November electricity prices, out tomorrow, down 15-20%

The country’s electricity suppliers, now finalizing their pricing policies for next month, are expected to announce, tomorrow, reduced tariffs for November, down by 15 to 20 percent compared to the current month’s levels, sources have informed.

Based on new law, suppliers are required to announce their electricity prices for the forthcoming month by the 20th of each preceding month.

Supplier tariffs, sources informed, should range between 0.45 to 0.50 euros per MWh, which, if confirmed, will result in a reduction of between 15 and 20 percent, compared to October’s prices.

The government’s level of subsidy support for electricity bills next month has yet to be announced. Given the current de-escalation in electricity prices, the government may choose to only rely on the Energy Transition Fund for next month’s subsidies and not use any budget money for this purpose, sources said.

Market analysts are projecting further electricity price reductions until the end of the year as a result of a drop in TTF natural gas prices. The Dutch index has fallen by 66 percent since an August 26 peak of 349.90 euros per MWh, reaching 116.45 euros per MWh yesterday.

The EU’s overachievement of gas storage levels, now averaging 91 percent of capacity, as well as an abundance of LNG supply to Europe, are key factors that have driven down the TTF.

 

PPC’s October tariff down 25%, similar cuts by all players

Power utility PPC, the dominant retail player, has announced an October tariff for households of 0.595 cents per KWh, 25 percent lower than the September tariff offered by the utility.

This 25 percent month-to-month reduction rate more or less applies for October household tariffs offered by all the country’s suppliers, who have just announced their tariffs for next month.

Under new market rules, electricity retailers must announce their tariffs for forthcoming months by the 20th of each preceding month.

PPC’s tariff of 0.595 cents per KWh is for monthly consumption of up to 500 KWh. The utility’s tariff for consumption over this level was set at 0.607 euros per KWh.

Protergia announced an October household tariff of 0.57630 euros/KWh. Elpedison’s October tariff was set at 0.5905 euros/KWh. Heron’s new tariff is 0.698 euros/KWh, with a punctuality discount rate of 20 percent that reduces its level to 0.5584 euros/KWh. Elsewhere, October household tariffs are: Volterra, 0.685 euros/KWh; Fysiko Aerio, 0.594 euros/KWh; Zenith, 0.589 euros/KWh; Watt+Volt, 0.5890 euros/KWh; Elin, 0.599 euros/KWh; Volton, 0.589 euros/KWh.

In September, the government spent 1.9 billion euros on electricity subsidies to contain retail prices at levels of between 14 and 16 cents per KWh.

Subsidies for October, to be inversely related to consumption, are scheduled to be announced today.

October tariffs slightly lower than September levels

Electricity tariff levels for October, to be announced late tonight by electricity retailers, are expected to be lower than September’s levels but still higher than August prices, energypress research has shown.

The anticipated retail electricity reduction has been attributed to a recent reduction in natural gas prices at the Dutch TTF hub.

Most suppliers are expected to set their tariffs for October at levels between 60 and 68 cents per KWh, while prices, by some suppliers, slightly below the level of 60 cents per KWh, have not been ruled out.

Under new market rules, electricity retailers must announce their tariffs for forthcoming months by the 20th of each preceding month.

September’s tariffs ranged between 68 and 80 cents per KWh, well over August’s levels of between 47 and 58 cents per KWh.

The government is seeking to stabilize prices for consumers through a latest subsidy package, whose amounts offered will be inversely related to consumption levels. It will be implemented as of October 1.

According to sources, highest subsidies will be offered to consumers making a low-consumption category, to be set at a maximum of 500 KWh per month. Slightly lower medium-category subsidies will be offered to consumers using between 501 and 1,000 KWh per month, while consumers exceeding 1,000 KWh per month will be offered the smallest level of subsidies, the sources added.

Higher-level energy consumers who succeed to reduce electricity usage by at least 15 percent compared to a year earlier will be transferred to the next-highest subsidy category, the sources informed.

Natural gas subsidies are expected to be universally applied.

 

 

October tariffs down, subsidies to reward lower power usage

Supplier electricity tariffs for October, due to be announced tomorrow, will be lower compared to September levels and are seen ranging between 0.599 and 0.680 euros per KWh.

A recently introduced market rule requires suppliers to provide their next month’s prices by the 20th of the preceding month.

Pricing for next month has proven very difficult to calculate as market conditions remain very fluid, TTF index prices changing continuously, market officials noted.

