PPC, majors face 20% sale limit on output for bilateral contracts

Vertically integrated electricity producers will be permitted to sell up to 20 percent of production through mutual agreements once the target model is launched, RAE, the Regulatory Authority for Energy, has decided, ultimately doubling a 10 percent limited proposed by the Greek stock exchange, energypress sources have informed.

RAE reached its decision to set the limit at 20 percent after considering arguments presented by producers and sector authorities during consultation.

The limit takes into effect power utility PPC, dominating the retail market, as well as all integrated producers with retail market shares of more than 4 percent – namely, as things stand, Protergia, Heron and Elpedison, all with over 4 percent for quite some time now.

This decision by RAE is one of the last pending issues concerning energy exchange markets, recently rescheduled to begin operating on September 17, if all goes according to plan from here on.

ESAI/HAIPP, the Hellenic Association of Independent Power Producers, had proposed a limit of between 5 and 10 percent for PPC’s mutual agreements and forward contracts, and proportional limits for vertically integrated electricity producers with market shares of more than 4 percent.

PPC, which, from the outset, pushed for a 20 percent limit, based its argument on a study by global energy consulting company ECCO International, according to which the sale limit on output should range between 10 and 20 percent.

 

US firm awarded target model codes-PPC restriction study

Greece’s target model for the electricity wholesale market, a process entailing its harmonisation with EU law, appears set to develop at a swift pace over the next few months with external support to be provided by ECCO International Inc., an experienced US-based global energy consulting and software company.

ECCO International Inc., headed by Dr. Alex Papalexopoulos, emerged as the winning bidder of tenders staged by the Joint Research Center (JRC), the European Commission’s science and knowledge service, according to energypress sources.

These tenders invited bidders to submit offers for three projects – design and processing of relevant codes for the prospective Greek energy exchange to be set up by LAGIE, the Electricity Market Operator; design and processing of relevant codes for the balancing market, expected to ensure security of electricity supply at the least cost; and, thirdly, a study on the existing market conditions in Greece, to include proposals aimed at restricting the main power utility PPC’s dominant position, both in electricity production and supply.

Besides its extensive international experience in such projects, ECCO International Inc. also possesses a firm understanding of the Greek market. In the past, the company has taken on projects for Greek authorites such as HEDNO, the Hellenic Electricity Distribution Network Operator, and RAE, Regulatory Authority for Energy.

Contracts for the three projects are expected to be signed next week, while the studies to be prepared by ECCO International Inc. will need to be completed and delivered by the end of this year.

The European Commission’s JRC is also contributing to the effort by offering technical support for Greece’s adjustment to the target model. Aspects entailed in the endeavor include linking Greece’s intraday market with the Italian market, to be followed by a link with the Bulgarian market. These moves will geographically broaden the market’s scale and, through interconnections, should counter local market distortions.

Also as part of the target model, four electricity wholesale markets – the term products market; the day-ahead market; the intraday market; and the balancing market – are being introduced. This prospect promises to expand the time periods available for transactions, ranging from many years ahead to real time. As a result, suppliers will be able to manage risk through a futures market and formulate more competitive products for consumers. At least some of the markets are set to begin operating in 2018.