Brussels hesitant on hedging mechanism for energy prices

A Greek proposal for the EU’s adoption of a temporary hedging mechanism as a means of easing the burden of sharply risen energy costs on consumers, to be tabled at a Eurogroup meeting of EU finance ministers today, will be met with hesitancy as the European Commission would not want to bring to the negotiating table issues linked to the Emissions Trading System, fearing any potential need of a compromise with member states opposed to the ETS, such as Poland, well-informed sources anticipate.

The European Commission has fought hard to establish the ETS as a means of combating climate change.

The temporary hedging mechanism would draw funds from the Emissions Trading System’s auctions of CO2 emission rights.

The hedging mechanism was proposed several weeks ago by Greek energy minister Konstantinos Skrekas and will be officially presented by Greek finance minister Hristos Staikouras to his European counterparts at today’s Eurogroup meeting.

The EU finance ministers will be focusing on the alarming increase in energy prices, prompted by a combination of international factors, though finalized decisions at this session are considered unlikely.

Minister calls for swifter Brussels support on new RES auctions plan

Energy minister Kostas Skrekas has requested swifter support from the European Commission, in the form of a comfort letter, on a plan concerning Greece’s new RES auctions, as well as auctions for the installation of hybrid stations on islands.

The minister made the request to European Commission deputy Margrethe Vestager, also Brussel’s Commissioner for Competition, during an online meeting between the two officials on Friday.

During the session, Vestager is believed to have expressed satisfaction over Athens’ implementation of a plan offering third parties access to state-controlled power utility PPC’s lignite-fired power production, an issue that had remained unresolved for many years.

PPC sold a first electricity package at a discount price on Friday, as part of the government’s agreement with the European Commission.

Greece’s energy minister also urged for efficient cooperation with the Directorate General for Competition on an ongoing effort aiming for the introduction, by the end of the year, of a Strategic Reserve mechanism.

The mechanism is planned to compensate PPC for its maintenance, as grid back-up, of lignite-fired power stations headed for withdrawal. The availability of these units is still needed to ensure grid sufficiency and stability.

 

 

Independent suppliers react to gov’t handling of subsidy plan

Independent electricity suppliers, especially the non-vertically integrated, have expressed strong disapproval of the manner in which the government presented a subsidy plan aiming to offer energy-cost relief to consumers, noting the presentation of the measures offered promotional support to state-controlled power utility PPC, the market’s dominant supplier.

The complaints, which focused on the subsidy plan’s presentation, not the actual measure, were expressed at a meeting yesterday between energy minister Kostas Skrekas and representatives of the country’s electricity suppliers.

During the government’s presentation of subsidies to be offered to counter rising electricity costs – wholesale and retail – pushed up by a combination of unfavorable factors in international markets, attention was also placed on an additional discount to be offered by PPC, to supplement the subsidies.

Independent suppliers perceived this latter detail as inappropriate market intervention by the government and an effort to give PPC a competitive edge over rival suppliers.

At the meeting, the energy minister called upon electricity suppliers to contribute to the energy-cost containment effort by utilizing the subsidy plan and offering discounts. Independent suppliers stressed they are currently operating with the slightest of profit margins.

The subsidies, to offer suppliers 30 euros per MWh, will be distributed by November, the minister informed.

Vertically integrated independent suppliers, which now have a clearer picture on PPC’s latest pricing policy, have already begun shaping strategies of their own, sources informed.

 

 

 

Independent players set to offer discounts, awaiting PPC clarity

Independent suppliers are set to offer discounts and tariff reductions to consumers, their effort focusing on consumption levels ranging between 300 and 600 kWh, not covered by state subsidies, according to latest updates.

Independent suppliers are awaiting the outcome of a meeting today involving energy minister Kostas Skrekas, during which state-controlled power utility PPC’s discount strategy will be clarified, before they take specific decisions, including for the consumption category of up to 300 kWh, applying to the majority of households.

Besides an across-the-board discount of 30 percent for all consumers, including the category up to 300 kWh, PPC has also promised an additional discount of between 3 and 4 percent for the 301-600 kWh category.