However, Greek market peculiarities, factoring in natural gas prices with some delay, are expected to result in lower retail electricity prices next month, the officials explained.

A day after October’s electricity tariffs are announced, the government plans to release a new subsidy formula, to become effective October 1.

According to sources, three consumption level categories will be established, the subsidies to be offered for each inversely related to electricity usage. For example, consumers with usage placing them in the highest consumption category will receive the lowest subsidies and vice versa.

Also, higher-usage consumers in lower subsidy categories will be elevated to the next highest subsidy category if they can reduce consumption by 15 percent compared to a year earlier.

 

 

 

August floating-rate electricity tariffs up 14% in Athens

Retail electricity price increases were highest in Athens in August, a monthly 33-city Household Energy Price Index survey conducted by energy research and consultancy firm Vaasaett has shown.

Athens’ retail electricity price increase for August was estimated at 34 percent, a rise that falls to 14 percent if fixed tariffs, far more expensive, are not factored into the calculations.

In Athens, fixed-rate tariffs are priced two to four times higher than floating-rate tariff deals offered by electricity suppliers.

Athens’ 14 percent price increase in August is a more realistic result than the study’s 34 percent rise, which takes into account fixed-rate deals, as virtually all consumers are not favoring fixed-tariff agreements given the far greater cost entailed.

The study bases its results on electricity tariffs offered by respective city market leaders, based on most recent market shares.

Fixed tariff-rate electricity deals are becoming increasingly uncommon, and more expensive, throughout Europe as suppliers are hesitating to offer such deals given the heightened level of market uncertainty.

In Greece, state subsidies are only available for consumers with floating-rate tariff agreements, making fixed tariff-rate deals even less popular.

 

Consumer confusion, distrust over supplier tariff offers

Many consumers are feeling confused about electricity tariff comparisons and how to go about determining the best supplier deals available in the market, a considerable number of enquiries expressed by energypress readers has indicated.

The confusion of consumers amid the energy crisis appears to have abounded despite the government’s recently introduced simplified system, through which suppliers announce the forthcoming month’s tariffs on a monthly basis. The net price for consumers results once state electricity subsidies have been subtracted.

Common questions asked by consumers include whether they should be on the constant lookout for lower-priced electricity offers, given the monthly tariff announcements by suppliers, which can fluctuate from month to month.

Consumers are also expressing insecurity as to where they should look for finalized, guaranteed price offers of suppliers, once the government’s subsidies have been deducted.

A price-comparison tool introduced by RAE, the Regulatory Authority for Energy, for this purpose does not appear to have convinced some consumers, or helped clarify the market picture for them, even though many consumers are aware of the tool’s existence and are using it.

 

 

Suppliers to increase tariffs in response to fixed-charge limit

The country’s electricity suppliers are expected to revise upwards their basic tariffs after being subject to a five-euro price cap on fixed charges.

In practical terms, suppliers who, for example, have set a tariff price of 50 cents per KWh and a fixed charge of 20 euros, which will now need to be reduced to 5 euros, will consider increasing their tariffs to 52 cents per KWh in order to offset the loss resulting from the price cap, the latest in a series of energy-crisis measures introduced by the government.

If the country’s electricity suppliers do decide to respond to the latest measure by increasing tariff levels, the government’s price-cap initiative on fixed charges could prove futile.

In the lead-up, electricity suppliers opted to increase their fixed charges to keep their tariffs – the competitive aspect of electricity bills – as low as possible after the government implemented price caps in the wholesale electricity market and abolished wholesale-price adjustment clauses in electricity bills, amongst other measures.

Suppliers are expected to announce their tariffs for next month either today or Monday.

Suppliers asked to recheck, substantiate tariffs for August

The country’s electricity suppliers have been ordered, by RAE, the Regulatory Authority for Energy, to provide by midday today, data proving that tariffs they announced for August are cost-effective, entirely legal and do not seek to circumvent the law through trickery.

The country’s electricity suppliers announced their tariff levels for August on Monday. From now on, they will be required to announce, on a monthly basis, their prices for the next month by the 20th day of the preceding month.

The latest RAE request may require some of electricity suppliers to recalculate their charges and tiered tariffs.

RAE, in a letter, has asked the country’s suppliers to substantiate the tariff levels they announced on Monday with detailed data.

