1,035.4 MW in the short-term auctions.

The “disruption management” plan will enable energy cost savings for major-scale industry in exchange for shifting energy usage to off-peak hours whenever required by the operator.

Industrial enterprises registered to take part include the cement producers Titan, AGET, Halyps, as well as Halyvourgiki, Hellenic Halyvourgia, Sovel, Sidenor, Aluminium of Greece, Elval, Halkor, and Solk from the metals sector.

In addition, four mines operated by main power utilility PPC have registered for a total of 152 MW in the short-term auctions.

The country’s industrial sector has sought the implementation of the “disruption management” plan for quite some time. Its requirement has now become even more urgent as a result of the end of electricity tariff discounts offered by PPC to major-scale consumers since the beginning of this year, a bailout requirement.

‘Disruption’ plan auction announcement in two weeks

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The “disruption management” plan, to enable energy cost savings for major-scale industry in exchange for shifting energy usage to off-peak hours whenever required by the operator, appears set to be implemented in March, when the plan’s first auction is likely to be held.

An announcement for the first auction is likely to be made later this month, around February 24 to 26.

Earlier this week, IPTO, the power grid operator, put the overall procedure in motion by announcing the terms for the “disruption management” plan’s auctions. Subsequently, RAE, the Regulatory Authority for Energy, will now put the plan through a swift public consultation process, expected to be completed by February 22.

It all boils down to meaning that, barring any unexpected developments, the additional energy costs burdening for the industrial sector as a result of a high-voltage tariff increase at the beginning of the year, without the arrival of the “disruption management” plan, will be limited to the first two months.

A ministerial decision for the “disruption management” plan was signed in late December. It had been anticipated that IPTO would require about a month-and-a-half to prepare the necessary preliminary details.

A total of 500 MW will be offered at the first auction. Industrial enterprises intending to take part in the auction will need to have registered at the IPTO registry ten days ahead of the announcement, according to the procedure’s regulations. Given that the first auction’s announcement is expected to be made late this month, the deadline for registrations is not far away.

According to sources, the level of interest among industrial enterprises is high. Virtually all industrial firms have either already registered or are preparing to do so.

IPTO preparing registry for ‘disruption management’ plan

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IPTO, the power grid operator, is pressing ahead with steps needed to implement the “disruption management” plan, to enable energy cost savings for major-scale industry in exchange for shifting energy usage to off-peak hours whenever required.

In an announcement released yesterday, IPTO called on consumers to sign on to a registry established for the plan, a necessary first step in the process, while also presenting plan details. They were published in the government gazette on December 28.

Consumers interested in signing on to the plan’s registry need to be connected to the grid. Telemetric measurement at facilities must also be possible, while loads offered by each consumer must measure at least 5 MW.

Limits of 500 MW will be offered at a first auction to be staged by IPTO, covering a one-month period. The durations of ensuing auctions will be determined by the operator.

‘Disruption’ plan will not be implemented until March

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Although officials at IPTO, the power grid opearator, are pressing ahead with technical and regulatory matters concerning the “disruption management” plan – to enable energy cost savings for major-scale industry in exchange for shifting energy usage to off-peak hours whenever required by the operator – the plan’s first monthly auction will not take place until February, meaning the “disruption” plan will not be implemented until March, energypress has been informed.

The possibility of the operator staging auctions within January with the aim of introducing the “disruption management” plan in February has been ruled out.

The ministry’s “disruption” plan was published in the government gazette on December 30, 2015, but IPTO still needs to complete various details, including the establishment of a registry, model contracts, and an auction mechanism, These cannot be delivered within January.

As for the amount of electricity to be offered through auction procedures, energypress sources informed that IPTO intends to fully utilize the upper limit offered through the “disruption” plan’s ministerial decision and offer 500 MW in the first month and continue with 1,000 MW in the following months.

This prospect has not been embraced by renewable energy source (RES) producers, as highlighted in a letter forwarded by SPEF, the Hellenic Association of Photovoltaic Energy Producers. RES producers believe that the IPTO auctions should not even come close to offering upper-limit amounts if excess electricity capacity exists in the grid.

The delay in implementing the “disruption” plan has troubled energy-intensive industrial enterprises, which do not appear willing to sign any individual electricity supply contracts with the main power utility PPC until the “disruption” plan has been implemented. Industrialists are holding back because new tariffs will lead to greater electricity costs, which may be tolerated by heavy industry only if offset by a coinciding “disruption” plan.

