EFET: Greek market restrictions, imperfections repelling traders

Greece’s electricity market is not an appealing prospect for traders as a result of a series of imperfections and restrictions, the European Federation of Energy Traders (EFET) has noted, informing the Greek energy exchange of an urgent need for a clear-cut schedule leading to solutions as soon as possible.

The EFET observations on the Greek market were part of a wider report covering markets of EU member states in southeast Europe.

The existing model applied in Greece does not allow market participants to trade freely in the country’s electricity market, EFET pointed out, noting, for example, that over-the-counter contracts are only partially permitted as traders cannot buy and resell electricity quantities in Greece, but, instead, need to export quantities they have purchased.

A rule forbidding market participants to switch from forward to day-ahead or intraday markets was another issue identified by EFET.

EFET also made note of rigid market rules conditions for transboundary trading that require imports and exports to be scheduled separately.

PPC equity capital raise, early November, to reach €1.1-1.2bn

Power utility PPC’s imminent equity capital raise, approved at yesterday’s general shareholders’ meeting and now set for the board’s approval, expected late October or early November, will inject a sum estimated between 1.1 and 1.2 billion euros into the company’s coffers, estimates have indicated.

Over the next ten days or so, PPC will continue promoting the equity capital raise to funds and institutional investors.

The equity capital raise will increase the stake of private investors from 34 percent to 66 percent and offer the corporation fresh capital for its enormous investment plan.

To date, the value of requests submitted by investors ahead of the book building process, expected late this month, has reached nearly two billion euros, triple the equity capital raise’s initial sum of 750 million euros.

The PPC board plans to meet either October 29 or November 1 to decide on the level of the equity capital raise, seen exceeding one billion euros, and also to approve it.

The book building process, to immediately follow, is expected within the first ten days of November.

Small-scale company shareholders expressed complaints during yesterday’s session, troubled by the prospect of being completely overshadowed, but PPC’s administration responded by noting they were free to take part in the upcoming equity capital raise.

Major funds, including CVC Capital and Blackrock, are believed to have requested big stakes during lead-up talks with PPC officials, while the overall investor interest is high.

 

Gov’t also working on support measures for gas consumers

The government is seeking further energy crisis support measures that would also facilitate energy consumer categories not included in relief measures announced so far to deal with the crisis.

The administration’s latest support effort, commented on yesterday by government spokesman Giannis Economou on SKAI TV, is believed to concern natural gas consumers and could entail offering this category installment-based payments for bills.

The administration has already announced subsidies for electricity consumers and, to date, not offered gas consumers any support.

However, the government’s plan, which could also include support measures for the mid-voltage category, is believed to still be at a preliminary stage.

Athens is seeking to mobilize EU member states for the establishment of an EU fund that would compensate energy consumers and ease the cash flow concerns of suppliers. EU leaders will focus on the energy crisis at a summit meeting this week.

Energy minister Kostas Skrekas has just announced an increase of a sum, from 10 million to 40 million euros, to be made available for funding electricity supply reconnection costs of low-income households facing supply cuts as a result of their inability to cover energy bills.

 

Fears of energy market unpaid receivables rebound growing

Government as well as electricity and natural gas company officials appear increasingly concerned about a rebound in unpaid receivables at energy firms as a result of exorbitant energy price increases faced by consumers.

The scale of the ongoing energy crisis plus the inability of analysts to make confident price projections has government officials scrambling for solutions, including through EU action, that could lessen the energy cost burden for consumers and protect supplier cash flow.

During a meeting yesterday with European Commission Vice-President Margaritis Schinas, Greek Prime Minister Kyriakos Mitsotakis reiterated a European Commission proposal for revisions that could enable energy bill payments through installments.

According to sources, the Greek government could insist on a proposal made by energy minister Kostas Skrekas for the establishment of an EU transitional compensation fund, supported by CO2 emission right revenues, distributing amounts to member states as energy-crisis aid.

