energy ministry

Ministry, SEV join forces to reduce industrial energy cost

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A working group formed by the energy ministry and the energy committee of SEV, the Hellenic Association of Industrialists, has begun work on measures intended to reduce energy costs for Greek industry.

At its first meeting, held yesterday, the working group took preliminary steps seeking measures that would ensure foreseeable and competitive energy costs for Greek energy-intensive businesses, industrial sector sources informed.

A decision to form this working group comprising energy ministry and SEV officials was reached at a meeting in October between SEV’s energy committee with the ministry’s leadership.

Implementing a compensation mechanism to cover CO2 emission costs between 2021 and 2030 for eligible industries was set at the top of the agenda, SEV officials who took part in the meeting informed.

Besides working on bringing this mechanism into play as soon as possible, the SEV and ministry officials will also seek to determine how much additional revenue will need to be injected into the mechanism so that it may cover relevant compensation amounts.

An increased 11 percent share of CO2 emission right revenues raised at auction is currently planned to be used to compensate industry for CO2 emission costs in 2023.

However, Greek industrial players argue this percentage is insufficient. The energy ministry has pledged to increase the share of CO2 right auction revenues for industrial emission cost coverage.

Ministry launches talks for biomethane sector framework

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The energy ministry is currently engaged in consultation with biogas producers, gas transmission and distribution network operators, gas suppliers, other relevant ministries and public bodies, as well as RAAEY, the Regulatory Authority for Waste, Energy and Water, to formulate policies for the promotion of biomethane production in Greece.

The ministry aims to establish Greece’s first ever institutional framework for biomethane production.

Deputy energy minister Alexandra Sdoukou set the procedure in motion by requesting the opinions of all the aforementioned entities on a relevant study conducted by a National Technical University of Athens team headed by professor Sotiris Karellas.

The NTUA study offers a description of biogas production technologies and the country’s potential in this field, while also proposing institutional measures and financial support schemes for this purpose.

Recipients of a related email forwarded by the deputy energy minister have been asked to offer their comments on the NTUA study by December 20.

Measures proposed in the study include upgrading existing biogas facilities into biomethane facilities, particularly if close to gas distribution and transmission networks; establishing new biomethane production facilities, especially in farming and livestock farming areas; issuing renewable gas certificates for the establishment of a renewable gas market; and utilizing carbon captured during the production of biomethane to produce synthetic fuels.

PPC alternative supply plan for islands to save €200m by 2030

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The energy ministry appears willing to accept an alternative electricity supply plan for Greece’s non-interconnected islands covering up until the end of the decade and just presented by power utility PPC, based on the results of a study indicating that overall savings, also benefiting consumers, would reach an estimated 200 million euros until 2030.

The alternative plan would combine existing power stations and additional generators, wind turbines and batteries on all islands not yet connected to the grid, while old power stations encountering technical faults will be withdrawn rather than repaired.

This alternative supply plan’s cost is estimated at 400 million euros until 2030, compared to a 600 million-euro cost anticipated if the current system of old power stations plus generators, leased by PPC for extra generation every summer, continues to be relied on until every single Greek island has been interconnected.

A total of 41 old power stations operating on islands should have been closed down long ago for safety reasons. Despite their continued usage, the Greek islands need additional 80 percent capacity boosts each summer to cover heightened, tourism-related electricity demand.

Higher-cost electricity generated on the islands is subsidized through public service compensation (YKO) surcharges on all electricity bills. This would be lowered if the alternative plan is adopted.

Fixed RES tariffs for bigger grid input limitations, batteries

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The energy ministry plans to offer fixed tariffs, at RES auctions as of 2024, as an incentive to investors behind RES projects accepting increased grid injection limitations or an obligation to incorporate batteries, measures that would save grid capacity.

Deputy energy minister Alexandra Sdoukou announced this plan at a three-day energy conference, “Energy Security and Green Growth”, organized by the energy ministry.

A grid injection limitation of 50 percent of RES output is expected to be imposed on RES projects as a prerequisite for fixed tariffs. It remains unclear if the auctions offering these fixed tariffs will be technology-specific or mixed. According to energypress sources, the new auctions could only concern photovoltaics. Also the ministry is believed to be considering to offer a total capacity of 2 GW for fixed tariffs, though this, too, remains unfinalized.

