RAE seeks to limit or abolish bilateral electricity contract restrictions

RAE, the Regulatory Authority for Energy, is moving to limit, or even abolish, restrictions imposed on bilateral physical delivery contracts in Greece’s electricity market as a step towards further liberating the market for price de-escalation.

RAE, in a letter forwarded to the country’s energy exchange, has requested a study examining all scenarios that would further facilitate bilateral physical delivery contracts.

The energy exchange intends to have completed its study in three months so that RAE can proceed with related legislative initiatives.

The issue of whether bilateral contracts in Greece’s wholesale electricity market could contribute to a de-escalation of electricity prices in the retail market has preoccupied local authorities for quite some time.

In recent months, wholesale electricity market price increases in Greece have been almost fully passed on to the retail market, contravening the pattern of more mature European markets.

Gas trading debuts at energy exchange, prices at €85-88

Wholesale gas trading debuted at the Greek energy exchange without any problems, transactions representing a total quantity of 1,101 MWh at prices ranging between 85 and 88 euros per MWh, energypress sources have informed.

Energy exchange officials and participating companies expressed satisfaction following the first day of trading.

Ten companies – electricity producers and natural gas suppliers – are so far registered to participate in trading on the new platform. These are: AXPO, ELPEDISON, MOTOR OIL, DEPA Commercial, DESFA, PPC, EPA ATTIKI, ZENITH, HERON and MYTILINEOS.

The new platform, operating between 9am and 2.30am, incorporates a day-ahead market covering three 24 periods in advance, as well as an intraday market. It also hosts gas balancing trading covering the grid’s needs.

Officials are planning to also launch, at a latter date, trading for futures contracts, which will enable companies to pursue hedging strategies without needing to resort to other European markets for such tools.

The new platform promises to lead to more competitive natural gas prices as it will enable companies to capitalize on opportunities whenever they arise.

 

 

Gas trading platform energy exchange launch in January

The Greek energy exchange is set for an expansion in January to also cover the country’s natural gas market with the introduction of a new trading platform for the sector, the president of RAE, the Regulatory Authority for Energy, Thanasis Dagoumas, has told the 1st Annual Regional Conference, organized by Eurogas with support from gas company DEPA Commercial.

RAE has already approved the new platform’s rules and plans to soon take all other regulatory decisions required, the RAE chief official noted.

The new trading platform is expected to offer intraday and day-ahead products covering three-day periods. It will also facilitate balancing market gas trading to cover grid transmission needs.

As a next step, further ahead, authorities plan to also establish a market for gas producers, offering players greater security through hedging options.

 

 

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.

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.

PPC local, European exchange option for lignite packages

Power utility PPC will be entitled to choose whether to offer lignite-fired electricity packages to third parties through the Greek energy exchange or European energy exchange, according to details of an upcoming mechanism to be implemented as a remedy to a long-running antitrust case concerning PPC’s monopoly in the lignite sector.

PPC preference for the domestic energy exchange would keep open the option of physical delivery of these lignite electricity packages and ensure the company greater flexibility in its portfolio management. Opting for the European energy exchange would not permit physical delivery, making the deals purely financial transactions.

All that remains for the implementation of the mechanism, whose details have been agreed to by the government and European Commission, is a decision by the energy ministry on when to submit a related legislative revision to parliament, according to sources.

The legislative revision has been completed and the ministry is believed to be on standby for an appropriate date, the objective being to make a first round of lignite-fired electricity packages available to third parties by the fourth quarter this year.

All electricity suppliers will be entitled to purchase these packages, to have three-month durations.

As previously reported by energypress, the electricity quantity planned to be offered to suppliers through the mechanism in the fourth quarter this year will represent 50 percent of lignite-fired output in the equivalent period of 2020.

Then, for every quarter in 2022 and 2023, lignite-fired electricity packages to be offered to PPC’s rivals will represent 40 percent of lignite-based production in equivalent quarters of the respective previous years.

According to the country’s decarbonization plan, all existing lignite-fired power stations will cease operating by the end of 2023.

 

IPTO, now in control of Crete’s small-scale link, boosts to full capacity

Power grid operator IPTO, which has assumed control of a small-scale power grid interconnection linking Crete with the Peloponnese following the transfer, to IPTO, of distribution network operator DEDDIE/HEDNO’s assets on Crete, effective August 1, has, since August 26, also increased the line to near full capacity, at 150 MW, sources informed.

