Plan for subsidized lower-cost RES power to industry explored

The energy ministry is working on a transitional state-support mechanism that would offer industrial consumers lower-cost electricity stemming from renewable energy sources.

The European Commission offers conditional approval to state aid resulting in green-energy access for energy intensive consumers.

The energy ministry’s effort to establish such a mechanism comes following the exclusion, from a government list of proposals for EU recovery fund support, of a plan envisaging power purchase agreements (PPAs) between industrial enterprises and RES producers.

The ministry’s new effort is expected to be a variation of the plan not included in the government’s list of proposals seeking support through the European Commission’s Recovery and Resilience Facility.

The ministry acknowledges that, under present conditions, direct and mutually beneficial agreements between energy-intensive industrial consumers and RES producers cannot be achieved, unless such deals concern companies belonging to vertically integrated groups.

The plan being explored would ensure RES producers remuneration for a percentage of their output absorbed,  through the state-support mechanism, at fixed tariffs and extended periods.

Extra RES measures to simplify installation, operating permits

The energy ministry is preparing to include simplification measures it appears to have settled on for the second stage of RES licensing procedures, concerning installation and operating permits, into the one draft bill to also incorporate EU energy efficiency directives being adopted.

The draft bill is expected to be forwarded for public consultation within the next few weeks, prior to Greek Orthodox Easter, in early May.

Public consultation on the energy efficiency EU directives being adopted has already been completed.

The imminent draft bill is not expected to bring about any fundamental changes to the second stage of the RES licensing procedure, as had been the case with a major first-stage change abolishing production licenses, sources have informed.

Instead, a series of revisions will be introduced to remove various obstacles encountered by investors in the maturity process of their projects, the objective being to significantly reduce the time needed for project maturity.

The second-stage RES licensing simplification plan promises to lessen both the number of steps and supporting documents needed for RES installation and operating permits.

The energy ministry also intends to revisit the first stage to implement further improvements, needed to counter the flood of producer certificate applications being submitted to RAE, the Regulatory Authority for Energy.

The government has declared its objective is to reduce the overall RES licensing procedure in Greece to two years, the EU average.

Consumers owing at least two bills to face switching block

Electricity suppliers will have the right to prevent consumers from switching supplier if owing two or more overdue power bills without having registered for any installment-based payback plan, according to a proposal forwarded by RAE, the Regulatory Authority for Energy, following two rounds of public consultation on the matter.

Suppliers will have the right to submit power supply cut requests to the distribution network operator DEDDIE/HEDNO for consumers owing at least two months of overdue and unattended power bills, according to the RAE proposal, which has received the backing of all electricity suppliers.

A debt-flagging system to blacklist customers behind on at least two electricity bills will also be incorporated into the measure as a collective system accessible by all suppliers and the distribution network operator.

In the event that consumers with overdue electricity bills register for installment-based payback plans with their supplier, then move to a new supplier but stop servicing the payback program, the previous supplier will have the right to request power supply stoppages, even for pending amounts as little as 50 euros, sources informed.

RAE will now need to relay its proposal to the energy ministry for a ministerial decision enabling a revision of the country’s electricity supply code.

 

New energy communities framework to aid financing, loans

The energy ministry is working on a draft bill to completely reform the regulatory framework governing energy communities as part of a wider effort promoting RES growth in Greece.

The revisions will seek to align the country’s existing regulatory framework for energy communities with the respective EU framework through the adoption of a series of EU directives and also lift a number of obstacles and resolve problems that have arisen since its implementation in 2018.

These revisions will also aim to resolve the inability of energy communities to participate in financing support programs and help them overcome difficulties encountered when seeking to qualify for bank loans.

Small-scale PVs, RES projects to be given deadline extensions

Investors behind small-scale solar energy projects awarded non-auction tariffs and RES projects that have secured their tariffs through auctions will be given more time to complete their projects,  with current tariffs intact, as a result of pandemic-related delays for which investors cannot be held accountable.

Investors have faced delays, both in delivery of equipment as well as project construction.

The energy ministry has prepared a related draft bill that will be submitted to parliament for ratification, ministry sources have informed.

Though it remains unclear when this could be, the ministry sources ascertained the bill would be ratified imminently, prior to an April 30 completion deadline for small-scale PVs.

