Tougher days lie ahead, GEK Terna CEO warns

The newly emerged market conditions created by the capital controls imposed in Greece mean that “today will be easier than the difficult days [that lie ahead],” Giorgos Peristeris, the CEO at the GEK Terna Group, whose activities include energy and construction, warned at a general shareholder’s meeting today, without going into great detail.

However, he did note that the Greek state, which owes GEK Terna a total of 400 million euros for work completed, has stopped making payments to all companies for public-sector projects.

Commenting on Ptolemaida 5, a prospective PPC power station planned for Ptolemaida, northern Greece, to involve the group, Peristeris noted that a construction permit is expected to be issued this week, based on information received until last Friday.

The corporate group’s chief official also noted that a deal between Greece and lenders, which had been hoped for until last Friday, would have ensured the provision of funds from the European Investment Bank, offering respite to local companies. These amounts would have partially covered amounts expected from the Greek state for projects being developed, he noted.

Asked to comment on whether work on various road projects would once again be halted as a result of the latest developments, Peristeris replied that banks were totally in charge on this front.

“The bank closures and capital controls will create extremely difficult conditions for companies and impact the transaction activities of citizens,” Peristeris noted. “We cannot imagine the prospect of a return to the drachma.”

No deal without PPC break-up and sale of IPTO, lenders say

The country’s lenders are insisting that the part-privatization of PPC and sale of IPTO, the power grid operator, be included in the final agreement leading to a new bailout agreement for Greece.

The inclusion of these two energy-sector sales as additional measures being demanded by the lenders was confirmed yesterday by a Greek official involved in the negotiations.

The official noted that “we continue to not be willing to discuss either matter”, adding further obstacles to the effort for an agreement. At the other end, the European Commission refused to offer any comments.

The dispute over these energy-sector matters adds to the widely publicized stand-off on VAT issues and pensions.

Among the lenders, the European Commission is at the helm of the energy-related demands, making clear that PPC’s part-privatization and sale of IPTO would open up the country’s electricity market in deeds and not just words, while also signifying Greek compliance with EU regulations and energy unification plans.

Countering the lender demands, Greek officials believe the Greek electricity market is free and operating under market competition conditions.

Sources in Brussels noted that both sides are adamant in their positions concerning the energy-sector matters, as is also the case with the VAT rate and pension issues, making any predictions impossible at this stage. The only sure thing at present is that lenders are not satisfied with Greece’s energy package of proposals.

This boils down to meaning that no bailout deal can be reached between Greece and its lenders without formal commitment for an end to the prevailing monopoly in the electricity market, through PPC’s part-privatization, and the natural gas market’s liberalization.

Greece, along with Bulgaria, is considered Europe’s last bastion insisting with monopolies in the energy sector.

Judging by the latest developments, a warning expressed several months ago by the EU’s competition commissioner Margrethe Vestager for Athens to adjust to EU regulations by reducing the dominance of enterprises enjoying monopolies was foreboding to say the least, regardless of whether many officials here paid no attention, or made out as if they had not paid any attention.

 

 

Energy-sector firms anxiously awaiting bailout developments

Energy-sector authorities contacted by energypress have all expressed deep concern over today’s crucial bailout talk developments as the possibility of a break in ties between Greece and its lenders has not yet been ruled out, while certain members of the leftist Syriza led coalition, including from its junior partner Independent Greeks, appear to want a rift.

The concern is not only linked to the concerns of the business sector – certain entrepreneurs, as a result of the nature of their particular fields, believe a Greek exit from the eurozone would benefit their operations – but, more crucially, the social, political, and economic upheaval that would be prompted by a breakdown in today’s negotiations.

Last week’s enormous outflow of deposits from Greek banks was countered with capital injections from the European Central Bank (ECB). If the negotiating sides fail to reach a deal, the ECB will stop providing liquidity, which would prompt a collapse of the local banking sector and leave banks unable to cover deposits. Implementation of capital control measures would be necessary, placing in danger social composure, the state’s smooth functioning, services, the economy, production, even national security. In addition, in the event of an unfavorable deal for the government, it would be forced to head for elections.

Certain energy sector officials told energypress that a temporary deal between Greece and its lenders would avert the danger of immediate collapse, but, essentially, the country and economy would fall further behind on commitments for the remainder of this year, increasing the difficulty of any prospective restructuring.

Both the Greek government and all creditor representatives need to act based on mature political insight for a wide-reaching and sustainable agreement. Only such a deal could restore faith in the economy and unlock investment as a preliminary step towards the economy’s revival.

The series of energy-sector demands set by the country’s creditor representatives include part-privatization of PPC, the main power utlity; privatization of IPTO, the power grid operator; gas market reforms; PPC tariff revisions based on production costs, which would lead to increases and decreases, depending on category; adoption of NOME-type auctions for lower-cost electricity; CAT revisions; energy tax revisions; and preparation of a legal framework supporting the renewable energy source (RES) sector.

 

 

Tsipras meets with Gazprom head, BRICS bank officials

Energy issues, including Greek Stream – the local segment of Turkish Stream, Russia’s latest pipeline proposal for natural gas supply to Europe via the south, from the Greek-Turkish border area – were discussed at a meeting in St Petersburg late yesterday between Prime Minister Alexis Tsipras and Gazprom chief Alexey Miller. The Greek head of state was accompanied by Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis.

The two Greek officials also met with board members of the BRICS Development Bank, now officially known as the New Development Bank (NBD), set up as an alternative to the US-dominated World Bank and IMF.

In St Petersburg to attend yesterday’s International Economic Forum (SPIEF – 2015), hosted by the Russian city, BRICS officials, representing the five-member association of emerging economies – Brazil, Russia, India, China, and South Africa – expressed interest to Tsipras for Greek cooperation with the NBD bank.

Tsipras and Lafazanis, the energy minister, were accompanied by the heads of Greece’s state energy apparatus – the main power utility PPC’s CEO Manolis Panagiotakis; DEPA, the Public Gas Corporation’s boss Spyros Paleogiannis; and ELPE Hellenic Petroleum chief Grigoris Stergioulis – on this trip, presumably to explore the possibility of doing business with BRICS members.

Tsipras is expected to sign an agreement at a meeting today with Russian president Vladimir Putin, formalizing Greece’s interest in the Greek Stream project.

Top energy officials join PM, minister for Russia mission

The top officials of the state’s energy apparatus have joined Prime Minister Alexis Tsipras and the Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis for an official visit to St Petersburg, during which the duo will meet with Russia’s President Vladimir Putin tomorrow and is expected to make official Greece’s interest in developing “Greek Stream”, the local segment of “Turkish Stream”, Russia’s latest natural gas pipeline proposal for supply to the EU via the south, from the Greek-Turkish border area.