In addition, IPTO yesterday successfully staged a trial run further boosting the line’s capacity to 180 MW, the absolute upper limit.

The Crete-Peloponnese grid link was launched on July 3 to transfer power loads from the mainland to Crete in order to prevent energy insufficiency issues on the island.

Between its first day and August 20, the link consistently supplied Crete at a capacity of between 70 and 80 MW. This transmission was boosted to 100 MW between August 20 and 25 ahead of the latest increases over the past few days.

Crete’s participation in target model markets will be based on a hybrid model proposed by the Hellenic Energy Exchange from October 1 until the island’s large-scale grid link with Athens is completed.

 

Wholesale electricity prices ease as RES input increases

Wholesale electricity price levels are expected to drop to an average of 130 euros per MWh in the day-ahead market today, down 20 percent compared to yesterday, a de-escalation attributed to increased RES input, the energy exchange has informed.

Stronger winds have been forecast, increasing the generation potential of wind energy units.

The maximum price in the day-ahead market today is expected to reach 186 euros per MWh and the minimum price will be 92 euros per MWh.

Natural gas-fired power stations are scheduled to contribute the lion’s share, 40 percent, of the day’s electricity needs, renewable energy sources will contribute 24 percent, electricity imports and lignite-fired power stations will each provide 15 percent, while hydropower facilities will contribute 6 percent.

Electricity demand for the today is forecast to drop by 2.5 percent compared to yesterday.

 

 

Strategic reserve necessary, exchange reacts satisfactorily

The end of the Greek energy system’s reliance on lignite, being phased out to help the global climate change effort, needs to be accompanied by a strategic reserve mechanism, which would maintain certain generation capacities outside the electricity market for operation during emergency cases until the ongoing transition to cleaner energy sources has been completed, the extreme heatwave conditions around the country over the past few days have highlighted.

Record-level electricity consumption, combined with power line damages caused by major fires, pushed the grid to the limit, raising fears of widespread power outages.

The government, currently seeking the establishment of a strategic reserve mechanism as part of a Capacity Remuneration Mechanism (CRM), needing European Commission approval, will need to highlight the heatwave-related events that have occurred in Greece over the past ten days.

Sidelined lignite-fired power stations needed to be brought back into action to help the grid meet electricity demand. They offered crucial production contributions representing between 14 and 18 percent of the energy mix.

Lignite-generated output also played a key part in the effort to maintain energy sufficiency last winter, in February, during heavy snowfall that damaged power infrastructure.

The energy exchange has performed rationally during the heatwave conditions, proving its ability to respond to the market’s demand and supply. Day-ahead market price levels rose sharply during the heatwave’s peak and are now subsiding.

 

 

Heatwave pushes up wholesale prices to over €100/MWh once again

The latest rise in temperatures, prompting further heatwave conditions around Greece, is impacting the wholesale electricity market as the average clearing price in the day-ahead market has risen again to levels of over 100 euros per MWh, following days of more subdued levels, according to energy exchange data.

The average clearing price for today is up to 103.8 euros per MWh, up from yesterday’s level of 93.47 euros per MWh and Sunday’s level of 75.34 euros per MWh.

According to the day-ahead market figures, overall electricity generation today is planned to reach 167,437,017 MWh, with lignite-fired power stations covering just 11,172 MWh, natural gas-fired power stations providing 86,541,739 MWh, hydropower facilities generating 11,829 MWh and all other RES units providing 57,894,278 MWh. Electricity imports are planned to reach 16,159,231 MWh.

Today’s electricity demand is expected to peak at 12.30pm, reaching 8,580 MW, according to data provided by IPTO, the power grid operator.

Three of power utility PPC’s lignite-fired power stations, Agios Dimitrios III, Megalopoli IV and Meliti, will be brought into action today, while five of the utility’s natural gas-fired power stations, Aliveri V, Lavrio IV and V, Komotini and Megalopoli V, will also be mobilized, along with gas-fired units operated by the independent players Heron, ENTHES, Elpedison (Thisvi), Protergia and Korinthos Power.

