Fast-track procedures in place for power line undergrounding

The energy ministry, striving to replace overhead power lines with underground networks for the infrastructure’s protection following recent fire-related damages, preceded by snowstorm damages last winter, has taken measures to clear the way of any possible bureaucratic delays and is also seeking to secure additional funds for the undergrounding work.

Legislative revisions recently ratified in Parliament include a measure facilitating fast-track power line undergrounding by operators through forest land without them having to wait for approval from forestry officials, which has been customary practice.

As a result, distribution network operator DEDDIE/HEDNO and power grid operator IPTO can now proceed with power line undergrounding projects without delay or cancellation risks. This applies for both new power line networks and replacement of older ones.

The country has, at its disposal, EU Recovery and Resilience Facility (RRF) money totaling 187 million euros for power line projects.

However, given the average cost of power line network undergrounding, estimated at 85,000 euros per kilometer, the aforementioned RRF amount would suffice for the development of about 2,200 kilometers, just a tiny fraction of the country’s existing overhead power lines.

Besides the RRF, the energy ministry is also considering to exhaust funding support possibilities through the National Strategic Reference Framework (NSRF) for the power line undergrounding expansion projects, now regarded as essential due to the growing impact of the climate change crisis.

Grid saturation forcing operator to block RES term applications

The grid’s medium-voltage capacity has reached its limit in many parts of the country, according to related information published by DEDDIE/HEDNO, the distribution network operator, forcing it to reject the overwhelming majority of new RES project connection-term applications.

Medium-voltage grid capacity is currently fully saturated in areas covering 40 percent of the country, including western Macedonia, in the country’s north, a lignite-dependent area planned for decarbonization.

RES connection-term applications in these areas lacking grid capacity are all being rejected. In other parts of the country, where limited grid capacity remains available, nine in ten RES applications are being rejected by DEDDIE/HEDNO, creating issues for prospective investors.

The problem primarily concerns smaller-scale RES investment plans not possessing the capacity to connect to the grid via IPTO, the power grid operator.

The saturation problem’s extent is even preventing the installation of roof-mounted solar panels in some parts of the country, according to one source.

The subdued potential, at present, of the latest Saving at Home program offering subsidies for energy efficiency upgrades at properties has been partially attributed to the grid’s lack of capacity for new RES installations.

 

Network damages estimated at €25m, operator well stocked

Damages to electricity infrastructure caused by extensive fires in various parts of the country have, according to an initial estimate, reached between 20 and 25 million euros, but the cost could rise as fires are still burning in northern Evia, one of the hardest hit areas, sources at DEDDIE/HEDNO, the distribution network operator, have noted.

The estimate includes sub-stations, utility poles and power lines. The operator is stocked with all the equipment needed to replace damaged infrastructure, the sources added.

The operator has been stocking up over the past year and a half, covering any equipment shortages, according to the sources.

Even so, the cost of the fire-related damages is not negligible. It represents approximately 14 percent of last year’s total investments at DEDDIE/HEDNO, which reached 175 million euros.

Up until Saturday, 2,150 utility poles, 120 sub-stations and 109 kilometers of low and medium-voltage power lines in the wider Athens area, Evia and the Peloponnese were reported to have been damaged, but these figures are expected to increase.

Tender relaunch for €1.6bn nationwide distribution network upgrade

Distribution network operator DEDDIE/HEDNO has relaunched a mammoth tender worth a total of 1.6 billion euros for the reinforcement and upgrade of the distribution network throughout Greece over a five-year period.

The tender was initially announced several months earlier but then withdrawn to take into account and adopt certain observations made by interested parties.

The relaunched tender concerns 37 contracts around Greece, 8 of these in the wider Athens area, 9 in the Macedonia-Thrace region, 7 in the Peloponnese and Epirus, 6 in central Greece and 7 at island locations.

DEDDIE/HEDNO aims to reinforce the distribution network for its role in the energy transition, while also protecting it against extreme weather conditions.

Pivotal IPTO substation returning to full capacity after repair work

Power grid operator IPTO’s pivotal Koumoundourou high-voltage substation, serving the wider Athens area, will be ready to counter elevated electricity demand levels of the summer season as the installation of a new autotransformer, required following an explosion and fire at the unit in February, has been completed, enabling the facility to return to full capacity, expected within the next few days.

Since the accident, the substation has operated below full capacity, following temporary adjustments.

The Koumoundourou substation’s return to full capacity promises to reinforce the country’s grid security, especially in the Peloponnese, as the summer’s power-demand peaks draw nearer.

Besides the fire-related repair work, the Koumoundourou substation is also undergoing an overall revamp, budgeted at 46 million euros. Work on this upgrade, scheduled to require a total of two and a half years to complete, is expected to be completed in September, 2023.