The Prime Minister suggested this proposal during his meeting with the European Commission deputy, who did not offer a direct response but indicated that a European solution would be sought during an EU summit scheduled for next week, sources said.

Support for energy consumers would also help the finances of suppliers, who, as a result, would be in a better position to offer energy bill payments through installments.

 

Three-part energy crisis plan to begin with €500m in subsidies

A government plan aiming to soften the effects of the energy crisis, which could last well into 2022, will be comprised of three stages, beginning with a 500 million-euro support package including double the amount of previously announced subsidies for electricity, as well as natural gas and heating subsidies.

The plan, whose details are expected to be announced later today, will then continue with a second support package for low-income households around Christmas time.

The third part of the plan, whose details will be announced at a latter date, is expected to entail the establishment of a mechanism absorbing extraordinary energy costs.

For its three-part plan, the government presumes the energy crisis, caused by an unfavorable combination of international factors, will last well into 2022. Some analysts believe the crisis could persist throughout next year.

Consumers throughout Europe are facing exorbitant electricity and natural gas costs that have increased multifold over the past few months.

 

 

Power bill subsidies increased, gas cost support also expected

The energy ministry is preparing to increase an electricity-cost subsidy package to between 280 and 300 million euros, from a 200 million-euro sum announced last month by Prime Minister Kyriakos Mitsotakis at the Thessaloniki International Fair, as a result of the continuing surge in energy costs, which, if not combated, could have political ramifications.

The ministry’s response comes following the announcement of September’s increase in the wholesale electricity price average, the latest in a series of monthly rises. Wholesale electricity prices averaged 134.73 euros per MWh in September, up from 121.72 euros per MWh in August and 101.86 euros per MWh in July, all well over the January average of 52.52 euros per MWh.

Finalized decisions on the subsidy support package have yet to be taken but officials have already agreed to draw the amount to be provided to consumers from the Energy Transition Fund.

The expected subsidy increase for electricity consumption would result in support worth between 40 and 45 euros per MWh, instead of 30 euros per MWh, effectively resulting in a monthly electricity bill reduction of 14 to 15 euros for consumers.

The government is also looking to subsidize natural gas bills through an additional support package expected to be worth roughly 150 million euros. Retail natural gas prices have risen by approximately 500 percent since the beginning of the year.

More energy price hikes feared as Europe searches for solution

Another round of record-breaking energy price increases throughout the continent could be looming. Europe is primarily placing its hopes on an increase of Russian gas supply, which would greatly ease the ongoing price ascent, but, for the time being, energy prices are continuing to rise at unfathomable rates.

Under the currently alarming conditions, shaped by an unfavorable combination of international market trends, including main supplier Russia’s subdued gas supply to Europe, Dutch TTF hub futures for November contracts are set to once again reach levels of 160 euros per MWh. This would skyrocket wholesale electricity prices to 350 euros per MWh, a 70 percent increase on the current record level of 204 euros per MWh and 300 percent higher than a year ago.

Russia has cut back on its gas supply to Europe as a means of pressuring the EU for approval of its Nord Stream 2 gas pipeline, running through the North Sea to Germany. The project is opposed by some EU members as they would lose significant sums in transit revenues.

The EU has been left without a Plan B and greatly dependent on Russian gas supply for a number of reasons, including a gas reserve drop in many countries due to the summer’s prolonged heatwave, as well as increased LNG demand in Asia.

In Greece, roughly 50 percent of the country’s electricity generation is produced by natural gas-fired power stations, meaning gas price levels directly impact electricity prices.

 

Major foreign fund interest in PPC equity capital increase

Power utility PPC, preparing to stage an equity capital increase later this month, seen reaching one billion euros, is reportedly receiving a mass inflow of enquiries by funds from around the world, including the US, UK, France, western Europe, and Australia, expressing interest to acquire sizeable company stakes in excess of ten percent.

