energy minister

Minister’s PPC rescue plan aims to inject €500m into utility

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Power utility PPC stands to gain financial support worth an estimated 500 million euros from a series of measures announced in Parliament yesterday by the newly appointed energy minister Costis Hatzidakis, the aim of his measures being to ensure the utility’s sustainability.

The minister’s restructuring plan for PPC, under severe financial pressure, includes an electricity tariff increase that is expected to boost the company’s annual earnings by roughly 200 million euros. This tariff hike, expected to be a single-digit rise, will not burden consumers, the minister pledged, as it will be neutralized by an equivalent reduction of a RES-supporting ETMEAR surcharge included on electricity bills. A 10 percent discount for punctual electricity payments will remain intact.

The government’s support plan for PPC also includes a cash injection of approximately 200 million euros for public service compensation (YKO) returns linked to previous years.

The sale of a minority stake of network operator DEDDIE/HEDNO, a PPC subsidiary, to a strategic investor is also a part of the minister’s plan.

A voluntary exit plan will seek to reduce the company’s payroll, now 16,000 strong, by 2,000 workers. It will target staff members who have qualified for pension rights but have chosen to keep working.

Also, NOME auctions, which, so far, have set back PPC by some 600 million euros since their introduction about three years ago, will be abandoned. The auctions have offered PPC rivals lignite and hydropower electricity generated by the power utility at below-cost prices.

Greater pressure will also be placed on PPC customers dodging electricity bill payments despite believed to be capable of covering required amounts. A mere 60,000 customers owe PPC approximately 800,000 euros, Hatzidakis, the energy minister, reiterated yesterday. PPC’s unpaid receivables figure has reached 2.7 billion euros.

Many aspects of the minister’s speech yesterday echoed proposals included in an older plan by McKinsey. The consulting firm was commissioned by PPC but its proposals have yet to be implemented. Plan features included a call for an operating profit improvement of 500 million euros over a five-year period, a voluntary exit plan for 2,000 persons, as well as tariff hikes.

 

 

New minister set to present PPC recovery plan details

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Hydropower units belonging to the power utility PPC will not be sold; NOME auctions will be abandoned; and electricity costs for consumers will not rise, the newly appointed energy minister Costis Hatzidakis is expected to announce later today when the New Democracy party presents its wider  policy program.

The minister is also expected to present details of a plan to seek strategic investment into distribution network DEDDIE once control of the network is transferred from PPC to the subsidiary with the permission of creditor banks.

Prime Minister-elect Kyriakos Mitsotakis is expected to make a general announcement on this network sale plan before his energy minister follows up with further details. The procedure will offer full protection for PPC’s interests, including compensation for the sale, the government officials are expected to stress.

The minister’s plan for an end of NOME auctions, launched about three years ago to offer independent parties access to the power utility’s lower-priced lignite and hydropower sources, was approved by the country’s lenders last week at a meeting between the two sides in Athens.

A transition plan leading to the launch of the target model, to offer market coupling, or harmonization of EU wholesale markets, is expected to be reached between the minister and the lenders when they next return to Athens for official talks in September. The transition plan will be designed to ensure that supply markets remain fully operational ahead of the target model’s launch.

The energy minister’s promise of no electricity cost increases for consumers will be accompanied by details of the state-controlled power utility’s more ruthless handling of unpaid receivables owed by consumers believed to be able, even affluent, but unwilling to cover their power bill debts. PPC is under financial pressure.

The government intends to reshape PPC along the lines of the transformation of telecommunications company OTE, a corporation in which the Greek State now holds just 5 percent, Deutsche Telekom being the main shareholder with a 45 percent stake.

Besides preventing a systemic crisis posed by PPC’s current financial woes, a rebound by the power utility would also send out a positive message for the Greek market to domestic and foreign institutional investors.

 

 

 

Minister to set tougher power bill collection terms for dodgers

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Power utility PPC customers seen as able but unwilling to pay their electricity bills can expect stricter terms, expected to be included in a package of new policies to be announced in Greek Parliament this Sunday by the recently appointed energy minister Costis Hatzidakis.

The minister will aim for a drastic collection record improvement at PPC, currently burdened by poor finances. The power utility’s more ruthless approach will need to be implemented by the power utility’s next administration.

Manolis Panagiotakis announced his resignation from the state-controlled power company’s top post shortly after the July 7 election.

Though strategic electricity bill dodgers are expected to be shown no further tolerance, struggling households should keep receiving subsidized support under the new program, it is believed.

PPC’s unpaid receivables, including monthly-installment payback programs, have reached 2.7 billion euros, an enormous sum given the size of the power utility and Greek economy.

Of this total, 800 million euros, slightly less than a third, is owed by 60,000 individuals who are not living in poverty, but, on the contrary, are affluent, Hatzidakis, the energy minister, told local media yesterday.