 

 

Wholesale price adjustment clause set for suspension

The government is moving ahead with a plan to suspend a wholesale price-related adjustment clause included in electricity bills, to follow the ratification of a RES draft bill that includes an order for temporary implementation of a mechanism  enabling partial returns of day-ahead market earnings through a wholesale electricity market cap.

According to energypress sources, energy minister Kostas Skrekas appears to have accepted a RAE proposal calling for the suspension, as of July 1, of a wholesale price adjustment clause included in electricity bills.

The energy minister is expected to suspend the clause for a total of 11 months, from July 1 to June 1, 2023, through an energy supply code revision.

Electricity prices for consumers will be controlled through a combination of wholesale market intervention (caps on producer earnings) and subsidy support.

According to the plan, electricity suppliers, as of July 1, will have the choice of offering three types of tariffs: fixed; flexible with upper and lower limits; and flexible without upper and lower limits.

RAE introduces five electricity billing categories

Revised billing layout guidelines forwarded by RAE, the Regulatory Authority for Energy, to electricity suppliers include five billing categories, leading to a framework enabling the suspension of wholesale price clauses.

The five categories offer: fixed tariffs; flexible tariffs with limitless adjustment clauses; flexible tariffs with upper and lower limits to adjustment clauses; flexible tariffs without upper and lower limits to adjustment clauses; and flexible tariffs without adjustment clauses.

The objective is to categorize new bills emerging in the market. The existing categorization system, comprised of three categories, would have led to consumer confusion as a result of structural inconsistencies.

PPC set to offer new fixed tariff package, beginning December 3

Power utility PPC is introducing a new fixed-tariff package for consumers, as of December 3, as part of the corporation’s hedging formula to offset risks.

The new package will, as of this coming Friday, offer consumers a fixed tariff of 18 cents per KWh, or 17 cents per KWh for online applications, as well as a 50 percent discount on fixed costs for the first six months if applications are lodged by a December 31 deadline. Tariff levels of rival suppliers currently average 23 cents per KWh.

The packages will be offered as one-year agreements and include household coverage for emergency technical support. The insurance policy incorporated into new agreements will entitle holders up to five visits per year from tradesman such as plumbers and electricians and cover damages up to 100 euros per visit.

 

 

Electricity suppliers snub RAE’s tariff categorization proposal

Power utility PPC and the country’s independent electricity suppliers have responded negatively to a proposal from RAE, the Regulatory Authority for Energy, calling for the categorization of low-voltage electricity tariffs offered to households into three groups, low, limited and high risk, for fixed, partially restricted and floating tariffs, respectively.

According to the RAE proposal, made in related public consultation, consumers taking on greater risk would be offered lower base tariffs, which, however, would be fully susceptible to market forces and resulting fluctuations.

In its response, PPC noted that it agrees on the existence of two consumer categories, offering fixed and floating tariffs, contending further categorization could ultimately unsettle consumers and even prompt negative perceptions of company offers as a result of the use of the high-risk tag.

Mytilineos group, in its remarks, noted that labelling a fixed tariff as a risk-free option would deprive consumers of the opportunity and incentive to change consumption habits or adopt options related to energy efficiency and savings.

 

Wholesale prices in Greece well over European average in 3Q

Wholesale electricity prices in Greece during the third quarter of 2020 were three times over the €16/MWh European average, based on the Nord Pool power exchange, a European Commission report covering European electricity markets for this period has shown.

The report also traces the market’s 3Q rebound following a heavy slump in the preceding quarter.

Average prices rebounded at a slower pace in southeast Europe, compared to other regions, before reaching pre-pandemic levels in September as a result of weak demand and high production of wind energy and hydropower facilities, according to the Brussels report.

The average price in the third quarter rose by 43 percent, against 2Q, to €43/MWh, and was 30 percent lower, annually.

European price shifts in August moved in coordination, while the price gap between Greece and the European average narrowed significantly in 3Q as a result of the use of lignite-fired units and weak demand.

This gap vanished in September as a result of stronger wind energy output, which exceeded one TWh for the first time. As a result, prices in the region were between €46 and €47/MWh in September.

As for energy-mix developments, lignite-based production in Greece experienced a decreased share, captured by natural gas-fueled output.

In southeast Europe, the lignite-based output share contracted to 29 percent in 3Q from 35 percent in the equivalent period a year earlier; the gas-fueled sector’s production share rose to 20 percent from 18 percent; and the RES sector’s share of the energy mix increased to 34 percent from 30 percent.