The new electricity supply contracts for industrialists are intended to replace the abolition of a 20 percent discount offered. During preliminary talks staged ahead of a PPC extraordinary shareholders meeting in early December, certain major industrialists had indicated they would sign new electricity supply deals, PPC officials were inclined to believe.

 

‘Disruption’ plan published in government gazette

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The country’s “disruption management” plan, to enable energy cost savings for major-scale industry in exchange for shifting energy usage to off-peak hours whenever required by IPTO, the power grid operator, has been published in the government gazette.

A Transitional Supply Security Fee of various levels will be imposed on electricity production stations of all technologies to cover the measure’s cost.

Wind-energy units will be charged 0.9 percent of revenues, owners of photovoltaic units, except for roof-mounted systems, will be charged 1.8 percent, small hydropower plants will be charged 0.4 percent of revenue, while geothermal and biomass-biogas units will need to pay 0.3 percent of revenue. As for large thermal units, lignite-fired stations, natural gas-fueled units, and combined heat and power (CHP) facilities will be charged 0.2 percent of revenue, petrol-fueled stations will be charges 0.1 percent of revenue, and hydropower stations 0.4 percent of revenue.

If the annual sums accumulated into the Transitional Supply Security Fee exceed the amount required to cover the “disruption” plan’s costs, then the power producers will be proportionally reimbursed.

For the plan’s next step, IPTO, the power grid operator, will need to establish a registry and stage auctions. The total annual sum to be offered by the “disruption” plan through the auctions will be 50 million euros. This amount will be covered by the Transitional Supply Security Fee to be imposed on renewable energy source (RES) producers.

Signed ‘disruption’ plan needs some time to be implemented

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Market officials, especially industrial sector electricity consumers, are eagerly awaiting for the cost-saving “disruption management” plan, signed by energy minister Panos Skourletis last Friday, to be published in the government gazette. However, the measure, to partially offset power utility PPC’s high-voltage tariff increases, will take at least one month, possibly even two, to be implemented.

A series of measures now need to be made by IPTO, the power grid operator, before the “disruption management” plan comes into being to enable energy cost savings for major-scale industry in exchange for shifting energy usage to off-peak hours whenever required by the operator.

IPTO must prepare auction details and a required mechanism and also establish a registry for participants.

Based on the experience of a similar procedure completed by LAGIE, the electricity market operator responsible for the country’s wholesale market, a period of up to two months may be needed before the “disruption management” plan’s mechanism becomes operational, while the support of a specialized company to establish database and software systems could be required.

As disclosed yesterday by energypress, no changes to an older pre-Syriza coalition “disruption management” plan, which had received European Commission approval, were made for the finalized plan just signed by Skourletis.

As a result, all photovoltaic system producers, except for the household sub-category, will contribute 3.6 percent of their total turnover to the “disruption management” plan, wind-energy facility operators will contribute 1.8 percent of turnover, and small-scale hydropower stations 0.8 percent of turnover.

Based on these percentage figures, a total of about 48 million euros is expected to be raised annually to fund the “disruption management” plan.

Unchanged ‘disruption’ plan, temporary CAT model signed

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Greece’s energy minister Panos Skourletis signed ministerial decisions on Friday for the adoption of a “disruption management” plan – to enable energy cost savings for major-scale industry in exchange for shifting energy usage to off-peak hours whenever required by IPTO, the power grid operator – as well as a new CAT mechanism, according to energypress sources.

The “disruption management” plan will be implemented without changes to an older format that had been prepared by the pre-Syriza coalition, despite efforts for revisions by Skourletis and his team during negotiations with the country’s creditor representatives, the sources informed.

This means that all photovoltaic system producers, except for the household sub-category, will contribute 3.6 percent of their total turnover to the “disruption management” plan, wind-energy facility operators will contribute 1.8 percent of turnover, and small-scale hydropower stations 0.8 percent of turnover. This plan had been endorsed by the European Commission during the pre-Syriza coalition’s tenure.

The planned contributions to the “disruption management” plan by renewable energy source (RES) producers have  been the cause of protest by the sector, which has contended it is being burdened to support the industrial sector.

Based on the aforementioned percentage figures, a total of about 48 million euros will be raised annually for the “disruption management” plan, although it is believed that no more than 30 million euros is required.