PPC is currently engaged in a continual flow of talks with investors ahead of the company’s general shareholders’ meeting, scheduled for October 19.

The power utility remains committed to its initial goal of maximizing participation for as many quality funds as possible, preferred over the participation of a limited number of funds.

The equity capital increase’s share price is expected to be set between 8 and 8.50 euros per share.

Taking, as an indicator, the interest of funds in the still-unfinished 49 percent privatization of distribution network operator DEDDIE/HEDNO, a PPC subsidiary, interested parties in the power utility’s equity capital increase could include Macquarie, the winning bidder in the DEDDIE/HEDNO privatization, CVC Capital, Blackrock, Ardian, KKR, First Sentier, Oak Hill, and Helikon Investments Limited, already holding a 5 percent stake in PPC.

The interest may also include players who placed offers for PPC’s 7-year bond issue in July. They include EBRD, Fidelity, Apollo, Carmignac, Twenty Four AM, Bluecrest and Pictet, Union Investments, Sona Asset Management, Barings, Aperture, Saba Capital and Vontobel.

In addition, a number of other players expressed early interest during roadshows late last year. These include Bell Rock Capital, Allianz Global Investors, Sephora Investment Advisors, Waterwill Capital Management, Cleargate Capital, and Zenon Investments.

The upcoming equity capital raise is expected to result in a decrease of privatization fund TAIPED’s current stake in PPC from 51 percent to 34 percent.

Local PV market grounded by China’s sharply reduced output

A drastic reduction in output of solar module panels by Chinese manufacturers, prompted by electricity shortages in the country as well as limited availability of PV materials, is heavily impacting RES sector investors in Greece.

Numerous local investors who had placed PV orders quite some time ago have been informed, by Chinese manufacturers, of delays for indefinite periods. Developers face the same problem.

PV prices have surge amid the extraordinary conditions making it extremely tricky, if not impossible, for Chinese manufacturers to price their products.

The energy crisis in China has forced the government to impose electricity consumption limits on industrial producers, which has hampered their operating capacity.

In response, many large-scale PV producers in China have chosen to suspend their operations, deeming as unfeasible the prospect of producing for a limited number of hours per day.

Five of the country’s PV producers, Longi, Jinko, Trina, JA and Risen, have issued a joint statement noting that, under the current conditions, their output cannot exceed 70 percent of capacity.

 

RAE forced to reset Cretan market target model entry for November 1

RAE, the Regulatory Authority for Energy, has reset the target model entry of Crete’s electricity market for November 1, a month beyond a previous date set by energy ministry legislation, to enable full development of information systems to be used by operators and their associates, and also ensure that consumers are better informed on the transition, the authority’s president Thanasis Dagoumas has announced.

This change of date highlights the fact that time had run out for the settlement of pending issues ahead of the previous October 1 launch date for a Cretan hybrid model, intended to offer protection against extreme fluctuations in the balancing market.

As previously reported by energypress, RAE, last week, requested updates from the operators (power grid operator IPTO, distribution network operator DEDDIE/HEDNO, RES market operator DAPEEP) as well as the energy exchange, on their level of readiness, technically, for the Cretan electricity market’s target model entry on October 1.

It can be presumed that at least some of these agencies had not completed actions required in their respective domains for a launch tomorrow.

Crisis Management Committee to examine supply security

The Crisis Management Committee is expected to meet within the first fortnight of October to examine the overall situation in the energy market, driving price levels up to exorbitant levels for consumers of all categories.

The committee’s members will discuss the issue of supply adequacy and security for meeting electricity generation needs, primarily.

Electricity, natural gas and CO2 emission prices are skyrocketing, while natural gas shortages are now emerging in EU markets, all as a result of an extraordinary combination of developments in European markets.

For the time being, Greek energy sector authorities – RAE, the Regulatory Authority for Energy; DESFA, the gas grid operator; and IPTO, the power grid operator – have remained reassuring. Yesterday, RAE president Athanasios Dagoumas noted: “We are not in a state of alarm but are vigilant.”