It still remains unclear how much the price gap between PPC and independent consumers offering lower tariff prices could be narrowed by this move.

Independent suppliers know well that they will need to keep offering lower tariffs than PPC, the dominant player, to remain competitive.

The government plans to adopt an Energy Transition Fund to offer electricity subsidies to households and small and medium-sized enterprises, heating fuel subsidies, and a range of other initiatives as a tool to contain the surge in wholesale energy costs, prompted by a combination of factors in international markets.

 

Energy minister calls emergency meeting, heatwave set to peak

Energy minister Kostas Skrekas is due to visit power grid operator IPTO’s control center in Athens today for an emergency meeting he has ordered to deal with grid sufficiency issues raised by the prolonged heatwave conditions, expected to become even more acute during the week.

Prime Minister Kyriakos Mitsotakis will participate in the emergency meeting along with the head officials of RAE, the Regulatory Authority of Energy, power grid operator IPTO, distribution network operator DEDDIE/HEDNO, and power utility PPC.

The grid is expected to face unprecedented conditions in coming days as electricity demand peaks to reach record levels, prompted by the extreme weather conditions.

The energy ministry has already urged the public to exercise restraint in electricity consumption over the next few days as a means of helping the pressured grid cope with the heatwave’s demands.

The energy minister also staged an emergency meeting yesterday morning with officials of the aforementioned energy sector companies.

Electricity demand today is expected to peak at 9,600 MW, at around 9pm, well over the average peak of 8,115 MW in the first half of 2021.

Suppliers unimpressed by plan ending PPC lignite monopoly

Independent electricity suppliers have remained unimpressed by measures taken to end stare-controlled power utility PPC’s exclusive access to lignite, noting resulting lignite-generated electricity amounts offered to third parties are too small to bring about changes to competition.

The country’s independent suppliers had until yesterday to respond to a 15-question questionnaire forwarded by the European Commission as part of a market test on the effectiveness of the measures, recently agreed on between Brussels and new energy minister Kostas Skrekas.

Certain respondents explained that low-priced lignite electricity purchases, even at levels well below day-ahead market price levels, would not offer benefits as they cannot offset extremely higher wholesale electricity prices, pushed up by increased balancing market costs.

Some of the vertically integrated suppliers, not facing problems by the wholesale price shifts, noted the measures would end the prospects of a futures market operating at the energy exchange any time soon.

PM to visit stalled Mesohora dam project, completion ‘near’

Prime Minister Kyriakos Mitsotakis and his energy minister Kostas Skrekas are scheduled to visit power utility PPC’s slow-moving Mesohora hydropower project in west Thessaly on Saturday as part of a wider visit to the area, for an update on its progress.

The Mesohora dam, along with the E 65 highway project in central Greece, will be the main topics of discussion at meetings, a few hours later in Trikala, between the PM, energy minister and regional authorities.

The Mesohora dam, close to completion since 2001, has been delayed by a series of setbacks, including, most recently, November’s nullification of the project’s environmental terms by the Council of State, Greece’s Supreme Administrative Court.

PPC is being deprived of revenue worth 30 million euros annually as a result of the project’s delay.

Efforts now being made to put the project’s completion back on track include PPC’s ongoing preparation of a new environmental impact study, which should pave the way for the dam’s new environmental terms.

The project’s new environmental license could be a swift procedure, enabling a restart of work for completion and trial tests of the new dam by the end of 2023, according to the most optimistic of forecasts.

The Mesohora hydropower facility, an investment exceeding 400 million euros, is designed to have a 160-MW capacity and produce eco-friendly electricity amounts of 360 GWh, annually.

Excessive cost, for PPC, of running lignite-fired units hastening exit plan

The financial burden on power utility PPC as a result of its continued use of lignite-fired power stations at a time when the EU is racing towards climate neutrality has prompted the utility to revise its lignite unit phase-out plan for power stations in northern Greece’s west Macedonia region and Megalopoli in the Peloponnese.

According to latest information, PPC’s administration is planning further premature withdrawals of lignite-fired power stations after announcing a precipitated exit of its Megalopoli III unit, as was reported by energypress yesterday.