Once completed, the upgrade will enable the substation to take on a significant proportion of the electricity load needed in the wider Athens area, while it will also serve as the connection point for the Crete-Athens grid interconnection, expected to be completed within 2023.

The substation will also serve as a terminal for the Eastern Corridor (400 kV) from the Peloponnese to the mainland, whose completion is expected in 2024.

 

HEDNO boosting substation capacities for RES connections

Distribution network operator DEDDIE/HEDNO is installing new transformers at existing substations in an effort to exhaust the technical potential of existing infrastructure and boost capacity for new RES connections, primarily solar energy, as well as other technologies.

Over the past few weeks, the operator has been installing additional transformers at existing substation units in northern Greece’s west Macedonia region, as a pilot stage,  energypress sources have informed.

This reinforcement approach cannot be implemented at all substation facilities as some are not big enough to host additional transformers, technical staff at the operator explained.

Once the reinforcement effort has been completed in the west Macedonian region, DEDDIE/HEDNO crews will also begin working on networks in other parts of Greece.

 

IPTO to challenge RAE’s €5m fine for west corridor line delay

Power grid operator IPTO will legally challenge a 5 million-euro fine imposed by RAE, the Regulatory Authority for Energy, for delays in the development of a “west corridor” transmission line in the Peloponnese, from Patras to Megalopoli, operator sources have informed energypress.

The authority’s decision is legally baseless and does not serve interests for optimal functionality in the energy market, the sources noted.

The RAE fine imposed on IPTO encourages local reaction in general and is detrimental to the effort being made for swift development of infrastructure projects around Greece, the operator’s sources added.

IPTO has never kept concealed delays it has faced to develop a small fraction of work remaining for the west corridor’s completion as a result of resistance raised by a regional monastery in the Kalavryta area, the operator sources asserted.

As soon as legal action was taken, late last year, against this project’s completion, IPTO informed RAE in writing about the initiative’s repercussions on the development plan, the sources said.

Also, IPTO does not accept any responsibility for balancing market cost increases, which have risen since last November’s target model launch, and will support its position by providing facts and evidence to RAE as well as other Greek and European authorities, the sources told.

 

Energy investment activity rising, focus on RES projects, energy transition

Investment activity in the domestic energy sector is rising with major deals being negotiated, the main focus being on renewables and the energy transition, participants at yesterday’s Delphi Economic Forum made clear.

This activity promises significant growth for all RES technologies, even the more innovative, such as offshore wind farms and energy storage units.

Major energy players are moving to capitalize on opportunities that are emerging as the country pushes ahead with its decarbonization effort. Also, investor talks concerning domestic and international partnerships, the latter promising to secure expertise in sectors such as offshore wind farms, are in progress.

Power utility PPC, moving ahead with RES investments, aims to have launched projects with a total capacity of 1.5 GW by 2023. The utility’s redevelopment plan for the country’s two lignite-dependent regions, Ptolemaida, in the north, and Megalopoli, in the Peloponnese, is in progress.

PPC plans to invest 3.4 billion euros on RES project development in these regions, and an upgrade of their distribution networks, Konstantinos Mavros, chief executive of PPC Renewables, a PPC subsidiary, told the forum.

PPC is also expected to establish partnerships facilitating its entry into the offshore wind market. In addition, the company also aims to have formed a joint venture with German power company RWE by the end of summer for development of RES projects totaling 2 GW.

Elsewhere, energy company Mytilineos is also preparing a strategic alliance with a major international group for its entry into the offshore wind farm sector.

Mytilineos is also close to completing, this year, a major post-lignite investment in natural gas-fueled electricity generation. In addition, the company plans to develop 300 MW in wind farms and 1.5 GW in solar farms over the next two years.

Furthermore, Mytilineos plans to develop 20 energy storage projects, each with 50 MW capacity, by utilizing its immense knowhow gained in this field through involvement in such projects abroad.

Hellenic Petroleum (ELPE) is preparing RES and digital transition projects and will concurrently focus efforts to reduce carbon emissions and develop more eco-friendly products, including biofuels and hydrogen.

The Copelouzos group is nearing an investment decision on the development of a natural gas-fueled power station in Alexandroupoli, northeastern Greece. A decision is expected this summer. The group is currently engaged in talks with neighboring North Macedonia’s power utility for its possible entry into this project as a minority partner.

As for networks, power grid operator IPTO has planned numerous projects as part of a ten-year investment plan worth five billion euros. The operator anticipates new RES project penetration of 17 GW, a forecast exceeding the National Energy and Climate Plan’s goals.

DEDDIE/HEDNO, the distribution network operator, has put together a 3 billion-euro investment plan for the two next regulatory periods, each four years long. Projects include network undergrounding, service upgrades and improvement, new technologies, as well as grid digitalization projects.