RES sector producers have suggested they should register to fund the plan but only contribute amounts gradually, based on real needs.

As for the new CAT mechanism, the energy ministry and creditor representatives agreed to implement a temporary mechanism until the end of 2016 as there is insufficient time to make required revisions to the wholesale market for the introduction of a permanent model.

Independent RES producers will not receive any CAT-related payments for production in 2015 as a result of the European Commission’s prohibition of retroactive payments through the temporary CAT plan.

 

 

Small-scale PV contributions to ‘disruption’ plan may be eased

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The energy ministry is examining the possibility of easing the financial contributions of small-scale PV units – facilities with capacities of no more than 100 KW – to the “disruption management” plan, following requests made last week by renewable energy source (RES) representatives during a meeting hosted by the ministry, energypress has been informed by a leading ministry official and additional sources.

Following the meeting, during which energy minister Panos Skourletis updated energy industry officials spanning the entire sector on reform developments, including the “disruption management” plan – to enable energy cost savings for major-scale industry in exchange for shifting energy usage to off-peak hours whenever required by IPTO, the power grid operator – it had been announced that certain revisions to the ‘distruption’ plan’s funding would be attempted, even if just marginal, based on observations and proposals by participants. No further information had been provided.

Originally, it had been planned for small-scale photovoltaic sector operators with facilities of up to 100 KW, barring household PVs, to contribute 3.6 percent of their total turnover to the “disruption management” plan. Wind-energy facility operators were planned to contribute 1.8 percent of turnover, and small-scale hydropower stations 0.8 percent of turnover. This plan had been endorsed by the European Commission during the pre-Syriza coalition’s tenure.

The 3.6 percent contribution of small-scale PV operators may now be reduced, while contributions by other RES sub-sectors could be increased to offset the cut.

Based on the aforementioned percentage figures, a total of about 48 million euros would be raised annually for the “disruption management” plan, although it is believed that no more than 30 million euros is required.

RES sector officials condemned the plan during Friday’s meeting, noting sector firms are being called upon to contribute to a mechanism that will ultimately benefit the industrial sector.

 

‘Disruption management’ plan to be presented next week

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The country’s finalized “disruption management” plan, to enable energy cost savings for major-scale industry in exchange for shifting energy usage to off-peak hours whenever required by IPTO, the power grid operator, is essentially ready and, barring unexpected developments, will be delivered by the energy ministry next week.

Energy Minister Panos Skourletis is currently enagaged in final talks with industrial representatives to ensure the delivery of a “disruption management” plan that may offer particular support to export-oriented enterprises employing vast numbers. “We are in contact with EVIKEN (Association of Industrial Energy Consumers) and agree on many issues,” Skourletis declared.

As has been previously reported by energypress, the plan will essentially be based on an older model that had been prepared by the pre-Syriza coalition and endorsed by the European Commission.

The “disruption management” plan promises to offer needed relief to the industrial sector following the abolishment of main power utility PPC’s 20 percent discount offered to the sector, a bailout demand.

On the contrary, the “disruption management” plan is a concern for existing renewable energy source (RES) investors, who will be burdened most by the measure’s cost. The initial plan – already endorsed – includes a term obligating PV producers to contribute 3.6 percent of their total turnover and wind-energy enterprises 1.8 percent to help finance the “disruption management” plan. A new wave of reaction is expected from the RES sector.

Although definitely a step in the right direction for the industrial sector, the plan will not sufficiently reduce energy costs for local producers to levels comparable to those paid by rival producers in other countries, which would help make Greek enterprises more competitive internationally.

PPC’s failure to roll over its recently reduced operating costs to industrial electricity tariffs is a concern for industrialists. CATs and a Variable Cost Recovery Mechanism, locally acroymed MAMK, applied to help cover power station start-up costs, have both been eliminated, and, in addition, fuel costs have fallen drastically.

Besides the “disruption management” plan, the energy ministry is believed to be adding final touches to energy sector prior actions linked to the country’s bailout agreement.

Also, Greek officials are still waiting for a response from lenders on a NOME auction plan submitted several weeks ago. NOME auctions will offer independent wholesalers access to PPC’s low-cost lignite-fired electricity production as a means toward reducing the utility’s market dominance. Lenders are believed to have relaxed their demand on PPC to reduce its retail market share by 25 percent in the short term for greater focus on the 50 percent reduction target by 2020.