Swift progress needed for Cretan link, minister supports

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There is no time to waste on the Crete-Athens grid interconnection project, while a solution in a dispute between Greek power grid operator IPTO and Cypriot consortium Euroasia Interconnector for control of the project’s development is desirable, the newly appointed energy minister Costis Hatzidakis has supported in comments at an Economist conference in Athens.

These thoughts, supporting swift development of the Cretan link, needed to avoid an energy shortage on the island, were also expressed by the Greek minister to his Cypriot counterpart Giorgos Lakkotrypis on the sidelines of the event, their first meeting since Hatzidakis assumed his post.

IPTO chief executive Manos Manousakis expressed satisfaction over the Greek energy minister’s determination to push ahead with the Cretan grid link.

Euroasia Interconnector, heading a PCI-status Greek-Cypriot-Israeli electricity grid connection project, is seeking control, as provider, of the wider plan’s Greek segment.

The country’s newly elected conservative New Democracy government must still clarify, to the European Commission, whether it supports the inclusion of the entire Greek-Cypriot-Israeli project, or just the Crete-Cyprus-Israel segment, on a new PCI list being prepared by the EU body. The previous Syriza government’s energy ministry supported the latter, taking national control of the domestic Crete-Athens section.

The energy ministry intends to forward a letter, officially expressing its position on the matter, within the next few days, sources have informed.

 

Top-level meeting between minister, lenders for PPC

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Newly appointed energy minister Costis Hatzidakis is expected to hold his first meeting with the country’s lenders either tomorrow or Friday for a session that should put to the test the minister’s plans for the future of the power utility PPC, currently struggling and incurring losses.

Initial reports had indicated the first round of talks – following the July 7 legislative election that brought the main opposition conservative New Democracy party into power – would be held between technocrats. But the opening session has been upgraded to a top-level meeting.

No commitments are expected to emerge from the opening session. Instead, Hatzidakis, the energy minister, will seek to get an idea as to where the country’s lenders stand on a new recovery plan for PPC envisioned by the government.

The PPC recovery plan will not be announced until its finalized shape has been agreed to between the Greek government and the country’s lenders. Though it remains unknown as to when this could be, the plan will certainly not be disclosed before the appointment of a new PPC chief executive.

Manolis Panagiotakis announced his resignation from the state-controlled power company’s top post shortly after the July 7 election.

Scheduled to take part at an Economist Conference in Athens today, the Greek energy minister is expected to highlight his concerns over PPC’s frail financial state; the need for a restructuring plan at the corporation; as well as the operating pressure faced by the grid, which Hatzidakis, dreading blackouts at the beginning of his tenure, has already described as being on the edge.

DEPA working on minor issues, anticipating leadership change

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Officials at gas utility DEPA are currently patching up on minor matters as they await bigger decisions, including the appointment of a new leadership, from the newly elected New Democracy government’s energy minister Costis Hatzidakis.

There have been no reports so far on candidates that could replace DEPA chief executive Velissarios Dotsis, appointed recently in an interim role.

The new energy minister’s team is currently focused on finding a replacement for former power utility PPC boss Manolis Panagiotakis, who resigned shortly after last weekend’s elections.

However, it is a matter of time before the energy ministry also turns its attention to DEPA and engages itself with the search for a new head official.

The current DEPA leadership is taking care of minor issues that have accumulated as a result of an administrative crisis at the gas utility over the past few months.

These include a plan for the addition of 6 or 7 auto gas stations to DEPA’s current network of 13 stations. This project is entitled to EU funding. Delays have jeopardized this funding.

Crete grid link project tenders headed for new extension

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Bidding deadlines for two tenders concerning the respective procurement of cables and transformers for the Crete-Athens grid interconnection, a project that is urgently needed to prevent a looming energy shortage on Crete, are headed for an extension.

Ariadne Interconnector, an SPV subsidiary established by power grid operator IPTO for the project’s development, will need to extend its bidding deadlines for the two tenders as AEPP, the Authority for the Examination of Preliminary Appeals, looking into action taken by Eurosia Interconnector, a consortium of Cypriot interests heading the wider PCI-status Greek-Cypriot-Israeli grid interconnection, has deferred its hearing for July 22 from July 15.

Euroasia Interconnector has been at odds with IPTO for development control of the wider project’s Crete-Athens segment.

The deadlines for the tenders now coincide with AEPP’s new date for the hearing. The deadline for the tender concerning the procurement of cables was previously set for July 8 before being extended to July 22. The tender for transformers was originally set for July 22.

Both tenders cannot proceed until AEPP has reached a decision on the dispute between IPTO and Eurosia Interconnector.

IPTO and RAE, the Regulatory Authority for Energy, have already submitted their cases for the AEPP hearing.

According to pundits, Eurosia Interconnector’s chances of a decision in its favor are minimal, at best.

The Cypriot consortium’s decision to take its case to AEPP has been interpreted as a time-buying initiative taken with the hope of gaining the support of the newly elected Greek government.