Overall natural gas consumption is expected to increase in 2021. Consumption was 14 percent higher in the first half compared to the equivalent period a year earlier, DESFA data has shown.

Gas demand rose in July and August to meet increased electricity generation needs and is also expected to be elevated this coming winter.

In Greece, approximately 60 percent of natural gas consumption results from electricity generation. The ongoing withdrawal of coal-fired power stations and greater reliance on fluctuating RES output is expected to lead to a further increase in demand for natural gas.

Local authorities have pointed to Greece’s natural gas source diversification, made possible by the Revythoussa LNG terminal and TAP, both offering alternative solutions, as crucial in the effort to manage the current energy crisis.

Ariadne Interconnection tender for minority stake approved

RAE, the Regulatory Authority for Energy, and the European Commission have approved a plan for a tender to offer a minority stake in power grid operator IPTO’s subsidiary firm Ariadne Interconnection, established specifically for the development of the Crete-Athens interconnection.

An initial plan for the sale of a 40 percent stake in Ariadne Interconnection is now expected to be lowered by IPTO, offering a reduced share, analysts believe.

The tender is likely to be announced by IPTO towards the end of the year, or possibly early in 2022. The procedure will be preceded by a roadshow pitching the tender and company that has taken on the Crete-Athens interconnection, a project budgeted at one billion euros.

Market officials believe the prospect of a minority stake in Ariadne Interconnection will most likely attract funds. China’s State Grid, holding a 24 percent stake in IPTO, has also expressed early interest.

The Crete-Athens interconnection project, currently in progress, is expected to be completed late in 2023 or early 2024.

It was originally planned as a segment of EuroAsia, a wider interconnection plan of PCI status to link the Greek, Cypriot and Israeli electricity grids, with EuroAsia, a consortium of Cypriot interests, at the helm. IPTO eventually withdrew the Crete-Athens segment for its development as a national project.

PPC equity capital increase to reshape market, rivals on alert

Power utility PPC’s plan, announced late last week, to proceed with a 750 million-euro equity capital increase, effectively a partial privatization that will result in a decrease of privatization fund TAIPED’s current stake in the company from 51 percent to 34 percent, promises to free the utility from restrictions imposed on state-controlled companies, boost its finances and enable the company to further consolidate its position as the dominant market player.

Rival players in the electricity and RES markets are closely following the developments, realizing the energy market map is headed for a major reshape if PPC’s equity capital increase is successfully completed.

PPC, as a transformed, independent corporation without state-company restrictions will be a much harder force to reckon with as it can be expected to charge ahead with an aggressive investment strategy in Greece and the Balkans, market players have commented.

Also, PPC, reshaping for a focus on green energy, will benefit from many advantages in the RES market, including the right to utilize its outgoing lignite areas for renewables, as well as priority grid dispatch rights given the strategic importance of its investments for the country, market officials have noted.

In response, rival players will now need to strengthen their capital standing and also consider strategic partnerships.

 

Crete market’s target model entry behind schedule

Delays observed in technical preparations by operators for the target model entry of Crete’s electricity market have resulted in pending issues that could prevent next month’s launch date from being achieved.

The energy ministry has prepared legislative revision stipulating a launch of a hybrid model for Crete on October 1.

In response to the delay, RAE, the Regulatory Authority for Energy, will request updates from the operators (power grid operator IPTO, distribution network operator DEDDIE/HEDNO, RES market operator DAPEEP) as well as the energy exchange, on their level of readiness, technically, for the Cretan electricity market’s target model entry at the beginning of next month.

RAE will reset the current launch date if it judges preparations to be at an unsatisfactory level. A one-month extension, for a November 1 launch, is possible.

 

 

PPC net debt drops below €3bn, Macquarie deal may push figure lower

Power utility PPC, expected to post first-half results today, will reportedly announce a net debt figure (total debt minus cash reserves) of less than three billion euros, following an extended period above this level, brought down by the company’s two securitization agreements with JP Morgan and Pimco for unpaid receivables.