Household electricity tariffs in Greece averaged €16.54/MWh (not including taxes and surcharges), while the country’s average for industrial tariffs was €10.62/MWh, the report showed.

Market restrictions on the way for electricity cost reduction

Energy minister Costis Hatzidakis’ recommendations to gas-fueled electricity producers for price restraint in the market have proven to be just partially effective, prompting RAE, the Regulatory Authority for Energy, to forward for public consultation restrictive measures, which, when legislated, will limit the levels of offers by producers in the balancing market.

Balancing market costs have risen sharply over the past six weeks, since the launch of target model markets, leading to elevated wholesale electricity prices that are now being passed on to the retail market, affecting consumers in the mid and low-voltage categories – households and businesses.

Sixth week target model market data made briefly available yesterday by power grid operator IPTO before being swiftly removed from the company website admittedly showed a de-escalation of price levels compared to unrealistically high levels reached in recent weeks, but, on average, these latest levels remained considerably high.

Taking this latest data into consideration, along with sharp price hikes recorded in the day-ahead market, the energy ministry is fully aware of the fact that electricity market prices could spin out of control if action is not taken.

The package of measures forwarded by RAE for public consultation is intended to restore market rationalization. It remains to be seen if these measures will prove effective.

Non vertically integrated electricity suppliers, hit hard by the increase in wholesale prices, are pushing for retroactive implementation of these upcoming restrictions.

 

Consumers hit with tariff hikes of over 20% in low, mid-voltage

Sharply higher wholesale electricity prices registered over the past five weeks or so in the energy exchange’s new target model markets have, to a great extent, been quietly passed on by suppliers to consumer tariffs in the household, business and industrial categories, without any related announcements  from suppliers.

Price hikes by electricity suppliers have applied to approximately 35 percent of total electricity consumption, during this period, while tariff hikes have exceeded 20 percent in the low and mid-voltage categories.

In the low-voltage category, suppliers have activated clauses enabling tariff increases when wholesale price levels exceed certain levels.

Very few independent electricity suppliers, both vertically integrated and not, carry fixed-tariff agreements in their portfolios, exposing most consumers to wholesale electricity price fluctuations.

On the contrary, power utility PPC, representing roughly 65 percent of overall consumption, does not include wholesale price-related clauses in its supply agreements, meaning its tariffs have remained unchanged over the past few weeks.

Instead, PPC includes clauses linked to emission right prices in international markets. These have remained relatively steady in recent times.

Even if wholesale electricity prices happen to deescalate in the next few weeks, a likely prospect, some latency should be expected in any downward tariff adjustments by suppliers.

Numerous consumers have lodged complaints with RAE, the Regulatory Authority for Energy, over the tariff hikes by suppliers. Complaints by suppliers against energy producers setting excessively high prices in target model markets have also been made.

Target model balancing cost skyrockets, suppliers on edge

Balancing costs in the electricity market have exceeded rational limits, skyrocketing to 57 million euros in the fifth week of the target model after totaling 71 million euros during the model’s first four weeks of operation.

Stubbornly high price levels in the wholesale electricity market have created perilous conditions that could lead non-vertically integrated suppliers to bankruptcy, while consumers, beginning with the mid-voltage category, now face tariff hikes as a consequence.

Balancing market costs between November 30 and December 6 doubled compared to a week earlier.

Despite energy minister Costis Hatzidakis’ warning of intervention to producers, whose overinflated offers have prompted this ascent, balancing market costs on December 5 and 6 exceeded 20 euros per MWh, well over levels of between 3 and 4 euros per MWh prior to the target model.

The target model, designed to ultimately homogenize EU energy markets into a single unified market, has been pitched by the Greek government as a price-reducing tool.

Though authorities have played down the price ascent of recent weeks, describing it as a nascent target model abnormality that will settle into place and not prompt consumer tariff hikes, suppliers, under severe pressure as a result of sharp cost increases, have called for immediate measures.

Suppliers have warned they will take legal action against all responsible parties in letters forwarded to the RAE, the Regulatory Authority for Energy, the energy ministry and power grid operator IPTO.

RAE held a meeting yesterday with major-scale producers, who defended their actions, according to sources. The authority limited its reaction to proposals, the sources added.

PPC’s new business plan aims to quadruple EBITDA over 3 yrs

Power utility PPC’s new business plan covering 2021 to 2023 will strive to quadruple the corporation’s EBITDA figure concerning retail activity to 466 million euros from 104 million euros in 2019 through measures focused on maintaining and rewarding a quality customer base in the low-voltage category, company officials have announced.

