TAP’s commercial launch now on the final stretch

The Trans Adriatic Pipeline (TAP) project, to enable the delivery of Caspian gas to destinations throughout southeastern, central and western Europe, is almost ready for its commercial launch, four years after construction began and 17 years after its first feasibility study was conducted.

The project, running from the Shah Deniz gas field in Azerbaijan, will represent the EU’s main alternative route for natural gas, greatly contributing to the end of the continent’s dependence on Russian gas, supply security and intensified competition.

The TAP project will begin operating at a capacity of 10 billion cubic meters, annually.

Greece was the first of the project’s host countries to complete its segment of construction work, a 550-km stretch across northern Greece, from Evros’ Kipoi area in the northeast to Ieropigi in the Kastoria province, at the Greek-Albanian border.

Just days ago, Greece’s energy ministry approved the operation of the project’s Greek segment, running from Evros to Rodopi, Xanthi, Kavala, Drama, Serres, Thessaloniki, Kilkis, Pella, Imathia, Florina, Kozani and Kastroria.

Authorities of the project’s two other host nations, Albania and Italy, will soon grant their respective operating permits, sources informed.

The project’s commercial launch is expected to take place close to the final quarter this year, the energy ministry has announced.

The Greek and Italian gas grid operators, DESFA and Snam, respectively, will need to prepare their national grids so that natural gas quantities can reach consumers via TAP, sources added.

 

Bulgaria gas pipeline explosion highlights need for local projects

Yesterday’s Bulgarian gas pipeline explosion in Bulgaria, prompting a supply cut into Greece from a northern route, yet again highlights how vital it is for Greece to develop two gas infrastructure project plans in Alexandroupoli, northeastern Greece, and Kavala, in the north.

The explosion of this pipeline, carrying Russian gas into Greece via Bulgaria, has not affected Greece’s energy security as supply from the alternate Kipoi route remains uninterrupted, while the contribution of high LNG reserves at the Revythoussa terminal, just off Athens, has also been crucially important.

However, a Greek energy crisis could have resulted if this accident were more serious, or if the Revythoussa facility did not exist, or, worse still, the accident coincided with even greater Greek-Turkish tensions than at present, which could have meant a cut in gas supply from Turkey, hosting one of Greece’s key gas import corridors.

The intensifying geopolitical instability of the wider region, which includes Turkey, an extremely troubling neighbor, makes imperative the existence of sufficient gas storage facilities to safeguard Greece’s energy security. Despite the precarious conditions in the region, Greece remains one of the European countries without sufficient energy storage infrastructure.

In addition to the existing Revythoussa LNG terminal, Greece’s infrastructure definitely needs to be reinforced by projects such as the Alexandroupoli FSRU and an underground gas storage facility at a virtually depleted offshore deposit south of Kavala.

 

US backs Greece’s east Mediterranean activities, major projects

All countries in the east Mediterranean region must carry out their activities in accordance with international law, including the International Law of the Sea as stipulated by the 1982 United Nations Convention on the Law of the Sea, the Greek and US governments have jointly announced following a high-level virtual conference held yesterday on energy issues.

This statement clearly offers US support for the positions of Greece, facing Turkish provocation.

The working group’s participating Greek and US officials reiterated the commitment of the two countries to cooperate on the effort to diversify energy sources in southeast Europe, collaborate with regional partners for energy source development, and promote regional energy security.

The latest energy working group builds on steadily growing bilateral cooperation following Greek-US strategic dialogue meetings in December, 2018 and October, 2019, the joint announcement added.

The Greek team was represented by the Ministry of Foreign Affairs’ Deputy Minister for Economic Diplomacy and Openness Kostas Frangogiannis and Deputy Environment and Energy Minister Gerassimos Thomas (photo). The US team was represented by Assistant Secretary of State for Energy Resources Francis Fannon and Under Secretary of Energy Mark Menezes.

Fannon, the Assistant Secretary of State, expressed satisfaction on the completion of the Greek segment of the TAP gas pipeline project, to carry Azeri gas to Europe.

The US official also offered support for the ongoing construction of the Greek-Bulgarian IGB gas pipeline interconnection and the progress achieved in plans for an FSRU in Alexandroupoli, northeastern Greece, a South Kavala underground gas storage facility, and Greek-North Macedonian connection.

Utilities prepare emergency coronavirus plan for energy security

The country’s energy utilities have prepared an emergency plan – comprised of alternatives – designed to ensure ongoing operations at strategically important energy facilities amid the coronavirus outbreak, now also a growing concern in Greece.