The two securitization deals, worth a total of approximately 370 million euros, have helped reduce PPC’s net debt to less than three billion euros for the first half. PPC’s net debt for the first quarter was worth 3.27 billion euros.

The power utility’s net debt could drop even further once a recent 2.116 billion-euro agreement with Australian fund Macquarie, for its acquisition of a 49 percent stake in distribution network operator DEDDIE/HEDNO, a PPC subsidiary, is finalized.

PPC’s net debt was at 5 billion euros in 2014 and could plunge well below the three billion-euro mark as a result of the recent deal with Macquarie, the winning bidder in a DEDDIE/HEDNO tender.

Overall, PPC is expected to post weaker financial results, compared to previous quarters, as a result of escalated prices for CO2 emission rights, fuel and gas, and the company’s market-share contraction. However, these unfavorable factors are believed to have been partially offset by an increase in demand for electricity over recent months.

 

Positive start for Greek, Italian, Slovenian intraday coupling

The coupling of the Greek, Italian and Slovenian intraday markets took a positive first step yesterday with a successful trial. According to Greek energy exchange sources, the transition from local intraday auctions (LIDAs) to regional intraday auctions (CRIDAs) covering the three countries was successfully completed.

Two complementary CRIDAs have been staged without any problems, while a third session is scheduled to take place early today.

The first CRIDA session ended with electricity price levels at 149.64 per MWh, 14.31 percent below the LIDA auction level recorded a day earlier. The initial CRIDA session’s transactions represented a total electricity amount of 2.53 GWh.

As a result of the market coupling, intraday market transactions will no longer be limited to domestic restrictions but will also utilize the capacity of the Greek-Italian grid interconnection left over once electricity import and export activity, through day-ahead markets, has been completed by the two neighboring countries.

Utilization of the grid interconnection’s leftover capacity will offer greater flexibility to suppliers, producers and self-supplying consumers.

The coupling of the Greek, Italian and Slovenian intraday markets represents a first step towards European intraday market unification.

It is planned to be followed, on March 8, by Greece’s entry into the European Cross-Border Intraday Market (XBID), offering continual intraday market transactions, via Italy and Bulgaria.

Industrial players paying price for energy supply agreement delays

Industrial producers who have prolonged their energy-supply negotiations and delayed signing new agreements now face drastically deteriorated conditions prompted by an alarming price surge.

Highlighting the unfavorable turn in market conditions, one small-scale industrial consumer is believed to have just signed a new high-voltage supply agreement at a price level of approximately 120 euros per MWh, about 30 percent higher than levels of just a few months ago and considerably higher than supply agreements reached early in the summer.

Power utility PPC managed to move fast enough to incorporate hedging agreements to these deals as protection against price rises, a crucial decision given the current conditions.

A number of large-scale industrial players have yet to reach electricity supply agreements, finding themselves fully exposed to the sharp price rises, caused by a combination of unfavorable factors in international markets.

Mid-voltage industrial producers find themselves in even more discomforting positions as electricity price rises for this category have been even steeper, reaching levels of 125 euros per MWh in July and 150 euros per MWh in August.

The adverse market conditions help explain Hellenic Petroleum ELPE’s recent decision to not sign a new supply agreement with PPC, turning instead to group member Elpedison for its electricity needs.

Increased electricity and natural gas costs are severely impacting the competitiveness of industrial producers, expected to pass on these increased costs to their product prices.

 

Strategic Reserve Mechanism by early ’22 requires much work

Athens and Brussels have agreed on an early-2022 launch for Greece’s Strategic Reserve Mechanism, planned to remunerate power-generating units made available by electricity producers for grid back-up services, but, even so, a considerable amount of work lies ahead.