The Megalopoli III unit will be shut down six months sooner, in mid-2021, instead of early 2022. This 250-MW lignite-fired facility has operated for just six hours since April.

The average variable cost of lignite-based energy generation is €0.80 per MWh, well over the System Marginal Price of €0.45 per MWh, according to data presented by energy minister Costis Hatzidakis.

According to some sources, PPC has once again raised, to the European Commission, a compensation claim for being required to keep operating high-cost power stations in order to secure grid sufficiency and security.

PPC will be forced to proceed with swifter lignite unit exits if this compensation request is not satisfied, pundits said.

Power grid operator IPTO has the final say on the assessment of energy security matters.

PPC’s lignite-fired power stations covered just 36.8 percent of the country’s overall electricity demand in the first half, its lignite units playing a diminished role.

 

New leadership at hydrocarbon management company EDEY

The Greek Hydrocarbon Management Company (EDEY), an independent company owned by the Hellenic Republic that oversees and manages the nation’s oil & gas exploration & production, investor relations and a growing portfolio of international energy infrastructure projects, has announced the appointment of a new chairman of the board of directors and a new chief executive. 

The appointments by Prime Minister Kyriakos Mitsotakis, follow the nomination by Greece’s energy minister Costis Hatzidakis and endorsement by the Special Permanent Committee on Institutions and Transparency of the Hellenic Parliament.

In a statement, the Minister of Environment and Energy, Costis Hatzidakis, noted that the appointments “mark a new chapter for the company, which now has an expanded role following the absorption of a number of International trans-boundary gas pipeline projects, such as the Greek-Bulgarian (IGB) pipeline, IGI Poseidon and East Med – projects supported by inter-governmental agreements between several countries in the Mediterranean region that will strengthen European security of supply as well as Greece’s role as a protagonist nexus in some of the region’s most important strategic developments.” 

The newly appointed chairman, Rikard Scoufias, who joins the company in a non-executive capacity from a distinguished energy and extractives career in Europe, the Americas, Asia and Africa, commented: “This is an important moment in the history of EDEY. Strong corporate governance, especially environmental and social governance (ESG), is in unprecedented focus, nowhere more so than the energy and extractive sectors. It is a privilege to be asked to lead such an eminent board of directors, with distinguished careers from Greece, Norway, the Netherlands, Cyprus, Denmark and the United Kingdom, and we all look forward to work closely with the executive team and to guide the company into this new chapter of growth and continued success.”  

Aristofanis Stefatos, EDEY’s newly appointed CEO, who returns to Greece following a successful executive career in Norway’s oil and gas industry, where he served as COO, CEO and in non-executive roles noted: “Τhe opportunities that hydrocarbon exploration and production offer Greece are significant. By securing these opportunities today, we position the country for the widest possible strategic choices for the future – including the delivery of Greece’s committed plans for alternative energies and long-term decarbonization. We will achieve this ensuring that EDEY is widely recognized as an efficient, transparent and dedicated partner to investors and all stakeholders, whilst at the same time holding those partners to the highest international environmental and social standards.” 

‘Energy ministry policies crucial in effort to revitalize economy’

The energy ministry’s policies promise to play a pivotal role in the challenge faced by the government to revitalize the national economy following lockdown, energy minister Costis Hatzidakis has noted in an article featuring in GREEK ENERGY 2020, the energypress team’s latest annual publication covering the Greek energy sector.

Action is already being taken by the ministry through a decisive energy-sector agenda that aims for growth and is fully aligned with the European Green Deal, now a key economic growth tool throughout Europe, the minister notes.

New financial tools such as an EU recovery fund, worth 750 billion euros, according to a European Commission proposal, are designed to help the EU achieve its goal of transition towards a zero-emission economy through support for the gradual elimination of fossil-fuel dependence, RES growth and energy savings, the minister writes.

Greece is ready to make the most of this EU support package, effectively an additional NSRF funding program for the country promising capital worth around 32 billion euros, in order to achieve sustainable green-energy growth, according to Hatzidakis.

