Target model schedule’s first major deadline hit by coronavirus

Trial runs of energy exchange market systems, the target model’s first major deadline, were officially scheduled to commence today but have been postponed as a result of coronavirus-related delays, power grid operator IPTO has informed.

IPTO, the energy exchange and EnexClear were scheduled to start system tests today.

General Electric, citing the period’s extraordinary conditions, has explained it is not in a position to deliver finalized version of a platform needed for the balancing market.

The company estimates a 50-day delay in the delivery of the related software, based on current data.

This delay will have a knock-on effect on the schedule mapping out an energy exchange launch on June 30.

According to law, RAE, the Regulatory Authority for Energy, will need to begin an investigation process on the matter and determine responsibilities for the delay. Presumably, IPTO and the energy exchange will need to offer explanations.

A new official date will then need to be set once the investigation has been completed. Now set to be dragged into the summer period, the energy exchange launch may be further delayed, beyond August.

 

Target model’s June 30 launch date headed for delay, extent unclear

The target model and energy exchange launch date, scheduled for June 30, is no longer possible, unless unforeseeable changes occur, the main issue now being the extent of the expected delay, officials agreed during a virtual conference staged on Wednesday by RAE, the Regulatory Authority for Energy.

Energy exchange and power grid operator IPTO officials took part in the session, held to evaluate preparations of the launch.

Officials admitted the target model’s delay could be over one month long. Given the August summer break, its launch may need to be made even later, they noted.

Similar thoughts were expressed during a preceding European Commission conference, on Monday, to check the target model’s progress.

Despite the extraordinary period’s accumulation of difficulties, the energy ministry still considers the existing target model launch date as official and contends it will make all efforts to achieve it.

General Electric, citing the unforeseeable coronavirus circumstances, has stated it cannot deliver a finalized platform for IPTO’s balancing market over the next few days, as had been planned.

Consequently, a trial run of market systems officially scheduled for April 10 is no longer possible, according to the energy exchange.

On the contrary, IPTO believes trial runs can still be performed without the balancing market’s finalized platform.

Futures market launched in adverse conditions, PPC the market maker

The energy exchange’s futures market begins operating today, far sooner than planned following considerable efforts from all agencies and authorities involved, but the launch comes at a time of adverse conditions.

Authorities, given the currently unfavorable abnormal market conditions, will be content to see this new platform operate without technical glitches. Trial runs ahead of today’s launch did not produce problems.

The current pressure felt by financial markets and electricity suppliers has reined in early expectations.

Power utility PPC will assume the crucial role of market maker, bringing in the embryonic market’s first futures products.

The early launch of the futures market was promoted by the energy ministry to help cover electricity supplier needs following the premature termination of NOME auctions.

Ministerial decision on target model schedule set for delivery

The energy ministry is close to issuing a ministerial decision that will offer a specific and binding schedule concerning the implementation of the target model, including the launch of energy exchange markets, ministry sources have informed.

Deputy energy minister Gerassimos Thomas, who attended yesterday’s opening energy exchange session for 2020, stressed the target model will be fully functional by the second half of 2020 following a series of delays. This development will offer greater market transparency and eliminate many distortions, he added.

Any violation of the target model schedule will require RAE, the Regulatory Authority for Energy, to impose penalties within 20 days, according to new regulations.

The ministerial decision setting the target model schedule is required by recent energy-sector legislation.

This legislation sets a road map of commitments for power grid operator IPTO and the Greek energy exchange leading to the launch of energy markets.

 

 

Authorities in rush for new futures product as NOME replacement

Authorities and agencies, primarily Greece’s energy exchange, tasked with designing a futures product intended to replace the country’s NOME auctions, being abolished, are racing against a time limit imposed by the European Commission.

The introduction of a six-month product, to run from this coming January to June, is being considered, according to a recent update provided by the government to Brussels.

Preparations leading to the establishment of required platforms by the end of the year are being pushed ahead.