Solar energy projects awarded non-auction tariffs are expected to be given six-month extensions, while RES projects that have secured tariffs at auction will be given an additional ten months for completion. Completion of projects by the new deadlines will certify the tariffs they currently hold.

A six-month extension for small-scale PVs would give this category until October 30 to begin operating, and, as a result, certify tariffs of 65.74 euros per MWh.

Also, small-scale PVs incorporated into energy communities will certify tariffs of 68.86 euros per MWh if they are completed by the October 30 date.

PPC compensation mechanism, market test talks at crucial stage

The European Commission is expected to show its cards next week on Greece’s quest for lignite compensation mechanisms supporting power utility PPC and the results of a market test concerning the utility’s availability of lignite-produced electricity to third parties.

These issues are expected to be discussed in detail by energy ministry and Directorate-General for Competition officials during a virtual meeting next week, following correspondence as well as a virtual meeting, on March 8, between energy minister Kostas Skrekas and the European Commission’s Vice-President Margrethe Vestager, also Brussel’s Commissioner for Competition.

State-controlled PPC has requested a strategic reserve mechanism for its lignite-fired power stations, still needed but nowadays loss-incurring as a result of higher CO2 emission right costs, as well as compensation for its premature closures of these units, currently being phased out until 2023.

All still appears to be vague on PPC’s market test for third-party access to its lignite-based electricity. The test was completed some time ago, failing to attract any real interest from rival suppliers.

The percentage of lignite-based electricity made available by PPC, initially set at 50 percent of total lignite-fired output and then lowered to 40 percent, is viewed, by third parties, as too small for any real gains.  Brussels has yet to comment on the market test’s result.

 

Brussels reiterates call for single energy, water authority

The European Commission has reiterated, in latest contact with the energy and environment ministry, a recommendation for the establishment of a single Regulatory Authority for Energy and Water as an independent monitoring body with a broadened task range, including regulation of rules for investments, management and pricing of water, especially drinking water, energypress sources have informed.

This time around, the recommendations by Brussels come as part of a strategy promoting the development of a circular economy and sustainable growth.

The European Commission was prompted to readdress the issue as it believes the existence of 120 or so municipal water supply and sewerage companies around the country – each applying their own and inexplicable, to a certain extent, pricing policies – does not contribute to rational water management.

Single regulatory authorities supervising the energy and water sectors have already been established in many EU member states, including neighboring Italy.

This country’s initiative was discussed, among other topics, at a meeting yesterday between energy minister Kostas Skrekas and Italy’s Ambassador to Greece, Patrizia Falcinelli, sources noted.

The establishment, in Italy, of a single regulatory authority for energy, water and wastewater has led to impressive social and economic benefits, the Italian diplomat is believed to have informed the Greek minister during their meeting.

The energy ministry is reportedly working on a plan designed to broaden the tasks of RAE, the Regulatory Authority for Energy, sources informed, stressing finalized decisions had yet to be taken.

Ministry approves strategy for emission-free buildings by 2050

The energy ministry has approved a report detailing a long-term strategy for the renovation of public and private buildings into carbon emission-free units of elevated energy efficiency by 2050.

The aim is to transform existing buildings into units of virtually-zero energy consumption, the report noted.

Given the fact that buildings currently represent almost 40 percent of overall energy consumption, a large-scale upgrade of existing buildings and construction of new eco-friendly buildings requiring minimal energy consumption is deemed necessary.

This prospect would offer tremendous energy consumption and cost savings for dwellers and users while also improving living standards in terms of comfort, security and health, the report notes.

Energy efficiency upgrade measures concerning 2020 to 2030 are already being implemented through the National Energy and Climate Plan, aiming for upgrades of 12 to 15 percent of buildings over this ten-year period.

However, more ambitious measures, including stricter exterior surface insulation standards for new buildings and a greater number of upgrades at existing buildings will be needed for close-to-zero carbon emissions in this sector by 2050, according to the report.

Energy consumption at buildings will need to fall 8 percent by 2030, compared to 2015, and close to 40 percent by 2050, the report notes.

 

Recovery fund subsidies worth €400m for energy storage units

The energy ministry plans to allot 400 million euros of EU recovery fund money to the development of central electrical energy storage units. A related proposal by the ministry is headed for inclusion into the national recovery plan.