The European Commission plans to make an official announcement on the Strategic Reserve Mechanism between late November and early December, ahead of the mechanism’s approval by the Directorate-General for Competition.

Authorities in Athens and Brussels are still engaged in talks aiming to finalize the shape of the mechanism, while, at the same time, preparations are in progress for the submission of a new Adequacy Report by power grid operator IPTO, a prerequisite for the approval of Greece’s Market Reform Plan, needed for the new strategic reserve mechanism’s implementation.

At present, Greek officials are preparing responses to a set of second-round questions forwarded by the European Commission. As was the case with the first round, the questioning is extensive. Many of the Brussels questions concern financial details linked to the operation of lignite-fired power stations.

The ongoing Athens-Brussels talks are based on a new draft for the mechanism delivered by the Greek government last May. It includes a proposal for demand-response incorporation into the new strategic reserve mechanism.

 

Energy privatizations exceed forecasts, raising nearly €3bn

Two major energy-sector privatizations whose bidding procedures were completed last week, the 100 percent sale of gas company DEPA Infrastructure and 49 percent sale of electricity distribution network operator DEDDIE/HEDNO, exceeded even the most optimistic of expectations, resulting in total revenue, from both sales, of 2.849 billion euros, well over initial projections of 2.2 billion euros.

Australian fund Macquarie’s 2.116 billion-euro winning offer for 49 percent of DEDDIE/HEDNO, being offered without managerial control, stands as a record sum for Greek privatizations.

The DEDDIE/HEDNO sale’s amount will be used by power utility PPC, the parent company, for network modernization, RES growth, and improved customer services.

Italy’s Italgas secured 100 percent of DEPA Infrastructure with an improved follow-up offer of 733 million euros. Thus sum is expected to exceed 800 million euros once the buyer’s bid for a 49 percent stake in distributor EDA THESS, covering the Thessaloniki and Thessaly areas, is submitted and added to the tally.

According to the DEPA Infrastructure sale’s terms, the winning bidder must also purchase EDA THESS’s 49 percent stake, held by Italy’s Eni gas e Luce, wanting to sell.

The favorable outcomes of the two privatizations highlight the country’s improving investment climate as well as the confidence of foreign institutional and strategic investors in the prospects of the Greek economy, Prime Minister Kyriakos Mitsotakis noted. This improvement is also confirmed by yet another upgrade of the Greek economy, this time by Scope Rating, he added.

Besides signaling good news for the Greek economy, the DEDDIE/HEDNO and DEPA Infrastructure privatizations also send an upbeat message on the prospects of the domestic energy market.

 

PPC targeted campaign to stop outflow of positive-profile customers

Power utility PPC is preparing a strategy that will offer customers personalized service reflecting their profiles and particular needs in an attempt to contain departures for other suppliers and boost profit performance.

PPC intends to develop targeted marketing campaigns as part of its effort, the objective being to hold on to customers with favorable track records and profiles, as well as to promote the sale of value-added products.

The PPC strategy is expected to include rewards for loyal customers with favorable track records.

Collaborative efforts with third parties offering telephone and electronic customer service are also being looked into.

Company divisions to take on the overall effort will need specialized, external support, PPC’s administration has concluded.

Energy bill unpaid receivables set to rebound, survey shows

The level of energy bill unpaid receivables appears destined to rise again, a survey conducted by GSEVEE, the Hellenic Confederation of Professionals, Craftsmen and Merchants, has shown.

According to its results, 16.5 percent of small and medium-sized enterprises have warned they will not be able to meet energy bill demands over the next six months.

This figure is slightly higher than the 15.2 percent of enterprises that have left behind bad debt for energy suppliers, meaning the overall level of unpaid receivables appears headed for a new rise.

The GSEVEE survey reported even more worrying results from the hospitality sector as it showed that roughly one in three eateries, or 30.9 percent, declared they expect to not be able to cover electricity or natural gas bills over the next six months.