PPC, which has just presented its three-year business plan to over 200 analysts and investors at PPC Investor Day 2020, projects a customer base contraction from 6.1 million last September to 4.7 million over the next three years, resulting in a retail market share drop to 54 percent from 64 percent at present.

PPC will seek to control the outflow of customers switching to rival suppliers by holding on to the cream of the crop. The utility will also seek to recapture positive-rated customers who have switched to rival suppliers in recent years.

The utility wants to increase its percentage of positive-rated low-voltage customers to 58 percent in 2023 from 48 percent at present. This goal will be driven by loyalty benefits and discounts specially adjusted to consumption profiles.

The corporation also aims to increase e-billing to represent 42 percent of customers in 2023 from just 10 percent at present. However, the utility will not abandon its network of conventional retail outlets. On the contrary, the company to increase its network of 110 outlets to 150 by 2023, all revamped and equipped with high-tech equipment, including automated payment machines.

PPC will also strive to decrease its unpaid receivables from 2.7 billion euros to 2.2 billion euros by 2023, its securitization packages and tougher collection campaigns being the key tools behind this objective.

 

 

Greece climbs up to 12th place in EU electricity tariff cost rankings

Greece has climbed seven places, to 12th from 19th, in the EU rankings for retail electricity cost, pushed higher by a government decision reached last year to increase tariffs at state-owned power utility PPC, according to latest Eurostat data.

These tariff hikes at PPC were imposed by the government in August, 2019 to protect the utility from falling into bankruptcy.

The EU rankings concern electricity price levels for household consumption levels between 2,500 to 5,000 kWh, annually.

Electricity tariff increases for households in Greece rose by an average of 8.6 percent in the first half of 2020, compared to the previous half, when the country was ranked 19th.

The first-half tariff price for households averaged € 0.129 per KWh, not including taxes and surcharges, up from €0.1189 per KWh in the second half of 2019.

PPC remains Greece’s dominant supplier, representing 63 percent of electricity consumption.

The PPC tariff increase has made electricity more expensive in Greece than in countries with higher income per capita levels. Electricity is now more expensive in Greece than in France (€ 0.1247 per KWh), Finland (€ 0.1178 per KWh), Spain (€ 0.1178 per KWh) and Sweden (€ 0.1130 per KWh), all with higher income levels. Electricity is also more expensive in Greece than in Portugal (€0.1139 per KWh).

Despite the country’s rankings rise, electricity prices in Greece remain below the EU average (€0.1327 per MWh), a result of the competition generated by independent suppliers, subduing prices.

The biggest electricity tariff decreases in the first half of 2020, compared to the previous six-month period, were recorded by the Netherlands (-31%), Latvia (-12.8%), Slovenia (-11.4%), Sweden (-10%) and Estonia (-8.9%), the Eurostat data showed.

PPC rivals awaiting utility’s next pricing move for response

Power utility PPC’s rivals are awaiting the utility’s next pricing-policy move before responding with offers of their own. A specially priced three-month package offered by PPC, the electricity market’s dominant player, to its customers as lockdown relief expires on June 26.

Lower wholesale electricity prices over the past couple of months as well as more efficient facility management by PPC, drastically reducing production from loss-incurring lignite-fired power stations, are two factors expected to enable the utility to keep offering appealing packages to customers, sector experts have told energypress.

An initiative taken by PPC during lockdown to equate usually higher tariff rates for consumption of more than 2,000 kWh with rates for consumption below the aforementioned limit could be an indicator of things to come from the power utility.

The market’s major independent suppliers are believed to have studied all possible scenarios in preparation for their respective responses.

PPC chief executive Giorgos Stassis has made clear the power utility’s intentions to regain part of its lost market share. The utility is expected to target specific customer profiles. In addition, bonus services may also be included in packages.

 

 

 

 

PPC financial results for 2019 seen reflecting moves late last year

Power utility PPC’s financial results for 2019, expected to be released this afternoon, should favorably reflect measures taken by the state-controlled corporation’s administration and the government during the final four months of the previous year, analysts have forecast.

The results, expected once the day’s trading has ended at the Athens bourse, are also expected to include an initial assessment of the impact, so far, of the coronavirus pandemic-induced lockdown on the corporate group.