The aforementioned sum will be used to subsidize energy storage projects and will be made available to investors through a mechanism whose details are still being negotiated by government and European Commission officials.

Once the mechanism has taken final shape it will be forwarded to Brussels’ Directorate-General for Competition and Directorate-General for Energy for approval from both, necessary ahead of its implementation.

Though further details on the prospective support mechanism remain unknown, its subsidies are expected to be offered through a competitive procedure promoting selected projects.

At this point, developments have indicated both central energy storage technologies – pumped hydroelectric energy storage and accumulators (battery units) – will be eligible for subsidy support.

A study on central energy storage conducted by the National Technical University of Athens (NTUA) for RAE, the Regulatory Authority for Energy, has shown that a combination of these two technologies is the optimal solution, as each covers different needs.

DEDDIE network expansion plan held up by internal dispute

Though the distribution network operator DEDDIE/HEDNO, encouraged by the energy ministry, appears to have decided to move ahead with plans for an expansion of its medium-voltage network, the decision is not being implemented as a result of disagreements, within the company’s ranks, on the plan.

According to sources, rival factions have been formed at the operator over the project, holding it back. Officially, the operator’s regional services, which have completed all required preliminary work, have yet to be given the green light.

Clarity on the network expansion plan is crucial for certain investors, especially solar energy investors, facing a March 22 deadline set by RAE, the Regulatory Authority for Energy, for a forthcoming RES auction in May.

The energy ministry has been informed of the deadlock at the operator and is expected to intervene to settle the dispute.

RES spatial plan to be delivered within 2021, Action Plan notes

The completion of a RES sector spatial plan within the current year has been included in an energy ministry Action Plan for 2021, just published along with the respective action plans of all other ministries.

The energy ministry’s action plan lists interventions planned for 2021 in nine areas under its authority, including energy-sector privatizations, energy market reforms, support for decarbonization and recycling, adoption of circular economic principles, greenhouse gas emission reduction, the tackling of climate change effects, as well as green energy transition.

RES sector measures this year will help cut down the time needed by new RES projects for licensing procedures to two years, the ministry anticipates in its action plan.

It also expects the installation, by the end of the year, of at least 2,000 recharging units for electric vehicles in public areas, including along highways, and at private properties, including domestic and commercial.

On the privatization front, the energy ministry expects all seven energy privatization plans to have been completed or reached an advanced stage by the end of the year.

On energy market reforms, the adoption of a remuneration mechanism for grid sufficiency, to replace a transitional mechanism remunerating flexibility, is a standout feature.

The energy ministry also intends to adopt, as Greek law, an EU directive promoting energy storage and demand response systems.

The ministry’s action plan also anticipates the signing of agreements this year for distribution network development and RES penetration support. It also expects DEDDIE/HEDNO, the distribution network operator, to announce a tender for the installation of smart power meters within the current year.

Taking into account plans by DEDDIE/HEDNO and power grid operator IPTO, the ministry expects investments in distribution and transmission networks to reach one billion euros this year.

Investments for gas network upgrades and expansion are expected to reach at least 300 million euros, primarily driven by projects planned by gas distributor DEDA, covering all areas around the country except for the wider Athens, Thessaloniki and Thessaly areas.

On international projects, the action plan notes that a Greek-Bulgarian gas pipeline project, the IGB, promising to significantly diversify Greece’s gas sources, will be completed by the end of 2021.

A latest edition of the Saving at Home program subsidizing energy efficiency upgrades of properties, budgeted at one billion euros, will stimulate work on 80,000 buildings in 2021, according the energy ministry’s action plan.

This activity will contribute to a National Energy and Climate Plan objective for an improvement, by 2030, of energy efficiency at buildings by 38 percent, reducing energy consumption to levels below those registered in 2007, the action plan notes.

 

IPTO study backing PPC lignite compensation bid soon to EC

The energy ministry is preparing to forward to the European Commission a power grid operator IPTO study that underlines the ongoing necessity of the country’s lignite-fired power stations for grid sufficiency.

The IPTO study was requested by energy minister Kostas Skrekas to bolster a compensation request submitted to Brussels by state-controlled power utility PPC as a result of the grid’s ongoing need for lignite units, nowadays loss-incurring facilities due to elevated CO2 emission right costs.