Various developments have shrunk the available time for the new product’s introduction by six months, placing all authorities involved under considerable time pressure.

The Greek energy exchange, aiming to start operating in February, is currently working closely will all other relevant agencies on various issues, including the delivery of a product to replace the NOME auctions.

The level of readiness of power utility PPC to assume the role of market maker of the new futures product is pivotal.

Independent suppliers fear post-NOME auctions void

Independent electricity supplier representatives will be going into their first meeting today with recently appointed deputy energy minister Gerassimos Thomas preoccupied by concerns over the plausibility of the deputy’s plan for an organized futures market, as an intermediate measure until the target model is implemented. They fear this plan may not be actualized.

Thomas, who requested today’s session as part of a series of meetings with energy sector players, has so far shown an eagerness to listen and seek solutions to various market issues.

The supplier representatives will be hoping the deputy minister has reassuring news on the launch of the target model and energy exchange markets in June, 2020.

They will also want firm news on a satisfactory hedging tool for competitive prices as a temporary substitute for NOME auctions – if they are abolished and the year’s final session, scheduled for October 16, is scrapped – until the target model’s implementation.

Suppliers fear being exposed to elevated wholesale electricity prices and other uncertainties that would endanger their sustainability if the year’s final NOME auction is not held. Suppliers have counted on the year’s final session, planned to offer a substantial electricity amount, as a growth catalyst over the next year.

Introduced about three years ago as a tool to reduce power utility PPC’s dominant retail market share, the NOME auctions have obligated the utility to offer rivals below-cost wholesale electricity.

 

Plan to end NOME auctions raises fears among suppliers

A government plan to prematurely end the country’s NOME auctions has unsettled some of the Greek retail electricity market’s independent suppliers, who fear the absence of an effective transitional model until the establishment of the target model would expose them to unforeseen dangers.

Energy minister Costis Hatzidakis has declared he wants to abolish NOME auctions, including the year’s final session, scheduled for October 16, noting the measure – introduced by the previous government as a tool to help end power utility PPC’s market dominance – is forcing the state-controlled utility to sell wholesale electricity at below-cost levels and consequently further aggravating the troubled firm’s financial performance.

Electricity suppliers, not including the major vertically integrated players, have expressed concerns as a further delay in the implementation of the target model and launch of energy exchange markets is considered likely.

Some suppliers have asked their legal departments to examine possible moves.

“On the NOME auctions, we would like to point out that we are confident the ministry will find the fairest solution for healthy competition,” commented Federico Regola, CEO at Zenith. “We are open to discussing our experience with authorities in order to relay our experience for utilization and the proper functioning of the market to the benefit of consumers. We are monitoring developments and awaiting related announcements while also maintaining our legal rights, like all companies, as this issue does not only concern Zenith but the entire sector,” he continued.

 

Energy exchange chief confident of full launch by next June

The Hellenic Energy Exchange’s (HENEX) outgoing chief executive Michalis Philippou is confident a road map leading to the exchange’s full launch next June will remain on schedule.

Philippou, who delivered an opening speech yesterday at a HENEX seminar titled “Derivatives Market Introduction”, asserted all energy exchange systems will be ready for use by the end of this year ahead of the exchange’s full launch on June 1.

During the preceding six-month period, participants will have the opportunity to become acquainted with the exchange’s systems, while HENEX can make any necessary corrections ahead of the full launch, Philippou pointed out.

The official explained it is crucial for the exchange’s various markets – day-ahead, intraday, futures and balancing – to begin operating concurrently so that harmony can be generated, otherwise the effort to establish a new model would run into problems.

This essentially means the energy exchange’s full launch next June should, more or less, signal the start of the target model, envisioning the harmonization of EU wholesale markets.

RAE pressuring for target model launch before June, 2020

RAE, the Regulatory Authority for Energy, is pressuring the Energy Exchange and power grid operator IPTO for swifter procedures leading to the establishment of a new model for the electricity market, the target model.