Also expected is an update on new initiatives, including investment plans, for the rest of 2020, following a forced revision of plans prompted by the pandemic.

PPC’s administration has set an operating profit objective of between 420 and 470 million euros for 2019, up from 150 million euros in 2018.

EBITDA figures of 240 million euros for the fourth quarter of 2019 and 337 million euros for 2019, overall, have been forecast by Pantelakis Securities.

During the final few months of 2019, PPC revised tariffs and abolished NOME auctions, described by company and government officials as a loss-incurring measure for the firm.

PPC expects even greater clarity on its financial standing in the immediate future. The corporation is waiting for more appropriate market conditions to securitize unpaid receivables worth 1.5 billion euros and issue a company bond.

Proceeds from these initiatives are expected to enable PPC to move ahead with an ambitious investment plan.

Independent power suppliers set to raise low-voltage prices

After raising electricity prices in the mid-voltage category, independent suppliers are now set to do likewise for low-voltage electricity, supplied to households and businesses. A first step by one or more suppliers is expected to  swiftly trigger action from the rest.

Virtually all independent suppliers have activated a clause used to cover elevated System Marginal Prices, or wholesale prices. The power utility PPC has already increased its mid-voltage electricity prices.

Higher tariffs at PPC, still the dominant player, have prompted many consumers to switch supplier in recent times, leading to considerable market share losses for the utility.

Though independent suppliers are currently gaining clients from the PPC outflow, they are also keeping a close watch on each other.

Independent suppliers must keep providing incentives to lure PPC customers, and, at the same time, lessen their risks of financial loss.

Lower-cost electricity acquired by independent suppliers at NOME auctions will soon run out. The government recently decided to abolish this procedure, loss-incurring for PPC. Independent suppliers should start being exposed to the wholesale market’s higher prices in January and will be fully exposed by June.

By this stage, the performance of independent suppliers will greatly depend on wholesale electricity market conditions.

If LNG prices remain subdued, a favorable prospect for the SMP, then independent suppliers, despite their increased exposure to the wholesale market’s conditions, will not be forced into loss-incurring deals but, instead, will be in a position to keep competing against PPC for market share gains.

State-controlled PPC has adopted into its business plan the prospect of a market share reduction to levels of around 60 percent or less by June, 2020. Subsequently, independent suppliers will control 40 percent of the retail electricity market, meaning competition between them, rather than against PPC, stands to intensify.

Any agreements reached during negotiations between the government and the European Commission in January will also impact the market.

Local retail electricity prices register EU’s 4th biggest dip

Retail electricity prices in Greece registered the EU’s fourth largest reduction in the first half of 2019, compared to the equivalent period a year earlier, falling by 1.3 percent, latest Eurostat data has shown, primarily as a result of more aggressive discount policies by independent suppliers for households and enterprises.

Denmark was ranked first with a 4.3 percent price fall, followed by Portugal with a 4.1 percent drop, and Poland, where retail electricity prices slid 3.1 percent.

The average EU price rose by one cent. The Netherlands posted the biggest price increase, averaging 20.3 percent. Cyprus followed with a 16.4 percent increase, Lithuania was next on the list with an average price hike of 14.4 percent and the Czech Republic was fourth with a 12 percent price increase.

Retail electricity prices in the Greek market are among the EU-28’s lowest, the Eurostat data showed. Greece was ranked 18th in this category with an average tariff price per KWh of 0.16 euro. Germany is the most expensive with an average tariff price per KWh of 0.30 euro. The EU average is 0.21 euro and the Eurozone average 0.22 euro, according to the Eurostat data.

Despite the more aggressive pricing policies of independent suppliers in Greece, power utility PPC maintained its dominant position with a retail market share ranging between 77 and 80 percent during the first half. PPC not only avoided dropping its prices but reduced a punctuality discount offered to customers paying their electricity bills on time.

Electricity prices in Greece and other EU member states could have been lower if it were not for the considerably sized surcharges and taxes added to electricity bills, Eurostat noted. Over one-third of total electricity costs go to state coffers and electricity transmission and distribution network operators, Eurostat added.

Ministry to make net metering revisions for greater appeal

Increased RES self-production and net metering appears to be a leading priority for the energy ministry, committed to an increase of the country’s renewable energy capacity, which, besides the development of major facilities, also depends on the installation of RES systems at as many domestic and business units as possible.

As part of the overall effort, the energy ministry has decided to make drastic changes to the existing net metering support mechanism, the objective being to make it more appealing for consumers as potential RES producers, energypress sources have informed.