The emergency plan, prepared by leading officials at power utility PPC, power grid operator IPTO, distribution network operator DEDDIE/HEDNO, gas grid operator DESFA and gas utility DEPA, in agreement with the energy ministry, is designed to offer maximum coronavirus protection to personnel, especially staff employed at energy production and distribution management posts.

The plan includes three alert levels, mild, medium and pandemic conditions.

Preventive disinfection operations are being carried out at utility facilities. Emphasis is being placed on IPTO’s national and regional energy control centers, DESFA’s LNG storage station on the islet Revythoussa, off Athens, as well as PPC’s power stations.

The plan also includes shift replacements and personnel transfers in the event of coronavirus spreads within utility ranks, as well as secluded on-site accommodation for personnel at energy infrastructure locations and power stations.

Online preparations are also being made to enable headquarter-based personnel to work from home should the outbreak worsen.

Overall, preventive measures promoted by national health authorities are being applied.

Energy utility officials who took part in a related energy ministry meeting have assured government authorities that the country’s electricity and natural gas supply will remain uninterrupted.

 

Investors keen on offshore wind energy parks, framework absent

A growing number of major renewable energy companies from abroad appear keen to develop offshore wind energy parks in Greece but the absence of legal framework covering this RES sub-sector is preventing any progress.

Representatives of at least two such foreign energy companies have spent time in Athens over the past few days for meetings with local authorities to explore the country’s offshore wind project prospects, energypress understands.

One of these, Copenhagen Offshore Partners, a Danish enterprise specializing in offshore wind projects, is believed to be eyeing the north Aegean area.

The other, US firm Invenergy, has been involved in recent meetings here to discuss the development of offshore wind projects in the south Aegean.

The RES sub-sector’s prospects in Greece were also explored last year by Norway’s Equinor. An undisclosed Spanish company is also believed to have looked into offshore wind project prospects.

Strong and dry seasonal winds appearing in the Aegean Sea in the summer, known as meltemia, are a major advantage for offshore wind projects in the area as they could provide support to the grid during summer, when electricity generation levels at onshore parks are lower.

Greek power grid operator IPTO is particularly interested in this prospect as it promises to reinforce grid security.

Also, the development of offshore wind energy facilities could play a key role in helping the country achieve ambitious renewable energy targets included in a revised National Energy and Climate Plan.

‘DEPA key to Greece’s leading Balkan role, energy diversification’

Greek gas utility DEPA chief executive Konstantinos Xifaras met earlier today with the U.S. Ambassador to Greece, Geoffrey Pyatt (photo), for a meeting focused on the recent energy-related developments in Southeast Europe as well as on the progress of significant projects in the wider region, currently under way or in design phase, such as the IGB pipeline, the Alexandroupoli FSRU and the EastMed pipeline, a project of strategic importance.

Following the meeting, Ambassador Pyatt remarked: “Greece is a leader in the Balkans in providing energy security and diversification of energy sources, and DEPA is key to its strategy. The U.S. therefore strongly supports DEPA’s participation in major projects that advance this strategy, particularly the Alexandroupoli FSRU, the IGB, TAP and potential EastMed pipeline, which are literally changing the energy map of Europe. These projects are critical for regional peace and security and will make Greece a regional energy hub.”

The DEPA chief commented: “We discussed, with the Ambassador, the course of significant energy projects currently under way in our region, in which DEPA has a leading role.  Over the past months, our company has striven to strengthen its position in the regional energy market, achieving notable cost reductions as well as expanding its activities in new sectors and products. At the same time, we remain focused on the double privatization [DEPA Trade, DEPA Infrastructure] and we are upgrading our participation in these international projects developing Greece into a regional energy hub, safeguarding, at the same time, the diversity of supply sources to the benefit of the country and consumers.”

 

DESFA’s Cretan FSRU proposal troubles RAE, considering tender

The board at RAE, the Regulatory Authority for Energy, needs to determine whether a proposal by gas grid operator DESFA for a floating storage and regasification unit at Atherinolakkos, Crete, is fit to be added to its national gas grid development plan for 2020 to 2029.

The investment plan, budgeted at 175 million euros, has been widely criticized by companies and market authorities through a public consultation procedure as DESFA wants national grid users to cover its cost. This demand has also troubled RAE, heading towards staging a tender.

According to sources, the authority will most likely ask DESFA to not include the FSRU project in its development plan this year and call for specific prerequisites that would give the investment social dimension.