While in opposition, the New Democracy party, which won last Sunday’s Greek elections, had not made clear whether it supported moves by IPTO, RAE and the ex-energy minister Giorgos Stathakis that ended up giving the Ariadne Interconnector subsidiary control of the Crete-Athens segment.

 

RES sector growth a top priority for new energy minister

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Further and swifter renewable energy growth is a top priority for the newly appointed energy minister Costis Hatzidakis, as he made clear at the ministry’s handover ceremony earlier this week.

The Prime Minister-elect Kyriakos Mitsotakis has also ranked the RES sector as a top priority in instructions forwarded to his energy minister.

In the lead-up to last weekend’s elections, highly ranked RES sector officials complained that the current level of bureaucracy and other administrative obstacles were stifling renewable energy plans.

Citing related studies, Giorgos Peristeris, president at ESIAPE, the Greek Association of Renewable Energy Source Electricity Producers, warned that investment plans worth 8.5 billion euros for renewable energy, energy storage and grid interconnection projects are in danger of not being executed as a result of the bureaucracy.

Panagiotis Ladakakos, the chief official at ELETAEN, the Greek Wind Energy Association, has also complained of high levels of bureaucracy troubling the RES sector.

The accumulation of problems created by slow licensing procedures at RAE, the Regulatory Authority for Energy, as well as slow court decisions and environmental approvals for projects, can end up delaying projects by as many as 20 years, officials have noted. This is a major disincentive for foreign investors otherwise interested in the Greek market, they added.

Experienced Hatzidakis tipped to assume energy portfolio

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Center-right New Democracy party deputy Costis Hatzidakis, possessing experience in energy sector matters, is rated the outright favorite to assume the new ND government’s energy and environment portfolio, sources have informed.

This choice for energy minister – if confirmed later today, when the new administration’s cabinet will be announced – highlights Prime Minister-elect Kyriakos Mitsotakis’ emphasis on the energy portfolio as well as his realization that there is no time to waste in the sector.

In the past, Hatzidakis has served as a development minister responsible for energy, while, in the lead-up to yesterday’s elections, played a leading role in shaping and projecting the ND party program for the energy sector. It included party proposals for the power utility PPC, under severe financial pressure.

Hristos Staikouras is being tipped to take over the helm at the finance ministry, while Adonis Georgiadis, also an ND deputy, is favored for the economy ministry, expected to be transformed into the investment ministry.

New ND party arrivals recruited from the center-left of the country’s political spectrum, including Mihalis Hrysohoidis and Kyriakos Pierrakakis, are also expected to figure in Mitsotakis’ government. The two officials are expected to take on consumer protection and digital policy duties, respectively.

 

Gas conversion of Cretan plants added to island sufficiency plan

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The conversion of power utility PPC’s oil power plant facilities in Crete’s Atherinolakos location into gas-fueled units appears to be the latest addition to a package of solutions intended to ensure electricity sufficiency on the island as of 2020, when high-polluting units, in their current form, will need to have been withdrawn from the system as part of the EU’s environmental policy.

The Atherinolakos units, offering a 100-MW capacity, were granted lifetime extensions a few days ago by energy minister Giorgos Stathakis, unilaterally, without European Commission approval, for continued operation until a grid interconnection project linking Crete with the Peloponnese is completed.

These PPC units have already been given an extension by the European Commission until the end of this year.

The energy minister’s plan intends to keep the Atherinolakos units running until the Crete-Peloponnese interconnection, Crete’s small-scale link, is completed. A large-scale interconnection linking Crete with Athens is also in the making.

The Atherinolakos units could end up becoming part of a long-term solution for Crete that will depend on LNG shipments to Crete.

 

Crete offshore licenses a step away from finalization

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A decision by the Court of Audit, one of Greece’s highest ranking courts, approving two hydrocarbon exploration and production licenses for offshore blocks south and west of Crete to a consortium comprised of Total, ExxonMobil and Hellenic Petroleum (ELPE) paves the way for the signing of finalized agreements.

This could take place at a signing ceremony on Crete prior to the July 7 snap elections with the participation of energy minister Giorgos Stathakis.

The three companies, keen to begin exploration activities before the end of the year, have urged the government for a swift completion of procedures.

The two agreements will still need to be ratified in Parliament following next month’s general elections before the three-member consortium can commence work.

The Court of Audit’s favorable decision represents one of the final steps in a procedure started in 2017, when Total and ExxonMobil had expressed interest.

 

DEPA Trade tender launch likely within May, minister tells

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A tender offering investors a 50.1 percent stake of DEPA Trade, one of two new entities that have emerged from a company split at gas utility DEPA, could be launched within May, the country’s top energy sector authority has noted.

The prospect, expressed yesterday by energy ministry Giorgos Stathakis on the sidelines of an annual conference held by HAEE, the Hellenic Association for Energy Economics, has been confirmed by TAIPED, which expects to launch the tender some time during the latter half of the current month.

DEPA’s leadership has declared it is set for this step. Chief executive Dimitris Tzortzis expects a business plan for the natural gas utility’s commercial interests to be ready within the next week or two.