One of the ideas being considered by officials at this stage is to enable prosumers (producer-consumer) to sell excess electricity production to the grid at a price level equivalent to the System Marginal Price (SMP), the wholesale price.

Another thought is to replace the current net metering billing period, covering three years, with a system offering instantaneous calculations.

Such revisions, compatible with EU directives, are already being adopted by other EU member states. Their implementation in Greece is expected to offer household and business electricity consumers further incentive to install RES systems, primarily solar panels, on roofs and rooftops.

Irrespective of the prospective support mechanism changes, net metering has already become a more attractive prospect for consumers as a result of power utility PPC’s recent electricity tariff hikes, which have considerably shortened the recouping period for net metering installation costs.

PPC collapse fears, hikes send 60,000 away in September

Abounding recent fears of a company collapse and higher electricity prices at the power utility PPC have driven an increased number of customers away to rival suppliers.

Approximately 60,000 PPC customers abandoned the utility in September, sharply up from 37,000 in August, energypress sources have informed.

This trend is further emphasized when compared to overall industry figures presented by RAE, the Regulatory Authority for Energy, at the recent Thessaloniki International Fair.

A total of 226,394 consumers switched electricity suppliers in the first half of the year, an average of roughly 37,700 per month, according to the RAE figures. Though the authority’s figures represent the overall shift concerning all suppliers, September’s loss of customers at PPC was undoubtedly considerable.

This period of customer losses at PPC coincided with intensified  promotional campaigns and discount offers from independent suppliers, their objective being to capture as big a share as possible of customers leaving the utility.

Despite last summer’s wave of unsettling sustainability news on PPC, certain pundits believe the millions of customers still with the utility will not easily part as many of the independent suppliers have yet to convince on the benefits of their offers.

 

PPC bond issue in January after rescue package measures

Power utility PPC will delay a planned bond issue until early next year, most probably within January, once a series of rescue-plan measures have been implemented, energypress sources have informed.

Though current market conditions are ideal, as highlighted by the 10-year Greek Govt bond yield of between 1.5 and 1.7 percent, the power utility’s board would rather wait for the implementation of all measures included in its rescue package before proceeding with a bond issue in pursuit of low-cost capital from international markets.

A series of measures intended to bolster PPC will have been taken by early next year. PPC’s first-half results, expected along with a report by the power utility’s certified auditor Ernst & Young on September 24, will include all measures deemed necessary for the corporation’s restructuring.

The energy ministry is soon expected to take legislative action enabling public service compensation returns of approximately 200 million euros to PPC for 2011 as well as the termination of NOME auctions in October or November, a favorable prospect for PPC, which has been obligated to offer below-cost wholesale electricity to rivals through the auctions over the past few years.

Also, between October and December, PPC plans to securitize unpaid receivables concerning electricity bills overdue by at least 60 days to draw capital from foreign funds.

Furthermore, consulting firm McKinsey is expected to have delivered an updated business plan for PPC by the end of December.

All these initiatives, along with electricity tariff hikes, will be included in PPC’s bond issue prospectus to make the utility’s growth prospects as convincing as possible.

PPC tariffs higher, consumer mobility still low, study highlights

Low-voltage electricity tariffs offered by independent suppliers for households and businesses are as much as 27 percent lower than those of power utility PPC, according to a study conducted by RAE, the Regulatory Authority for Energy, following the utility’s recent pricing policy adjustments.

The RAE study compared the low-voltage tariff rates offered by PPC and 16 independent suppliers in the 0-2,000 KWh consumption category over a four-month period.

PPC’s tariff rate in September was 89.89 euros per MWh, while the lowest rate in the market was 72.80 euros per MWh, according to the RAE study.

The majority of independent suppliers offered tariffs between 81.45 and 81.90 euros per MWh, the study found.

It also highlighted the difficulties in reducing PPC’s retail market share, consumer apprehension for switches to other suppliers listed among the key factors.

Though Greece’s electricity market was liberalized back in 2008, PPC maintains a 73.52 percent share of total consumption in the low and mid-voltage categories and 88.25 percent overall.

A total of 25 independent suppliers have emerged over the past 11 years but consumer mobility has remained low.

Just 3.35 percent, or 226,779 of the country’s 6.76 million low and mid-voltage consumers (not including the islands) switched electricity suppliers in the first half of 2019, according to the RAE study.