Besides decarbonization and RES development, other aspects incorporated into the energy ministry’s wider plan include:  electromobility growth; a third Saving at Home subsidy program for domestic energy-efficiency upgrades; reforms for greater competition, transparency and more attractive price offers in the energy market; reduced industrial energy costs; and energy-sector privatizations, the minister notes.

 

August launch of target model not possible, pundits insist

A launch of spot markets at the Greek energy exchange is not possible until September, well-informed market officials insist, rejecting recent claims by power grid operator IPTO deputy chief Yiannis Margaris of an earlier target model start within August.

The energy ministry is currently coordinating with IPTO, the Hellenic Energy Exchange (HENEX) and RAE, the Regulatory Authority for Energy, for clarity as to when the launch of the target model’s energy exchange markets is feasible.

A June 30 launch date will inevitably be missed, a key problem behind the delay being the absence of a specific date for the delivery of a balancing market platform to IPTO by General Electric, commissioned this project.

A GE team that was stationed in Athens for this project left the country without notice, citing the possibility of greater pandemic danger ahead, in reaction to its outbreak. This has delayed the delivery of the platform.

IPTO is now closely coordinating with GE for a specific delivery date, following the relaxation of lockdown measures.

Trial runs of all market systems linking IPTO, HENEX and EnexClear were scheduled to begin April 10. Dry-run testing, or continual simulation, of market systems was scheduled for May 15, ahead of the June 30 launch date for the target model’s day-ahead, intraday and balancing market launches, now all out of the question.

 

 

‘Firm steps for privatizations but pandemic’s impact considered’

Decisive steps are being taken for Greece’s energy-sector privatizations, representing two thirds of the country’s overall privatization program, but the pandemic’s impact on international markets will not be neglected, energy minister Costis Hatzidakis has pointed out in an interview with Greek daily To Ethnos.

There is no need to rush a plan to reduce the Greek State’s stake in Hellenic Petroleum (ELPE) as this sale is not one of restructuring character, the minister noted.

A government decision to sell stakes in DEPA Infrastructure and DEPA Trade, two new entities emerging from a split at gas utility DEPA, is moving ahead as planned, Hatzidakis informed.

First steps have been taken to reduce, below 51 percent, the Greek State’s share in power grid operator IPTO, “but this does not mean we will proceed tomorrow morning,” he said.

State-controlled power utility PPC is preparing terms of an international tender for the sale of at least 49 percent of distribution network operator DEDDIE/HEDNO, a subsidiary, the minister said. This procedure is scheduled to commence in the third quarter of this year, he added.

Suppliers dread bad debt of permanent business closures

Electricity and gas suppliers, fearing a new wave of bad debt that could balloon should retailers and enterprises currently in lockdown fail to reopen, have expressed their concerns to deputy energy minister Gerassimos Thomas in a virtual conference.

Consumers of all categories, including households, have increasingly struggled to pay their energy bills during the coronavirus pandemic. Overdue energy bills have increased by levels ranging from 20 to 35 percent, according to data forwarded by suppliers to RAE, the Regulatory Authority for Energy, and the energy ministry.

Besides fearing an eventual financial collapse of many retailers and businesses amid a protracted lockdown, authorities suspect some survivors could opt to relaunch their businesses under new tax file numbers in an effort to escape accumulated energy bill debt obligations.

The energy ministry is now seeking to establish a clearer picture on the energy bill collection records of suppliers as a means of shaping appropriate cash flow support measures.

A ministerial decision offsetting debt between energy suppliers and market operators will soon be signed, Thomas, the deputy energy minister, informed.

Energy Min Hatzidakis: The effort is in May to be able to return to normality

The government is gearing its efforts toward a return to normality in May but no guarantees can be given, stated Environment and Energy Minister Kostis Hatzidakis speaking to SKAI TV on Tuesday.
“The return to normality can’t be done thoughtlessly or just because we want it but will depend on the implementation of the measures and on the data,” he explained.
“We made this effort with so much discipline that nobody would have believed it so why should we ease off now? We will continue to listen to the scientists as we have done up until now,” he added.
Referring to the measures to support businesses and workers, Hatzidakis underlined that these were above the EU average, adding that the government’s aim to “save its strength” for next October and November, because the virus may return.
Asked about the “corona-bonds”, he said that the discussion is not over yet and that there are voices in this direction even within Germany. “It is  not only a matter of solidarity but it is in their own interests, because if the South collapses they won’t have any place to export to,” he said.