RAE officials have reiterated the need for the development of the authority’s proposals to help cover Crete’s energy needs until a major interconnection project, to link the island with Athens, is completed. This intermediate period may exceed three years, it is believed. An FSRU will need to contribute to the overall effort.

RAE has asked the energy ministry to make legislative revisions needed ahead of tenders concerning the development of projects for energy sufficiency on Crete.

One of these entails a conversion of power utility PPC facilities totaling 100 MW from diesel-fueled to gas-fueled units. Another project concerns the construction of a new 100-MW gas-fueled power station, plus an FSRU. RAE also wants new wind and solar energy units installed for a total capacity of 100 to 150 MW, as well as energy storage batteries with a capacity of between 40 to 50 MW.

DESFA, responding to the criticism, explained that it does not intend to construct a gas-fueled power station, noting such a task is beyond its realm.

Also, its FSRU proposal for Crete purely represents a solution to secure energy sufficiency on the island, DESFA officials told energypress. The project already carries social dimension as it aims to supply gas to a non-interconnected area, they added.

Motor Oil wants Corinth FSRU included in DESFA 10-year plan

Petroleum group Motor Oil wants a prospective FSRU project for Corinth, west of Athens, included in gas grid operator DESFA’s ten-year plan, it has noted in a letter forwarded to RAE, the Regulatory Authority for Energy, as part of a related public consultation procedure.

A floating LNG terminal at Corinth would offer multiple benefits for the natural gas markets of Greece and the wider southeast European region and, therefore, must be included in DESFA’s ten-year plan, Motor Oil supported in its letter.

RAE has already awarded a license for the project but a decision concerning a future capacity commitment at this new national grid entry point has remained pending since last June.

The project is strategically important as a very large proportion of Greece’s current – and near-future – gas imports enter via Turkish territory, Motor Oil pointed out. The Corinth FSRU would further diversify Greece’s supply sources, without geopolitical risks or restrictions, as the facility will be able to absorb supply from anywhere in the world, the petroleum group added.

This FSRU would ease congestion at the existing Revythoussa unit off Athens and contribute to energy supply security, Motor Oil, operating a major refining facility in Corinth, also noted among other factors.

ESAI/HAIPP, the Hellenic Association of Independent Power Producers, has also expressed support for the Corinth FSRU, noting, in its letter, the facility would offer a new gas grid entry point, desaturate Revythoussa and help offer more competitively priced natural gas to the Greek market.

Officials to examine domestic gas supply security, Ukraine route a concern

The indefinite outcome of ongoing negotiations between the EU and Russia for a renewal of a gas supply agreement facilitating supply to the continent via Ukraine will be a major concern for Greek energy market officials at a meeting scheduled for Monday to examine domestic energy security matters for the forthcoming winter, including alternatives in the case of emergencies.

An existing gas supply agreement between the EU and Russia expires on December 31. It remains unclear when a new agreement could be reached and what terms it could carry. Talks between Brussels and Moscow have been difficult so far.

Officials representing Greece’s energy ministry, RAE, the Regulatory Authority for Energy, gas grid operator DESFA, power grid operator IPTO and the Greek energy exchange, amongst others, will participate in Monday’s meeting, at the RAE headquarters.

In a recent report, ENTSOG, the European Network of Transmission System Operators for Gas, tasked with facilitating and enhancing cooperation between national gas transmission system operators (TSOs) across Europe, pointed out two gas supply security concerns for Greece.

The country, along with central and other southeast European countries, would face problems if Russian supply via Ukraine were to be interrupted during high-demand periods.

Any disruption of LNG supply from Algeria, providing Greece with significant quantities, was also pointed out as a concern in the ENTSOG report.

The European Commission has requested all EU member states to provide respective gas-related energy security plans, given the uncertainty of the EU’s talks with Russia, so that Brussels may establish an overall picture.

Officials in Athens remain confident the Greek energy plan will effectively deal with gas needs in Greece this coming winter. An upgrade in the storage capacity of Greece’s Revythoussa LNG terminal close to Athens, as well as an increase in LNG imports, has helped reinforce this confidence.

 

 

Continuation of energy strategy minister’s guide at Cairo forum

Recently appointed energy minister Costis Hatzidakis will formally commence work on promoting Greece’s international energy relations at his first meetings abroad, today and tomorrow, at the East Med Gas Forum in Cairo.

The minister, in recent speeches, has already made clear his interest in supporting a national strategy shaped to bolster the country’s energy security, elevate its geopolitical role and fuel economic growth.

Strategic partnerships with Cyprus, the USA, Israel and Egypt will play a pivotal role in this effort.

