New energy exchange market, coupling date delays likely

Greek and Italian officials representing grid operators, regulatory authorities and the energy exchanges of both countries believe targets dates set for the launch of new energy exchange markets and coupling of the Greek and Italian markets are too immediate and not achievable, it was determined at a recent meeting in Athens.

A target model agreement between Greece and the country’s lenders has set April 1, 2019 as the starting date of new energy exchange markets and June 1, 2019 for market coupling of the Greek and Italian markets.

Even if all market regulations, platforms and other details are ready for an April 1 launch of new energy exchange markets, some time would still be needed for real-condition training purposes of participants, officials taking part in the Athens meeting agreed. A launch about two months later, in July, 2019, would be more realistic, they noted. During this period, preparations for Greece’s coupling with the Italian market would be concurrently pushed ahead.

It became apparent at the Athens meeting, staged in July 12, that Italian and other European market officials to be impacted by the Greek-Italian coupling plan are not prepared to move ahead unless systems have previously been tested and operated on a trial basis for a satisfactory period of time. This essentially means that Greece’s coupling plan with the Italian market is not possible any sooner than the end of 2019.

New market conditions concerning the time it will take to implement the target model are expected to be presented at a related local event tomorrow.

It remains unclear how Brussels will react to any schedule revisions beyond Greece’s bailout period, ending next month. Lender representatives showed some flexibility during their most recent visit to Athens as they also acknowledged the initial plan’s dates are premature. At the other end, Greek officials have presented solid proof of a dedicated effort and progress made until now.

The country’s lenders, especially the European Commission, may maintain this more tolerant stance if Greek officials manage to convince that all possible efforts have been made.

Any delays to the new energy exchange market and Greek-Italian coupling dates will create further uncertainty with respect to NOME auction revisions that will enable the incorporation of these auctions into futures markets.

This uncertainty and various other market factors drove prices higher at a NOME auction held yesterday.


Energy Exchange prompts 62.23% supplier surcharge reduction

The establishment of the Greek Energy Exchange has led to a significant 62.23 percent reduction of the supplier surcharge, related budget data covering June 19 to June 30, has shown.

The figures are based on supplier operating costs for 2018 submitted by the Greek Energy Exchange to RAE, the Regulatory Authority for Energy, which has yet to offer its endorsement.

The supplier surcharge reduction is expected to be revised to 55.16 percent once other regulations are imposed.

The Greek Energy Exchange is expected to make corrections, if needed, following RAE’s approval of the figures.

Greek energy exchange set to be established by Monday

The Greek energy exchange company will most likely be founded on Monday though there is a light chance of the procedure being completed by tomorrow.

Procedures concerning the new company’s registration at the General Commercial Registry (GEMI), the single electronic commercial registry, are expected to be finalized tomorrow.

LAGIE, the Electricity Market Operator, is scheduled to hold a general meeting today to formalize decisions concerning the energy exchange company’s establishment.

LAGIE, IPTO, the power grid operator and DESFA, the natural gas grid operator, are expected to participate in the new company with an overall 49 percent stake, while private-sector enterprises, including the European Bank for Reconstruction and Development (EBRD) and the Athens Stock Exchange, the new exchange’s main shareholder, will control a majority 51 percent stake.

The Cyprus Stock Exchange, which has agreed to participate with a ten percent stake, will not be present at this initial stage as Cypriot parliament has yet to approve its involvement. This ten percent stake will be temporarily held by the Athens Stock Exchange and transferred to its Cypriot counterpart at a future date.

Subsequently, the starting shareholders line-up of Greece’s energy exchange will be comprised of three institutions, LAGIE (22%); IPTO (20%); and DESFA (7%), and, from the private sector, the Athens Stock Exchange (31%) and the EBRD (20%).

The participation of independent producers as shareholders of Greece’s energy exchange is not anticipated for now, but such a prospect cannot be ruled out in the future.

Greece’s energy exchange is planned to begin operating next April. In the meantime, the new company will need to be certified by RAE, the Regulatory Authority for Energy, as a market operator for the transitional period leading to the implementation of the target model, envisioning market coupling, or harmonization of EU wholesale markets.


Key figures drawn to Energy Commodities Conference

The fourth edition of the Energy Commodities Conference, an event established not only as a leading business meeting point regarding the Greek Energy Exchange, but also as one of the most ambitious and innovative events in the wider region, was recently successfully held at the GazArte venue in Athens, organizers announced in a statement.

Foreign markets were represented by exceptional professionals who attended the conference either as speakers or as participants.