The inclusion to the Greek delegation of the energy-sector company chiefs – main power utility PPC’s Manolis Panagiotakis; DEPA, the Public Gas Corporation’s Spyros Paleogiannis; and ELPE Hellenic Petroleum’s Grigoris Stergioulis – has obviously prompted curiosity over the purpose of their participation. It is believed they have joined the mission to develop ties leading to cooperation with members of the BRICS association of emerging economies – Brazil, Russia, India, China, and South Africa.

The Greek energy officials are expected to engage in talks with BRICS representatives on the sidelines of the St Petersburg International Economic Forum (SPIEF – 2015), to be held today.

As for the Greek government’s ambitious bilateral maneuverings with Russia, certain pundits have already limited their expectations of any meaningful and significant results. Such ties cannot be forged in minimal time for results of substance, and, most crucially, the European Commission has already expressed its disapproval of Greece’s effort to develop closer ties with Russia, the skeptical pundits contend.

Essentially speaking, the series of talks by Greek officials in St Petersburg, to culminate with that of tomorrow’s meeting between Tsipras and Putin, amount to no more than a game of diplomatic poker. The key message being conveyed is that Tsipras is in Russia to sign bilateral energy agreements of cooperation with the Russians at a time when Greece’s debt and bailout issues are the focus of attention in Brussels and Berlin.

Besides the Greek Stream pipeline project, it seems that the Greek government is also seeking to include various other issues as part of a wider energy agreement, such as LNG, crude oil supply, the expiring hydrocarbons tender for offshore blocks in the Ionian Sea and south of Crete, as well as the electricity market. The five-member BRICS association includes three petrol-producing countries, Brazil, Russia, and South Africa.

Russia’s Turkish Stream proposal seems to have already run into trouble. Turkey, the Former Yugoslav Republic of Macedonia (Fyrom), and Serbia, countries through which the pipeline would cross, appear doubtful, to add to the European Commission’s reserved stance, despite the fact that nobody doubts the pipeline would be a useful addition to EU energy supply.

 

Tax measure offering selective exemption removed for relook

An article included in a mini tax reform bill that was submitted to Greek Parliament last week, exempting industrial enterprises relying entirely on natural gas for production purposes from a special consumption tax (EFK) imposed on natural gas, has been withdrawn for further processing following the negative reaction it prompted in the industrial sector, which argued the article provides selective favorable treatment.

The article, as it stood, essentially focused on Phosphoric Fertilizers Industry (PFI), Greece’s largest chemical company, making it the basic beneficiary. PFI produces ammonium nitrate, a process for which the chemical company consumes considerable amounts of natural gas, representing 90 percent of the final product’s total cost.

Yesterday afternoon, during a parliamentary session on the mini tax reform bill, Alternate Finance Minister Nadia Valavani withdrew the article in question. In doing so, she noted that the measure, valued at 25 million euros per year, was too costly for the Greek state’s coffers to not include more beneficiaries, especially enterprises having trouble meeting salary, social security fund, and gas bill payments. Valavani said the article requires more work but would return to parliament as part of another bill.

Following the heated response from industrial sector officials, the Finance Ministry and Production Reconstruction, Environment and Energy Ministry both denied being responsible for the measure. According to sources, the Minister of State was behind the tax-relief measure, whose team had assured the energy minister it would apply to a large number of industrial enterprises before the article was endorsed by Panagiotis Lafazanis, the energy minister.

Lenders, Greek officials at opposite ends on energy issues

The country’s lenders have asked for “irrevocable steps” towards the privatization of IPTO, the power grid operator, while also requesting the part-privatization of PPC, the main power utility, for the establishment of a “fully functional” new privatized business unit, confirming preceding energypress reports on the energy-sector developments at the bailout negotiations.

At the other end, the list of proposals forwarded by Greek officials does not include a single reference to these requests, as had been anticipated. The majority of proposals made by the lenders, including on the energy front, as terms for a new bailout agreement, stand no chance of being accepted by the leftist Syriza-led coalition, at least not by its current line-up.

On their request for PPC’s part-privatization, a plan that had been set in motion by the country’s previous administration before it was ousted from power in the January 25 snap elections, the lenders noted it needs to serve as a key revision for reforms in Greece’s electricity market.

The move had been expected following remarks made a fortnight ago by the EU’s competition commissioner Margrethe Vestager, who, while noting the Greek energy market is plagued by a lack of competition, stressed “PPC’s monopoly must come to an end.”

As for the request by lenders concerning IPTO, it is clear they want the power grid operator’s privatization process to resume. Despite strong interest expressed just months ago by Italy’s Terna and the State Grid Corporation of China (SGCC), the procedure was interrupted following January’s elections.

Besides the PPC and IPTO requests, other lender proposals include natural gas market reforms; tariff revisions at PPC, based on production costs, meaning both price increases and decreases, depending on category; adoption of the French NOME model for lower-priced electricity; CAT mechanism reforms; reinforcement of RAE’s (Regulatory Authority for Energy) independence and financial standing; energy-sector tax revisions; and preparation of a legal framework supporting renewable energy sources (RES).

The Greek side’s only privatization reference for the energy sector concerns the sale of a stake in DESFA, the natural gas grid operator, to Azeri company Socar, estimated to provide 188 million euros. But, at this stage Socar appears set to abandon the process following EU investigations into an agreement reached by the Azeri company with the previous Greek government.

The list of energy-related proposals by Greek officials also includes a plan for the natural gas market’s liberalization, based on new legislation by October this year. A measure for the state’s payment of 200 million euros owed to the power utility PPC by the end of 2015 has also been included.

On the RES front, the government has proposed a new way of calculating Emission Reduction Tariff (ETMEAR) surcharges added to electricity bills, within three months of a bailout agreement, as well as new development plan for the RES sector, in cooperation with German consulting firm GIZ.

Energy a key theme at the recent Economist conference

Energy was a key theme at the Economist’s recent 19th Roundtable with the Government of Greece in Athens, with much discussion of pipelines and the politics surrounding them.

Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis set out a vision of Greece as a “pluralistic energy hub” and a “pioneer in energy interconnections”. Diversity of energy links would make the country truly independent in the energy sphere, he noted.

The euro-zone economy is improving, supported by a trio of favorable factors, quantitative easing (QE) from the European Central Bank (ECB), cheaper oil, and a cheaper euro, former Italian Prime Minister Enrico Letta pointed out at the conference.

However, the uncertainty over Greece is a big cloud on the European horizon, with a palpable risk of the country falling out of the euro zone – a 40% chance, reckons Joan Hoey of the Economist Intelligence Unit (EIU). Greece is back in recession, and growth forecast for 2015 has been taken down to 0.5% by the European Commission and to zero by the EIU.

Precisely because all eyes are on Greece there was very high interest in the Roundtable, with more than 600 people attending the session with Finance Minister Yanis Varoufakis and at the closing dinner with Prime Minister Alexis Tsipras.

Tsipras said his government came with “a new perception of how society and the economy can be organised”, and he gave an assessment of its first 100 days. Among the achievements he listed were first steps to “relieve the humanitarian crisis”, anti-tax-evasion measures, jobs restored to cleaning ladies at the finance ministry, a law to reopen public TV, moves towards raising the minimum wage and bringing the issue of wartime reparations from Germany into the limelight.