RAE incentives-based plan for IPTO as part of new policy for operators

RAE, the Regulatory Authority for Energy, is set to forward a package of incentives for power grid operator IPTO designed to influence the operator’s annual earnings when specific objectives are achieved or missed.

This move by the authority comes as part of its wider effort offering incentives to electricity and gas market operators.

RAE, at its latest board meeting, approved a first set of incentives proposed for IPTO by an external consultant, energypress sources have informed. This set of incentives is expected to be forwarded to IPTO within the next few days for observations and comments.

The regulatory authority is aiming to forward the package of IPTO incentives for public consultation towards the end of this month, before it is endorsed by the board and published in the government gazette by the end of June, and implemented six months later.

The authority is essentially aiming for the package to be implemented by January 1, 2022, as part of a new framework covering 2022 to 2025.

The same external consultant was hired for a similar-minded set of incentives concerning the electricity distribution network operator DEDDIE/HEDNO.

RAE’s chief executive Thanassis Dagoumas recently told a news conference that the authority intends to adopt an incentives-based strategy for all operators with the aim of improving their services.

The authority will intensify its monitoring of operator projects in development and ultimately hand out bonuses or penalties, depending on the degree of progress, he noted.

For the time being, the incentives-based strategy applies for DEDDIE/HEDNO, as well as the gas distribution operators (DEDA, EDA Attiki, EDA THESS), offering extra WACC for the achievement of objectives concerning gas market penetration and distribution cost reduction for consumers.

 

HEDNO VDR opening Tuesday, bidders in partnership talks

Power utility PPC plans to open a virtual data room concerning the sale of a 49 percent stake in subsidiary firm DEDDIE/HEDNO, the distribution network operator, on Tuesday, once confidentiality agreements with nine second-round qualifiers, and other documents, have been approved by the utility’s board, expected a day earlier.

All documents necessary for the sale procedure will be forwarded to the nine bidders for observations.

The VDR will offer bidders access to technical and financial data concerning DEDDIE/HEDNO.

As of next week, PPC and each of the nine second-round qualifiers, preparing to make binding bids, will begin separate talks, correspondence and negotiations that are expected to run for months, for the finalization of a shareholders agreement.

Given the width of second-round qualifiers, this privatization’s completion is anticipated towards the end of autumn.

The buyer’s board representation will reflect the minority 49 percent stake to be acquired, with 5 members on an eleven-member board, or 4 members if a nine-member board is chosen.

Some board members will be given reinforced managerial roles for the PPC subsidiary. Proposals for the chief financial officer and chief operating officer posts will be made by the buyer, according to sources.

Though the road ahead towards the DEDDIE/HEDNO sale’s completion is long, the nine second-round qualifiers have already begun talks for possible partnerships, between themselves and beyond.

One of the nine qualifiers, the US fund CVC Capital Partners – whose Greek portfolio is continuously growing, investments including three hospitals, Metropolitan, Iaso General and Ygeia, as well as imminent deal completions for food production conglomerate Vivartia, dairy company Dodoni, and insurance company Ethniki Asfalistiki – is engaged in talks with fellow US fund KKR and Australia’s Macquarie for the establishment of a consortium that would bid as one for a 49 percent stake in DEDDIE/HEDNO. KKR and Macquarie are among the nine second-round qualifiers in the DEDDIE/HEDNO sale.

HEDNO sale bids to be delayed by 2 months, for September

The privatization plan for distribution network operator DEDDIE/HEDNO, whose sale is offering investors a 49 percent stake, is expected to be delayed by approximately two months as a result of the need for greater preparation time prompted by the large buyer turnout.

The operator’s parent company, PPC, the power utility, will now aim for a binding-bids deadline and finalization of the sale around September.

According to the sale’s original schedule, candidates were set a July deadline for binding bids.

Nine funds have qualified for the second, and final, round. They could be joined by energy market operators ahead of their binding bids.

PPC chief executive Giorgos Stassis plans to table the distribution network operator’s privatization at the parent company’s next board meeting.

Stassis will, yet again, inform the PPC board on the level of suitability of second-round qualifiers in terms of their energy infrastructure track records and, even more crucially, ability to meet the demands of DEDDIE/HEDNO’s investment plan, requiring 3 billion euros until 2028.

Separate talks are currently being held by the seller with representatives of each of the nine funds, in the process of signing confidentiality agreements for access to the operator’s virtual data room, containing technical and financial data.

Minority role for HEDNO buyer of 49%, cooperation promised

The prospective buyer of a 49 percent stake in distribution network operator DEDDIE/HEDNO is expected to be given minority rights, reflecting the acquired stake, in the company’s new management and board.

The ongoing privatization’s nine second-round qualifiers will be provided full details on the precise administrative model to be adopted and the sale procedure’s next steps in letters to be forwarded by state-controlled power utility PPC, the operator’s parent company, possibly on May 10.