Existing legislation covering RES auctions will need to be amended to facilitate the ministry’s fixed-tariffs plan.

 

 

 

Tough offshore wind farm competition, action needed

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The Greek government appears determined to ramp up its plans for offshore wind farm development so that positive momentum generated by announcements made so far does not go astray.

The endeavor is extremely complex, its target for 1.9 GW in six regions by 2030 is very pressing, while competition between countries to attract investments in this sector is intensifying.

Greece faces tough competition from Europe’s north and must convince major foreign companies that it means business.

Speaking at an energy ministry conference yesterday, deputy energy minister Alexandra Sdoukou noted that acceleration and hard work is needed, calling on sector experts, technocrats and companies to coordinate with EDEYEP, the Hellenic Hydrocarbons and Energy Resources Management Company, overseeing the effort, in order to complete, within 2024, preparations for delivery of small and large-scale projects.

Also, it would be ideal, according to the deputy minister, to launch tenders for wind and seabed surveys in 2024, so that the ensuing contractors may begin conducting these studies early in 2025 for delivery in 2026.

This would enable authorities to announce, also in 2026, tenders offering investors licenses for six selected offshore areas, a development that could make the 1.9-GW target by 2030 achievable, the deputy minister pointed out.

Auction for 400 MW in pilot-project floating turbines in ’26

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A second package of pilot offshore wind farms, this one featuring floating wind turbines instead of fixed-foundation turbines, is being planned by the energy ministry as a package to be developed prior to 2030 and possibly exceed 400 MW.

Contractors of these offshore wind farms will be determined through auctions. The energy ministry plans for these auctions to be staged in about three years’ time, towards 2026, so that the pre-2030 completion target date for these projects can be achieved.

Successful participants will secure investment support for the development of their projects, while the ensuing pilot offshore wind farms will operate under a scheme offering guaranteed revenues for their electricity production.

As the development of these projects will be prioritized by authorities, they will be installed at an initial lot of sea areas to be fully licensed by EDEYEP, the Hellenic Hydrocarbons and Energy Resources Management Company, overseeing marine areas appropriate for such projects.

These pilot-project sea areas will be picked from a collection of marine zones to qualify for the development of a first wave of offshore wind farms, totaling 1.9 GW, by 2030, as projected in the National Energy and Climate Plan.

Brussels fully approves Greek list of REPowerEU projects

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The European Commission has approved all energy projects included on a new list prepared by the energy ministry and submitted to Brussels for support through a revised REPowerEU program.

Brussels’ approval comes as a positive first step, but plenty of work lies ahead if the projects included on the REPowerEU list are to be actualized.

The REPowerEU program, proposed by the European Commission in response to the 2022 Russian invasion of Ukraine, aims to end the EU’s reliance on Russian fossil fuels before 2030.

Based on past experience, the energy ministry knows well how challenging it will be to coordinate various agencies in the public and private sectors so that a Resilience and Recovery Fund deadline, set for December 31, 2026, is met. The revised RePowerEU section, which includes projects budgeted at 795 million euros, is part of Greece’s RRF.

The available period of just over three years may seem like plenty of time, but given the complexity of the projects, it is not.

Greece’s 795 million-euro RePowerEU list is made up of 560 million euros for energy saving projects, 75 million euros for hydrogen and biomethane projects, 75 million euros for a Carbon Capture and Storage (CCS) supply chain, and 85 million euros for energy storage systems.

Funds sought for pilot-project offshore wind farms

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The energy ministry is seeking funds to subsidize the development of pilot-project offshore wind farms at one or two areas identified by EDEYEP, the Hellenic Hydrocarbons and Energy Resources Management Company, among a wider selection, as marine areas appropriate for such projects.

The pilot projects, according to the ministry’s plan, are intended to pave the way for the development of a series of offshore wind farms supporting a capacity target of 2 GW by 2030.

Sector authorities, including Aristotelis Aivaliotis, the energy ministry’s General Secretary of Energy and Natural Resources, as well as Kostas Skrekas, minister of development and investment, have highlighted the importance of these pilot projects, noting they will help establish a local industry supporting the sector’s needs in coming years.

The energy ministry’s initial funding idea, through the decarbonization fund, has yet to receive any feedback from the European Commission, raising doubts, at the ministry, of this route’s prospects.