(ANA-MPA)

Energy suppliers to receive Development Bank support

Electricity and gas supply firms, pressured by the financial repercussions of the coronavirus pandemic, are among the country’s enterprises to be offered liquidity support by a prospective Development Bank that will operate as a guarantee fund.

The Ministry of Development and Investment intends to soon establish this new bank using EU National Strategic Reference Framework (NSRF) funds.

Talks are in progress for the establishment of a “guarantee mechanism, for electricity companies, providing working capital,” energy minister Costis Hatzidakis noted just days ago.

The plan was also discussed at a meeting between Development and Investment Minister Adonis Georgiadis, CEOs of Greek banks and the secretary-general of the Hellenic Bank Association.

The bank association is now expected to submit its observations on the plan’s draft law. According to the plan, Greek State guarantees will cover 80 percent of each loan granted, while banks will cover the remaining 20 percent.

Energy deputy presenting NECP in Brussels, Paris, NYC

The country’s newly unveiled National Energy and Climate Plan will also be presented in Brussels today by deputy energy minister Gerassimos Thomas at the council of EU energy ministers, the first stop in a series of presentations abroad.

Over the next few days, Thomas will also be taking the plan to Paris and New York for official presentations.

In Brussels, today, the Greek energy deputy will present the NECP’s ambitious targets to peers and intends to highlight that many of these goals will seek to exceed the expectations of the new European Commission.

The initial response to the NECP’s objectives, by Brussels and investors, has been extremely encouraging. The Greek plan is seen as far more ambitious than those of many other EU member states.

All EU member states will be presenting the key aspects of their respective NECPs at today’s council meeting.

The European Commission will then determine whether proposals made by Brussels last June have been adopted by member states for their NECPs, all revised.

The Greek energy deputy’s Paris sessions, later this week, include an International Energy Agency (IEA) event on the climate.

In New York, Thomas is scheduled to attend an annual Capital Link forum on Monday, whose latest edition is focused on Greece, for contact with investors, major investment banks and energy sector experts closely monitoring the Greek market’s developments.

Besides Thomas, a host of other Greek ministers and deputies, as well as leading officials of the country’s four main banks, are expected to participate at the New York event, titled “21st Annual Capital Link Invest in Greece Forum – Greece is Back”.

 

SGCC wants relaxation of bailout hiring limits at IPTO

State Grid International Development, a member of the corporate group State Grid Corporation of China (SGCC), has sent a clear message to the Greek government calling for a relaxation of recruitment terms at power grid operator IPTO, in which the Chinese company is a strategic partner with a 24 percent stake, noting current hiring restrictions, resulting from a related bailout term imposed on public utilities, increase this investment’s risk and affect its growth prospects.

The Chinese investor wants IPTO included in a draft bill relaxing recruitment terms for the power utility PPC and distribution network operator DEDDIE/HEDNO.

The request was expressed through a letter signed by State Grid International Development chief official Hu Yuhai and received by Energy Minister Costis Hatzidakis, his deputy Gerassimos Thomas, as well as Interior Minister Takis Theodorikakos, according to energypress sources.

The issue had been brought to the attention of the previous Greek government several months before its legislative election defeat in July, the Chinese investor reiterated.

“We consider the situation incomprehensible and somewhat unreasonable when a company the size of IPTO, with support from the strategic investor, is not given the opportunity to select and remunerate its staff in accordance with its rules, serving its interests,” the Chinese firm noted in its letter.

SGCC’s investment and IPTO’s growth prospects will be placed under a state of uncertainty if the Greek power grid operator is not included in the revisions planned for PPC and DEDDIE/HEDNO, the Chinese investor warned, promising fair and transparent recruitment procedures if the restrictions are lifted.

 

PPC voluntary exit plan may push for up to 5,000 retirees

Though the details of power utility PPC’s voluntary exit plan are still being worked on, the plan could push for the withdrawal of as many as 5,000 employees of various qualifications, divisions and levels, according to sources.