At this year’s call there was an impressive response from companies and executives linked to the Energy Market, as well as from significant industrial energy consumers.

More than 180 executives had a first-rate opportunity to become acquainted with the latest developments, reflect on steps to be taken in the future, spend time in professional networking and share their own experiences with others.

The key points of the conference were: A presentation by LAGIE (Electricity Market Operator) representative Christoforos Zoumas, whose aim was to offer clarity on elusive information concerning the establishment and operation of the new Hellenic Energy Exchange under the joint venture of LAGIE and ATHEXGroup; a presentation by European Energy Exchange (EEX) representative Alexandros Papageorgiou, who analyzed the action plan and product development relating to the Greek market; a presentation by IPTO (power grid operator) representative Iraklis Skoteinos, who elaborated on the new Balancing Markets under the newly-formed regime of Hellenic Energy Exchange; a presentation by the Heron Group of Companies representative Costas Baslis, who examined the current status of the integration of thermoelectric units in the Day-Ahead Scheduling (DAS) as well as the lack of hedging products; presentations of business experts, who provided valuable insight into advancements in the energy markets of Germany, Italy, Hungary, Croatia, Albania and Bulgaria; as well as two interactive workshops, which provided attendees with an opportunity to interact with the ECC clearing mechanisms as well as acquire information on Italian market price drivers.





Energy Exchange’s launch planned for early next April

A detailed presentation, by Greek officials to lender technocrats, of a plan leading to the launch of Greece’s energy exchange in April is seen as realistic and implementable and, therefore, should be accepted by the troika heads.

The first step, as was recently reported by energypress, will entail the notarization of the energy exchange company’s establishment in June, if all goes according to plan.

Regulations concerning the exchange’s new markets will then be submitted to RAE, the Regulatory Authority for Energy, and should be endorsed by September, following consultation.

According to the plan, trial runs should begin at the beginning of 2019 ahead of the launch of the energy exchange’s new markets on April 1.

A coupling of markets will concurrently include Italy and Bulgaria.

Lender technocrats met yesterday with RAE officials. Judging by various media reports, RAE’s monitoring of the market for remit violations will be strictened.

As a first step, and with transparency in mind, conventional producers will be selected to participate in all markets except for futures markets.

Also, it is believed that a restriction concerning an acceptable ratio of amounts traded in the futures and intraday markets will need to be implemented to maintain liquidity in short-term markets and avoid abusive actions.

Restrictions, such as a minimum variable cost, will not be imposed in the intraday market.

Moreover, it will be mandatory for producers to participate in both the intraday and balancing markets to maintain supply security.

A central dispatch model, rather than a self-dispatch model, has been selected to enable a smooth transition to the new markets.

The Energy Exchange will need to be certified by RAE as a market operator for the transition period leading to the implementation of the target model.

The target model envisions market coupling, or harmonization of EU wholesale markets.


Energy exchange establishment June 18, LAGIE approval today

Today’s anticipated approval by the LAGIE (Electricity Market Operator) board of a new subsidiary will mark the beginning of a 40-day process – approximately – leading to the notarization of the energy exchange company’s establishment on June 18, if all goes according to plan.

Following today’s LAGIE endorsement, the new company will be registered at the General Commercial Registry (GEMI), the single electronic commercial registry.

A compulsory one-month waiting period will follow before a LAGIE general meeting is held on June 15 to formalize decisions on various related matters that will have already been resolved going into the meeting.

Any problems that may be encountered by prospective energy exchange company shareholders will be indentified and resolved by the June 15 date, according to the overall procedure’s schedule.

Any interested parties with issues will be excluded and the energy exchange company will be established with all legitimate candidates on board.

A combination of market operators and private-sector enterprises, numbering six in total, are expected to make up the energy exchange’s shareholder line-up. LAGIE (22%); IPTO, the power grid operator (20%); and DESFA, the natural gas grid operator (7%); are expected to be joined by three private-sector companies, the Athens Stock Market (21%); EBRD (21%); and the Cyprus Stock Exchange (10%).

The private sector companies will need to control at least 51 percent of the new energy exchange company as a means of ensuring it steers clear of various bailout-related staff and flexibility restrictions imposed on public-sector enterprises.

All the aforementioned prospective shareholders will most likely be ready to sign the energy exchange’s founding act on June 18. If not, the company will be established with all legitimate contenders. The private sector’s overall majority stake will be maintained in this case, too.