‘DAPEEP should manage PPAs platform, not energy exchange’

Preparations for the country’s Market Reform Plan, expected to soon be submitted to the European Commission for approval, have prompted a reaction from RES market operator DAPEEP, asserting it should be appointed operator of green-energy power purchase agreements (PPAs) instead of the energy exchange, as has been stipulated in the plan, now undergoing public consultation.

DAPEEP’s objection to the PPA plan, included in the Market Reform Plan, emerged at a meeting staged by RAE, the Regulatory Authority for Energy, uring discussion on the road map for domestic wholesale electricity market revisions.

DAPEEP’s operator’s chief official Yiannis Giarentis protested that the operator has supported the RES sector’s development for years, being at the helm of this market for 20 years, but has now been sidelined as green-energy PPAs, to facilitate bilateral agreements between RES producers and industrial consumers, are about to come into the picture.

RAE will now examine various proposals and views before taking a stance on the matter.

Energy exchange’s gas market trading details forwarded for public consultation

The Hellenic Energy Exchange has forwarded for public consultation a list of proposals it has submitted to RAE, the Regulatory Authority for Energy, concerning natural gas market details ahead of the prospective energy exchange trading of gas products.

Matters addressed include the procedure to be applied to determine energy exchange  participation rights, charges and commissions for gas product transactions, professional competence requirements as well as product specification rules.

According to one proposal, an annual subscription fee of 7,000 euros will be set for participants.

Also, daily commission fees of 0.005 per MWh for gas products traded in the day-ahead and intraday markets has been proposed.

The energy exchange’s public consultation procedure is planned to end August 31.

Energy exchange gas platform to be presented Monday

The energy exchange is nearing an expansion through the addition of a new trading platform for natural gas market products, scheduled to be presented by the Hellenic Energy Exchange and gas grid operator DESFA this coming Monday.

Related public consultation, already in progress, is planned to run until the end of August.

Until now, the Greek energy exchange has only facilitated electricity market trade.

The energy exchange, in association with DESFA, has been working on the new gas market platform since last year, the aim being to launch it within 2021.

The exchange’s new gas platform is expected to help establish Greece as a trading hub of geostrategic and geopolitical significance.

Suppliers request revisions to alleviate cash-flow pressure

Electricity suppliers, facing steep and lasting wholesale electricity cost increases, which have resulted in cash-flow issues, are seeking revisions that could alleviate the pressure, in recommendations submitted to RAE, the Regulatory Authority for Energy.

Rising wholesale electricity costs have created major cash flow problems for non-vertically integrated electricity suppliers as they are being forced to pay increasing amounts for electricity and related guarantees ahead of payments, to them, by consumers.

Consumers have also felt the pinch as suppliers, seeking protection against the rising wholesale prices, have activated wholesale cost-related clauses incorporated into their supply agreements.

Solutions for both sides seem elusive at present as market forecasts do not see any price de-escalation ahead, only further increases.

In one of the recommendations forwarded to RAE, suppliers called for their cash collateral payments made to the Hellenic Energy Exchange, as a form of guarantee, to be replaced by letters of guarantee representing equivalent amounts.

Suppliers have also requested a reexamination of the clearing price and payment formula in the day-ahead and intraday markets.

They also requested extensions for surcharge payments to power grid operator IPTO and the distribution network operator DEDDIE/HEDNO.

 

Energy Exchange Group (EnEx) celebrates its 3-year anniversary

Founded in June 2018, EnEx is comprised of the Hellenic Energy Exchange S.A. (HEnEx) and the EnEx Clearing House S.A. (EnExClear). Since its designation by the Greek Regulatory Authority for Energy (RAE) as the Nominated Electricity Market Operator (NEMO), HEnEx has evolved in line with the European agenda for a single and integrated European energy market.

As a designated NEMO, HEnEx successfully performed the necessary market transformations for the preparedness and operation of the Greek power market under the new model. All changes were completed in time and by the 1st of November 2020, the Greek power market was integrated with the European Target Model for electricity markets. HEnEx now operates the Day-Ahead Market, the Intraday Market and an energy Derivatives Market.

A very important milestone for HEnEx was the market coupling of the Greek Day-Ahead market to the European markets – over the border between Greece and Italy on December 15th 2020. On May 11th 2021, HEnEx achieved its second market coupling with Bulgaria. These interconnections enable cross-border trading, optimal capacity allocation and congestion management – all of which, facilitate a European Union-wide market in electricity with optimal welfare and resource allocation.