As for the crucial matter of the negotiations, the prime minister said he was devoting much of his time to them personally. The partners should not imagine that “our red lines will fade”. Four key points for an agreement were low primary surpluses as targets, especially for the first two years; no obligation for new cuts on pensions and salaries; a restructuring of public debt; and solid packages of public investment. Common ground seems to have been identified, and Tsipras expressed optimism that a deal was very close.

Varoufakis stressed that Greece would not do the sort of deal with its creditors that resulted in only a temporary fix. Emphasising the need to be more realistic about the targets set, he said he would “never sign a deal that is not dynamically consistent”.

Minister of state Nikos Pappas echoed this notion, saying that Greece wants to reach a deal that will lead to “solutions”, not just any kind of deal.

According to Varoufakis, Greek debt has to be “redesigned”, avoiding the term “haircut”, a taboo word. Payments to the ECB should be deferred to the future and Greece integrated into the QE mechanism, he noted, adding there should be no change in VAT before the end of the summer.

Both Letta and Varoufakis stressed that Grexit would be a disaster. Letta called it a “catastrophe”, while Varoufakis said it would be a “recipe for going back to the Neolithic age”, even if he might have preferred that Greece had stuck with the drachma rather than joining the euro in the first place. On the positive side, the finance minister believed that as soon as a deal is struck there would be a “torrent of investment” in Greece. “Greece is going to have a bonanza,” Varoufakis remarked.

For the opposition New Democracy party, former deputy finance minister Christos Staikouras, speaking at the opening dinner, said that in its four months in charge, the Tsipras government had “lost time, confidence and allies”. Considering various measures, such as the primary budget surplus, payment arrears, non-performing loans, the investment climate, privatisation, education reforms, Greece had started to regress rather than make progress, Staikouras remarked.

Offering his views on reforms, based on the experience of other countries, Alvaro Pereira of the OECD’s Economics Department stressed the need not just for passing laws but having the ability to put them into practice. For a new government, front-loading of reforms is vital, and cross-party support helpful, Mexico being a good example, he noted.

The bankers were naturally concerned about the shortage of liquidity, but believed that much of the problem stemmed from the uncertainty over whether Greece would reach a deal with the institutions. As uncertainty comes down, liquidity would come back.

Government ministers did not dispel entirely concerns that tourists to Greek islands would have to pay an 18% tax on hotel and restaurant bills – saying it would not happen this summer, but not ruling out the proposal altogether.

For all the concerns over Greece, a bigger worry is the tension between Russia and the West and the possibility of nuclear war, said Laza Kekic, setting the scene for the session on security challenges for Europe.

Greece’s Defence Minister Panos Kammenos, leader of the Independent Greeks, the coalition’s junior partner, stressed that Greece’s role was to be a “pillar of stability” in a region of instability. He criticised the treatment of Greece by Germany (which wants to “impose its rule throughout Europe”) and expressed his displeasure with the West’s sanctions on Russia. Kammenos revealed that he was going to the US soon and would propose the creation of a new NATO base on an Aegean island.

Industrial association proposes measures for sector’s survival

SEV, the Hellenic Association of Industrialists, proposed a series of measures for growth in various sectors, noting these are already being widely implemented in other parts of Europe, at a general meeting held today by the association.

SEV’s list of proposals, announced by the association’s head, Theodoros Fessas, and to be forwarded by the association to the government, will seek a drastic energy-cost reduction for the industrial sector, down to levels enjoyed by fellow European operations, whose energy-cost levels are between thirty and forty percent lower.

Reduction of a special consumption tax (EFK) imposed on natural gas headed for industrial use and electricity production, set at 5.4 euros per MW/h – which is double the European average, and ten times more than a minimum level set by an EU directive – is one of the measures proposed by SEV.

SEV also proposed the swift implementation of a “power 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.

A committee assembled to examine the measure recently held a serious of sessions in a bid to determine how the “disruption” measure would be funded. Industrial and renewable energy source (RES) sector representatives were included in the committee. The Production Reconstruction, Environment and Energy Ministry, ultimately responsible for the matter, has yet to deliver a plan.

The “power disruption management” measure is one of the European Commisssion most heavily backed measures for ensuring smooth-functioning of grids in Europe.

A third economic-growth measure proposed by SEV entails incorporating EEAG (European Economic Advisory Group) state aid guidelines for the environment and energy sectors between 2014 and 2020 into the country’s legal framework.

The new guidelines, published by the European Commission just over a year ago, primarily seek the adoption of measures that would bolster competitiveness for energy-intensive European industry and help offset the effects of policies implemented in the field of energy and environmental change.

 

 

 

Major roundtable on European, Greek recovery in Athens this week

The forthcoming 19th Roundtable organized by the Economist and entitled “Europe: The Comeback? Greece: How resilient? Brainstorming with world leaders” will take place on May 14 and 15 in Athens at the Athenaeum InterContinental Hotel.

The event will be sponsored by Metaxas & Associates Law Firm in association with the Government of Greece.

Invited speakers are distinguished personalities from around the world, including Greece’s Prime Minister Alexis Tsipras; Pierre Moscovici, European Commissioner for Economic and Financial Affairs, Taxation and Customs; Klaus Regling, the Managing Director of European Stability Mechanism; and Poul Thomsen, Director of the IMF’s European Department.

Top personalities from politics and academia will once again brainstorm, openly discuss and put forward new proposals on the all the issues that this year’s 19th annual Roundtable will be covering. Lessons to be learnt from EU Members States on economic recovery, restructuring the Greek economy, privatization schemes and investment, finance, energy, tourism, shipping, business, technology and innovation are the key topics to be covered at this year’s two-day event.

Moderator of the panel discussion focusing on the prospects of the Greek Energy Market will be Managing Partner of M&A Law Firm, Dr. A. Metaxas.

M&A ranks as one of the leading business law firms in Greece, especially in the core fields of its specialization, these being energy, privatizations and legal and regulatory aspects in all network bound sectors of the economy.

The two-day Summit’s website may be visited via this link.

Greek official’s 3-5bn euro gas pipeline deal claim denied by Moscow

Greece is set to sign an agreement with Russia, possibly even tomorrow, for the local segment of “Turkish Stream”, Russia’s latest natural gas pipeline proposal for supply to the EU from the south, in exchange for an advance payment of between three to five billion euros, German magazine Der Spiegel has reported, based on an alleged leak made by an unnamed Greek government official.

The prospect was also reported by Greek business newspaper Agora. However, Kremlin representative Dimitry Peskov has already denied that such a deal has been reached.

Greece is running out of time to service major debt repayments and still needs to persuade highly skeptical creditors of a credible reforms plan to secure another tranche of needed bailout funds.