Sub-contracted external associates hired by DEPA on a regular basis and promised job security amid the company’s transformation will be transferred to DEPA subsidiaries – Attiki Natural Gas, EDA and DEDA – before ending up on payrolls, according to the plan.

A number of investors named by DEPA in the recent past as possible buyers are expected to be joined by US and UK funds, according to the company.

As for DEPA’s cash reserves, 110 million euros will be transferred to DEPA Trade and 70 million euros to DEPA Infrastructure, the other new entity emerging from the DEPA split.

Responding to reports claiming that a tender for DEPA Infrastructure could precede that of DEPA Trade – which would represent a turnaround in the order of events as they have been presented until now – Tzortzis, the gas utility’s head, said this is theoretically possible but would require a legislative revision.

Stathakis, the energy minister, and his associates are expected to hold talks during the current week on the next ownership steps to be taken for ELPE (Hellenic Petroleum), after a recent tender offering a 50.1 percent stake failed to produce a result. This failure has impacted the DEPA sale procedure as ELPE holds a 35 percent share of the gas utility.

The Greek State offered 20 percent of its 35.48 percent ELPE share and the Latsis group’s Paneuropean Oil 30.1 percent of its 45.47 stake.

 

 

 

 

ELPE ownership decisions to be sought in coming days

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The uncertainty concerning the next steps to be taken for the future ownership of ELPE (Hellenic Petroleum) could become clearer this week as the country’s lender representatives pursue their post-bailout review in Athens.

The position to be adopted by the lenders on ELPE will be particularly important on how the matter plays out. They could insist on a privatization repeat for ELPE’s 50.1 percent following the initial effort’s failure to produce a result. If so, a relaunch would not take place until after this month’s European elections, and, almost certainly, the Greek elections, due in autumn.

Attracting investors during the pre-election period would be difficult to accomplish. ELPE’s privatization is not a market restructuring measure but is purely driven by cash-collecting incentives.

The Latsis group, whose Paneuropean Oil contributed 30.1 percent of its 45.47 ELPE stake to the initial sale effort, wants to hold on to its stake in the listed petroleum company, according to sources. The Greek State offered 20 percent of its 35.48 percent share in the ELPE sale.

Energy minister Giorgos Stathakis has ruled out the possibility of any sale of the Greek State’s ELPE stake through the bourse.

The sooner ELPE’s future ownership is cleared up the easier it will become for authorities to push ahead with the privatization of DEPA Trade, one of two new entities that emerged from a recent split at gas utility DEPA. ELPE holds a 35 percent stake in DEPA.

The petroleum group, which has made clear its interest for a bigger role in Greece’s natural gas market, may seek to increase its DEPA stake.

RES auction amounts limited, mature projects insufficient

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RAE, the Regulatory Authority for Energy, will not offer the entire RES capacity amount allotted for 2019 at two upcoming RES auctions as market data has shown an insufficient number of mature projects for full absorption.

Solar energy investors with projects of between 500 KW and 20 MW will be offered 300 MW through the auction’s first category, while, in the other category, a further 300 MW will be offered to wind energy investors with projects of between 3 and 50 MW.

A ministerial decision signed by energy minister Giorgos Stathakis, offering 430 MW for solar energy projects and 400 MW for wind energy projects through RES auctions in 2019, was published in the government gazette last Friday.

The results of RES auctions staged last July and December, as well as data on the current amount of mature projects, were used by RAE for its calculations restricting the RES auction capacities offered.

RES auction participants have until May 31 to register. However, the date of the RES auction has yet to be set.

Amynteo silence adds to investor jitters over PPC sale

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A decision by the main power utility PPC chief Manolis Panagiotakis to drop from a recent board meeting’s agenda the subject of a closure of the now-expired Amynteo lignite-fired power station is believed to have added to the ambiguity surrounding the utility’s relaunched sale package of lignite units.

Panagiotakis’ unexecuted announcement has been interpreted as an attempt to send out a positive message to investors as Anynteo’s eventual withdrawal from the grid would make other power stations units included in PPC’s sale package more competitive.

PPC is not planning an immediate withdrawal of Amynteo. The power plant’s closure is expected in late 2020 or early 2021, when a 32,000-hour extension offered by the government through a ministerial decision last November – as a further extension to Brussels’ 17,500 hours – should expire.

Investors eyeing PPC’s sale package, whose initial sale effort failed to produce a result, are still waiting for clarity on a number of issues.

Details remain pending on a profit and loss sharing mechanism expected to apply for the Meliti and Megalopoli units offered in the package. Investors are waiting to see these details in an updated SPA.

Also unclear are the developments of PPC’s effort for an improved lignite supply agreement with Lignitorihia Ahladas, the operator of the Ahlada mine feeding the Meliti power station. Improved price and quantity terms are being sought. Energy minister Giorgos Stathakis is mediating these talks.