EnExClear plays also an important role in the flawless operation of the spot electricity markets in Greece. It provides clearing, risk management and settlement services for the Day-Ahead Market and the Intraday Market, and is also responsible for the clearing, settlement and shipping of implicit cross border transactions with the coupled markets. Furthermore, EnExClear is also responsible for the risk management and the settlement of positions of the balancing market, which is run by the Greek Transmission System Operator (IPTO).

Both HEnEx and EnExClear are directing their efforts towards the next important steps:

The establishment of a gas trading platform is the next major milestone. In collaboration with the Greek Gas TSO (DESFA), RAE and the Ministry of Environment, EnEx is designing the model for the new gas trading platform which is expected to be operational in fall 2021.

This year, HEnEx will also start operating three Complementary Regional Intraday Auctions (CRIDAs) and foresees its inclusion in the European Cross-Border Intraday (XBID) initiative in Q1 2022. Furthermore, following the connection of the island of Crete to the mainland electricity network, HEnEx is also leading the integration of the island to the existing Day-Ahead and Intraday Markets of mainland Greece.

In this dynamic and evolving energy environment, EnEx is committed to contributing to sustainability and providing high quality, transparent and non-discriminatory services to its markets participants. With confidence, EnEx will continue developing with vision and determination, while learning from its positive experiences, and strengthening the relationship with its partners and stakeholders.

 

RAE scrutinizing greater lignite use, IPTO may need to clarify

RAE, the Regulatory Authority for Energy, is considering to seek clarification from power grid operator IPTO on a series of electricity market issues, including differing formations adopted for the day-ahead and ISP markets.

A first presentation, last week, of the target model’s new wholesale market, energy exchange market results and the energy mix has shown an increase in the use of lignite-fired power stations, despite their higher cost.

Power utility PPC’s lignite-fired power stations are still deemed necessary for electricity supply security, even when capacity levels are sufficient, to counter instability issues at the grid’s northern section, where interconnections facilitate electricity exports.

The use of lignite-fired power stations, such as Agios Dimitrios, Megalopoli IV and Meliti, despite the higher cost of CO2 emission rights, has significantly increased energy costs for suppliers and industry.

Also, when IPTO issues grid distribution orders to lignite-fired power stations, the grid-contribution programs of other units are consequently canceled out and remunerated by the energy exchange, even for energy amounts not contributed to the grid.

Meanwhile, lignite-fired power stations are remunerated through the balancing market at price levels that usually exceed 100 euros per MWh.

RAE’s intervention is intended to ensure the electricity market’s smooth functioning and efficiency, for the benefit of participants and consumers.

Strict schedule for Crete target model transition plan

The European Commission has offered preliminary approval, still unofficial, of a Greek proposal concerning a transitional framework for Crete’s electricity grid link with target model markets.

This development will now enable RAE, the Regulatory Authority for Energy, to conduct public consultation for a temporary plan concerning the island’s participation in the target model’s wholesale markets.

RAE is expected to begin the public consultation procedure this week, sources said. It will feature a strict road map for the model’s implementation, from forthcoming steps all the way to legislation.

The plan’s framework will include two alternative methods for the island’s electricity supply transactions through a small-scale interconnection, with the Peloponnese.

The solution to be selected will greatly depend on the results of the public consultation process.

As previously reported by energypress, a transitional framework is necessary as Crete’s electricity needs will only be partially covered, at a level of about 30 percent, through the small-scale interconnection.

The framework will expire once the island’s full-scale grid interconnection, all the way to Athens, begins operating in 2023.

Authorities gearing up for intraday market entry of traders

Authorities are picking up the pace on moves needed to also enable traders to begin participating in Greece’s intraday electricity market, one of the new wholesale markets emerging with the target model’s recent introduction.

The Greek energy exchange will forward its proposal for necessary market regulation amendments to RAE, the Regulatory Authority for Energy, within the next two months, energypress sources informed.

These revisions will take finalized shape through ongoing discussions between the energy exchange, as operator of the intraday market, power grid operator IPTO, managing international grid interconnections, and RAE.