Greek Prime Minister Alexis Tsipras made an official visit to Moscow earlier this month, during which he expressed interest in the development of Russia’s latest natural gas pipeline proposal for supply to the EU via Greece and Turkey. If constructed, it would replace Russia’s preceding and indefinitely shelved plan, South Stream, which would have bypassed Ukraine and crossed the Black Sea to Bulgaria.

According to the reports, Greece will receive an advance payment for anticipated future profit to be generated for the country by the “Turkish Stream” pipeline.

Greek government officials were not available to comment on the Spiegel article, Reuters reported.

Peskov, the Kremlin representative, told Russian business news radio station Business FM that energy cooperation was obviously discussed during the Greek prime minister’s visit to Moscow but “Russia did not promise any financial support because nobody requested it.”

Commenting on the issue, German Finance Minister Wolfgang Schäuble noted he would be glad to see Greece sign an energy deal with Russia, while adding that the prospect would not resolve the country’s bailout problems.

High energy cost a problem, Lafazanis tells EU counterparts

Greece’s elevated cost of energy stands as the sector’s main problem, as well as a key concern for the national economy, Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis told an informal meeting of EU energy ministers yesterday in the Latvian capital, Riga.

“Despite the difficulties, Greece has made positive steps in the area of energy efficiency, even though plenty still needs to be accomplished,” Lafazanis told his EU counterparts. “But the hight cost of energy continues to be the main problem for our economy, in the energy sector, which, in order to be dealt with, requires that our country pursues a new, progressive, independent, and multi-dimensional energy policy, part of which entails establishing a pluralistic energy hub between East and West,” he continued.

The Greek minister’s comments were offered during discussion on the meeting’s opening topic, “Energy Efficiency – Heating and Cooling”.

Lafazanis noted that the main social issue in the energy sector concerns countering energy-related poverty and energy deprivation, which have sidelined a considerable percentage of populations in EU countries. Drastic price-reduction policies are needed, as are energy policies based on social and income criteria, he noted.

“Improving energy efficiency, our topic today, means absolutely nothing for citizens and households being totally deprived of energy sources, and, possibly, as well as for frail economies that are pressured by stagnancy and recession and trapped in chronic investment inactivity. This cannot be easily overcome by investments in energy efficiency.”

The meeting continues today with a discusson on “Regional Cooperation in the Energy Sector”.

 

Tough task ahead for next leaders of privatization fund

The latest leadership – in a series of changes – to be appointed at TAIPED, the State Privatization Fund, will face the demanding task of seeking to draw foreign investors to Greece based on a radically revised plan being prepared by the recently elected government.

The leftist Syriza-led coalition government’s plan, as was reported in local press over the weekend, will be based on the establishment of “growth-intended consortiums” aiming to utilize public wealth, as the country’s new administration has renamed Greece’s privatization effort. These consortiums will be comprised of state property, interests in various sectors, including energy, and stakes in public companies. Investors will be offered both minority and majority stakes, depending on each particular case.

The government’s plan envisages offering investors stakes in new profit-making consortiums, while, at the same time, maintaining state control of strategically important infrastructure, companies, and property. The country’s airports and Hellenikon, a sizeable seaside plot in southern Athens, are just some of the privatization tasks that await TAIPED’s new leadership.

Whether the government’s plan will be embraced by investors remains to be seen. The main challenge will be to restore investor confidence in Greece, a far-reaching task that stretches well beyond the realm of TAIPED’s leadership.

Alternate Finance Minister Nadia Valavani has proposed two candidates for the top administrative posts at TAIPED. Stergios Pitsiorlas, a major tourism-sector entrepreneur and old party official at Synaspismos, Syriza’s precursor, has been proposed for the president’s role at the fund. Antonis Leousis, a figure with extensive experience in the property market sector, backed by a long tenure at Alpha Bank’s urban property division, has been proposed for the managing director’s role.

Both candidacies are expected to be appointed imminently. If so, they will replace Manolis Kondylis and Paschalis Bouhoris, respectively, who had been appointed to their posts by the country’s previous administration about eight months ago.

Pitsiorlas recently gained wider local exposure for his involvement in an investment worth over 100 million dollars by two companies, Med Sea Health and Mare Village, to develop tourism-industry infrastructure in northern Greece’s Halkidiki, in the Kanistro area. The project, a resort offering luxury accommodation for 400 persons over 13.2 hectares of land, is expected to begin operating in 2016. It is being funded by Russian capital, as well as other sources.

 

Greece wants benefits for TAP support, Lafazanis stresses

The newly elected Syriza-led coalition government will continue offering its support to the TAP (Trans Adriatic Pipeline) project, to transmit Azeri natural gas to Europe via Greece, but will expect benefits for the country in return, the newly appointed Production Reconstruction, Environment and Energy Minister Panayiotis Lafazanis made clear today during a series of high-profile meetings on an official visit to Baku.

Lafazanis’s agenda included a meeting with Azeri president Ilham Aliyev for a  discussion on broader cooperation between the two countries. The two officials mutually agreed that ties stood on solid ground between Greece and Azerbaijan. The need for further collaboration between the two countries was also pointed out, which, the officials added, was not only important for the two countries, but the wider region as well.

Lafazanis also took part in a Southern Corridor advisory council meeting, where he expressed Greece’s support for the TAP project. Lafazanis noted the Greek government was ready and waiting to contribute to the infrastructure project for its swiftest possible completion.

The Greek minister also met with the European Commission’s Vice President Maros Sefcovic, in charge of Energy Union, for a discussion on southeast European energy matters, with emphasis on the TAP project.

These subjects were also discussed in a meeting with Amos Hochstein, Acting Special Envoy and Coordinator for International Energy Affairs at the US Department of State.

During a meeting with Bulgaria’s Energy Minister Temenuzhka Petkova, Lafazanis and his neighboring counterpart both expressed their support for a swift completion of the IGB (Interconnector Greece-Bulgaria) gas pipeline project. The two officials underlined the need to further examine the project’s progress in the immediate future.

Lafazanis also held talks with Azeri Energy Minister Natiq Aliyev, during which both officials expressed an interest for a broad development of ties between the two countries, beginning with the TAP project. Lafazanis pointed out the need for Greece to gain benefits in exchange for the country’s support of the project. This position was reiterated by the Greek minister to TAP Managing Director Ian Bradshaw.

Lafazanis also held a meeting with BP’s Regional President for Azerbaijan, Georgia, and Turkey, Gordon Birrell. BP holds a 20 percent stake in the TAP consortium. The Greek minister again pointed out Greece’s request for benefits in exchange for the TAP project’s progress, adding that he was ready to discuss specific Greek proposals.

 

 

 

Lafazanis presents new energy policy, PPC, DEPA, ELPE roles

Delivering a policy speech in Parliament today, Production Reconstruction, Environment and Energy Minister Panayiotis Lafazanis reiterated previous government announcements for the energy sector, including new roles to be played by PPC, the Public Power Corporation, DEPA, the Public Gas Corporation, and ELPE, Hellenic Petroleum, and the cancellation of sector privatizations.

