energy exchange

Energy exchange equity line-up issues delaying preparations

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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

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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

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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’

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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

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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.