The buyer is expected to be represented by five members in an 11-member board or four members should a nine-member board be favored. Some of the buyer’s board members are expected to have bolstered managerial roles.

In its forthcoming letters to the second-round qualifiers, PPC, to maintain majority control of DEDDIE/HEDNO, is expected to ensure that the eventual buyer will not face obstacles in crucial investment issues as the power utility will be a cooperative chief partner.

Once they have been updated on details by PPC, through its forthcoming letters, the nine second-round qualifiers are expected to sign confidentiality agreements offering access to the operator’s virtual data room.

A series of private meetings between bidder representatives and PPC will follow, ahead of their binding offers, expected to be submitted by September.

All nine qualifiers are believed to be considering partnerships ahead of their binding bids. In recent weeks, a well-known foreign fund already possessing a strong presence in Greece’s food market, as well as other sectors, has been involved in talks, for a minority role, with one of the US or Australian funds through to the second round.

Collectively, the second-round qualifiers in the DEDDIE/HEDNO sale manage over 10 trillion euros, while most have interests in utilities around the world.

HEDNO investments up 17% in 2020, binding offers for 49% in 3Q

Distribution network operator DEDDIE/HEDNO has reversed its trend of declining investments in recent years, increasing investments to a level of 175 million euros in 2020, a 17 percent increase compared to a year earlier, parent company PPC informed analysts yesterday during a virtual-conference presentation of the group’s 2020 results.

Part of these investments concerned the network’s expansion, whose total length increased by 808 km for medium-voltage networks and 661 km for low-voltage networks. Also, a further 538 low and medium-voltage transformers were installed.

As a result, the medium-voltage network’s length totaled 113,358 km at the end of 2020, the low-voltage network’s length totaled 128,211 km, while the network’s total number of installed transformers reached 165,290.

The network’s active users totaled 7,593,412 at the end of 2020, 12,668 of these in the medium-voltage category.

According to PPC’s group results, DEDDIE/HEDNO’s net profit fell to 20.3 million euros in 2020 from 70 million euros a year earlier.

Binding offers for PPC’s sale of a 49 percent share in DEDDIE/HEDNO are planned for the third quarter this year, PPC’s administration informed analysts during yesterday’s session.

Guaranteed revenues for operators ‘must not breed complacency’

Operators must not become complacent as a result of their guaranteed revenues but, instead, strive to keep improving their services, RAE (Regulatory Authority for Energy) chief executive Thanassis Dagoumas has stressed.

High yields secured by electricity and gas market operators active in Greece’s transmission and distribution networks are breeding complacency and prompting these companies to skip crucial investments needed for upgraded consumer services, the RAE chief has suggested.

The regulatory frameworks these operators are subject to, offering natural monopolies, result in considerable advantages compared to other sectors of the economy, Dagoumas noted.

It must be widely accepted, as a matter of principle, that perpetually high profit margins resulting from activities free of competition, without improved services in return, is not reasonable, the RAE chief noted.

Fair competition is a fundamental component of the EU itself, Dagoumas pointed out.

RAE plans to implement incentives for all operators, not just the electricity distribution network operator DEDDIE/HEDNO, and the gas distributors DEDA, EDA Attiki and EDA THESS, as is the case at present, Dagoumas disclosed.

DEDA, EDA Attiki and EDA THESS have been offered extra WACC returns for meeting gas penetration objectives and reducing overall distribution costs for consumers.

HEDNO bidders to next stage of sale with regulatory ambiguities

Second-round qualifiers of a privatization offering a 49 percent stake of distribution network operator DEDDIE/HEDNO, a subsidiary of power utility PPC, are entering the procedure’s next stage without a clear picture on the company’s regulatory framework, still not established, despite a March 31 deadline.

Though related talks began well in advance, RAE, the Regulatory Authority for Energy, is still awaiting all the details it requires from the operator on its regulated earnings and network development plan before the authority can reach a decision on the regulatory framework.

The operator’s regulatory framework is crucial for the privatization as it concerns pivotal matters such as extra wacc for certain projects, as well as Opex, Capex settings, amongst other details.

Once established, DEDDIE/HEDNO’s new regulatory framework will be applied retroactively, as of January 1, 2021.

Though its delivery date still remains unclear, it will include two periods, covering 2021 to 2024 and 2025 to 2028, which will give potential buyers a long-term perspective on the returns to be offered by the investment.

RAE has already decided on a formula calculating required earnings from the distribution network as well as the wacc level.

Second-round qualifiers are expected to be given access to DEDDIE/HEDNO’s virtual data room within the next few days for an assessment of the operator’s financial standing as part of due diligence.