An exodus of such a number of employees, representing roughly 30 percent of PPC’s workforce, will obviously cost the power utility a considerable amount.

If this target figure is to succeed, the incentives for employees will need to be far more generous than those offered in an exit plan last year. Severance pay of 15,000 euros plus a 5,000-euro bonus prompted 220 voluntary exits.

A voluntary exit plan outlined last week by energy minister Costis Hatzidakis – it includes employees five years or less away from the retirement age of 60 and  covers all their social security fund commitments until pension eligibility is reached, plus severance pay – is expected to cost at least 100,000 euros per employee, according to more reserved union estimates.

Some 4,000 PPC employees are currently already eligible for pensions. A total of 16,747 employees were on the power utility’s payrolls at the end of 2018.

Minister reveals RES plans at Renewable & Storage Forum

Renewable energy units without operational support contracts will enjoy automatic market entry, large-scale RES projects with capacities exceeding 250 MW will not participate in competitive procedures but be promoted through a special support framework, while initiatives will be taken to unblock and foster the development of hybrid energy storage and offshore wind energy projects, energy minister Costis Hatzidakis disclosed at a Renewable & Storage Forum staged in Athens by energypress.

The minister was responding to questions during a live interview with energy-sector journalists Thodoris Panagoulis and Haris Floudopoulos at the event. The interview was staged before an audience of some 400 forum attendants.

Many RES producers believe they can secure better prices for output in the market rather than through competitive procedures and, as a result, are keeping projects. The first of the three aforementioned disclosures made by the minister at the event is promising news for these investors.

Also, RAE, the Regulatory Authority for Energy, has taken action for the remuneration of RES projects with capacities exceeding 250 MW. The energy ministry is now preparing a related bill. Strong interest exists for the development of major-scale wind and solar energy projects, which, until now, have been held back. Their development will be crucial in helping Greece’s RES sector capture a 35 percent share of the country’s energy mix, the target set, market officials have stressed.

Additional RES sector legislative revisions to facilitate RES licensing procedures and spatial matters are being worked on, Hatzidakis, the energy minister, reiterated at the forum.

IGB agreement, target model on agenda of minister’s Sofia visit

The signing of a Greek-Bulgarian bilateral agreement for the IGB gas grid interconnector, a project of major geopolitical significance, may be at the top of the agenda of the energy ministry leadership’s official visit to Sofia tomorrow and Thursday, but the target model, also on the agenda, is just as crucial.

The target model is vital as it entails the coupling of the Greek and Bulgarian electricity markets, needed for the establishment of regional electricity market, a key EU energy policy.

Given the Sofia trip’s demands, energy minister Costis Hatzidakis will be joined by his deputy Gerassimos Thomas.

Hatzidakis, on this trip, is expected to sign a bilateral agreement for the IGB gas pipeline’s construction and operation. A shareholders’ agreement and a European Investment Bank (EIB) loan agreement for the project are also planned to be signed.

The Greek-Bulgarian gas pipeline project, measuring 182 kilometers, will link Komotini, in Greece’s northeast, with Stara Zagora, creating a second interconnection point for the Greek and Bulgarian gas systems, in addition to an existing station in nearby Sidirokastro.

The new project, to offer an annual capacity of 5 billion cubic meters, will begin operating at a lower capacity level of 3 billion cubic meters.

The IGB pipeline is planned to be linked to the TAP project, running across northern Greece. Combined with the Bulgaria-Romania and Bulgaria-Serbia interconnections, the IGB will contribute to the establishment of a vertical corridor through the Balkans and connect central Balkan countries with Caspian gas supply.

Gov’t seeking post-lignite plan, communities to be reassured

The energy ministry is looking to reassure local authorities in the country’s lignite-dependent northern region of west Macedonia that Greece’s planned transition towards a post-lignite era will take place following comprehensive planning and also include financial support for affected communities through EU funds.

Deputy energy minister Gerassimos Thomas will travel to the region today for talks over the weekend with local authorities, union leaders and workers. Energy minister Costis Hatzidakis and power utility PPC’s chief executive may also follow up with visits to the region next week.