IPTO set to distribute 2 GW for offshore wind farm areas

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Power grid operator IPTO plans, in a fortnight’s time, to distribute 2-GW in grid capacity to Greek sea areas selected to host the country’s first round of offshore wind farms, as part of the overall work being conducted by the Coordination Committee for the Connection and Development of Offshore Wind Farm Projects.

IPTO will present offshore wind farm areas to which the 2-GW capacity will be distributed at the committee’s next meeting, schedule to take place in two weeks.

EDEYEP, the Hellenic Hydrocarbons and Energy Resources Management Company, overseeing Greece’s offshore wind farm plan, presented sea areas marked out for offshore wind farm approximately one month ago.

A legislative revision securing a 2-GW capacity in the grid for the first round of offshore wind farms will be brought to Parliament for approval this coming Thursday, sources informed, confirming deputy energy minister Alexandra Sdoukou’s related announcement made just days ago at the official opening of Copenhagen Offshore Partners’ Athens office.

The 2-GW capacity in first-round offshore wind farms includes 600 MW marked out for pilot projects.

Last week, EDEYEP announced pilot-project permits for two companies, Aioliki Provata Trainoupoleos M.A.E, and Thrakiki Aioliki 1, SA, subsidiaries of Terna Energy and the Copelouzos group, respectively.

 

Ministry turns to wholesale market for cost-cutting leeway

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The energy ministry is preparing to scrutinize the wholesale electricity market in search of leeway for cost-cutting measures that could ultimately lead to lower retail electricity prices, ministry officials have told energypress.

This initiative comes following a series of cost-reduction measures prepared for the retail electricity market and set to be introduced.

The ministry intends to conduct a deeper examination of all market factors and tariff charges in an attempt to lower their cost and make them more competitive, energy minister Thodoris Skylakakis noted at a recent conference organized by IENE, the Institute of Energy for Southeast Europe.

The ministry’s effort will place emphasis on reducing Balancing Market costs by limiting quantities that need to be activated.

The Balancing Market is a mechanism ensuring that electricity supply matches demand in real-time. By optimizing the activation of balancing quantities, it is possible to enhance the efficiency of the market and potentially reduce associated costs.

The ministry’s series of retail electricity market cost-cutting measures, already prepared, include stricter rules to counter electricity theft; consumers switching suppliers despite owing overdue amounts at previous suppliers; and imposing limits to the country’s universal electricity supply service, offered, by law, by the top five suppliers as a last-resort solution to black-listed household and business consumers who have been shunned by suppliers over payment failures. The majority of consumers moving on to this service continue to not pay for electricity supply.

Stricter switching, power theft rules headed for Parliament

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The energy ministry plans to submit a draft bill of retail electricity market revisions to Parliament next week. The bill contains stricter rules aiming to prevent consumers with unpaid electricity bills from switching suppliers and counter electricity theft.

Consumers will not be able to move away from their electricity supplier if the supplier is the third power retailer at which they have accumulated overdue energy bills within a five-year period beginning January 1, 2020, according to the draft bill.

This obstacle will be combined with a debt-flagging system prepared by RAAEY, the Regulatory Authority for Waste, Energy and Water, energy minister Thodoris Skylakakis informed suppliers just days ago.

The retail electricity market revisions also include a single variable tariff formula that all electricity retailers will need to adopt and include in their tariff packages offered to customers as of January 1, 2024.

Speaking yesterday at the 27th National Energy Conference “Energy + Development”, an event organized by IENE, the Institute of Energy for Southeast Europe, the energy minister spoke of the very high cost to the system caused by electricity theft, estimating its cost at 400 million euros per year.

Rules against electricity thieves will become a lot stricter, while complicit electricians will have their professional licenses revoked, according to the new rules.

Suppliers want more flexible formula for new variable tariff

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A new variable tariff formula that suppliers will need to adopt as a means of improving price-comparison clarity for consumers and stimulating competition will be launched as planned, January 1, when energy crisis measures will be withdrawn, ending subsidies for consumers, energy minister Thodoris Skylakakis confirmed at a meeting yesterday with top officials of ESPEN, the Greek Energy Suppliers Association.

The single variable tariff formula, which all suppliers will need to include in their overall package of tariff offers to consumers, is being introduced with a large proportion of consumers in mind and will allow price comparability of companies’ offers, promoting competition, the minister stressed.