HEDNO suitors all real-money investors with long-term views

All nine qualifiers through to the second round of a tender offering a 49 percent stake of distribution network operator DEDDIE/HEDNO possess extensive experience in infrastructure management around the world and are long-term, real-money investors.

The tender’s shortlist, announced yesterday, includes Blackrock, the world’s biggest investment fund, back in the Greek picture after subscribing to a bond issue staged last month by the operator’s parent company PPC, the power grid operator.

Blackrock has based these investment decisions on Greece’s economic prospects beyond the pandemic as well as common business principles shared with PPC.

The capital managed by the nine qualifiers is worth 10.2 trillion euros. More importantly, the qualifiers are backed by formidable profiles, their portfolios carrying investments in utilities, infrastructure and energy companies.

France’s Ardian, managing assets worth over 100 billion euros, Canadian investment corporation British Columbia Investments (BCI), handling a 100 billion-euro portfolio, the American funds Blackrock, managing assets worth 9 trillion dollars, CVC Capital Partners (120 bn), KKR (250 bn) and Oak Hill (50 bn), Italy’s infrastructure fund F21, as well as Australia’s Macquarie (420 bn) and First Sentier (180 bn) are all long-term investors.

BCI and Macquarie have jointly engaged in a series of takeovers, beginning in 2012 with German networks company Open Grids Europe, and following up, in 2014, with US electricity firm Cleco, and networks company Endeavour Energy in 2017. BCI also controls Chilean power distributor Transelec as well as Canada’s Corix.

Blackrock controls US corporation Hearthstone Utilities and the UK’s Kelas Midtream and Calisen PLC, active in smart meters.

America’s KKR acquired New Jersey water management company Bayonne Water and Wastewater Concession in 2012 and Middletown Water in 2014.

Macquarie’s portfolio includes Spain’s Viesgo, Germany’s Open Grid Europe, and the portfolio of First Sentier (previously First State) includes the UK’s Electricity North West and Anglian Water.

Crete-Athens grid link omitted from Greek RRF proposal

A grid interconnection to link Crete with Athens has been omitted from a national plan containing 112 projects for which financial support will be sought through the European Commission’s Recovery and Resilience Facility.

It was the energy sector’s only surprise omission from the government’s plan for RRF support, to be submitted to Greek Parliament within the next few days for ratification before being forwarded to the European Commission.

Even so, progress of the Crete-Athens grid interconnection project, vital for Crete’s energy sufficiency without reliance on high-cost local power stations, will not be affected by the decision as a number of other financing options remain available, authorities have stressed.

These include the National Strategic Reference Framework and the Just Transition Fund.

The national RRF plan was discussed at a cabinet meeting yesterday ahead of its presentation, planned for tomorrow.

A proposal for a 200 million-euro injection into the RES special account, facing deficit territory, has been included in the national plan.

Other key features of the plans are: the country’s energy efficiency upgrade program for homes, businesses and public buildings; the decarbonization plan; installation of smart meters; upgrade and undergrounding of transmission lines; as well as development of electric vehicle recharging infrastructure.

New network expansion model to support PV investments

A new formula just introduced by the distribution network operator DEDDIE/HEDNO for the expansion of medium-voltage transmission lines promises to restart the development of small-to-medium scale solar energy projects by providing a viable way for investors to cover the cost of network projects.

This new approach comes as an effort to end investment stagnancy in the RES sector by enabling RES producers to overcome local network saturation issues that have prevented the development of their project plans.

The new formula entails the issuance of connection terms for clusters of independent PV units, for which the operator will temporarily cover the cost of network expansion projects concerning units that will not pay immediately.

The plan was introduced by the operator last Friday, beginning with the issuance of connection terms for a first batch of three PV clusters.

It comes at a time when, according to data processed by SPEF, the Hellenic Association of Photovoltaic Energy Producers, the percentage of RES applications rejected by DEDDIE/HEDNO has reached a level of 80 percent.

This heightened level of rejections has, more recently, prompted the intervention of sector agencies, highlighting the fact that investor interest in RES investments, especially small-and-medium sized photovoltaics, has come to a standstill.

 

DEDDIE network expansion plan held up by internal dispute

Though the distribution network operator DEDDIE/HEDNO, encouraged by the energy ministry, appears to have decided to move ahead with plans for an expansion of its medium-voltage network, the decision is not being implemented as a result of disagreements, within the company’s ranks, on the plan.

According to sources, rival factions have been formed at the operator over the project, holding it back. Officially, the operator’s regional services, which have completed all required preliminary work, have yet to be given the green light.

Clarity on the network expansion plan is crucial for certain investors, especially solar energy investors, facing a March 22 deadline set by RAE, the Regulatory Authority for Energy, for a forthcoming RES auction in May.

The energy ministry has been informed of the deadlock at the operator and is expected to intervene to settle the dispute.