Recent energy cost increases by suppliers and the threat of further hikes as a result of a combination of various factors in international markets threaten to place energy consumers under even greater pressure.

The energy cost hikes will have a knock-on effect throughout the market, increasing food, raw material and fuel prices, and, as a result, reducing disposable incomes and making payment of energy bills even more demanding.

The unpaid receivables issue that has troubled the domestic market over the past decade or so of recession had begun easing off prior to the pandemic.

Power utility PPC, holding the lion’s share of the retail electricity market, has carried the heaviest unpaid receivables burden, which, at one point, had even exceeded three billion euros.

 

Big week for energy privatizations, approaching finales

It is a big week for the country’s energy privatizations with gas company DEPA Infrastructure’s tender set to reach a concluding stage tomorrow and that of distribution network operator DEDDIE/HEDNO also approaching its finale as its binding bids are scheduled to be opened on Friday.

Italgas, Italy’s biggest natural gas distribution company and the third largest in Europe, has, according to sources, submitted the highest bid in the DEPA Infrastructure sale, offering an 100 percent stake, and is the only bidder to which the privatization fund TAIPED has extended a request for an improved offer, by tomorrow.

The Italgas offer is believed to be close to 700 million euros, a figure expected to rise further, and well above an offer submitted by rival bidder EPH from the Czech Republic.

As for the privatization of DEDDIE/HEDNO, a power utility PPC subsidiary, four binding offers, for a 49% stake, have been submitted by major international funds CVC Capital Partners Group, First Sentier Investors Group, KKR Group, and the Macquarie Group. This level of participation could boost bid levels. Offers of over 1.5 billion euros, or even 1.7 billion euros, could be unveiled, sources have anticipated.

The rebounding economy, potential of Greece’s energy market, as well as the statures of all five suitors involved in the two sales could result in two of the country’s most lucrative privatization agreements, in all sectors.

Government looking to expand eligibility for electricity subsidies

Taking into account the rising energy costs and potential repercussions on society, the government is seeking to make revisions that would make more households eligible for subsidized electricity through the Social Residential Tariff (KOT) program.

The administration is looking to loosen KOT-related income and property criteria for the entry of several hundred thousand more households to the program.

The government also aims to increase the KOT subsidy program’s discount rates for electricity, currently ranging between 45 and 60 percent, depending on income levels, property assets and electricity consumption levels.

Under the current criteria, 450,000 households are eligible for electricity subsidies through the KOT program.

Additional funds are believed to be available to make the subsidies available to a greater number of households, but the finances may not suffice to cover the full extent of the expansion sought by the government.

Binding bids for HEDNO today, PPC sets ambitious target price

The sale of a 49 percent stake in power utility PPC’s subsidiary DEDDIE/HEDNO, the distribution network operator, has reached the final stretch with at least three bidders in contention as the binding-bids deadline expires today.

US fund CVC Capital, as well as Australia’s Macquarie and First Sentier, are believed to be in the running, while the participation of KKR (Kohlberg Kravis Roberts & Co. L.P.) remains probable.

PPC’s administration is not expected to accept anything less than 1.5 billion euros for the subsidiary’s 49 percent, a price expectation based on DEDDIE/HEDNO’s book value, estimated at 3 billion euros.

The operator’s regulated earnings for 2021 to 2024 begin at 771 million euros and reach 798 million euros in 2024.

The financial offers by bidders are not expected to be opened today but will remain under wraps until all other details (legal, technical) of the offers have been fully examined.

Once the binding bids have been submitted, PPC will call an extraordinary general shareholders’ meeting for the sale’s approval. PPC’s objective is to have completed this partial privatization by the end of the year.

 

HEDNO executive bonuses excluded from operating costs

RAE, the Regulatory Authority for Energy, has forbidden the operating-expense inclusion of bonus amounts offered by distribution network operator DEDDIE/HEDNO to its executives, a decision reached through the authority’s approval of the operator’s allowed regulatory income for 2021 to 2024 and required revenue for 2021.