PPC, Greece’s sole operator of lignite units, plans to phase out its lignite units over the next three years as part of the country’s decarbonization strategy.

The energy ministry expects to forward the IPTO study to the European Commission within the next fortnight. Greece is seeking compensation for PPC through a support mechanism for as long as these lignite units remain in use.

Last week, the European Commission began examining whether a similar German compensation request complies with EU rules and should be approved.

European Commission Executive Vice-President Margrethe Vestager suggested that the German plan theoretically complies with Europe’s green energy agreement and its goals.

“Within this context, our role is to safeguard competition by ensuring that compensation for premature withdrawal [of lignite units] is kept to a minimum,” Vestager commented. “The information available at this point is not sufficient to judge.”

EU hesitation to the German plan concerns a number of aspects, including the duration of the compensation period.

DESFA focusing on gas pipeline for west Macedonia network

Gas grid operator DESFA and energy ministry officials are currently discussing financing options that could be sought for the operator’s plan to develop a gas pipeline needed to facilitate a gas network expansion in northern Greece’s west Macedonia region, energypress sources have informed.

DESFA is awaiting approval by RAE, the Regulatory Authority for Energy, for its ten-year development plan, worth more than 545 million euros, including the gas pipeline project.

The talks between DESFA and the energy ministry officials are focused on public funding possibilities, primarily European, to cover part of the cost of the gas pipeline, which would ultimately help contain the level of network usage tariffs to be covered by consumers.

Local officials anticipate this network expansion plan should qualify for EU development fund support, even though EU policy generally does not favor gas projects, as it clearly represents a development project that promises multiple regional benefits, including replacement of lignite-based energy, on the way out as a result of the country’s decarbonization strategy.

Besides the EU recovery fund, officials in Greece are also considering the prospects of financial support from the EU’s National Strategic Reference Framework or a number of regional development programs.

The gas network expansion plan in the country’s west Macedonia region will require the development of a 130-km gas pipeline from Trikala, in the mainland’s mid-north, a project budgeted at 110 million euros.

According to sources, DESFA has revised an original pipeline route plan, bringing the pipeline closer to cities where medium and low-pressure networks for households and businesses are to be developed by gas distributor DEDA.

Government determined to eliminate anti-RES movement

Government policy for renewable energy sources is focused on facilitating their development and regards the RES sector as a key source of economic growth, deputy minister for environmental protection Giorgos Amyras has stressed, during a virtual meeting, to regional authorities around the country, who have raised obstacles of varying degree, frustrating government officials and renewable energy investors.

Though the resistance by regional and municipal authorities opposing RES development is widespread, it has been especially strong in northern Greece’s west Macedonia area.

Officials representing this region have not just responded negatively to environmental studies submitted by investors, but also called for the suspension of all renewable energy licensing procedures until a national spatial plan is completed, still at least two years away, and a legal framework enabling regional and municipal authorities to block RES investments in their respective regions is established.

RES investors have expressed their frustration to the energy ministry, which will be determined to appease players, already annoyed by the imposition of an extraordinary fee on existing RES units.

The ministry’s leadership will be desperate to eliminate this destabilizing factor that could potentially undermine the country’s investment climate.

Given the large number of licensing applications, investors have indicated they are prepared to inject sizeable capital amounts for RES projects, as long as they are not caught up in misadventures and bureaucratic delays.

Three key factors pivotal for offshore wind farm development

Spatial planning-licensing, grid connectivity and the remuneration formula for investors are three key factors pivotal to the development of the country’s offshore wind farm industry, investors and authorities agree.

Speaking at an event staged yesterday by ELETAEN, the Greek Wind Energy Association, the energy ministry’s secretary-general Alexandra Sdoukou stressed that the right formula for the sector’s development needs to be based on these three factors.

This industry’s course abroad, so far, has shown that a variety of options can be adopted for each of these factors. Fellow European countries have followed a range of paths, often contradictory. Greece’s energy ministry will need to seek solutions that best suit local conditions.