Suppliers called for greater flexibility to the single variable tariff formula so that they could make monthly adjustments, based on prevailing wholesale electricity prices.

All pending retail electricity market issues were tabled during the meeting. These include planned reimbursements for electricity suppliers who have been forced to cover an estimated 800 million euros, overall, in subsidies offered by the state during the energy crisis as support for small and medium-sized enterprises; stricter market rules preventing consumers with unpaid bills from switching suppliers; as well as the imposition of a time limit, for users, on the country’s universal electricity supply service, offered as a last-resort solution by the top five suppliers, based on market share, to black-listed household and business consumers who have been shunned by suppliers over payment failures.

Power suppliers’ association holds crucial talks with ministry

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ESPEN, the Greek Energy Suppliers Association, will push for swift government action that would finalize a series of pending electricity market measures at a meeting today with the energy ministry’s leadership.

The association, determined to reduce high unpaid receivables faced by electricity suppliers, is awaiting stricter user rules, including a time limit, for the country’s universal electricity supply service. It is offered as a last-resort solution by the country’s top five suppliers, based on market share, to black-listed household and business consumers who have been shunned by suppliers over payment failures.

ESPEN also wants the ministry to push through with plans designed to prevent consumers with unpaid electricity bills from switching suppliers without restriction.

The talks between the two sides will also include implementation details on the new retail electricity market rules, planned to come into effect January 1.

The revisions include the end of a freeze on indexation clauses, green tariffs, and a single variable tariff formula aiming to simplify price comparisons for consumers.

A legislative revision covering these revisions has been ratified in Greek Parliament, but a ministerial revision is still needed. It is expected to be delivered within the next few days, sources informed.

Electricity suppliers want clarity as they will need to inform customers of  upcoming market rule changes by December 1.

 

 

Ministry working to resolve PPA issues faced by industry

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The energy ministry is working on a plan that would allow industrial enterprises to use green-energy power purchase agreements (PPAs) as a means of gaining long-term visibility on energy costs, while keeping supply prices at internationally competitive levels.

As part of the effort, the ministry is seriously considering the possibility of requiring RES projects that secure tariffs at future RES auctions to sign bilateral contracts with industrial consumers for a share of their overall power output.

Though a first round of green-energy PPAs involving energy-intensive consumers have already been established, challenges have been encountered, a key problem being a drastic reduction in grid capacity availability.

One solution being worked on by the energy ministry entails increasing an injection limitation for new photovoltaics to 50 percent of output, as well as making battery installations compulsory for new solar farms.

New RES spatial plan to include stricter installation rules

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Stricter RES spatial plan rules being prepared for renewable energy project installations include a number of zoning prohibitions and new restrictions.

The new rules, included in a study that has been drafted by environmental authorities and forwarded to the energy ministry for evaluation, feature a more stringent approach concerning the installation of solar energy facilities, while the number of wind priority areas, acronymed PAP, have been increased to a total of 68, nationwide.

Of these, 32 percent are situated in Crete, which has been incorporated into the country’s RES spatial plan for the first time.

A total of 68 municipalities are included in the RES spatial plan as wind priority areas, 22 of these in Crete. The island’s Heraklion prefecture tops the Cretan list with 15 PAP areas, followed by Chania, with three, and Rethymno and Lasithi, listed with two apiece.

Greece’s Macedonia region in the country’s north ranks second with 16 municipalities on the PAP list, followed by Evia (12), mainland Greece (7), eastern Macedonia and Thrace (7), the Peloponnese (2) and Epirus (2).

Zoning prohibitions have been imposed on a total of 13 areas, including nine mountain ranges without roads, these being Lefka Ori in western Crete; Mount Saos on Samothrace; Mount Smolikas in Ioannina; Grevena, northern Greece; Mount Tymfi in northwestern Greece; Mount Taygetus, in the southern Peloponnese; Mount Chatzi, part of the Pindus mountain range in northwestern Greece; Agrafa in mainland Greece; and Mainalo in the central Peloponnese.

The plan also includes zoning prohibitions for wind farm installations at areas of particular natural beauty, Natura 2000 network habitats, Ramsar Convention wetlands, and areas associated with tourism development.