Minister promises lifeline extension for PPC’s Kardia power station

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The main power utility PPC’s Kardia power station in northern Greece’s Kozani area will continue to operate beyond May, when the facility’s EU-approved 17,500-hour lifespan expansion is due to expire, a union group leader has contended following talks with energy minister Giorgos Stathakis, mindful of upcoming elections.

The government has agreed to strict European Commission withdrawal terms for the Kardia unit.

One of the Kardia power station’s units, Kardia III, has just 13 days of operating time remaining.

In comments to local media, Moschos Moschou, the head of PPC’s Spartakos union group, representing workers employed in electricity production, has assured that a lifespan extension beyond May would be granted to Kardia as part of Greece’s effort to meet energy sufficiency and energy security requirements.

Moschou and the energy minister also discussed the lifeline extension of another PPC unit, Amynteo, given an additional 32,000 hours from the previous 17,500.

PPC has already received four different Amynteo environmental upgrade proposals from the Mytilineos, Copelouzos, Peristeris and Intrakat groups. No agreements have been reached.

Private-sector investors will need to participate in any Amynteo power station upograde, the energy minster told Moschou, according to the union leader.

 

 

 

Minister: DEPA hirings will be limited to full-time associates

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Gas utility DEPA hirings of workers currently subcontracted as associates will be limited to persons covering continual company needs, energy minister Giorgos Stathakis told parliament yesterday in response to recent reports contending he is preparing to have all of the utility’s 200 subcontracted workers added to the payroll.

Reports a fortnight earlier contended the minister had bowed to union pressure and, mindful of upcoming elections, was preparing to distribute the gas utility’s subcontracted workers to three gas utility supply and distribution subsidiaries as a means of bypassing ASEP (Supreme Council for Civil Personnel Selection) employment restrictions imposed by the bailout.

An upcoming DEPA privatization plan entails a split of the utility into DEPA Trade and DEPA Infrastructure, included in an energy ministry draft bill that has been submitted to parliament for a vote tomorrow.

DEPA’s overall payroll cost will remain unchanged through the new DEPA companies to emerge from the split, the minister also informed. This comment has troubled current DEPA staff members as it implies salary cuts will need to be made if some of the subcontracted associates are added to the payroll.

Preparations for the DEPA Trade and DEPA Infrastructure business plans began ten days ago and will be ready by April 10, it has been revealed. Staff decisions will need to be made by then.

DEPA staff to end up at DEPA Infrastructure – whose majority stake will remain under state control – will be comprised of employees at gas supplier EPA Attiki, covering the wider Athens area; DEDA, responsible for gas network development in regions not covered by the parent company; and DEPA’s infrastructure division. A voluntary exit plan will be offered prior to the split.

At DEPA Trade, whose 50.1 percent majority will be placed for sale, employees will be protected by a three-year job security plan.

 

 

 

Crete exploration license by May, minister assures ExxonMobil deputy

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Exploration and production agreements for two offshore blocks west and southwest of Crete awarded a year-and-a-half ago to a consortium comprising ExxonMobil, Total and ELPE (Hellenic Petroleum)  will be ratified in Greek parliament by May, the latest, energy minister Giorgos Stathakis has assured a leading ExxonMobil official.

Tristan Aspray, ExxonMobil’s Vice President of Exploration for Europe, Russia, and the Caspian, has apparently accepted the minister’s commitment with satisfaction, but this remains unconfirmed.

The two officials met on the sidelines of the Delphi Economic Forum, a high-profile four-day event that ended yesterday.

Consortium officials have begun showing signs of frustration over the slow-moving licensing procedure for the two offshore Crete blocks.

In a carefully worded statement, the US Ambassador to Greece, Geoffrey R. Pyatt, who also attended the forum, noted he was eager to see the bureaucratic delays come to an end so that exploration work off Crete could commence.

The tender for the two offshore Crete blocks was launched in December, 2017. The ExxonMobil-Total-ELPE consortium submitted its bid in March, 2018 before it was endorsed four months later. If parliament ratifies the related licenses in May, the entire procedure will have taken 18 months to complete.

RAE requests more IPTO details on Crete link project to set WACC figure

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RAE, the Regulatory Authority for Energy, has requested additional data from power grid operator IPTO to determine the weighted average cost of capital (WACC) and regulated yield for Ariadne, an SPV established by the operator to develop the Crete-Athens grid interconnection.

Moves are also being made to recategorize the Crete-Athens link as a national project rather than a segment of the wider PCI-status Greek-Cypriot-Israeli electricity grid interconnection project, as has been the case until now.

Euroasia Interconnector, a consortium of Cypriot interests heading the wider project, has just warned that the loss of the Crete-Athens segment’s PCI status will prove costly for Greek consumers.

IPTO and Euroasia Interconnector have been at odds for control of the wider grid interconnection’s Crete-Athens segment.

Details requested by RAE from IPTO include a precise budget figure for the Crete-Athens link’s total construction cost as well as specific completion and electrification dates.