Prime Minister Kyriakos Mitsotakis, speaking at the UN Climate Action Summit in New York earlier this week, spoke of complete decarbonization in Greece by 2028. The prospect has unsettled lignite-dependent communities in Greece.

Shutting down all lignite-fired power stations in Greece will require considerable planning.

Power utility PPC’s activities in western Macedonia represent 45 percent of the region’s economic activity. Approximately 4,200 persons are employed at PPC’s mines and power stations in west Macedonia and Megalopoli, the country’s other major lignite source in the Peloponnese. Adding sub-contractors to this tally increases the workforce figure to 6,000.

The move towards decarbonization is a European challenge concerning many countries besides Greece, including Austria, the Czech Republic, Germany, Poland and Romania. All are currently seeking solutions.

Member states feeling insecure about their post-lignite futures are eagerly awaiting the new EU budget, expected to be completed by early 2020, to see if additional funding will become available for Europe’s energy transition fund, currently limited to 4.8 billion euros for 41 lignite-dependent regions around the continent.

All Ptolemaida V options now being officially examined

A development decision on power utility PPC’s planned lignite-fired Ptolemaida V power station is now officially preoccupying authorities, examining various options, including a fuel switch to natural gas.

All appears possible at this stage. Besides an in-progress report from the McKinsey consulting firm, examining all possible scenarios for the unit along with PPC, Prime Minister Kyriakos Mitsotakis made reference to the matter for the first time yesterday while speaking at the UN Climate Change Summit. He spoke of total decarbonization in Greece by 2028.

Echoing this remark, energy minister Costis Hatzidakis left open the possibility of a zero-lignite energy mix by 2030 when asked if Greece’s new National Energy and Climate Plan, to soon be submitted to Brussels, would include such a target.

Hatzidakis hinted that such a prospect is possible. However, he did not commit on how the government would choose to handle Ptolemaida V.

“If you were to ask me about the existing lignite-fired power stations, I would have answered that we will have a clear picture on how many of these units are sustainable in three to four weeks,” Hatzidakis noted. “But this is not so for Ptolemaida V, where the matter is very complicated. At this stage, nobody can talk of an optimal solution.”

Contrary to the previous PPC administration, the power utility’s new leadership, headed by Giorgos Stassis, does not consider the Ptolemaida V investment a certainty. However, Stassis and his associates are also aware of how complex the matter is, making abandonment difficult.

For example, abandoning the Ptolemaida V project would severely impact the northern region’s local economy, dependent on lignite activity. Also, PPC has already spent close to 950 million euros. Turbine and generator orders have arrived, while agreements, including EPC contracts, have been signed.

As for the thoughts of a fuel switch, from lignite to natural gas, PPC would be better off building a new gas-fired power station in Lavrio, southeast of Athens, close to gas sources and urban centers consuming considerable electricity amounts.

 

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.

 

DEPA leadership set for appointment, new privatization model near

The imminent appointment of Konstantinos Xifaras, a former managing director at gas grid operator DESFA, as chief executive of gas utility DEPA, and Giannis Papadopoulos, previously the managing director at venture capital firm Attica Ventures, as DEPA’s new company president, marks the first step towards a revision of the utility’s privatization plan, including related legislation.

Privatization fund TAIPED is expected to meet today or tomorrow to endorse DEPA’s new two-pronged leadership. An extraordinary shareholders’ meeting will immediately follow at DEPA for the duo’s approval.

The country’s previous Syriza administration had ratified legislation for a DEPA split plan entailing the establishment of two new corporate entities, DEPA Trade and DEPA Infrastructure. The plan was to sell a majority stake of DEPA Trade followed by a minority 14 percent stake in DEPA Infrastructure.

However, the recently elected conservative New Democracy government’s energy minister Costis Hatzidakis has implied a more aggressive DEPA sale plan will be adopted to offer investors majority stakes in both the utility’s trade and network divisions.

 

NOME auctions ending, EC to decide on October session

The big question currently preoccupying the thoughts of domestic electricity market officials is whether the next and final NOME auction of the year – planned to offer independent suppliers a mammoth quantity totaling 1029 MW on October 10 – will be staged as this will greatly influence the market’s shape until the eventual implementation of the target model.