Lafazanis pointed out that his ministry’s renaming – from Environment, Energy & Climate Ministry under the previous administration – was not coincidental as production reconstruction stands as a leading priority for the newly elected leftist Syriza-led coalition government.

The newly appointed minister stressed that the government will support  the development of innovative industrial initiatives, including the interests of employees and the environment.

He noted that the General Secretariat for Industry would be revamped while adding that the implementation of specific sector policies would be pursued despite obstacles set by EU regulations. Lafazanis cited the shipyard industry as an example.

Lafazanis slammed the energy-sector policies pursued by the previous coalition government, especially in electricity, describing them as disastrous.

“PPC was downgraded and ripped off. If it does not change course quickly, it will be led to suffocation. Electricity prices have skyrocketed to unbelievable levels and are worsening the recession,” Lafazanis remarked. “The much-heralded market’s liberalization may have benefited major private-sector interests but it disorganized the market. Energy-related poverty has spread to unprecedented levels and overdue unpaid power bills owed to PPC exceed 1.7 billion euros,” he continued.

On renewable energy source (RES) production, the minister noted that its share in the energy market had grown significantly but smaller ventures were being wiped out and were at a loss as to when they would be paid for production. The RES sector is owed over 500 million euros for production distributed to the grid. PPC’s cash-flow problem is the root of this problem.

Lafazanis reiterated that the new government will cancel the previous administration’s plan to dismember and part-privatize PPC, as well as its effort to privatize IPTO. PPC subsidiary firm PPC Renewables will no longer be degraded but, instead, will play a leading role in the RES sector, Lafazanis asserted.

On a wider scale, PPC will serve as a driving force for a new energy policy that will support the industrial sector and economic growth, the minister said, adding that the utility needs to be restructured, staffed with new staff members, and disentangled from private-sector interests. Restructuring at PPC could lead to a production cost decrease of between twenty and forty percent, Lafazanis noted, referring to a study conducted on the issue by RAE, the Regulatory Authority for Energy. The benefits could be rolled over onto consumer and business electricity bills, he added.

The minister reiterated the government’s plan for free electricity to 300,000 households currently living under the poverty line.

On natural gas, Lafazanis said his ministry will “strive to achieve lower supply prices, currently the most expensive in Europe.” DEPA, the Public Gas Corporation, will be reconstructed to assume a role, without intermediaries, as a gas supplier for the entire country. “All privatizations plans are being abandoned,” he noted.

On the previous administration’s unfinished attempt to privatize DESFA, the Natural Gas Transmission System Operator, Lafazanis noted: “If we were the government, we would not have proceeded with this privatization. Besides, [Azeri energy company] Socar which is interested in acquiring DESFA, is a state-run company itself. It is not coincidental that most planned privatizations are nationalizations as they [companies up for sale] would be passed on to foreign state-run companies.”

The government will decide on DESFA once the European Commission completes its investigation into the agreement between Socar and the previous Greek administration over EU competition concerns, Lafazanis reiterated.

Commenting on the fuel market, the minister noted that ELPE could play a major productive role, as well as a key role in reducing fuel price levels in the Greek market.

On hydrocarbon exploration, Lafazanis said his ministry would push to the limits in search of solid partnerships. Following the completion, last Friday, of a tender for three onshore blocks in western Greece, a new hydrocarbons state company will be established for future activity, the minister reminded. An ongoing tender for exploration and exploitation of twenty sea blocks in the Ionian Sea and south of Crete will be reexamined, he added.

Concluding his speech, Lafazanis declared Greece will pursue a new energy policy through which the country will no longer play a subordinate role as a satellite state dependent on other countries, or groups of countries. Instead, Greece will employ a multi-leveled, multi-dimensional energy strategy in partnerships promoting national interests, he noted.

 

 

Besides Baku, energy minister planning Beijing visit

Production Reconstruction, Environment and Energy Minister Panayiotis Lafazanis is preparing to make an official visit to Beijing, according to sources, following the minister’s likely trip to Baku this Thursday for a South Stream conference. An exact date for the minister’s visit to Beijing has yet to be determined.

If he does attend this week’s conference in the Azeri capital, Lafazanis will meet with his counterparts from Bulgaria, Albania, and Croatia, as well as highly ranked European Commision officials.

The Greek minister met in Athens last week with Azerbaijan’s ambassador to Greece, Rahman Mustafayev for talks on an unfinished agreement, reached by Greece’s previous administration, for a 66 percent sale of DESFA, Greece’s natural gas grid operator, to Azeri energy company Socar, as well as the developing TAP (Trans Adriatic Pipeline) project, to carry Azeri natural gas into Europe.

Lafazanis’s agenda for his prospective trip to Beijing remains unclear. In the lead-up to Greece’s January 25 snap elections, Chinese officials had contacted the Syriza party, then still the main opposition party, for discussions on Chinese investment initiatives in Greece, including in the energy sector.

China’s SGCC was one of four participants in an international tender for the privatization of IPTO, Greece’s Independent Power Transmission Operator, a process now already considered dead following the newly elected Greek Prime Minister Alexis Tsipras’s policy announcements, which rule out the sale of all state networks.

In pre-election contact with Syriza party officials, SGCC had pointed out that it was not exclusively interested in acquiring a stake in IPTO, but was also open to other forms of collaboration concerning the country’s electricity network infrastructure.

Besides taking part in privatization attempts for IPTO and Greek ports, Chinese companies have also expressed a wider interest to invest in various Greek sectors, such as energy – in general – metallurgy, transport, and processing.

 

Social security-linked wealth fund of state assets planned

The newly elected leftist Syriza-led coalition government is examining the prospect of utilizing many prized state assets under the umbrella of a new sovereign wealth fund that could be used to cover future social security needs.

Although still at a theoretical stage that lacks specifics, such a fund, along the lines of a government pension fund adopted in Norway, would utilize state assets, including from the energy sector, through various financial tools such as new types of securities, rather than privatizations.

This plan could also take in IPTO, the Independent Power Transmission Operator, despite the Production Reconstruction, Environment and Energy Minister Panayiotis Lafazanis’s cancellation of the previous administration’s effort to privatize the operator.

A rough outline of the intended plan, which could incorporate revenues generated by hydrocarbon exploitation rights as well as state property, may soon be presented in Parliament by the new Deputy Finance Minister Nadia Valavani.

Although an official title has yet to be given to the prospective fund, a number of considerations are already being tossed about, including State Assets Fund and National Wealth and Social Security Fund, as had been mentioned by the Syriza party back in 2012.

Highlighting the new government’s change of strategy, Valavani, last Friday, called for the administration of the State Privatization Fund, or TAIPED, to resign.

A government official was yesterday quoted by Reuters as saying that “Greece will not cancel privatizations that have been completed” without specifying any further.

In any case, energy-sector privatization efforts can be considered all over, which does not mean that certain companies, such as IPTO, cannot be utilized in other ways.