Until now, IPTO has provided a construction cost figure of 996.4 million euros, not including support and extraordinary costs. A Grant Thorton study has budgeted the project at 1.1 billion euros. Also, a 2022 completion date has been provided but RAE wants the exact month declared.

Energy minister Giorgos Stathakis has set a February 28 deadline for Euroasia Interconnector to recognize IPTO’s Ariadne as the sole project promoter for the Crete-Athens segment.

Euroasia Interconnector is not expected to accept. If so, RAE, immediately following the February 28 deadline, will award the Crete-Athens project to Ariadne as a national project included in IPTO’s investment program.

 

 

Ministry committee receives Crete hydrocarbons impact study

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An environmental impact study concerning offshore hydrocarbon exploration activity planned for south and southwest of Crete has been forwarded to a special energy ministry committee by EDEY, the Greek Hydrocarbon Management Company, following a related public consultation procedure.

This special committee is now in the process of assessing the study before delivering its findings to energy minister Giorgos Stathakis for authorization. Once signed by the minister, the environmental study, along with licensing agreements drafted for offshore plots in the aforementioned regions, will be sent to a supervisory committee for a final legality check before heading to parliament as a draft bill for ratification.

Speaking at the Athens Energy Forum yesterday, Stathakis, the energy minister, estimated that licenses offered for Crete, as well as the Ionian Sea, would be submitted to parliament in approximately two months.

A consortium comprising Total, ExxonMobil and ELPE (Hellenic Petroleum) has been awarded licenses around Crete, while Repsol and ELPE have secured a license for an Ionian Sea block.

Both investment teams are hoping for a swift completion of bureaucratic procedures to commence their exploratory work as soon as possible.

National Energy and Climate Plan until 2030 set for Brussels delivery

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Greece’s National Energy and Climate Plan until 2030 could be submitted to the European Commission today, or, if not, will definitely be delivered to Brussels by the end of the month for approval, energy ministry sources have informed.

The plan, which presents investment plans exceeding 30 billion euros and envisioned for development over the next decade, embodies the country’s international commitments aimed at tackling climate change. It serves as road map for Greece’s green-energy future.

Greece’s National Energy and Climate Plan is based on three main components. It sets an energy savings objective that is expected to improve at an annual rate of 1.5 percent. Approximately 50,000 houses will need to be environmentally upgraded each year if such a rate is to be achieved, according to the plan.

The plan also envisions an increased RES energy role to 32 percent of total consumption and between 55 and 57 percent of electricity production, as well as an objective to restrict lignite for electricity generation to 17 percent. RES investments of 8.5 billion euros for electricity production are envisioned in the National Energy and Climate Plan.

The plan’s third main component focuses on combating energy poverty as a means of making energy accessible for all. Energy minister Giorgos Stathakis has described this objective as a top priority for the government.

Swift Brussels response on CAT plan promised by Moscovici

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Greece has been promised solid indication of the European Commission’s intent on the country’s effort to secure CAT remuneration for two lignite-fired power stations, Megalopoli and Meliti, included in main power utility PPC’s bailout-required disinvestment of lignite units.

CAT remuneration for the power stations is seen as a crucial incentive to draw investors to the sale.

Though Brussels is not expected to deliver its decision on Greece’s CAT plan any sooner than April, which stretches well beyond the schedule of PPC’s ongoing disinvestment effort, the European Commissioner for Economic and Financial Affairs Pierre Moscovici, who met yesterday with Greek energy minister Giorgos Stathakis, is believed to have promised a swift response in the form of notification.

PPC has already announced it will upload this notification, regarded as the European Commission’s final position with virtually absolute certainty, into the disinvestment’s data room for investors to appraise. The European Commission’s views on the Greek CAT proposal’s details, including duration, remuneration levels and procedures, are expected to be included in the notification.

Stathakis, the energy minister, also held another important meeting yesterday with officials of EVIKEN, the Association of Industrial Energy Consumers, to discuss the government’s efforts aimed at securing  Greece’s demand response mechanism (interruptability), a pivotal energy cost-saving tool for industry.

EVIKEN officials emerged content from the meeting and confident the energy ministry is committed to this effort. Details concerning the ministry’s moves to be made on the matter have not been disclosed.

Greece moving closer to sales of ELPE and DEPA, minister asserts

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Greece has crossed a key hurdle to the sale of a controlling stake in ELPE (Hellenic Petroleum) as it rushes to meet its privatization pledge after emerging from its third and final bailout.

In a Bloomberg interview, energy minister Giorgos Stathakis said Greece has reached an accord with potential buyers of the ELPE stake – valued at the current market price of 1.16 billion euros and seen as a flagship privatization – over the control of its wholly owned unit, ELPE Upstream. Under the accord, the state will own 50.1 percent of ELPE Upstream, which holds Hellenic Petroleum’s hydrocarbon exploration and concession rights.