The authorities are seeking to establish an optimal formula for the intraday market entry of electricity traders.

The talks, until now, have indicated that intraday day interconnection rights will not be required for transboundary trade between intraday markets that have not undergone coupling.

Therefore, traders will be able to participate in the intraday market by utilizing the amount of daily interconnection rights they have secured and not used for transboundary transactions in the day-ahead market.

The addition of traders to the intraday market promises to boost its liquidity, currently low. This will help liberate market players by offering them greater flexibility, limiting the pressure on the balancing market.

DG Comp motives for restart of older PPC probe unclear

The European Commission has brought back to the fore a Directorate-General for Competition investigation of power utility PPC and power grid operator DEDDIE/HEDNO over market dominance abuse, despite major market changes that have taken place since 2017, when the probe began.

The direction the investigation’s restart remains unknown. Negotiations between Greece and Brussels for new mechanisms being negotiated could be impacted, some pundits suspect.

Also, the government and state-controlled PPC are currently seeking compensation for the power utility’s need to keep lignite-fired power stations and related mines operational for grid sufficiency needs.

No findings of the investigation’s first round have been released. The probe included raids by DG Comp officials, both local and Brussels-based, of the PPC and IPTO headquarters in Athens that lasted several hours, resulting in confiscations of USB flash drives, documents and hard drives.

PPC’s then-administration, in an announcement at the time, informed that the raid concerned a check on the utility’s “supposed” abuse of market dominance in the wholesale market for electrical energy produced from 2010 onwards.

Prior to the investigation, Brussels suspected levels of the wholesale electricity price – known as the System Marginal Price (SMP), at the time – were being manipulated by PPC through its lignite and hydropower facilities.

In 2017, PPC held an 87 percent share of the retail electricity market and 57 percent of overall electricity generation, now down to approximately 67 and 39 percent, respectively.

Four years ago, PPC’s lignite facilities still dominated the corporation’s portfolio and the energy exchange and new target model wholesale markets did not exist.

The current market setting bears little resemblance to back then. Lignite has regressed into an unwanted, loss-incurring energy source that is being phased out by PPC until 2023, while the energy market is undergoing drastic transformation, as was acknowledged by the European Commission Vice-President Margrethe Vestager, also Brussels’ Commissioner for Competition, in an announcement yesterday.

 

PPC extends industrial tariff negotiations until June

Power utility PPC has extended by three months its negotiating period for new high-voltage industrial tariffs following a request by a number of energy-intensive producers, energypress sources have informed.

The negotiating sides acknowledge pandemic-related problems have prompted the need for additional time, during which  compromise solutions will be sought.

PPC had given industrial enterprises until February 28 to accept a new high-voltage tariff pricing formula. The previous system’s validity expired December 31.

Industrial electricity charges for the first two months of 2021 have been based on the terms of expired agreements.

According to sources, tariff levels are of secondary importance in these negotiations, the prime concern being a new pricing system sought by PPC, which, if implemented, would bring an end to fixed tariffs and volume discounts.

PPC contends that the target model and its accompanying energy exchange markets, such as the balancing market, need to be taken into account for new pricing formulas.

The negotiating sides appear determined to reach agreements that would bolster the competitiveness of industrial producers without obligating the state-controlled power utility to supply high-voltage electricity at below-cost levels.

Transitional hybrid plan for Cretan participation in markets

RAE, the Regulatory Authority for Energy, has decided on a transitional hybrid model for Crete’s participation in target model energy markets, covering production and consumption, once the island’s small-scale grid interconnection to the Peloponnese is soon launched.

The fundamentals of the transitional model – to be applied until Crete’s full-scale grid interconnection, all the way to Athens, is completed – have been agreed on by the participating market operators. But details still need to be worked out.

Power grid operator IPTO, distribution network operator DEDDIE/HEDNO and the energy exchange are currently shaping the finer details of the transitional plan, expected to be finalized over the next few days.

Under the transitional hybrid solution, Crete – whose grid will continue being managed by DEDDIE/HEDNO until IPTO takes on the responsibility when power utility PPC, DEDDIE/HEDNO’s parent company, has transferred its network ownership on the island to IPTO – will purchase electricity transmitted through the small-scale grid link at target model energy markets.

As for electricity flowing in the opposite direction, production of Cretan units will be represented by IPTO.