The spatial planning-licensing options range from a liberal model adopted by the UK, offering offshore wind farm investors maximum freedom to develop their investment plans, as they deem best, including in choice of appropriate location for maximum commercial potential, and, at the other end, a state-regulated model, as practiced in countries such as Denmark and the Netherlands. In this latter case, state regulatory authorities are responsible for determining installation locations and capacities, through studies of their own, before staging auctions.

ELETAEN’s proposal favors a mixed approach, through which the state would initiate the process by allotting wider areas for offshore wind farm development.

The wind energy association also favors a mixed approach for network connectivity that would require power grid operator IPTO to develop main lines in areas designated by the state for offshore wind farm installations.

Local authorities and players still appear to disagree on whether non-auction fixed tariffs will need to be offered to investors as a catalyst for this industry during its early stage of development.

Sdoukou, the energy ministry’s secretary-general, did not rule out such an approach at yesterday’s ELETAEN event. But, regardless of whether a preliminary stage of non-auction fixed tariffs will be offered, all sides seem to agree that tariffs, later on, will be exclusively made available to offshore wind farm investors through auctions.

 

Offshore wind farm framework within first half, auction in ‘22

A legal framework for offshore wind farms will be ready within the next few months, no later than the end of the year’s first half, enabling investments in this sector to begin in Greece, the energy ministry has assured.

The energy ministry’s leadership is expected to reiterate this stance, without offering further scheduling details, at an event to be staged today by ELETAEN, the Greek Wind Energy Association. Energy minister Kostas Skrekas and the ministry’s secretary-general Alexandra Sdoukou will be participating.

Norway, a country with extensive offshore wind farm knowhow, will be strongly represented at the ELETAEN event. The Norwegian Ambassador to Greece, Frode Overland Andersen, and Daniel Willoch, a representative of NORWEA, the Norwegian Wind Energy Association, will take part.

So, too, will Giles Dickson, CEO at Brussels-based WindEurope, promoting the use of wind power in Europe.

If all goes as planned with efforts being made by the energy ministry, as well as ELETAEN, a first auction for offshore wind farms in Greece could be staged within the first half of 2022.

Considerable progress has been made in recent months, but pending issues on important details concerning spatial and licensing matters, connectivity with power grid operator IPTO’s network, as well as a remuneration formula for investors, all still need to be settled. The overall effort is complex and involves a number of ministries.

Investor interest in offshore wind farms is high as studies project electricity costs concerning floating units in Greece will experience a 40 percent decline by 2050. This cost, according to an older European Commission study, was estimated to drop from 76 euros per MWh in 2030 to 46 euros per MWh in 2050.

The same study estimated Greece’s offshore wind farm capacity would reach 263 GW, a prospect promising investors sustainability for the development of such projects.

Norway’s Equinor has already expressed the strongest interest for offshore wind energy development in Greece. Denmark’s Copenhagen Offshore Partners, also a major global player, has also shown some signs of interest.

As for Greek companies, TERNA Energy, the Copelouzos Group, and RF Energy have, in the past, submitted applications for offshore wind energy parks to RAE, the Regulatory Authority for Energy.

 

RES projects to be granted deadline extensions due to pandemic delays

The energy ministry is considering to extend RES project deadlines, by a considerable number of months, both for projects that have secured tariffs at auctions or through non-competitive procedures, as a result of difficulties encountered by investors amid the ongoing pandemic, sources have informed.

The ministry has acknowledged the far greater degree of difficulty entailed in developing RES projects during the pandemic, the sources said. Problems encountered by investors have ranged from delivery delays of equipment to construction difficulties.

The ministry, according to the sources, is planning to extend, by six months, an existing April 30 deadline for non-auction tariffs secured by PV project investors. This would effectively enable small-scale 500 KW PV projects being developed by private investors to adopt an existing reference tariff price of 65.74 euros per MWh until October 30, when ready to operate.

Also, an existing tariff price of 68.86 euros per MWh for energy communities appears headed for an extension.

The ministry also intends to offer a ten-month deadline extension for the launch of projects being developed through competitive procedures without the loss of tariff prices already secured.

In addition, the ministry appears likely to extend a June 30 deadline for connection agreements concerning energy communities, up to 18 MW, formed through non-competitive procedures. Though the additional time to be granted for this category has yet to be decided, an extension ranging from three to six months is being considered.