 

2-GW grid capacity reservation for offshore wind farms to be ratified

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A legislative revision reserving 2 GW in power grid capacity for the country’s prospective offshore wind farms is expected to be ratified in Greek Parliament within the next few days.

This 2-GW grid capacity reservation for electricity to be produced by offshore wind farms has been included in the revised National Energy and Climate Plan, recently forwarded to the European Commission for approval.

Deputy energy minister Alexandra Sdoukou referred to the aforementioned developments during a speech yesterday at an opening ceremony staged by Copenhagen Offshore Partners for a new office in Athens to host its Greek subsidiary.

COP, regarded as one of the world’s leading companies in the category of floating offshore wind turbines, is partnering with fund management company Copenhagen Infrastructure Partners (CIP), with which Mytilineos has formed an alliance, mainly for the development of offshore wind energy projects in Greek waters.

At the event, Sdoukou highlighted the importance of the National Offshore Wind Farm Development Program, which was recently completed and presented by EDEYEP, the Hellenic Hydrocarbons and Energy Resources Management Company.

“We are now in a position to know the country’s potential and the first areas where wind farms will be installed,” Sdoukou noted.

Greece’s revised NECP foresees the development of offshore wind farms – both floating and fixed-foundation installations – with a total capacity of 2 GW by 2030 and 17 GW by 2050.

Greek pavilion for first time at upcoming COP28 conference

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Greece will have its own national pavilion at a UN climate change conference for the very first time when officials meet for a 28th edition, COP28, in Dubai November 30 to December 12, sources have informed.

Over 25 events are planned by the energy ministry to promote Greek energy projects contributing to the energy transition, the sources noted.

The country’s presence at the conference with an independent pavilion comes following intensive efforts since last year. The Greek pavilion will provide a platform for crucial Greek energy projects.

At the preceding event, COP27, the then-Secretary General of Energy and Mineral Resources, Alexandra Sdoukou, now the deputy energy minister, had presented a GR-Eco Islands initiative, involving small islands that can serve as examples, models and case studies for green sustainability as a whole.

At COP28, the energy ministry will be organizing – with Sdoukou at the helm – a series of events showcasing, internationally, the country’s initiatives on sustainable development, green energy and energy transition. DESFA, the gas grid operator, IPTO, the power grid operator, and SEV, the Hellenic Association of Industrialists, will be involved, as will Enterprise Greece, the official investment and trade promotion agency of the Greek State.

Presidential Decrees covering offshore wind farms in a year

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Presidential Decrees on the delimitation of offshore wind farms areas, required as part of the domestic development of this sector, still nascent in Greece, are expected to be ready a year from now.

In the meantime, a series of preceding steps need to be taken before the Presidential Decrees are signed. They include consultation, this month, on a Strategic Environmental Impact Assessment; approval of the National Program for offshore wind farms, through a ministerial decision; a tender for the plan’s technical studies; and submission of all resulting technical studies and a finalized Strategic Environmental Impact Assessment in the summer of 2024.

The signing of Presidential Decrees, expected to take place in October or November next year, will signify that all is ready for the launch of auctions offering offshore windfarm areas to investors.

No final decisions have been reached at the energy ministry on a proposal forwarded by EDEYEP, the Hellenic Hydrocarbons and Energy Resources Management Company, for the development of offshore wind farms as pilot projects.

The energy ministry can contribute to the wider effort by accelerating the formulation of the emerging sector’s institutional framework, as well as by taking political initiatives that could cover funding gaps of projects through EU funds, according to Aristotelis Aivaliotis, the energy ministry’s Secretary General for Energy and Mineral Resources.

One or two pilot projects could be funded through the island decarbonization fund, though this would require the European Commission’s approval, the official has noted.

The National Energy and Climate Plan envisages the installation of 1.9 GW in offshore wind farms by 2030.

Industry partially satisfied with gov’t energy-cost strategy

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SEV, the Hellenic Association of Industrialists, has expressed partial satisfaction over government action aiming to reduce energy costs for energy-intensive industries.

Energy minister Thodoris Skylakakis has reportedly pledged to meet as many industrial-sector requests as possible, even within the remainder of 2023.

These requests include a CO2 cost-offsetting mechanism between 2021 and 2030; a two-year extension, covering 2024 and 2025, of a Temporary Crisis and Transition Framework adopted by the EU as economic support for member states following Russia’s invasion of Ukraine; as well as a demand response mechanism rewarding flexibility.