The transitional model, when ready, will be forwarded for public consultation. European Commission approval will be needed for the finalized plan. RAE has already briefed Brussels officials on its proposed transitional model.

Finding a solution for Crete has proven to be a challenge as the small-scale grid link to the Peloponnese will not fully cover the island’s energy needs, meaning it will not automatically cease to be a non-interconnected island once the small-scale grid link begins operating. However, a considerable part of Crete’s energy needs, approximately 30 percent, will be served by the small-scale interconnection.

Normally, when grid links for non-interconnected islands are completed, IPTO assumes responsibility of their electricity networks. However, Crete, Greece’s biggest and most populous island, represents a much bigger interconnection project that is being developed over two stages. The project’s second stage, to reach Athens, is anticipated in 2023.

Failure to find a transitional solution would threaten to leave the small-scale link unutilized.

CO2 right prices up 39% in 45 days, adding to wholesale market price ascent

CO2 emission right prices have hit new records, trading at levels of over 30 euros per ton in recent days for a rise of 39 percent over the past month and a half that has contributed to the wholesale market price ascent.

These elevated CO2 right levels peaked on Tuesday, at 32.02 euros per ton, well over a price of 23.05 euros per ton recorded just weeks ago, at the end of October.

The upward trajectory of CO2 emission right costs is also contributing to even higher prices in Greece’s wholesale electricity market.

Last Wednesday, the day-ahead market’s average price exceeded 80 euros per MWh, rising further to 93 euros per MWh hour yesterday.

If CO2 emission right trading prices persist at levels of more than 30 euros per ton, power utility PPC will activate a related wholesale price clause incorporated into its supply agreements.

Besides the increase in CO2 emission right costs, the Greek day-ahead market has followed the upward trajectory of other European markets, where the combination of higher demand and deteriorating weather conditions is pushing price levels higher.

According to Greek energy exchange data for today’s day-ahead market, the price will average 82.31 euros per MWh, peaking at 114.1 euros per MWh and dropping as low as 44.38 euros per MWh.

 

Industry opposes bilateral contract restrictions

EVIKEN, the Association of Industrial Energy Consumers, has expressed opposition to an energy exchange proposal, delivered through public consultation, calling for the imposition of restrictions on bilateral contracts reached by suppliers.

In its letter, EVIKEN notes that an upper limit restricting supplier bilateral contracts to 20 percent of total sales, if suppliers hold a retail electricity market share greater than 4 percent, ensures conditions of liquidity in the day-ahead market and prevents a squeeze on prices.

The association, in its letter, proposes that this regulatory measure be abolished in the day-ahead market given the extremely high price levels registered, noting its maintenance over an extended period threatens to create oligopolistic conditions in the market.

Legal action, even at an EU level, could be taken over the matter, crucially important for the industrial sector, EVIKEN indicated.

Minister urges target model readiness for smooth launch

Energy minister Costis Hatzidakis has urged all target model officials – including RAE, the Regulatory Authority for Energy; power grid operator IPTO; the energy exchange and EnExClear – to have resolved any pending issues so that a smooth launch of the model may be achieved on November 1.

Describing the upcoming date as historic for Greece’s energy sector, the minister was essentially conveying concerns of energy producers, traders and suppliers, not yet fully convinced that all market systems will be in full working order for the imminent launch.

The balancing market, in particular, remains a concern. The energy exchange is overseeing the day-ahead and intraday markets and IPTO will manage the balancing market.

Simulated dry-run testing of these markets, conducted for a period of over two months to test their limits and operating ability ahead of the target model launch, was completed about a fortnight ago.

Greece’s lead-up to the EU target model has been affected by a series of delays. Hatzidakis, the energy minister, is clearly determined to see the target model procedure through, not only because it is an EU commitment but also because of its prospective market and consumer benefits.

The target model will result in market coupling, or harmonization of EU wholesale markets, the intention being to eliminate market distortions and intensify competition.

A final full-scale test of all market systems is scheduled for October 27 while all is anticipated to be ready on October 30 ahead of the November 1 launch.

New market dry-run testing to end this week, target model launch on Nov. 1

The dry-run testing procedure for market systems ahead of the forthcoming target model launch, scheduled for November 1, will be finalized at the end of this week, RAE, the Regulatory Authority for Energy, the energy exchange and power grid operator IPTO have jointly decided.