Power utility PPC, which began offering below-cost wholesale electricity to rivals through NOME auctions when they were introduced as a market-opening measure in 2015, following an agreement between the previous Syriza government and the European Commission, wants the October NOME session scrapped.

So, too, does the recently appointed new energy minister Costis Hatzidakis, who described Syriza’s NOME agreement as “the world’s first ever free privatization” in an interview for the Sunday edition of Greek daily Kathimerini.

The former Syriza government introduced the measure as a tool to help reduce PPC’s dominant retail electricity market share from 90 percent to 50 percent. It has not worked. PPC’s market share remains over 80 percent and the utility, Hatzidakis contended in the interview, has lost over 600 million euros as a result of this measure.

A legislative bill abolishing the NOME auctions and setting the groundwork for a transition to the post-NOME era will be submitted to Greek Parliament before the end of October, Hatzidakis noted, adding he wants to have reached an agreement on the NOME auctions with Brussels prior to this. The European Commission has the final say on the matter.

Electricity suppliers are hoping one final NOME auction can be staged in October so that they can stock up on a year’s worth of electricity to cover market needs, even at a higher starting price, as would be the case if the session is held.

 

PPC public service return for 2011 from 2020 national budget

The government has decided to cover a power utility PPC a public service compensation (YKO) payment of 195 million euros, endorsed by RAE, the Regulatory Authority for Energy, through the 2020 national budget, energypress sources have informed.

Though this solution, agreed to by energy minister Costis Hatzidakis and the finance ministry, does not promise instant relief for state-controlled PPC, burdened by poor finances, it does secure a prospective cash influx that will be taken into account by Ernst & Young, the utility’s certified auditor, scheduled to deliver a report on the Greek power utility on September 24.

This amount is expected to contribute to a sum of over 800 million euros needed by PPC over the next 12 months, according to new chief executive Giorgos Stassis.

RAE’s initial calculations for PPC’s 2011 public service compensation resulted in a sum of 160 million euros before this amount was revised to 195 million euros. PPC originally sought a sum of between 650 and 700 million euros before settling for RAE’s far lower figure.

Sale of additional IPTO stake likely, priority rights for SGCC

The government is seriously considering a further sale of power grid operator IPTO by offering part of a 51.12 percent stake directly and indirectly controlled by the Greek State in a procedure that would also offer the operator’s management.

State Grid Corporation of China (SGCC), which acquired a 24 percent stake of IPTO in 2017, is expected to be given priority rights in any further sale.

A decision is not expected until October. Officials supporting a further sale cite the operator’s improved performance since SGCC’s acquisition approximately two years ago.

Also, the sale of a greater IPTO stake would provide additional impetus to the execution of the operator’s investment program, supporters of the plan note.

Energy minister Costis Hatzidakis has already noted a further sale of IPTO is a plan on the government’s agenda.

NECP being revised for more ambitious RES targets

Deeper penetration of renewable energy sources into the country’s energy mix is figuring as a key policy for Greece’s newly appointed environment and energy ministry.

The ministry is working to revise the National Energy and Climate Plan following recent observations by the European Commission, which described the country’s RES targets as not ambitious enough, energypress sources informed.

Officials are currently moving to assemble a work group by October so that an updated plan, detailing Greece’s post-lignite era targets, can be completed by the end of this year.

Greater RES participation in the country’s energy mix will be facilitated by a swifter withdrawal of old lignite-fired power stations operated by the power utility PPC, officials have stressed.

The energy ministry has commenced talks with the European Commission for an acceleration of the transition period entailing the closure of old power stations.

PPC’s newly appointed administration has begun conducting a cost-benefit analysis on lignite-fired power stations before deciding which units will be withdrawn.

The imminent privatization of distribution network operator DEDDIE/HEDNO, expected to bring in investments leading to an upgrade of the electricity grid, will also be pivotal in accelerating the RES sector’s penetration of the energy mix, the officials added.

The network infrastructure’s current state is one of the main obstacles stopping producers from investing, they added.