However, the ministry does not appear keen to act on requests made by Greek industry for a reduction of grid and distribution network usage surcharges imposed by power grid operator IPTO and distribution network operator DEDDIE/HEDNO, respectively.

Further industrial-sector requests for connection-term priority concerning green-energy PPAs and an end to a transit fee on gas from Bulgaria also seem unlikely to be accepted by the ministry.

 

Second auction for standalone battery support imminent

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RAAEY, the Regulatory Authority for Waste, Energy and Water, is set to announce a second auction offering state investment support for standalone batteries as, according to energypress sources, the energy ministry has signed a required ministerial decision halving the inaugural auction’s level of 200,000 euros per MW to 100,000 euros per MW.

The energy ministry decided to significantly reduce the state investment support offered through the second auction based on the results of the first auction.

The second auction will be announced as soon as the ministerial decision is published in the government gazette, which could occur today or, at the latest, by the middle of next week.

As investors will be able to submit applications for the state investment support six weeks after the auction has been announced, its deadline is expected to expire just after Christmas. The list of projects qualifying for the state investment support should be finalized towards the end of January.

The halved investment support to be offered at the second auction is intended to help broaden the portfolio of  projects receiving support. According to an initial plan, standalone battery investment support is planned to be offered for a total capacity of 1,000 MW, over three auctions.

Standalone batteries totaling 400 MW secured investment support at the first auction, while an initial plan for support to a further 300 MW through the second auction will remain unchanged.

Any extra capacity that would exceed the initial plan for a total of 1,000 MW will be made available at the third auction, expected to take place within the first few months of 2024. Projects planned for development at ex-lignite areas will participate in the third auction.

Biomethane sector draft bill forwarded for consultation

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A draft bill for the development of Greece’s biomethane sector is ready and set to be forwarded for consultation, deputy energy minister Alexandra Sdoukou has told a conference organized by the Hellenic Association of Biogas Producers (HABIO/ESPAV).

Consultation on the draft bill will, according to the energy ministry plan, begin with a closed procedure involving biomethane producers, supply companies, gas operators and other public entities directly associated with the sector, to provide initial comments and observations on the draft bill for preliminary corrections.

The consultation procedure will then continue as normal with the aim of being completed by the end of the year so that legislation procedure may begin early in 2024.

The ministry opted for a double-staged consultation procedure believing it will bring the shape of the legislative proposal as close as possible to completion, having taken into account the views of market officials. A similar route was followed to update the National Energy and Climate Plan.

Investment support for the biomethane sector will be sought through the REPowerEU facility, introduced by the European Commission, in response to the 2022 Russian invasion of Ukraine, to end the EU’s reliance on Russian fossil fuels before 2030.

Prinos CCS state aid talks with European Commission begin

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Prinos CCS, a carbon capture and storage project being promoted by upstream company Energean as Greece’s first CCS facility, at a depleted underwater Prinos field, south of Kavala, is approaching the stage of development.

The Greek ministry has pre-notified the European Commission on a relevant support scheme, within the framework of Climate, Energy and Environmental Aid Guidelines, allowing exceptions to an EU ban on state aid in the climate, environment and energy sectors.

The ministry’s pre-notification is expected to initiate consultation between the two sides for the formation of a support scheme that will need to be appraised and approved by Brussels.

Greek officials have also submitted a funding request for 50 million euros through the REPowerEU facility.

Prinos CCS has been included in a sixth edition of a PCI/PMI list, which was given the green light yesterday by a relevant Brussels committee but still needs to be approved by European Parliament and the European Council.

PCI/PMI status would facilitate financing for the CCS project’s development plans through the Connecting Europe Facility, the EU fund supporting infrastructure investments in transport, energy, digital and telecommunication projects. This status could also lead to favorable borrowing terms for the project.

Greek gas grid operator DESFA is supporting the effort to secure PCI/PMI status for the Prinos CCS project.

DESFA’s role in the project’s development would entail constructing a network for collecting CO2 quantities. Industries operating in the wider Athens area would be connected to this network.

CO2 amounts would be liquefied and temporarily stored at a facility near the port of Elefsina, west of Athens, then loaded onto CO2 tankers and shipped out to the Prinos CCS.