The bonus amounts set aside by the operator for executives are worth a total of one million euros, for one year.

RAE rejected the inclusion of this amount in HEDNO’s operating expenses by pointing out that bonus payments for executives do not offer any benefits to users of the distribution network.

PPC borrowing cost cut further with new bond loan agreement

Power utility PPC has signed a new bond loan agreement for an amount of 300 million euros involving Alpha Bank as well as participation from Eurobank.

The loan amount, to be used for general business purposes, will have a three-year duration with an option for a further two-year extension.

More specifically, PPC plans to utilize the amount as working capital in the context of measures taken by the company to ensure and reinforce its cash flow in the short term.

The bond loan agreement includes a series of conditions including a clause committing PPC to a 40 percent reduction of CO2 emissions by December, 2022, compared to 2019.

According to sources, the new bond loan agreement has a lower interest than levels achieved by PPC in recent bond issues.

PPC’s most recent bond issue, last month, was offered at an interest rate down to 3.375 percent.

The success of PPC’s preceding bond issues was instrumental in the company’s negotiations with banks for a further reduction in its borrowing costs.

 

Distribution network operator upgrading channels of communication

Distribution network operator DEDDIE/HEDNO received 32,471 documents concerning enquiries and complaints in 2020, the operator has informed Parliament.

Of these documents, 26,237 (80.8%) were enquiries; 5,354 (16.49%) were complaints; 251 (0.77%) complaints about voltage quality; and 629 (1.94%) complaints beyond HEDNO’s realm of responsibility.

As part of its effort to upgrade customer services, HEDNO has modernized its channels of communication through online systems.

 

Energy transition proving to be expensive, 30% price hike seen

Unprecedented price rises in the wholesale electricity market, up by as much as 80 percent between July 1 and August 8 and tripled since the beginning of the year, will inevitably impact consumers with imminent increases of approximately 30 percent, market officials have told energypress.

The average wholesale electricity price for this year has been estimated at between 80 and 90 euros per MWh, up 30 percent compared to levels in 2019, used as the base year as price levels in pandemic-hit 2020 were distorted by the unprecedented conditions.

Households and businesses should soon expect elevated electricity bills as a result of wholesale-related clauses triggered by suppliers in response to the sharp wholesale electricity price increases recorded since early July.

These developments, largely attributed to European Commission policies implemented to combat climate change, have prompted comments by key energy market officials, including Evangelos Mytilineos, chairman and chief executive of the Mytilineos group, who recently warned “the energy transition will be expensive.” Another official noted this is a “new era of higher-priced electricity.”

CO2 emission right costs have more than doubled since the beginning of the year, reaching levels, at present, of between 54 and 55 euros per ton.

Natural gas prices have doubled since January at the TTF Dutch trading platform, to 42 euros per MWh.

Greek market officials widely acknowledge the country has no other option but to gradually end its reliance on lignite and fossil fuels, while stressing, however, the need for swifter legislative revisions facilitating quicker RES penetration and energy storage development.

 

 

Narrow power outage escape for Athens as fire damages key lines

The wider Athens area’s grid remains on red alert today after the capital narrowly escaped a widespread power outage yesterday following a return to service, a little after midnight, of power grid operator lines, while, in another encouraging development, winds are gaining momentum, boosting wind energy output.

The worst fears may be over but, even so, there is no capacity for complacency for as long as the extensive fires north of Athens, in the Varybobi area, keep burning.

For hours last night, Athens was on the brink of a general blackout as this fire disconnected two of three lines linking the city’s east and west. An extensive power outage, all over the city, would have been inevitable had the third line been damaged.

At 9pm last night, power supply for a big section of the city was provided through the one unaffected line. A change of wind direction helped keep the fire at a distance from this line, whose disruption would have cut power supply for millions.

Any remaining threat of an extensive power outage in Athens will be quelled once the Varybobi fire is brought under full control.