Then, within a three-month period following its establishment, the Energy Exchange will need to be certified by RAE, the Regulatory Authority for Energy, as a market operator for the transition period leading to the implementation of the target model.

The target model envisions market coupling, or harmonization of EU wholesale markets.


Lenders favor end to variable cost lower limit for producers

The country’s lenders favour the scrapping of a variable cost lower limit imposed on electricity producers for sale prices of their output, but the prospect has raised concerns among Greece’s independent producers who regard the lower limit as a safety net, energypress sources have informed.

Greece’s independent producers fear that the main power utility PPC could go as far as to offer electricity production for zero amounts, in order to sideline the independent producers, if the existing cost lower limit is abolished.

Talks are currently in progress for the shaping of new energy exchange-related markets – day-ahead market, intraday market, balancing market and term products market.

The independent producers have proposed that the cost lower limit be maintained until the market begins operating in accordance with European standards.

The lenders also favor offers to the intraday market by entire portfolios of producer units, not just individual electricity production units, as has been planned until now by RAE, the Regulatory Authority for Energy.

The troika is also aiming to introduce strict market monitoring measures to keep a close watch, on a daily basis, of market player moves.

Energy exchange equity line-up issues delaying preparations

Problems encountered by candidate shareholders of Greece’s prospective energy exchange in their efforts to legalize their participation in the venture are causing set-up delays, energypress sources have informed.

LAGIE, the Electricity Market Operator, has been given a 15-day extension to submit a Greek energy exchange investment plan to RAE, the Regulatory Authority for Energy, by the end of the month.

The operator will then need to stage a general meeting to endorse the new exchange. Its founding act needs to be ready within May, according to a bailout term faced by Greece.

LAGIE envisions an energy exchange shareholder line-up of the power and gas grid operators, IPTO and DEFSA, respectively, itself, as well as private-sector institutions, namely the Cyprus stock exchange, the EBRD, and the Athens Stock Exchange, the venture’s main shareholder.

According to a related law, the private sector will control at least 51 percent of the new energy exchange company as a means of ensuring it steers clear of obstacles and restrictions concerning flexibility and staffing at public-sector enterprises.

If the current complications faced by prospective shareholders are not overcome, then a simpler company may be founded, with the Athens Stock Exchange controlling 51 percent and LAGIE the other 49 percent, as an initial step to avoid missing the deadline, before other institutional shareholders eventually also hop on board.

As part of the transition leading to the implementation of the target model, RAE will need to certify the firm as a market operator within three months of its establishment.

The target model envisions market coupling, or harmonization of EU wholesale markets.





Energy exchange, target model schedules get Brussels nod

Greece’s lender representatives, in Athens for fourth-review bailout negotiations, have expressed understanding for energy sector-related delays concerning the bailout program, while European Commission technocrats, part of the lenders team, agreed that preparations leading to the establishment of a local energy exchange as well as the target model are on the right track.

The lender representatives held meetings with officials from RAE, the Regulatory Authority for Energy; LAGIE, the Electricity Market Operator;  IPTO, Greece’s power grid operator; and the Athens stock exchange. Technical details and schedules concerning the energy exchange and target model were presented and examined.

The groundwork was laid for the detachment of the energy exchange’s development from the bailout review procedures, during yesterday’s meeting, according to some sources. If so, this suggests that European Commission officials are convinced of the progress being made for the energy exchange’s finalized plan, expected late April of early May. RAE is expected to have approved spot market regulations by the end of June.

The energy exchange’s aim will be to harmonize the Greek energy market with all European markets, generate greater competition and transparency, and offer energy supply security to the country’s energy mix through diversified energy sources, including greater renewable energy participation.

The establishment of the energy exchange has been incorporated into the Target Model, a process entailing the electricity wholesale market’s harmonisation with EU law.

The switch from Greece’s current daily energy program to the target model system is scheduled to take place following the first quarter of 2019, once IPTO has finalized a new system code. The punctuality here will depend on the progress of preparations for the establishment of the forward market, day-ahead market and intra-day market.

Firms interested in providing the software for the balancing market face a late-March deadline. The winning bidder is expected to be announced in April. This project will take one year to complete.

It is believed that, by then, the Greek electricity market will be able to bridged with the Italian market, which will represent the target model’s first practical application.

Authorities are examining the possibility of an intermediate stage that would initially only bridge the day-ahead market. However, this seems unlikely, meaning that all markets will need to be bridged as one move.



Imminent energy exchange to aim for three main objectives

The establishment of a local energy exchange, being incorporated into an imminent draft bill carrying various bailout requirements, will aim to achieve three main objectives.