Energean holds a license for the Prinos facility, currently running until August, 2024. As a next step, the company will need to secure a social and environmental impact study. Its approval would enable Energean to take a next step and apply to EDEYEP, the Hellenic Hydrocarbons and Energy Resources Management Company, for a CO2 storage license, which would make the company its operator.

Energean plans to start operating the Prinos CCS in late 2025 or early 2026 at a first-phase level for storage of up to 1 million tons of CO2 per year.

 

Electricity market measures to be announced next Wednesday

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Energy minister Thodoris Skylakakis plans to announce, on November 1, details of imminent energy-cost measures intended to subdue retail electricity prices by intensifying competition through a single variable-tariff formula for all suppliers, who will remain free to set profit margins in accordance with their pricing policies, while also offering selective subsidy support to low-income households.

The single variable-tariff formula for all suppliers is also intended to offer consumers greater clarity by improving their price-comparing ability.

The ministry, expected to submit to parliament an amendment for the single variable-tariff formula any day now, believes its package of new measures, planned to be implemented January 1 in place of energy-crisis measures that included universal electricity subsidies and a freeze on indexation clauses, will help contain energy costs, despite the reactivation of indexation clauses and the widening Middle East conflict.

According to the plan, all electricity consumers will be automatically transferred to the new single variable tariff as of January 1, for 12 months, unless they opt, prior to this date, for any other supply deals offered by suppliers.

Electricity suppliers, convinced the single variable-tariff formula will not enable them to mitigate risk and also breach EU market rules, are already calling for changes to the plan.

In response, the ministry has noted suppliers will be free to set profit margin levels as they please. It has also pointed to a recent EU report highlighting the need for greater transparency in the Greek energy market.

Next Wednesday’s announcements by the energy minister will also include details on a new debt-flagging system designed to contain the high level of unpaid receivables in the country’s electricity market. The minister’s package of measures is also expected to contain an action plan addressing electricity theft.

Electrical heating allowance details presented next week

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The energy ministry plans to present, next week, an overall package of measures for the retail electricity market, including a new framework for an electrical heating allowance supporting low-income consumers that will replace the existing system of universal subsidies offered for all electricity bills.

According to energypress sources, the plan’s structure will greatly resemble existing cost-support plans for other heating fuels, including diesel, natural gas, wood and pellet heating. This essentially means that both income and asset criteria will be taken into account.

Single people with an income of up to 16,000 euros per annum and married couples with an income of up to 24,000 euros per annum will be entitled to the electrical heating allowance. The income criterion will be increased by 5,000 euros per child for families with children.

Also, a property ownership limit of 200,000 euros is expected to apply for single people and 300,000 euros for married couples and single-parent families.

As is the case with existing heating fuel support, allowance limits for electrical heating costs will most likely range from 100 to 800 euros per year.

The allowance for electrical heating and allowance for other heating fuels will be mutually exclusive. Eligible parties will only be able to apply for one of the two allowances.

 

New forest biomass market backed by €150m in CO2 funds

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Carbon emission right auction funds totaling 150 million euros are estimated to be utilized to establish a new forest biomass market in Greece, according to a plan just presented by energy minister Thodoris Skylakakis.

This new market is planned to involve many players, beginning with forestry departments, to be subsidized for harvestable biomass with a proportion of revenues generated at auctions for carbon credits.

The plan, as a second step, will entail the establishment of an exchange for CO2 tons to be made available in a voluntary market for carbon credits. These carbon credits will correspond with additional volumes of CO2 emissions absorbed through actions such as efficient forest management and reforestation.

Companies and energy-intensive industries wanting to improve their environmental footprints will be the potential buyers of these carbon credits.

New forest management entities, to act as project developers, will result from partnerships between 293 forest cooperatives and companies certified for the amount of CO2 they can absorb.

Subsidy amounts to be paid to these forest management entities will be determined by the extent of forest management studies that have been carried out. Subsidy amounts offered will increase in accordance with the degree of difficulty in biomass collection and resulting level of contribution to fire prevention and forest protection, according to the plan.

The ministry plans to have its plan legislated by the end of the year so that the initiative may be launched in 2024, initially on a smaller budget.

 

 

 

Suppliers fear single variable tariff formula complications

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Electricity suppliers fear a single variable tariff formula to be introduced by the energy ministry in January for all suppliers to apply before setting respective tariff levels depending on their profit-margin strategies, may create more problems than it could solve.