The authority wants the target model to be launched sooner than June, 2020. According to a recent schedule, the new model, which should have been launched in 2015, is slated for a launch in the second half of 2020.

IPTO and the Energy Exchange need to respond, by next month, to questions raised by RAE at a July hearing on the reasons for the model’s series of deferrals by next month.

RAE supports the establishment of one liquidator for four new spot markets to emerge under the target model.

The country’s lender representatives will be in Athens next month. If unfinished target model matters are not sorted out by then, Greek authorities will have serious explaining to do.

 

HENEX, IPTO face RAE hearing over target model, exchange delays

The administrations of the Hellenic Energy Exchange (HENEX) and power grid operator IPTO have been summoned to offer explanations for significant delays holding back the launch of the target model and full operation of the energy exchange at a RAE (Regulatory Authority for Energy) hearing today.

RAE has expressed concern over a series of delays and continual schedule revisions for the new markets.

The authority has warned that these delays are detrimental for market participants, including industrial enterprises currently unable to establish bilateral agreements.

According to the most recent update, the Greek energy exchange is expected to be fully operational by June, 2020, when all its platforms should be up and running following trial runs.

This will enable Greece to proceed with an EU market coupling plan via Italy before a grid link with Bulgaria is also established.

The target model is planned to offer market coupling, or harmonization of EU wholesale markets.

 

HENEX, IPTO to face RAE hearing over target model, exchange delays

The administrations of the Hellenic Energy Exchange (HENEX) and power grid operator IPTO have been summoned to a hearing later this month by RAE, the Regulatory Authority for Energy, to offer explanations for significant delays concerning the launch of the target model and full operation of the energy exchange.

The hearing is planned to take place at the end of July, energypress sources have informed.

RAE has expressed concerns over a series of launch deferrals of the target model, to offer market coupling, or harmonization of EU wholesale markets.

The authority sees these delays as being abnormal while also negatively impacting prospective market participants such as industrial enterprises, currently not able to proceed with bilateral agreements.

In its most recent update, IPTO noted that the energy exchange will be fully operational in about a years’ time, in June, 2020.

RAE, concerned by target model delay, requests report

RAE, the Regulatory Authority for Energy, concerned about Greece’s delayed implementation of the target model, aiming for market coupling, or harmonization of EU wholesale markets, has requested a detailed progress report from the Energy Exchange and power grid operator IPTO.

The authority also wants the two bodies to deliver a binding finalized schedule detailing when this preparatory work will be completed for the new model to be ready to operate.A series of target model deferrals have raised concerns at RAE, now preparing to apply increased pressure, sources noted.

According to the latest schedule, the electricity market’s new model, which should have been launched in 2015, is now expected to be ready to operate in the second half of 2020.

A tender for logistics required in the market coupling procedure between the Greek and Italian markets is expected to be completed by this date.

Delays have also been identified in the establishment of three spot markets at the energy exchange – intraday, day-head and balancing markets.

RES output payments troubled by new system delay

Major delays in the implementation of a new renewable energy support system, requiring full coordination between various industry agencies, threaten to leave producers unpaid for their output.

The power grid operator IPTO and the energy exchange are among the bodies that need to introduce new systems and tools, but technical issues confronted along the way have severely delayed the process, whose launch has been scheduled for July 1, now seen as an impossible target.

The energy ministry has been fully informed on the matter and prepared a legislative amendment to offer a three-month extension. However, the execution of this act is now in doubt as a result of the government’s call, last weekend, for snap elections on July 7. Legislative activity is highly unlikely, if not impossible, in the lead up.

RES producers will not be able to be paid for their output as of July 1 if the new support system has not been implemented because of a resulting legal void.

Sensing the danger of this problem in the making, energy ministry officials are now seeking solutions, energypress sources informed.

Spot market upper, lower limits would distort target model, EVIKEN warns

Industrial sector officials have warned that an Energy Exchange proposal for upper and lower limits in the spot market’s day-ahead and intraday markets, forwarded for consultation by RAE, the Regulatory Authority for Energy, would lead to target model distortions.