Network damages remind of need for system upgrade

Power outages in many parts of Greece, including hard-hit Athens, as a result of collapsing trees that damaged overhead power lines during heavy snowfall earlier this week, have triggered discussion about the need for underground distribution networks and the network’s overall reinforcement and improvement.

Also, the installation of 7.4 million smart power meters, a project budgeted at 800 million euros, is a priority, distribution network operator DEDDIE/HEDNO officials stressed in the wake of network damages inflicted by the snowstorms.

Distribution network investments have fallen behind over the past eight years, sliding from approximately 280 million euros in 2012 to 123 million euros in 2017 and 2018 before slightly rebounding to 135 million euros in 2019 and an unconfirmed 178 million euros in 2020.

This reduction in network investments by DEDDIE/HEDNO has stemmed from poor financial performances by parent company PPC, the power utility, during the aforementioned period.

“Ten years of economic crisis in Greece has led to slight infrastructure regression,” the recently appointed energy minister Kostas Skrekas noted late last night, while crews were working overtime to restore damages caused by Medea, as the extreme weather system was dubbed. “We have allotted 200 million euros of recovery fund money for underground cable investments,” the minister added.

Speaking at an energy conference yesterday, the ministry’s secretary-general Alexandra Sdoukou said government plans for an upgrade of the country’s power distribution network would result in investments anticipated to total 3.5 billion euros over the next decade.

Ministry planning support mechanism for green PPAs

The energy ministry is seeking to establish yet another support mechanism, one subsidizing electricity absorbed by energy-intensive industries and other enterprises from renewable energy stations, whose cost the ministry aims to incorporate into the recovery fund.

Power purchase agreements (PPAs) reached between major-scale RES producers or aggregators with industries and other energy-intensive enterprises need to be reasonably priced if they are to ultimately prove beneficial for companies. The support mechanism would come into play here.

Green energy prices can be low and beneficial for industries and energy-intensive enterprises as RES stations have minimal operating costs once installed. These units merely have to cover investment costs and eventually make a profit for investors, once launched.

However, balancing market costs in target model markets, which significantly increase the cost of green electricity, also need to be factored into the equation.

The energy ministry will seek to subsidize balancing market costs by using recovery fund money as part of the effort.

The plan promises to help achieve two key goals. Firstly, RES stations will ensure supply channels for their production and thereby cement long-term performance figures, creating favorable conditions for bank loans financing green-energy investments. This would gradually increase the number of RES installations around the country.

As for the plan’s second key goal, energy-intensive industries and other enterprises with elevated energy costs would be ensured low-cost, eco-friendly electricity, subsequently boosting their level of competitiveness.

The support mechanism planned by the energy ministry will need to be endorsed by the European Directorate for Competition.

The government has high expectations for the success of this support mechanism as it acknowledges energy cost is a burden for Greek producers and other enterprises, including in the tourism sector.

Ministry measures to block unrealistic RES license bids

The energy minister appears determined to cool off what it sees as an overheated renewable energy market, fearing the relentless, often unrealistic, drive by prospective investors for producer certificates during recent licensing cycles, peaking with last December’s 1,864 applications representing 45.55 GW, will inevitably lead to side effects for the sector.

The ministry is now looking to introduce filters that would limit the processing of applications to those linked with investors possessing the financial means to carry out project plans, and to RES applications that have secured legal possession of required property.

Applicants may need to attach letters of guarantee or other documents proving their financial capability to their producer certificate applications. Such a measure, it is believed, will block the mass inflow of applications submitted by applicants who stand no chance of actualizing their project plans.

A second filter being considered at the ministry would immediately reject applications that do not possess the required land. This measure could be introduced in the form of a preliminary concession agreement concerning property use.

As part of this measure, procedures enabling property owners to block RES license applications submitted by investors who have not been given consent for land they intend to use will most likely be simplified. Under current rules, land owners seeking to reclaim their property need to apply for RES licenses themselves.

Net metering framework to be revised, EC wants tougher rules

The implementation of a new EU directive for the RES sector promises to bring about many changes to the net metering framework, which, amongst other things, will offer incentives for maximum concurrence, or direct consumption of the greatest possible quantities of RES-generated electricity.

Overall, the directive, which needs to be incorporated into Greek law by June, 2021, will introduce tougher regulations, require the sale of excess energy quantities and offer reduced offsetting time periods.