The ministry believes the introduction of a single variable tariff formula will intensify competition, helping subdue prices, and also help consumers make direct price comparisons, not possible amid the vagueness of the current system.

According to the plan, all electricity consumers will be automatically transferred to the new single variable tariff as of January 1, for 12 months, unless they opt, prior to this date, for any other supply deals offered by suppliers.

Barring unexpected developments, a relevant legislative revision will most likely be submitted to Parliament this week.

According to the plan, suppliers will announce variable tariffs on a monthly basis, at the beginning of each month. These tariffs will fluctuate, reflecting average wholesale electricity price levels of the previous month.

The single variable tariff formula will include a mechanism correcting high prices, through lower and upper limits set by suppliers.

However, market sources have expressed concerns, noting that, to hedge limits, suppliers will have to increase their own margins, which risks making them uncompetitive.

Early-November notification for business PV subsidies

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A 160 million-euro support program subsidizing solar energy panel installations by enterprises is nearing its launch, with the energy ministry set to publish its terms and conditions early next month, ahead of the program’s official announcement.

The support program will only be made available for zero feed-in systems – solar panel units not injecting their production into the grid.

Electricity produced by this category of units will either be instantly self-consumed or stored in incorporated batteries for latter use.

The energy ministry had initially considered restricting this subsidy program to enterprises installing solar systems with batteries, but ended up deciding to also make it available for businesses not incorporating batteries to their panels as some enterprises may not require storage options due to extended operating hours that would enable them to instantly self-consume all energy output.

Subsidy amounts will be smaller for solar panel installations without batteries as a result of their lower investment cost.

Ministry’s single variable tariff intended to boost competition

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A decision by energy minister Thodoris Skylakakis to introduce – as of January, for 12 months – a single variable tariff formula for all electricity suppliers, whose level they will set depending on respective profit-margin strategies, is intended to intensify competition leading to lower prices, or at least, price containment at reasonable levels.

The application of a single pricing formula, to be made available to all electricity suppliers, will enable consumers to make instant price comparisons with the push of a button, not possible under the current complicated system.

“If I were to ask you who the lowest-price supplier is would you know? The problem is that we don’t have a common tariff offered by all suppliers. A common tariff will now exist. All details will be announced within the next ten days,” Skylakakis, the energy minister, told local radio station Parapolitika yesterday.

All electricity consumers will be automatically transferred to the new single variable tariff as of January 1, unless they opt, prior to this date, for any other supply deals offered by suppliers.

The energy ministry estimates over 4 million consumers, or at least 70 percent of 5.7 million in total, will favor an automatic transferal to the new single variable tariff over any of the new products to be made available by suppliers.

Some market officials believe consumer preference for the new single variable tariff will be even greater.

Authorities are preparing for the Greek electricity market’s return to normality as of January 1, when subsidies are planned to end and indexation clauses reintroduced.

However, market conditions are currently adverse and challenging given last week’s outbreak of the Israel-Gaza war as an addition to Russia’s ongoing war in Ukraine.

A continuation of current market trends and conditions, which have pushed natural gas prices up 36 percent since the beginning of October, to 49 euros per MWh, would inevitably result in higher domestic electricity prices in January.

RAAEY proposal adopted for suppliers’ windfall profit tax

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The energy ministry has decided on a formula for a windfall profit tax on electricity suppliers concerning earnings between August, 2022 and June, 2023, adopting a recommendation by RAAEY, the Regulatory Authority for Waste, Energy and Water, that sets a price level of 25 euros per MWh, across the board, for all suppliers, as a fair price, energypress sources have informed.

A related ministerial decision could be issued within October. Once published, RAAEY will be able to officially commence calculating  windfall profits earned by electricity suppliers during the 11-month period.

The windfall tax formula will most likely be applied over three segments. The first would cover a five-month period from August to December, 2022, while two three-month segments, running from January to March, 2023 and April to June, 2023, would follow.

The tax measure could also be applied over one eleven-month period, but this is unlikely as such an option would require a legislative revision.

The choice of method applied will influence the level of windfall profits recovered. If applied over one eleven-month period, the measure would rake in approximately 250 million euros from all electricity suppliers.

If broken up into three segments it would result in a collection of roughly 275 million euros from all electricity suppliers.