RES spatial plan to be delivered within 2021, Action Plan notes

The completion of a RES sector spatial plan within the current year has been included in an energy ministry Action Plan for 2021, just published along with the respective action plans of all other ministries.

The energy ministry’s action plan lists interventions planned for 2021 in nine areas under its authority, including energy-sector privatizations, energy market reforms, support for decarbonization and recycling, adoption of circular economic principles, greenhouse gas emission reduction, the tackling of climate change effects, as well as green energy transition.

RES sector measures this year will help cut down the time needed by new RES projects for licensing procedures to two years, the ministry anticipates in its action plan.

It also expects the installation, by the end of the year, of at least 2,000 recharging units for electric vehicles in public areas, including along highways, and at private properties, including domestic and commercial.

On the privatization front, the energy ministry expects all seven energy privatization plans to have been completed or reached an advanced stage by the end of the year.

On energy market reforms, the adoption of a remuneration mechanism for grid sufficiency, to replace a transitional mechanism remunerating flexibility, is a standout feature.

The energy ministry also intends to adopt, as Greek law, an EU directive promoting energy storage and demand response systems.

The ministry’s action plan also anticipates the signing of agreements this year for distribution network development and RES penetration support. It also expects DEDDIE/HEDNO, the distribution network operator, to announce a tender for the installation of smart power meters within the current year.

Taking into account plans by DEDDIE/HEDNO and power grid operator IPTO, the ministry expects investments in distribution and transmission networks to reach one billion euros this year.

Investments for gas network upgrades and expansion are expected to reach at least 300 million euros, primarily driven by projects planned by gas distributor DEDA, covering all areas around the country except for the wider Athens, Thessaloniki and Thessaly areas.

On international projects, the action plan notes that a Greek-Bulgarian gas pipeline project, the IGB, promising to significantly diversify Greece’s gas sources, will be completed by the end of 2021.

A latest edition of the Saving at Home program subsidizing energy efficiency upgrades of properties, budgeted at one billion euros, will stimulate work on 80,000 buildings in 2021, according the energy ministry’s action plan.

This activity will contribute to a National Energy and Climate Plan objective for an improvement, by 2030, of energy efficiency at buildings by 38 percent, reducing energy consumption to levels below those registered in 2007, the action plan notes.

 

Talks continue for EU recovery fund energy projects package

Electricity network upgrades, including restricted underground cable installations – due to limited funds – at areas presenting serious energy security problems; decarbonization; as well as spatial planning and redevelopment for carbon-neutral cities feature as plans in an initial energy-projects package, worth over one billion euros, linked to the EU’s recovery fund, Brussels sources have informed.

Brussels authorities are currently appraising these projects, a procedure expected to be completed by the end of March. The Greek government will then need to immediately incorporate approved plans into a National Recovery and Resilience Plan and submit it to Brussels by early April.

Energy minister Kostas Skrekas and European Commission officials discussed the ministry’s proposals during a virtual conference yesterday.

Besides decarbonization, energy efficiency upgrades of buildings, as well as energy-related town and spatial planning, the government is also addressing the need to modernize infrastructure, especially networks, as was highlighted by problems encountered in many parts of Greece during recent snowstorms.

The installation of underground transmission cables will be restricted to between 2,000 and 2,500 kilometers of medium and low-voltage networks, given the amount of recovery funds available for this project, estimated at 200 million euros, according to energypress sources.

The cost of installing underground medium-voltage power lines is estimated at 100,000 euros per kilometer, compared to 30,000 euros for overhead lines. Installation costs for low-voltage power lines are estimated at 70,000 euros per kilometer, compared to 25,000 for overhead lines.

The overall effort is also expected to include an upgrade of ageing overhead transmission lines around Greece, dating back to the 70s and 80s.

Operator DEDDIE 49% sale first-round bids submitted today

State-controlled power utility PPC and the government will be hoping today’s first-round, non-binding deadline for expression of interest in the 49 percent sale of the utility’s subsidiary DEDDIE/HEDNO, the distribution network operator, can attract a solid turnout of formidable bidders.

An onslaught of criticism against DEDDIE/HEDNO over the past few days following widespread power outages caused by Medea, as the extreme weather system was dubbed, certainly has not been good for the operator’s reputation.

On the other hand, the network’s deficiencies, exposed by extensive weather-related damages in the wider Athens area, lends tremendous support to the need of a powerful investor ready to finance the network’s badly needed upgrade, expected to cost 3.5 billion euros.

Expectations of a solid investor turnout have been high in the lead-up to today’s first-round deadline. PPC plans to announce this sale’s first round participants during the day.

Many prominent funds have shown interest in the sale but the identities of those that will follow through and participate have remained unclear. It also remains unclear if any of these funds will establish partnerships – for the DEDDDIE/HEDNO sale – with European network operators.