“Talks with the potential buyers of the 50.1 percent stake in Hellenic Petroleum over Elpe Upstream have finished and all issues have been resolved,” Stathakis said in the interview in Athens.

The push to see the sale through comes after Greece, in August, ended its final international bailout following its decade-long financial crisis. Privatizations, a cornerstone of the bailout program’s rebound plan, haven’t been popular with the leftist government of Prime Minister Alexis Tsipras. Once famous for dragging its feet, the government is now interested in “stepping up the privatization drive,” Grigoris Stergioulis, chairman of Enterprise Greece, the nation’s trade and investment promotion agency, said in August.

Assets in addition to Hellenic Petroleum being prepared for sale include parts of DEPA, Greece’s natural gas supplier, and plants owned by PPC, the country’s state-controlled and largest electricity provider.

Binding offers

Greece’s state-asset sale fund qualified in July two investors for the controlling stake in Hellenic Petroleum – Glencore Energy UK Ltd and Vitol Holding BV – allowing them to continue with the process. The stake is being sold by Paneuropean Oil & Industrial Holdings SA and the Hellenic Republic Asset Development Fund, the refiner’s first and second-largest shareholders.

“While some details remain for the shareholders’ agreement, we expect binding offers on Jan. 28,” Stathakis said. The two companies have concluded their separate ventures for making bids, he said.

On DEPA, Greece is preparing a draft law to split the natural gas supplier into two parts to pave the way for the sale of the company, Stathakis said. The law to create DEPA Infrastructure and DEPA Commercial will be presented to parliament by the end of January, he said.

US foray

Greece will sell the majority of DEPA Commercial, retaining a 15 percent stake. DEPA Infrastructure will comprise the country’s gas network and international projects, including major investments in pipelines, and this part will remain under state control. Greece will invite investors to show interest in the sale during the first half. The state currently controls a 65 percent stake in DEPA while Hellenic Petroleum owns the remaining 35 percent.

DEPA’s purchase in December of the first cargo from Cheniere Energy Inc.’s Corpus Christi liquefied natural gas export terminal, the newest such outlet in the US, opens the way for the regular supply of US LNG to Greece, the minister said.

“Discussions have begun concerning amounts and price and the outcome is a matter of months,” Stathakis said.

Meanwhile, PPC has approved an agreement for investors to buy its lignite coal-fired plants in Meliti and Megalopoli, Stathakis said. The sale is part of an effort to meet the demands of Greece’s creditors for the company to reduce its dominance in the country’s electricity market. Binding offers are due shortly, Stathakis said. (Bloomberg)

Tesla presents microgrid plan for non-interconnected islands

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US energy company Tesla has presented a plan for the development of a microgrid on Greece’s non-interconnected islands at a meeting yesterday with Greek energy minister Giorgos Stathakis.

The Tesla proposal, a system dubbed Powerpack and based on solar panels and large-capacity batteries, has already been developed on American Samoa, unincorporated US territory including five main islands in the South Pacific Ocean, as a replacement for inefficient diesel-fueled generators consuming 1,400 liters of diesel per day.

Tesla’s system for American Samoa entailed installing solar panels with a 1.4-MW capacity and 60 Tesla Powerpacks for a battery energy storage capacity of 6 MWh.

Regarded as one of the world’s most advanced electricity microgrid solutions, this system ensures electricity supply for as many as three days without sunshine, while its batteries may be fully recharged in seven hours.

According to Tesla, the Powerpack system’s resulting energy cost ranges between 170 and 135 euros per MWh, which is 15 to 30 percent less than the cost of diesel-generator electricity, reaching 200 euros per MWh.

Tesla’s power-network proposal for Greece’s non-interconnected islands, growing into a major attraction for energy sector investors, is the latest following presentations by companies such as Enagas, Socar and EdF.

Lower RES costs offering new growth potential for sector

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Lower RES costs, now comparable to those of conventional energy sources, are crucially important for the sector’s development, energy minister Giorgos Stathakis noted following Monday’s second RES auction for the year, during which investors bid aggressively to lower production tariffs for new project investments.

The minister, who rushed to hail the development ahead of an official announcement by RAE, the Regulatory Authority for Energy, on the session’s price levels, said he felt vindicated by the ministry’s decision to set ambitious energy mix RES targets as part of the national energy and climate plan.

RES company officials also expressed satisfaction as lower prices pave the way for the development of new units, especially wind and solar energy facilities. The validity of an older argument stating consumers are being forced to shoulder costly renewable energy production is now beginning to fade.

A number of factors have contributed to the drop in RES prices, a key reason being the achievement of significant RES technology advancements (next-generation turbines and solar panels), reducing facility installation costs and ensuring higher efficiency.

Also, the development of new wind energy parks at more accessible locations is now more common as high-altitude areas, a priority in the past due to their greater production potential, are gradually running out and, in addition, no longer necessary as a result of the progress in turbine technology.

The stronger prospects of the Greek economy, aiding financing costs, has also helped lower RES prices.