Dry-run testing of the day-ahead, intraday and balancing markets began on August 3 to test their limits and operating ability ahead of the target model’s launch, aiming for market coupling, or harmonization of EU wholesale markets.

Market coupling, to increase competition and lower wholesale energy prices, will ultimately lead to energy union, the EU strategy seeking to offer consumers secure, sustainable, competitive and lower-cost energy.

All domestic parties involved, as well as the energy ministry, have ascertained the Greek launch will take place on November 1 following previous delays.

Even during these final days of simulated testing, day-ahead market prices have, at times, continued to display discrepancies with Day-Ahead Schedule price levels.

This has been attributed to the absence, from dry-run testing, of many traders who participate in the Day-Ahead Schedule, meaning the price levels of the two situations are based on different data.

Though balancing market prices have improved considerably as the simulated testing has progressed, following discrepancies, conclusions cannot be made until actual market conditions come into effect.

Meanwhile, public consultation by RAE on a market monitoring mechanism and a market surveillance mechanism for the new markets is due to be completed next Monday.

The market monitoring mechanism will seek, through structural and performance indicators, to evaluate levels of concentration and the market power of each participant, while the market surveillance mechanism will focus on identifying and combating strategies detrimental to competition.

The next step, once the new markets are launched, will be to market couple, initially with the Italian market, by the end of the year, followed by the Bulgarian market, in the first quarter of 2021, Greek energy minister Costis Hatzidakis recently informed.

 

 

Target model ‘dangerous without monitoring mechanism’

The launch of target model markets without a fully functional market monitoring mechanism from the very first day, if not sooner, threatens to undermine the entire effort, two industry associations, ESAI/HAIPP, the Hellenic Association of Independent Power Producers, and ESEPIE, the Hellenic Association of Electricity Trading & Supply Companies, have reiterated in warnings to RAE, the Regulatory Authority for Energy.

RAE is currently preparing a market monitoring mechanism, with support from a specialized consultant from abroad, for the target model markets, but the project is still a long way off, energypress sources have informed. RAE is believed to have received an initial draft of the monitoring mechanism plan now being processed in detail for a finalized version.

The market monitoring mechanism, needed to ensure healthy electricity market competition, will accumulate data from power grid operator IPTO and the Greek energy exchange to identify possible market manipulation practices.

The target model, aiming to harmonize Greece’s electricity market with wholesale electricity markets in the EU, faces a delay of a few weeks. Authorities identified pending issues in the lead-up to the previous launch date, scheduled for September 17.

Even the smallest of flaws in a market as limited in size and depth as the Greek market can prompt major financial consequences for participants, ESEPIE warned in its letter to RAE.

The implementation of an effective monitoring mechanism can prevent such setbacks and is essential for creating a climate of confidence in the new markets, the association stressed, adding the mechanism should have been applied during dry testing staged in the lead-up to the target model launch.

Extra week for dry-run tests ahead of target model launch

A dry run procedure offering simulated testing of all market systems and resolving any glitches ahead of the target model launch, scheduled for September 17, has been extended for another week until September 6.

Authorities met last Friday for a latest review of dry-run results. ESAI/HAIPP, the Hellenic Association of Independent Power Producers, in its observations, primarily focused on the balancing market.

The association also objected to integrated programming process revisions proposed by power grid operator IPTO, as well as the timing of these proposals, just days ahead of the official launch of markets.

ESAI/HAIPP is expected to forward its views on the issue, in writing, to the energy ministry, later today or tomorrow. The matter essentially concerns the calculation of reserves to be covered by the system for its security.

The Energy Exchange, to operate the day-ahead, intraday and forward markets, and IPTO, operating the balancing market, are both scheduled – based on a ministerial decision – to deliver an interim report this week for the energy ministry and RAE on the progress and level of readiness of market systems.

These systems have been undergoing continual testing since August 3. The number of dry-run participants has increased in recent days, while price levels are now at far more rational levels, especially in the day-ahead market.

All market participants, approximately 60 in total, have until September 4 to submit required supporting documents to the Energy Exchange in order to receive membership registration certificates by September 11.