As net metering represents a form of energy storage, beyond the power meter, the new framework’s preparations have been handed to a committee formed by the energy ministry to put together a legal and regulatory framework for energy storage units.

The new net metering formula will remunerate RES energy that is injected into the grid network for not being instantly consumed. This remuneration amount will need to reflect production value. As a result, officials are considering to base these remuneration calculations on the day-ahead market price.

The resulting net-metering balance will be based on the value of production and consumption, a completely different approach to the current system, for which offsetting is based on the quantities of electricity that have been produced and consumed.

Brussels once again scrutinizing PPC high-voltage market share

Power utility PPC’s solid market share, especially in the high-voltage category, is once again being scrutinized by European Commission officials as part of Brussels’ ninth post-bailout review.

According to sources, European Commission authorities are seeking explanations from Greek officials for the state-controlled power utility’s unabating market share in the high-voltage category.

Brussels officials appear to be holding PPC responsible for selling specially priced industrial electricity at extremely low levels. Industrial consumers, also contacted by European Commission officials as part of the review, have attributed their customer loyalty to a lack of competition in Greece’s industrial electricity market.

PPC has held on to virtually all of its industrial customers, except for AGET (Heracles General Cement Corporation). MEL (Macedonia Paper Mills) abandoned PPC for a short period but has since returned.

Brussels officials are also believed to have questioned PPC’s electricity price levels in the low and medium-voltage categories, suggesting that these, too, are low.

It remains to be seen if this overall probing by the European Commission will develop into any form of official pressure.

Just days ago, energy minister Kostas Skrekas reached an agreement with the European Commission to end a long-running anti-trust case against PPC by agreeing to gradually end the utility’s monopoly of lignite-based electricity production. Despite the development, a number of Brussels officials appear to be keeping PPC in the frame.

 

Key issues in new minister’s first session with EC officials

Today’s first meeting, via teleconference, between Greece’s recently appointed energy minister Kostas Skrekas and European Commission authorities, as part of Brussels’ ninth post-bailout review, will focus on four key issues: power utility PPC’s lignite monopoly; the proper functioning of target model markets; energy-sector privatizations, and the decarbonization plan for west Macedonia, a lignite-dependent area in the country’s north.

The four issues were addressed in preliminary talks last week between Alexandra Sdoukou, secretary-general of Greece’s environment and energy ministry and Brussels technocrats.

It remains to be seen if the European Commission will again commend Athens, and to what extent, for the target model’s functioning, as Brussels had done last November, when the model’s new markets in Greece were launched as a step to harmonize EU energy markets.

However, weeks into the launch, balancing market costs skyrocketed, leading to sharply increased wholesale electricity prices. RAE, the Regulatory Authority for Energy, is now considering to introduce an adjustable price-containing measure to be set as a percentage of day-ahead market prices.

The European Commission, in the latest talks, can also be expected to push for the launch of a market test concerning an agreement offering independent players access to PPC’s lignite-based electricity production.

Though the interest of independent players for lignite-based electricity may have diminished given its increased cost, this antitrust case, unresolved for years, remains a big concern for the government as Brussels could associate it with pending Greek issues.

The complexity of PPC’s lignite monopoly case was deepened following a decision by the previous energy minister, Costis Hatzidakis, to bundle the matter with a Greek compensation request based on the utility’s need to keep running lignite-fired power stations for energy sufficiency. According to reports, his successor, Skrekas, will not sway from this policy.

As for energy-sector privatizations, a sale plan for gas supplier DEPA Commercial has attracted considerable interest but officials are concerned as parent company DEPA is embroiled in an ongoing lawsuit with ELFE (Hellenic Fertilizers and Chemicals).

DEPA has appealed a verdict awarding the producer a compensation amount of 60 million euros following overcharging claims. The case could be deferred until September, meaning binding bids by possible DEPA Commercial buyers may need to be delayed.

Greece’s decarbonization master plan features 16 key investment proposals that are expected to create over 8,000 jobs, directly and indirectly, in lignite-dependent areas. However, numerous complex matters need to be resolved, including the transfer of related property controlled by PPC, Brussels’ approval of a series of incentives for new investments, and scores of licensing issues.