 

 

Draft bill for DEPA’s sale-related split expected early December

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An energy ministry draft bill for public gas utility DEPA’s split into two companies, DEPA Infrastructure and DEPA Trade, as part of its privatization procedure, is expected to be submitted to parliament within the first ten days of December, following yesterday’s Competition Commission approval of the split.

The commission’s decision on the split, the final obstacle before stakes are offered to investors, may have come as relief to the energy ministry and DEPA’s board, but ministry officials, now penning the draft bill, remain undecided on jobs at the gas utility and its subsidiaries.

DEPA’s own team is not so much of a concern. The ministry’s job concerns are mostly focused on the futures of some 150 sub-contractors working on a virtually permanent basis with DEPA and associated firms.

According to sources, the majority of DEPA staff wishes to be transferred to the split’s resulting DEPA Infrastructure company, to remain under the control of the Greek State.

According to Greece’s 2019 budget, submitted to parliament yesterday, a 14 percent stake of DEPA Infrastructure will be privatized along with a 50.01 percent stake of DEPA Trade.

“The basic idea is to split the company into two parts, offer a majority stake of the commercial division to a strategic investor and maintain the Greek State’s strong presence in the distribution network,” energy minister Giorgos Stathakis told reporters.

Greece supporting energy projects ahead of FYROM vote

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Energy minister Giorgos Stathakis will head a Greek delegation of key energy-sector figures on a visit to the Former Yugoslav Republic of Macedonia (FYROM) for energy investment talks with FYROM government officials on September 24 and 25.

The visit has been timed just days ahead of the neighboring country’s September 30 referendum asking voters if they support EU and NATO membership by accepting a recent agreement between their country and Greece over a new name for FYROM, the Republic of Northern Macedonia, to be used for both domestic and international purposes.

The name dispute, 27 years long, has kept the smaller and younger country out of international institutions.

The two sides have not ruled out the signing – during the two-day visit – of Memorandums of Cooperation for energy projects that would provide energy security to the neighboring country and highlight Greece’s prospective role as an energy hub.

Representatives of Greek natural gas grid operator DESFA, Hellenic Petroleum (ELPE) and power grid operator IPTO will join Stathakis, the energy minister, on the visit, also seen as an attempt by Greece to encourage a “yes” vote in the referendum.

 

Reintroduced fuel inspection bonus pay not producing results

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The reintroduction of a bonus pay system for inspectors at KEDAK, a fuel handling and storage controls authority, stopped at the beginning of 2016 and reinstated late in 2017, has done little to increase the number of checks made with the intention to clamp down on fuel smuggling and tampering activity.

A total of just 720 inspections on fuel traders were made in the first half of 2018 and a mere two offenders were reported, prompting fines totaling 126,000 euros, energy minister Giorgos Stathakis recently told parliament in response to a question by an opposition party MP.

The General Chemical State Laboratory still needs to conduct tests on seven gasoline and five diesel samples collected by KEDAK inspectors, meaning that, at best, the number of offenders in the first half of 2018 will reach 14 in total.

Head inspectors are paid 97.15 euros per in bonus money for every check conducted and their assistants receive 77.72 euros. These amounts are increased by 20 percent for inspections conducted on Sundays, after hours, and on public holidays. The bonus pay system includes a monthly limit of 300 euros per inspector.

The number of fuel inspections registered has been on a downward trajectory in recent years. A total of 4,018 inspections were made in 2014 and 1,875 in 2016. The numbers have since slid further.

 

New Mykonos grid interconnection to save €80m per year, energy minister tells

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The country’s new electricity grid interconnections represent a significant step along the way towards a new era, energy minister Giorgos Stathakis noted during a speech at a ceremony held yesterday to inaugurate an interconnection project linking the island Mykonos with the mainland grid.

This project, which completes the first phase of the Cyclades grid interconnection with the mainland, promises annual savings of 80 million euros, otherwise spent on high-cost, high-polluting electricity generation at power stations operating on the islands. The operating costs of these facilities are covered by consumers through public service compensation (YKO) surcharges added to electricity bills.

The minister told the ceremony, attended by Prime Minister Alexis Tsipras, that he expects the Cretan submarine power cable interconnection to soon be completed. This project’s completion, covering electricity supply to and from Crete, the country’s biggest and most populous island, will lead to further public service compensation savings and also offer major environmental benefits. YKO costs in Greece amount to between 600 and 700 million euros per year.

Stathakis, during yesterday’s speech, also made reference to EU environmental targets for 2030. An EU objective has been set for the renewable energy sector to provide 32 percent of electricity consumed. The EU is also aiming for a 32.5 percent electricity consumption reduction compared to 2009 levels.

If these targets are to be achieved, the RES sector will need to double over the next decade and energy consumption will need to drop at a rate of nearly 1.5 percent per year.

The interconnections will provide crucial support for Greece in the country’s effort to reach these goals as current electricity production on the islands is harmful for the environment.