 

Energy, environment to add 9.5bn euros, 40,000 jobs, PM says

Prime Minister Antonis Samaras, who presented the government’s pre-election policy for economic growth over the weekend – named “Greece 2021” by his conservative New Democracy party – stated that the energy sector will constitute one of seven main industries of the national economy.

Samaras said that, through his party’s policy, energy and the environment will play a pivotal role by adding 9.5 billion euros to the national economy, as well as 40,000 new jobs. Emphasis will be placed on the renewable energy source (RES) sector, water management, as well as treatment of solid and liquid waste, the Prime Minister noted.

The country’s hydrocarbon prospects will also play a key role in his party’s growth plan, Samaras remarked, while noting that “the first signs concerning natural gas and our country’s underwater wealth are extremely encouraging.”

He reminded that tender plans for hydrocarbon exploration had gone beyond the theoretical stage and were currently in progress. “They have disclosed our ability to play a leading role in Europe’s energy supply, which is a matter that greatly interests Europe, itself. This future is not too far off,” Samaras noted.

Commenting on the government’s privatization plans, Samaras said such options are pursued by all countries, but were a taboo subject here, and, in some cases, remain so, implying the main opposition leftist Syriza party, which says it opposes privatizations.

 

 

Minister presents Greece’s energy priorities in Istanbul

Environment, Energy & Climate Change Minister Yiannis Maniatis has underlined the importance of regional cooperation and European Union financing of crucially important infrastructure projects for the continent’s energy security during a recent trip to Istanbul.

Maniatis, who was in the Turkish city late last week to attend an energy and economy summit organized by the US think tank Atlantic Council, also took part in two Turkish ministerial meetings.

The Greek minister told his Turkish colleagues, at one of the two ministerial meetings he attended, that the European Commission president Jean-Claude Juncker was making good use of a 300-billion euro energy package.

Maniatis also pointed out that Greece is focusing its efforts on three energy-related projects, TAP (Trans Adriatic Pipeline), to serve the region’s Southern Gas Corridor, development of the IGB pipeline to connect Greece and Bulgaria, as well as construction of the East Med Pipeline, intended to carry gas from Israeli deposits towards Europe.

At the second ministerial meeting attended by Maniatis, whose focus was on the completion of Europe’s energy integration, especially matters concerning north and south, the Greek minister spoke of the need for the establishment of a common energy market and full development of interconnecting pipelines between EU member states. Maniatis spoke more extensively on an initiative to develop gas pipeline infrastructure that will connect Greece, Bulgaria, Romania, and Hungary. The Greek minister also discussed this prospective project with Bulgaria’s Deputy Minister for Energy Anton Pavlov, as well as the respective Energy Ministers of Romania and Hungary, Razvan Nicolescu and Andras Aradszki.

The Greek minister also met with US Secretary of Energy Ernest Moniz, as well as Amos Hochstein, Acting Special Envoy and Coordinator for International Energy Affairs at the US Department of State. The three officials discussed the prospects of Greece becoming an energy hub in the region.

During his meeting with Turkish Energy Minister Taner Yildiz, the Greek Environment, Energy & Climate Change Minister presented Greece’s positions on Cyprus’s Exclusive Economic Zone (EEZ), while expressing hope that a cooperation council to be set up by the two countries in early December will contribute to diffusing the current tension.

 

 

State aid shaping new energy market environment

The European regulatory framework and, in particular, new guidelines set by the European Commission for state aid in energy and environmental protection for 2014 to 2020, have shaped an entirely new environment for the European energy market, it was concluded at a recent workshop held in Athens.

The event, “Modernization of the Regulatory Framework for State Aid – Challenges for the Greek Public Administration”, co-organized by the Hellenic State Aid Institute (EIKE), the Finance Ministry’s state aid department, and the Center of International and European Economic Law (CIEEL), was streamed live by energypress.

The presentations delivered at the event made clear the importance and advanced penetration of state aid in the energy sector, while also highlighting problems encountered in matters such as industrial energy pricing policy, the “disruption management” plan – to enables energy cost savings for major-scale industry in exchange for a reduction in energy consumption whenever required by the system, if overloaded – legal restrictions in the renewable energy source (RES) sector, and the shaping of the Capacity Assurance Mechanism.

Participants at the one-day event, held last Thursday, included authorities from both the public and private sectors, members of Greece’s academic community, as well as European Commission officials who analyzed new EU regulations concerning state aid, as well as the significantly revised framework for energy investment state aid, new guidelines, and the challenges faced in implementing these.

The new guidelines, enforced last April, reflect the increased penetration of RES producers in recent years. They note that unnecessary government intervention should be avoided to keep additional taxpayer costs to a minimum.

The new regulatory framework’s content includes a plan for the gradual introduction of RES payment mechanisms adjusted to market regulations, and replacement of feed-in tariffs with feed-in premium systems.

Other subjects discussed at the event included state aid cases linked with major energy-related topics in Greece, such as energy cost for industry, as well as the New Deal, introduced as a solution to the renewable energy sources (RES) special account deficit at LAGIE, the country’s Electricity Market Operator.

The EIKE president, Prof. Dr Antonis Metaxas, offered a timely analysis on the legal protection possibilities for energy players in state aid matters, as well as on the application of state aid regulations by national courts.

 

Alpha Bank: Greece benefitting significantly from lower oil prices

Considerably lower international oil price levels, combined with the euro’s declined value against the dollar, are benefiting the Greek economy in its course towards a rebound in 2014, while the conditions created by these shifts also promise to spur and establish economic growth in 2015, Alpha Bank noted in its weekly report.

Despite the large increase in negative inflation in October, due to lower oil prices, the recovering Greek economy is creating conditions for stronger consumer demand, while also weakening the prospects of sustained negative inflation, the report noted.

The consumer price index fell to -1.7 percent in October, from -0.8 percent in September.

Greece’s negative inflation, from mid-2014 onwards, has resulted mostly from lower prices of imported products, especially petrol. Weakened domestic demand has been a far less significant contributing factor, unlike 2013, in the lower inflation rate, the report noted.

Significantly lower prices for products in Greece have primary resulted from the decline in petrol prices and the sharp 27 percent reduction of the special consumption tax (EFK) imposed on fuel.

The price of heating fuel in October this year was 17.9 percent lower compared to the equivalent month last year, while the price drop for transportation fuel was 2.1 percent.

In dollar terms, petrol prices have dropped by 27 percent since June, 2014, while, if calculated in euro terms, the decline has amounted to 21 percent.

Countries dependent on oil imports, including Greece and fellow European states, have benefitted significantly from this shift. On the contrary, the lower international oil prices have had a negative impact on oil-exporting nations such as Venezuela, Kuwait, Iraq, and Nigeria.

 

Consumers to ‘benefit most’ from Energy Exchange in the making

The establishment of an Energy Exchange in Greece is currently in the making, the initiative’s objective being to align the country with successful endeavors made in other parts of Europe and also establish the country as an energy hub in southeast Europe, Environment, Energy & Climate Change Minister Yiannis Maniatis stressed today during a speech at the “Energy Commodities Conference, 2014”.