The target model is aiming for market coupling, or harmonization of EU wholesale markets, in order to unify energy markets.

Though RAE acknowledges bailout terms do not permit the imposition of any upper or lower limits for offers and prices in these markets, the authority has put forward upper and lower limit proposals noting a need for a smooth transition towards the target model without any extreme price fluctuations.

EVIKEN, the Association of Industrial Energy Consumers, has responded by forwarding a letter that argues such price limits would neither comply with existing terms nor prices determined by decisions at ACER, Europe’s Agency for the Cooperation of Energy Regulators.

The proposal would lead to severe market distortions by limiting the free setting of market prices and also delay the Greek market’s coupling with the Italian and Bulgarian markets, EVIKEN stressed in its letter.

 

Revised energy exchange spot markets on track for September

Greece’s energy exchange authorities are striving for spot market exchange platforms to be ready by September, for training purposes, ahead of a fully-functional launch of the exchange’s three spot markets – the intraday, balancing and day-ahead markets – by the end of the year.

A derivatives market is expected to be ready approximately two months later while, the third step of the overall procedure, expected within 2020, will entail electricity market coupling with regional markets, beginning with Italy.

The initial target dates of the target model, aiming for market coupling, or harmonization of EU wholesale markets, in order to unify energy markets, ended up being beyond reach, as certain authorities with know-how had warned, but the procedure’s revised dates now appear to be on track.

The new trading tools to be made available to investors through the energy exchange promise to offer investors elevated business risk control and safer investment development.

 

 

PPC-related penalty added to year’s NOME auction amount

RAE, the Regulatory Authority for Energy, has decided to increase the overall NOME electricity amount to be offered over four auctions in 2019 by adding 520 MWh/h to the scheduled 1,444 MWh/h tally as a penalty for the main power utility PPC’s failure to reach an end-of-2018 market share contraction target.

The year’s auctions are planned to start with a modest electricity amount of 350 MWh/h at 2019’s opening session, scheduled for February 8, according to a just-released Energy Exchange chart detailing the distribution of amounts over the year’s four auctions.

Authorities are believed to have decided on a small electricity amount for the opening session so as to enable a reduction of bigger amounts set for the year’s three ensuing auctions if PPC’s ongoing bailout-required disinvestment of lignite units succeeds.

Independent suppliers have already reacted against the distribution plan for the year after interpreting this approach as a form of further protection for PPC.

The NOME auctions were introduced over two years ago to offer independent players access to PPC’s lower-cost lignite and hydropower sources as a means of intensifying competition in the retail electricity market, still dominated by the state-controlled power utility.

According to the Energy Exchange chart, 355 MWh/h has been planned for the year’s second NOME auction on April 17, 500 MWh/h is scheduled for a July 17 auction, and 767 MWh/h for 2019’s fourth and final auction on October 16.

NOME export revisions ahead, extra power amounts to be cut

The energy exchange, understandably in agreement with RAE, the Regulatory Authority for Energy, plans to revise a NOME auction electricity exports measure to secure NOME prices instead of System Marginal Price (SMP) levels for new customers joining independent electricity suppliers during three-month intermediate periods between auctions.

In a related public consultation procedure held over the past few days, suppliers warned a framework of measures planned by authorities would expose them further to SMP levels and prevent suppliers from broadening customer bases between auctions.

Authorities are also examining ways to maintain rights acquired by suppliers and traders for futures products bought at previous auctions.

In its public consultation procedure intervention, ESAI/HAIPP, the Hellenic Association of Independent Power Producers, called for additional measures that could help increase the retail electricity market shares of independent suppliers.

Meanwhile, the energy ministry is planning a legislative revision to abolish a bailout tern requiring the addition of NOME auction electricity amounts in 2019 as a penalty against the main power utility PPC for its failure to meet a market share contraction target set for 2018. This action will be taken assuming PPC sells its Meliti and Megalopoli lgnite-fired power stations included in its bailout-required disinvestment package of lignite units.