A market test staged in December, as well as contact with interested parties, has indicated that the American funds KKR and Blackrock, Australia’s Macquarie Group, and France’s Ardian, could participate in the sale.

The managerial rights to be attached to the minority 49 percent stake will be bolstered to not block potential buyers from crucial decisions.

DEDDIE/HEDNO possesses a regulated asset base worth over 3 billion euros, networks totaling 242,000 km in length, 240 high-voltage substations, 163 low-voltage substations, a 5,800-member workforce, and a client base numbering 7.5 million.

The company caters to annual demand of 43.194 TWh and 57,752 RES units with a total capacity of 3,926 MW.

Network repairs almost done, 60,000 reconnections made

Repairs to medium-voltage power line networks in the wider Athens area, damaged during the heavy snowstorm earlier in the week, especially in the capital’s north, have almost been completed, with just small sections remaining, distribution network operator DEDDIE/HEDNO updated this morning.

Operator crews have needed to work overtime, focusing their efforts on the capital’s northern areas Ekali, Dionysos, Agios Stefanos, Kryoneri, Anixi, Drosia and Kalamos, all hit especially hard by Medea, as the snowstorm was dubbed.

Some 60,000 households and businesses of 70,000 that were disconnected from the network during the extreme weather conditions have had their electricity supply restored, the operator informed last night.

DEDDIE/HEDNO, in its updates, has urged the public to stay away from any fallen power lines or utility poles.

The operator has also requested households still disconnected from the network to contact the operator through any of the following: 11500, 2111900500, MyDEDDiE app (Android), iOS (mobiles), or www.deddie.gr.

DEDDIE/HEDNO has reinforced its Athens crews with a further 60 technicians brought in from the Peloponnese, Epirus and central Greece areas, where repair work has been completed.

Network damages remind of need for system upgrade

Power outages in many parts of Greece, including hard-hit Athens, as a result of collapsing trees that damaged overhead power lines during heavy snowfall earlier this week, have triggered discussion about the need for underground distribution networks and the network’s overall reinforcement and improvement.

Also, the installation of 7.4 million smart power meters, a project budgeted at 800 million euros, is a priority, distribution network operator DEDDIE/HEDNO officials stressed in the wake of network damages inflicted by the snowstorms.

Distribution network investments have fallen behind over the past eight years, sliding from approximately 280 million euros in 2012 to 123 million euros in 2017 and 2018 before slightly rebounding to 135 million euros in 2019 and an unconfirmed 178 million euros in 2020.

This reduction in network investments by DEDDIE/HEDNO has stemmed from poor financial performances by parent company PPC, the power utility, during the aforementioned period.

“Ten years of economic crisis in Greece has led to slight infrastructure regression,” the recently appointed energy minister Kostas Skrekas noted late last night, while crews were working overtime to restore damages caused by Medea, as the extreme weather system was dubbed. “We have allotted 200 million euros of recovery fund money for underground cable investments,” the minister added.

Speaking at an energy conference yesterday, the ministry’s secretary-general Alexandra Sdoukou said government plans for an upgrade of the country’s power distribution network would result in investments anticipated to total 3.5 billion euros over the next decade.

Two funds submit DEDDIE interest ahead of sale’s preliminary deadline

Two undisclosed funds have jumped the gun to submit non-binding, first-round expressions of interest for the sale of a 49 percent stake in distribution network operator DEDDIE/HEDNO three days before a February 19 deadline, highlighting the heightened level of buyer interest that surrounds this privatization.

European and US investment teams, more so than network operators, have shown particular interest in the DEDDIE/HEDNO sale during its lead-up.

A market test in December revealed that 19 potential bidders include New York-based Blackrock, the world’ biggest investment fund, managing capital worth 7.8 trillion dollars; American giant KKR, handling 220 billion dollars; as well as French fund Ardian, one of Europe’s most dynamic, with involvement in over 150 enterprises and capital management worth more than 100 billion dollars.

Though it remains unknown if any of the aforementioned players were early birds, it has become very clear that funds will play a big role in this sale.

In an effort to add to the sale’s appeal, power utility PPC, DEDDIE/HEDNO’s parent company, has decided to bolster the 49 percent minority rights by offering potential buyers equal powers with PPC over crucial network operator decisions.

Between four and seven investment teams have displayed the greatest level of interest in the DEDDIE/HEDNO sale. Some of these teams are believed to be engaged in negotiations to establish new formations for this sale.

PPC, backed by positive news, on standby for bond issue

The Greek State’s recent bond-market outing for an unprecedented, in the country’s history, borrowing cost of less than 1 percent paves the way for power utility PPC to follow suit.

This low yield and strong attraction of institutional investors, who ended up with over 95 percent of the Greek State’s bond issue, combined with a steady interest by foreign investors in PPC’s portfolio are believed to be pushing the power corporation towards a more aggressive financing policy for a return to bond markets following a six-year absence.