Maniatis noted that export orientation, a geopolitical upgrade, the establishment of a regional market in southeast Europe, functional modernization, price reductions, and transparency in competition all stood as priorities for the country’s energy market at present.

Besides facilitating these developments, the creation of an Energy Exchange will also offer thorough, quality services covering the needs of producers and, primarily, consumers, through tight monitoring that will ensure transparency and fair trade, the minister said.

“The new corporate structure will take on and upgrade activities being performed by LAGIE, the Electricity Market Operator, concerning the wholesale electricity market, and will enrich these through the development of an energy producers market,” Maniatis told the conference. “It will also enable the creation of appropriate payment and settlement mechanisms, potentially through the incorporation of commodity transactions.”

The minister described the Energy Exchange’s creation as a national effort that will require a collective effort from all parties involved. This was already being achieved, Maniatis noted. The Environment, Energy & Climate Change Ministry, the Regulatory Authority for Energy (RAE), the Athens Stock Exchange, the Capital Market Committee, LAGIE, suppliers and producers were all working in unison for the Energy Exchange’s development, the minister said.

The initiative’s timing was crucial for the country, the minister remarked, as it coincides with an effort being made to establish Greece as an energy hub amid an extremely competitive international environment.

“The country’s comparative advantages – geographical position, eurozone participation, knowhow, existing and planned bilateral interconnections, and a well-educated workforce – stand as allies in the effort,” Maniatis pointed out.

The Energy Exchange, to offer a platform for a competitive and transparent energy market operating in accordance with the sector’s international environment, will, above all, benefit consumers, the minister underlined.

Energy Exchange’s creation will require a ‘collective effort’

The prospective Greek Energy Exchange, intended to offer free but regulated trade of energy-related commodities, appears likely to involve contributions from both Hellenic Exchanges SA, the parent company of the Athens Stock Exchange, and LAGIE, the Electricity Market Operator, for its creation, still at an embryonic stage.

Conflicting opinions of the two ministries involved in the venture, the Environment, Energy & Climate Change Ministry, and the Finance Ministry, as to whether LAGIE or Hellenic Exchanges SA will control the Greek Energy Exchange, have already surfaced. The Energy Ministry is endorsing LAGIE for the job, while the Finance Ministry would prefer Hellenic Exchanges SA.

Procedures for the exchange’s establishment, to contribute to Greece’s effort in becoming an energy hub in southeast Europe while also advancing the objective of a fully integrated European energy market, have been slow to start off. Just days ago, the Environment, Energy & Climate Change Minister Yiannis Maniatis commissioned energy sector authorities to prepare legal framework within three months for the new exchange. Once prepared, the framework will be forwarded for public consultation.

“There is some activity concerning what we have named the Energy Exchange, with great delay, to be honest, as many of the tasks we are now starting should have been close to completion,” Konstantinos Botopoulos, president of the Capital Market Committee, admitted in a recent interview. “The Environment, Energy & Climate Change Ministry, exclusively responsible for the venture’s political decisions and legal framework, the Capital Market Committee, the Regulatory Authority for Energy (RAE) – they are willing to help with proposals and become involved in the new enterprise – as well as LAGIE, the present operator, are the basic institutional players. Therefore, this will be a collective effort based on an agreement to fully develop Greece’s energy market. We hope that proceedings accelerate from this point onwards, and that we soon have progress,” he added.

An external consulting firm is likely to be commissioned to prepare a business plan in the lead-up to the establishment of the new company, with LAGIE and Hellenic Exchanges SA as its partners.

 

 

Plan initiated for Greek Energy Exchange

The Environment, Energy & Climate Change Ministry has initiated a plan to create a Greek Energy Exchange that will strive to play a significant role in the southeast European market by offering a platform for energy-sector trading issues.

As a preliminary move, Environment, Energy & Climate Change Minister Yiannis Maniatis asked energy sector authorities – at a recent meeting in Athens – to prepare legal framework within three months leading to the creation of an energy exchange. The framework will then be forwarded for public consultation.

The plan is for the new energy exchange to take over and upgrade activities currently being conducted by LAGIE, the Electricity Market Operator, concerning the electricity wholesale market, according to the minister. Maniatis has also noted that appropriate trading and settlement mechanisms would be created by the exchange, adding that energy commodity trading could also be incorporated into the exchange’s activities.

The creation of an energy exchange promises to align Greece with a European framework for an integrated energy market. At present, four energy exchanges operate in the EU. Earlier this year, on February 14, these four exchanges and thirteen electricity operators were integrated to function as a unified platform, making the date a landmark occasion for the European energy market as a first step towards full integration. The current integrated region, covering an area stretching from France to Finland, functions based on a common pricing system.

The meeting in Athens held by Maniatis included participation from Konstantinos Botopoulos, president of the Capital Market Committee; Sokratis Lazaridis, managing director of Hellenic Exchanges SA, parent company of the Athens Stock Exchange; LAGIE managing director Tasos Garis, and Regulatory Authority for Energy (RAE) vice president Dimitris Rachiotis.

Dundee summit to examine UK’s future energy mix

The Dundee Energy Summit (DES 2015), aiming to provide a platform for constructive dialogue between participants, is scheduled to take place at Scotland’s University of Dundee on January 31, 2015.

To be themed “United Kingdom’s Future Energy Mix: Considering North Sea Declining Production”, the event is being organized by a seven-member team of postgraduate students at the University of Dundee’s Center for Energy, Petroleum and Mineral Law and Policy.

The event’s participants, to be largely comprised of postgraduate students and young scientists, will include guest speakers such as professionals and energy-sector academics.

 

Greek role pivotal for EU energy security, PM stresses

Europe’s energy security and Greece’s pivotal role in the diversification of the continent’s energy supply were addressed by Greek Prime Minister Antonis Samaras during his speech at the two-day Asia-Europe Summit Meeting (ASEM) in Rome.

According to government sources, Samaras stressed that establishing alternative energy sources stands as a crucial part of Europe’s effort to achieve energy security.

The Greek Prime Minister underlined that, as part of this effort, Greece has undertaken a pivotal role through its involvement in the development of the Southern Gas Corridor, to link the Caspian region with Europe’s energy market. The Greek Samaras described this effort as a long-term vision, noting that the country was not only engaged in developing pipeline infrastructure but building bridges of cooperation.

During his speech, the Greek leader also made note of the country’s hydrocarbon exploration initiatives and the imminent international tender for exploration and exploitation of blocks in the Ionian Sea, western Greece, and south of Crete.

Samaras described the association between Europe and Asia as not just being about commerce and economics. He highlighted the enormous cultural heritage of both continents and the importance of increased ties through academic cooperation and tourism.

The Asia-Europe Summit Meeting, held under the theme “Responsible Partnership for Sustainable Growth and Security”, concludes later today.