Its results were presented at the 84th Thessaloniki International Fair by Evaggelia Gotzou, director of RAE’s consumer, environment and retail markets protection department.

 

Households, businesses to cover bulk of PPC rescue plan’s cost

Households and businesses using low and medium-voltage electricity will shoulder most of the weight of a rescue plan prepared for troubled power utility PPC as these consumer groups  will end up covering 350 million of 490 million euros in additional revenues to be generated by the plan’s revised pricing policy.

Of this 350 million-euro amount to be covered by households and businesses, 250 million will stem from tariff hikes; 68 million will result from a punctuality discount reduction for low-voltage consumers; 16 million from a punctuality discount cut for medium-voltage consumers; and 16 million euros from the termination of a punctuality discount offered for CO2 emission right costs in the medium-voltage category.

PPC’s electricity tariff hikes, just introduced, include a 16.8 increase to 0.11 euro per kWh for consumption up to 2,000 kWh. A 16.5 percent tariff hike has been imposed on consumption of 2,000 kWh and over, taking the rate to 0.11946 euro per kWh.  Nighttime tariff rates have been increased by 19.4 percent to 0.07897 euro per kWh.

A RES-supporting ETMEAR surcharge included on electricity bills has been reduced by 25 percent to 0.017 euros for low-voltage household consumers to partially offset the tariff hikes.

The aforementioned rate revisions, along with a VAT reduction from 13 to 6 percent on electricity bills, will result in annual electricity cost increases of between 30 and 60 euros for consumers requiring 3,300 kWh.

Sharp rise in wholesale, CO2 right costs behind tariff hikes

Increased System Marginal Prices (SMP), or wholesale electricity prices, and CO2 emission right costs are key factors behind the power utility PPC’s substantially higher operating costs, negative impact on the corporation’s financial results, and the resulting need to increase electricity tariffs, the utility’s new chief executive Giorgos Stassis is expected to underline at a board meeting tomorrow.

PPC’s pricing strategy and policy is shaped by a series of factors concerning the overall production and trade cost estimates of the vertically integrated company, the chief executive’s address is expected to stress.

The wholesale electricity price average for 2019 is estimated at 67.15 euros per MWh, up from 60.33 euros per MWh in 2018 and 54.70 euros per MWh in 2017, according to official industry data. A further rise, to 70.33 euros per MWh, is expected in 2020.

The CO2 emission right cost average for 2019 is projected to be 25.70 euros per MWh, a sharp rise from 14.68 euros per MWh in 2018 and 5.84 euros per MWh in 2017, according to the industry data. This cost is expected to escalate further, to 30.25 euros per MWh, in 2020.

Independent suppliers adjusting policies in view of PPC hikes

The country’s independent electricity suppliers, sensing opportunity for retail market share gains amid greater competition as a result of power utility PPC’s imminent tariff hikes, are looking at making price adjustments to capitalize on these changes.

The upcoming electricity tariff hikes by PPC, still the dominant player, will bring to an end distorted market conditions prompted by the utility’s refusal to adjust its pricing policy to considerably higher wholesale electricity costs.

Though the final price comparisons of packages – including surcharges and taxes – to be offered by suppliers will ultimately differ very little, as PPC intends to partially offset its tariff hikes with surcharge reductions, the independent suppliers will be keen to focus on tariff prices, specifically, and take advantage of the power utility’s hefty tariff increases.

PPC’s tariff hikes will range from 21.5 to 24.5 percent. This promises considerable leeway for independent suppliers to shape more aggressive pricing policies in the retail battle against the power utility.

PPC’s anticipated adoption of a clause triggering further tariff hikes should CO2 emission right costs exceed certain levels, and vice versa, is another favorable development for the independent suppliers as the stigma associated with their preceding implementation of this measure will be diluted.

The ambiguous immediate future of NOME auctions is a negative factor that spoils the otherwise favorable scene for independent suppliers. This ambiguity injects an element of risk to the plans of independent players for pricing policy adjustments.

It remains unclear if the year’s final NOME auction, scheduled for October, will take place. Energy minister Costis Hatzidakis has noted he intends to negotiate the  termination of NOME auctions with the European Commission.

State-controlled PPC would prefer that the October session does not take place, whereas independent suppliers see this disputed session as one more opportunity to stock up on lower-cost wholesale electricity, even at higher starting prices, for a certain period, which would further boost their level of competitiveness.