 

Safety mechanism to limit energy exchange fluctuations

Sizeable electricity price discrepancies – compared to day-ahead scheduling market levels – observed by officials in ongoing dry-run testing of Energy Exchange markets ahead of the target model launch scheduled for September 17 and attributed to unrealistic offers made by participants, are expected to narrow as more participants become involved.

Even so, officials supervising the simulated testing of all four Energy Exchange markets – day-ahead, intraday, forward, balancing markets – plan to introduce a safety mechanism enabling participants to make improved follow-up offers if price levels fluctuate beyond upper and lower limits.

Officials at related agencies and the energy ministry are confident the dry run will be completed on time despite being up against a very tight schedule.

The head officials of RAE, the Regulatory Authority for Energy, the energy exchange, and power grid operator IPTO held a summit meeting yesterday with energy minister Costis Hatzidakis and the ministry’s secretary-general, Alexandra Sdoukou, to discuss the progress of the dry run. Other officials meet on a weekly basis to discuss the effort.

To date, any technical issues that have arisen have been resolved. Both the Energy Exchange and IPTO appear ready for the real-life launch. Market systems have been undergoing continual testing since August 3.

However, a shortage in the number of dry-run participants, especially traders, has been observed. This is concerning as current evaluations of the market system performances cannot be considered entirely accurate. All key players – gas-based electricity producers, suppliers, traders, RES producers and aggregators – must be involved in the simulated testing for a dependable picture.

Once the Energy Exchange and IPTO have declared their readiness, RAE will need to offer its approval of the dry run on September 11, a week before the target model’s scheduled September 17 launch.

The aim is for all players to have entered the market systems on September 15 to prepare their orders for the launch two days later.

Crucial week for target model’s dry-run tests of market systems

Though any glitches that have emerged during ongoing simulated testing of all energy exchange market systems ahead of a target model launch scheduled for September 17 have been quickly resolved, officials remain concerned about the venture’s level of readiness.

The number of participants for the dry run’s virtual transactions, especially traders, has been insufficient, while participants are submitting unrealistic offers, officials have observed.

This has prompted major fluctuations as well as sizable electricity price discrepancies compared to day-ahead scheduling market levels.

Market systems at the Energy Exchange, to operate the day-ahead, intraday and forward markets, and at the power grid operator IPTO, operating the balancing market, have been undergoing continual testing since August 3.

This week will be crucial as an increase in the number of participants is anticipated, while heightened maturity in bidding methods is also expected, all of which should result in safer conclusions.

For the time being, a deferral of the target model’s September 17 launch date is not being considered. All operators must declare complete readiness to RAE by September 11 if this launch date is to be maintained.

Electricity price levels, once the target model is launched, cannot be forecast at present. This could be possible within the next few days.

Officials at the energy ministry, RAE, the Regulatory Authority for Energy, the energy exchange and IPTO, all monitoring the effort, are scheduled to stage their next weekly meeting tomorrow.

Greek wholesale electricity prices topping European levels

Greek wholesale electricity prices are currently among Europe’s highest, energy exchange data covering the past few days has shown.

On August 11, the System Marginal Price, or wholesale price, in Greece’s day-ahead market reached 52.3 euros per MWh, Europe’s second-highest level following Poland.

On the same day, Germany’s SMP was significantly lower, at 36.3 euros per MWh, the level in Italy was 41.15 euros per MWh, Bulgaria registered 41.17 euros per MWh and Romania 40.82 euros per MWh.

In yesterday’s day-ahead market, Greece’s SMP was 52.3 euros per MWh, once again virtually topping European levels, exceeded only by the Polish price. Elsewhere, Germany registered 35.86 euros per MWh, Italy’s level was 42.96 euros per MWh, Bulgaria registered 39.13 euros per MWh, Romania 38.25 euros per MWh, while Spain and Portugal both registered 39.27 euros per MWh.

Greece’s SMP was once again second-highest, behind Poland, in the day-ahead market for today, registering a level of 42.5 euros per MWh. Germany registered 38.59 euros per MWh, Italy was at 41.34 euros per MWh, the Czech Republic’s level was 39.02 euros per MWh, Bulgaria registered 39.33 euros per MWh, Romania registered 40.14 euros per MWh, while the SMP level in Spain and Portugal was 40.52 euros per MWh.