German ETS proposal for summit based on Greek study

A German proposal for a revision to the European emissions trading scheme (ETS), on the agenda for the EU leaders’ summit in Brussels on October 23 to 24, will be based on a study conducted in Greece.

Germany’s Ministry for Economy Affairs and Energy commissioned a National Technical University (NTUA) laboratory headed by Professor Pantelis Kapros to conduct a study of various European scenarios based on a carbon emissions objective for 2030.

The German ministry has entrusted the NTUA laboratory with research work in the past. It has undertaken a number of projects over the past three years.

The German government will present the findings of the NTUA study tomorrow in Brussels, with a host of European energy sector authorities in attendance.

The latest NTUA study for the German ministry examines the impact of a prospective revision to the CO2 emissions market, based on a proposal forwarded by the European Commission and Germany, entitled “Market Stability Reserve”. The proposal has already received backing from a number of EU member states, including the UK, France, the Netherlands, and Belgium.

An agreement on the CTS revision is expected to be reached at the summit, where the Energy and Climate agreement for 2030 will be negotiated. A binding objective on energy efficiency, supported by Greece, does not appear likely. Instead, achievement of a 30 percent objective set for 2030 will probably be left for national leaders to manage as they see fit.

A binding target requiring increased renewable energy source (RES) contribution to 27 percent of the energy mix by 2030 may be raised to 30 percent.

As for the carbon emissions reduction objective, a binding target of 40 percent by 2030 is expected to be set.

Energy sector authorities to attend tomorrow’s presentation include Public Power Corporation (PPC) head Arthuros Zervos; Enel Group Regulation Vice President Simone Mori; Acciona CEO Rafael Mateo Alcala; GDF Suez Vice-Chairman and President Jean-Francois Cirelli; Philips Senior Director for Energy and Climate Change Harry Verhaar; growth and competitiveness advocate Business Europe President Emma Marcegaglia, and Maciej Bukowski, president of the Warsaw Institute of Economic Studies.

 

 

Main opposition MP attacks coalition on all energy fronts

The head official on energy matters at Syriza, the leftist main opposition party, unleashed a relentless attack against the coalition government’s energy policies, on all fronts, in Parliament yesterday.

Increased electricity bills charged by PPC, the Public Power Corporation, plans for its part-privatization, as well as the promotion of private-sector interests were among the aspersions cast by the Syriza official, Thanassis Petrakos, an MP representing Messinia, in Greece’s southwest.

During his address in Parliament, delivered as part of a three-day vote of confidence debate for the coalition, Petrakos condemned the coalition of having worsened an already extremely expensive electricity supply system created by “your previous governments”, referring to the coalition’s conservative New Democracy and socio-democratic PASOK parties. The Syriza party MP argued that this had led to an electricity cost increase of 103 percent for households and 76 percent for businesses over the past 12-year period.

As a result, power supply had been cut off for 312,343 households in Greece throughout 2013, according to figures provided by HEDNO, the Hellenic Electricity Distribution Network Operator – locally referred to as DEDDIE – Petrakos remarked. The Syriza MP noted that consumers were spared of power disconnections only one week ahead of the European Parliament elections, as a pre-elections period favor.

The amount of unpaid electricity bills had reached 1.8 billlion euros, while thousands of poverty-stricken households were unable to pay their electricity bills, including readjusted terms for these, Petrakos told Parliament.

Syriza’s head official for energy matters also asserted that PPC, the Public Power Privatization, was headed towards part-privatization to serve the interests of energy-sector entrepreneurs.

Petrakos condemned the coalition for selling out on the country’s natural gas interests, referring to the imminent privatization of DESFA, the Natural Gas Transmission System Operator.

He also accused the coalition of leading thousands of small-scale photovoltaic producers to despair. They were promised plenty but were eventually devastated, he contended, while noting that large-scale PV producers had been protected.

 

Building sector stimulus package discussed with troika

Details of a likely stimulus package totaling 800 million euros that is intended to revitalize Greece’s building sector, dormant through the country’s deep recession over the past five or so years, have been discussed between Energy & Climate Change Ministry officials and the country’s creditor representatives, or troika.

The ministry is seeking to ensure 400 million euros for a “Saving at Home” buildings energy-efficiency upgrade program – through the Partnership Agreement, or new National Strategic Reference Framework (NSRF) – as well as funding for energy upgrades to public and professional buildings, worth 200 million euros, respectively.

The introduction of tax breaks for energy-related work on buildings worth as much as 15,000 euros, whose possible implementation had been announced prior to the troika’s arrival in Athens for negotiations, was also discussed at the meeting.

Finer details of the stimulus package, whose cost is expected to be covered through value added tax revenues generated by building-sector invoices for energy-related work, as well as other sector-related tax revenues, are currently being examined.

Ministry officials estimate that the stimulus package will create approximately 12,000 new jobs, while 70 percent of materials and equipment to be used for the energy-related building upgrades will be locally produced.

Other issues on the agenda of talks between the ministry and troika officials included an update on the prospective sale of IPTO, Greece’s Independent Power Transmission Operator – locally referred to as ADMIE – the part-privatization of PPC, the Public Power Corporation, as well as the finalization of an agreement to privatize DESFA, the Natural Gas Transmission System Operator, now believed to be close to completion.

Minister offers socio-democratic rundown, on energy, at party event

Environment, Energy & Climate Change Minister Yiannis Maniatis, a member of the coalition’s junior partner, PASOK, provided a rundown of key socio-democratic, progressive principles for the energy sector, commenting on their implementation within a Greek context, during a speech delivered this week at an event co-organized by the Institute for Strategic and Development Studies (ISTAME) – a think-tank affiliated with the PASOK party – and an SPD (Social Democratic Party of Germany) institution.

Entitled “Progressive Policy in the Energy Sector – An Opportunity for Social Democracy”, the event included speeches from Ralf Bartels, an energy-sector workers’ union representative – he filled in for SPD general secretary Yasmin Fahimi, who was unable to attend – and Alfred Geissler, CEO of German energy company STEAG.

Maniatis’s list of progressive principles for the energy market included growth sustainability; European solidarity through the creation of crisis mechanisms; benefits for local communities and reduction of regional inequalities; interconnection of islands; low-priced energy for business and households; self-production, and transparency to help combat bureaucracy.

“The question that preoccupies us all is whether progressive policy in the energy sector exists,” Maniatis remarked.

Greece’s Energy Minister also spoke of a global situation in which two crises were concurrently developing. “We are in the middle of two crises, the global financial crisis of capitalism, and the global environmental crisis,” Maniatis said, adding these developments had combined to cause food crises in numerous countries around the world. Progressive political thinking needed to adapt to the new environment and find solutions, Maniatis highlighted.

As for the energy sector amid this troubled context, Maniatis remarked that “adequate and affordable energy, produced in such a way that does not downgrade the environment, and which is sustainable, stands as the objective.”

Besides Maniatis, a host of other PASOK party officials took part at the event.