According to the bailout term, RAE – this month – was supposed to add approximately 520 MWh/h to 2019’s NOME electricity amount of 1,444 MWh/h. Instead, 520 MWh/h now appears set to be reduced from the year’s NOME tally.

The government and country’s lenders have agreed on a reduction of the NOME auction tally from 22 percent of total consumption to 13 percent if the ongoing sale effort for these two lignite units is completed.

 

 

Brussels opposes Greek export limit plan for NOME electricity

The European Commission has expressed its opposition to a plan by RAE, Regulatory Authority for Energy, aiming to limit exports of electricity amounts acquired at Greece’s NOME auctions – following an energy exchange recommendation in a public consultation procedure – but notes certain exceptions would be permitted, in a letter forwarded to the authority.

Brussels reminds RAE restricting free trade is forbidden by the EU, while adding European courts have made clear that, besides certain quantitative restrictions, trade restrictions implemented as official state policy are not permitted.

Greek authorities have been asked to prove if the NOME export limits being contemplated could qualify as exceptions.

RAE, in related talks expected soon with European Commission authorities, intends to highlight the need for NOME export limits and will be hoping for an agreement ahead of the first auction in 2019.

The Brussels letter’s first part focuses on EU concerns over China’s presence in the Greek energy market.

 

 

Traders appeal to Brussels over NOME export limit proposal

Energy firms primarily active in transboundary electricity trade are seeking European Commission support in an effort to prevent the adoption, in Greece, of restrictions – including indirect measures – on exports of electricity amounts secured at local NOME auctions.

Traders were prompted into action by a Greek Energy Exchange proposal forwarded to a public consultation procedure staged by RAE, the Regulatory Authority for Energy, calling for NOME-related electricity exports to be sold at just under the System Marginal Price (SMP), or wholesale price, rather than lower prices secured at the auctions.

NOME auctions were introduced about two years ago to offer independent energy firms access to the main power utility PPC’s lower-cost lignite and hydrocarbon sources as a means of breaking the utility’s retail electricity market dominance.

In their appeal, export-minded traders have cited the EU’s free-trade principle as their main argument. It is not yet clear how the European Commission could respond.

 

 

 

Greece backs Poland in CO2 price investigation request

Poland appears to have gained the Greek government’s support in the country’s request to the European Commission for an investigation into CO2 emission right price manipulation suspicions at energy exchanges.

Like Warsaw, the Greek government is also concerned by the rise in CO2 emission right prices, energy ministry sources have admitted.

It remains unclear if the issue was tabled at a meeting yesterday between energy minister Giorgos Stathakis and Maros Sefcovic, the European Commission’s vice president for Energy Union.

Emission right allowances could be increased if these price manipulation suspicions are confirmed, sources around Europe believe.

Poland has been particularly affected by escalating CO2 emission right prices as it a coal-dependent nation. Just weeks ago, the Polish government forwarded a request, in writing, to Brussels calling for an investigation into CO2 emission right prices. They reached 20.70 euros per ton yesterday.

PPC reacts against RAE tribunal plan for energy exchange disputes

The main power utility PPC has raised objections to Greek energy exchange rules proposed by RAE, the Regulatory Authority for Energy, especially a proposal that would give the authority the right to arbitrate energy exchange disputes, regarded as anti-constitutional by the power utility.

PPC’s objections were included in a letter forwarded by a key official. Early last month, RAE invited interested parties to take part in public consultation.

PPC, in its letter, contends that the proposed regulation would deprive parties involved in disputes of the right to choose their preferred courses of action.

According to the RAE proposal, the arbitration tribunal for Greek energy exchange disputes would be chaired by members of RAE, technical chambers, lawyer societies, as well as professors of higher education institutions with related knowledge.

RAE’s proposals would prevent the newly established energy exchange from developing into an important regional exchange, PPC also asserted in its letter.

 

 

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.