Saving at Home subsidy platform revisions made for broader access

The Saving at Home subsidy program supporting energy efficiency upgrades of properties was relaunched today after being suspended for technical improvements to its online platform accepting applications.

Technical interventions were made to rectify a severe imbalance in the processing of bids that benefited larger-scale professionals of the building industry, such as big civil engineering firms using specialized software for swifter access to the platform.

Individuals and smaller firms, as a consequence, were blocked from the system, which operates on a first-come, first-served basis until subsidy funds allocated to specific regions around Greece are exhausted.

Interested parties now have a five-minute time limit to fill in application details and lodge their bids from the moment they enter the system. This time restriction will secure fairer play by offering broader access to the platform, energy ministry officials explained.

Revisions were also made to simplify application procedures for subsidy bids concerning apartment blocks. Subsequently, applicants belonging to this category do not need to provide bank account details until a latter date.

Today’s platform relaunch began with subsidy applications for the east Macedonia and Thrace region.

The online platform opens for west Macedonia residents on January 27, property owners in central Macedonia can submit applications as of January 29, while interested parties in Thessaly can lodge bids as of February 1. The category for apartment blocks opens February 3 for the entire country.

The platform’s opening time, 10am, remains unchanged.

Preliminary talks for 9th post-bailout review begin today

Power utility PPC’s lignite monopoly ordeal, the effort to ensure proper functioning of target model markets, the progress of privatization plans, and Greece’s decarbonization master plan for the lignite-dependent local economies of west Macedonia, in the country’s north, and Megalopoli, Peloponnese, are the key issues on the agenda of the ninth post-bailout review set to be conducted by the European Commission.

Preliminary review talks are scheduled to commence today between energy ministry officials and Brussels technocrats. These will be followed by higher-level talks involving technocrat chiefs and Greece’s newly appointed energy minister Kostas Skrekas.

Though his predecessors faced plenty of pressure, especially over PPC’s dominance, the new minister could be in for a hard time if pending energy-sector issues are not directly dealt with.

RAE, the Regulatory Authority for Energy, and power grid operator IPTO are still seeking solutions to tackle problems faced by the target model’s new markets. They got off to a problem-laden start in November, prompting a sharp rise in balancing market costs during the first few weeks.

As for energy-sector privatizations, the plan to offer a 49 percent stake in distribution network operator DEDDIE/HEDNO appears to be making sound progress and attracting strong interest, as exemplified by the participation of 19 participants in December’s market test.

On the contrary, the privatization plan for gas supplier DEPA Commercial could be destabilized by the company’s ongoing legal battle with ELFE (Hellenic Fertilizers and Chemicals) over an overcharging claim made by the latter. This battle could delay and affect the DEPA Commercial sale.

The Just Transition Plan for Greece’s decarbonization effort is now beginning to make some progress, but this unprecedented endeavor’s degree of complexity cannot be overlooked. Vast amounts of land controlled by PPC need to be repurposed, Brussels must approve investment incentives, and licensing matters need to be resolved, amongst other matters.

Decarbonization compensation effort locked in bureaucracy

A Greek decarbonization compensation request forwarded to the European Commission for power utility PPC’s need to keep operating lignite-fired power stations, nowadays loss-incurring units, from 2021 to 2023, has developed into a slow-moving ordeal locked in Brussels bureaucracy.

Though, until recently, the Greek request appeared to be headed towards approval, Brussels officials have since slowed down the case, extensively questioning the claim through a stream of emails to the energy ministry.

State-run PPC is seeking respective compensation amounts of 180, 150 and 200 million euros for the three-year period.

The European Commission has been relentless with its questioning despite appearing to recognize the validity of the Greek compensation request.

The Netherlands and Germany have both received similar decarbonization compensation amounts.

Greece, according to some sources, has not pursued the right strategy as it should have delayed the decarbonization compensation request case until the finalization of an older antitrust case concerning PPC’s lignite monopoly.

Though Greece and the European Commission reached an agreement last October, according to which 40 percent of PPC’s lignite-generated electricity production must be exclusively made available to independent suppliers at a pre-determined price, not below cost, the decision has yet to be implemented.

A market test still needs to be conducted to measure the market’s level of interest in this offer. Given the cost of lignite, independent players may not be interested.