However, PPC has yet to decide on when to make its move. The corporation has not planned a bond issue for this month or next, sources have informed energypress. Even so, a sudden decision cannot be ruled out, they added.

PPC has been contemplating a bond-market outing since late December, when Fitch Ratings delivered a positive credit rating. The US firm included, for the first time, PPC on the list of enterprises it rates and offered a BB ranking, two times better than a preceding B ranking delivered by S&P in November.

At the time, despite the good news, company sources insisted PPC’s objective to head to capital markets in the first half of 2021 remained unchanged.

But a wave of favorable news, which, besides the BB rating from Fitch Ratings, includes PPC’s securitization packages for unpaid receivables; the achievement of profit figures for a fourth successive quarter; a new business plan; the launch of a privatization procedure for distribution network operator DEDDIE/HEDNO; and an upcoming partnership agreement with Germany’s RWE for RES investments in Greece; has generated momentum for PPC.

A bond issue would help finance many of the company’s project plans, primarily in the RES sector, as well as distribution network investments. It will also enable PPC to restructure older debt for lower-cost borrowing terms.

China’s SGCC lodges complaint over DEDDIE sale exclusion

State Grid Corporation of China (SGCC) has filed a complaint with the European Commission after being barred by Greek power utility PPC from the sale of a 49 percent stake in its subsidiary DEDDIE/HEDNO, the distribution network operator, over conflict-of-interest concerns.

The Chinese firm, a strategic partner of Greek power grid operator IPTO with a 24 percent stake, has forwarded a letter to Brussels claiming PPC’s block breaches EU law.

According to the sale’s terms and conditions, any company with direct or indirect control of IPTO or any of its subsidiaries cannot participate in the DEDDIE/HEDNO sale because of conflict-of-interest issues.

SGCC’s Brussels initiative highlights the Chinese company’s strong interest in acquiring a stake and role in the distribution operator’s network. The prospective installation of 7.5 million digital power meters at private properties around the country is the major draw for SGCC, sources noted. DEDDIE/HEDNO also plans to digitize and upgrade its outdated network.

PPC has extended its first-round expression of interest deadline to February 19. A considerable number of companies seem intent to participate.

 

PPC’s new image a prelude to revised business plan, imminent

Retail outlets to open for extended business hours, digital products and new services, swifter withdrawals of lignite-fired power stations, as well as an acceleration in the development of major-scale and smaller RES projects are among the factors contributing to power utility PPC’s new corporate image, showcased yesterday, during a 40-minute event, by chief executive Giorgos Stassis, who described the new image as a prelude to a revised business plan to be presented towards the end of the year.

The revised business plan, to have a three-year duration, will be a more ambitious and confident plan than last year’s version as, besides swifter lignite unit exits, it will feature bolder digitalization steps, a more aggressive retail market policy, aim for a RES portfolio well over 1 GW over the next three years, through a pool of prospective projects totaling 6 GW, and also feature network and personnel investments.

Next year, the company will aim to double 24 existing retail outlets – they begin operating for extended business hours as of today – as well as 75 service centers that may be visited by appointment only.

Yesterday’s announcements represent just part of the developments to be gradually announced by PPC, the most imminent being a new series of digital products, dubbed PPC myHome, to be launched within the next few days.

The new business plan’s level of ambition will also depend on external factors, Brussels being pivotal. Settlement of the country’s ten-year lignite dispute with the European Commission will offer state-controlled PPC greater leeway.

PPC is also hoping for a favorable Brussels response within November on a compensation request for 200 million euros, annually, for every year lignite-fired power stations in the west Macedonia and Megalopoli regions will need to keep operating.

Southeast Europe network coordination center working on launch

The Southeast Electricity Network Coordination Center (SEleNe CC), established in Thessaloniki to support regional network security in southeast Europe, is currently recruiting personnel and installing technical equipment required for its operations.

All necessary equipment is expected to be installed at the center’s Thessaloniki headquarters by the end of September, energypress sources have informed. The objective is to have prepared the center as a fully operational unit by the end of the year.

The new regional center was established following years of efforts by the power grid operators of Greece (IPTO), Italy (TERNA SpA), Romania (Transelectrica), and Bulgaria (ESO-EAD), each holding equal shares.

It is managed by a four-member board comprising Ioannis Kabouris (IPTO), the chief executive, and three members, Angelin Tsachev (ESO-EAD), Enrico Maria Carlini (TERNA SpA), and Adrian Suta (Transelectrica).

The coupling of respective markets, expected soon, will represent a next step in the region’s harmonization and incorporation into Europe’s unified electricity market, promising major benefits for consumers, Kabouris, the chief executive, has noted.