The first of these will be to harmonize the Greek energy market with all European markets. A second objective will aim for greater competition and transparency, which should offer households and enterprises lower energy costs. A third objective will be to offer energy supply security to the country’s energy mix through diversified energy sources, including greater renewable energy participation.

The establishment of an energy exchange has been incorporated into the Target Model, a process entailing the electricity wholesale market’s harmonisation with EU law.

The energy exchange promises to bridge Greece’s day-ahead market with the Italian and Bulgarian markets, as well as those of other neighboring EU member states, depending on their degree of readiness.

The Target Model is expected to significantly bolster the industrial sector as, on the one hand, energy costs are expected to drop, and, on the other, industrial enterprises will be able to participate in the energy market and establish supply deals with electricity producers. This will provide industrial enterprises with full control over their long-term energy costs.


KEN official: ‘Let’s first utilize existing interconnections’

Electricity interconnections reduce risk and prices but the country’s existing potential and interconnections are not being fully utilized, Yiannis Psarros, the crossboundary trade manager at independent supplier KEN, noted in an interview for local business news channel SBC’s Energy Week show, hosted by energypress journalist Thodoris Panagoulis.

“Let’s utilize these [existing interconnections] first and then look at developing new ones, such as the Cretan interconnection, Eurasia and Euroafrica,” Psarros remarked. “Our country depends greatly on interconnections,” he added.

Electricity suppliers in Greece are currently absorbing elevated wholesale prices but it remains questionable as to how long they can keep doing so, the KEN official explained.

Inadequate rainfall and an increase in oil prices have driven up wholesale electricity prices, compared to recent levels in Europe and the Balkans, Psarros pointed out.

Psarros described the NOME auctions – introduced in Greece slightly over a year ago to offer independent suppliers access to the main power utility PPC’s low-cost lignite and hydropower sources – as a transitional measure that cannot be relied on for favorable market conditions in the future.

Until now, NOME auctions have helped the market remain afloat but made minimal impact in terms of independent supplier growth through a contraction of PPC’s dominant market share, the KEN official remarked.

He admitted current market shares of independent suppliers would have been lower had NOME auctions not been introduced. Also, extraordinary situations such as last winter’s energy crisis would have proved devastating without the NOME auctions, he added.

Psarros described the bailout-required contraction target set for PPC as ambitious – given the measures implemented to date. PPC’s retail electricity market share, still at about 83 percent, needs to drop to less than 50 percent by 2020.

The KEN official expressed satisfaction with the newly emerged company’s performance over the past nine months. KEN now operates 19 retail outlets and is one of the two or three fastest growing suppliers in terms of new customer arrivals, stressed Psarros, who also made note of the independent supplier’s establishment of a crossboundary trade division.

He expressed reservations over next April’s target starting date for the Greek energy exchange but admitted serious work is being carried out for its launch.

“The energy exchange promises to introduce a futures market, in other words, each player will be able to buy and sell future-term energy. It’s a usefool tool,” Psarros said, adding consumers stand to benefit from the resulting competition.


Energy exchange, part of target model, almost ready

A draft bill leading to the creation of the Greek Energy Exchange, worked on by a team of experts on behalf of the energy ministry and now forwarded to RAE, the Regulatory Authority for Energy, and LAGIE, the Electricity Market Operator, for final observations, is nearing completion.

Final revisions are expected to be made by mid-November before the draft bill is submitted to Parliament for ratification.

The process, initiated by a Memorandum of Understanding that was signed by LAGIE and the Athens Stock Exchange in February, has progressed at an extremely satisfactory pace as a result of the fine collaboration of the two entities and the expertise of their officials.

The establishment of an energy exchange, a bailout reqirement, has been incorporated into the Target Model, a process entailing the electricity wholesale market’s harmonisation with EU law.

LAGIE and the Athens Stock Exchange are not only aiming to reshape the local wholesale electricity market within the time frame offered but also to establish the energy exchange as a broad platform serving many purposes.

At least three commodities – electricity, natural gas, and environmental commodities – will be traded at the Greek energy exchange, through at least one market for each category, according to the draft bill.

Regional competition created by energy exchanges such as those of Turkey and Bulgaria has increased the need for swift action so that the Greek energy exchange may be established as the center of the wider region’s energy markets.

According to the schedule, the Greek energy exchange may begin operating next April, which would provide the groundwork for the target model’s implementation in the electricity market by the end of 2018.