Greece, Cyprus, Egypt, Israel, Italy, Jordan and the Palestinian Authority will all be represented at the Cairo forum.

Hatzidakis, Greece’s energy minister, is also expected to discuss energy partnerships and regional security with US energy secretary Rick Perry, who is in the Egyptian capital as part of a tour of the east Mediterranean.

Development of the submarine East Med gas pipeline, a project promising security and stability for the wider region, is a leading priority  for Greece.

On a wider level, the minister can be expected to carry on supporting a national strategy pursued over the past decade to establish Greece as a pivotal energy player in the region and key problem solver of regional energy partnership issues.

As for other major energy infrastructure projects, the new Greek government will continue to provide national support for the swift completion of the Trans Adriatic Pipeline (TAP), planned to transport Caspian natural gas to Europe, and the Greek-Bulgarian IGB gas grid interconnector. Other investment plans such as the Alexandroupoli FSRU and the Kavala underground gas storage facility will also keep receiving the support of Greece’s administration.

Gas conversion of Cretan plants added to island sufficiency plan

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.

 

Ministry planning Crete diesel unit extensions beyond 2019

The energy ministry is preparing a legislative amendment to extend the lifelines of all diesel-fueled power stations operated by the state-controlled power utility PPC on Crete, despite EU regulations requiring the gradual withdrawal of these high-polluting units in 2020 and 2021.

The ministry wants a longer life for PPC’s diesel-powered units to avoid energy shortage problems on Crete until the island’s grid interconnections with the Peloponnese and Athens are completed and launched, in 2022 and 2023, respectively, as is anticipated. PPC needs to be legally covered to keep these units running.

Last October, the European Commissioner for Climate Action and Energy Miguel Arias Canete made clear that Greece will not be granted any further deadline extensions beyond December 31, 2019 for the diesel-fueled power stations operating on Crete.

Three diesel-fueled power stations with a total capacity of 728 MW currently operate on Crete. The island’s electricity demand is currently at a level of 630 MW and is expected to exceed 700 MW in 2020.

PPC asked to explore Crete energy sufficiency solutions until 2022

The main power utility PPC, in ongoing exchange with RAE, the Regulatory Authority for Energy, has reiterated its concerns of a potential energy sufficiency threat on Crete until 2022, when the anticipated launch of grid interconnections is expected to have resolved the problem.

A study conducted by RAE in conjunction with DEDDIE, the Hellenic Electricity Distribution Network Operator, has forecast a capacity deficit for the island in the lead-up to the island’s grid interconnections.

Responding to a RAE request calling on PPC to explore possible solutions, the power utility has asked for further clarification. The power utility wants specific figures concerning Crete’s capacity shortage threat.

The energy authority apparently wants PPC to work on proposals covering three scenarios for additional electricity generation of 50, 100 and 150 MW.

Solutions contemplated so far include a PPC tender for the installation of additional wind energy facilities as well as proposals by Gek Terna and Socar for the development of small-scale LNG-fueled power stations as back-up solutions.

However, at this stage, it remains unclear if future market conditions can secure the sustainability of such back-up LNG units once Crete’s grid interconnection projects are launched.

 

 

New power demand record set yesterday, forecast exceeded

A new winter season electricity consumption record was set by the grid yesterday, exceeding levels reached during the energy crisis in the winter of 2017.

Power grid operator IPTO’s forecast of 178,000 MWh for yesterday ended up reaching 185,000 MWh, setting a new record for one day’s demand during the winter.

IPTO’s miscalculation prompted lower day-ahead market levels and a lower System Marginal Price (SMP) of 75.70 euros per MWh. This wholesale price level would probably have been higher had the operator’s electricity demand forecasts been more accurate.

The operator’s miscalculation has been attributed to a misjudgement of the impact on electricity demand of the return to normal work and production schedules following the festive season.

The winter weather conditions were milder yesterday compared to Tuesday but the return to full-scale operations at most schools, businesses and industrial enterprises was underestimated. January 6, Epiphany (Theofania), is a public holiday in Greece.

IPTO had forecast a demand level of 7,770 MW for midday yesterday but the actual level reached 8,996 MW. The forecast for 1 pm was 7,750 MW but ended up reaching 8,936 MW, while the forecast for 2 pm, 7,670 MW, was also less than the resulting 8,904 MW figure.

The additional electricity amounts needed by the grid prompted greater distribution difficulties. Solar energy output was diminished due to the weather conditions but wind energy levels were up for a number of hours.

All available thermal and hydropower facilities needed to be called into action, while industrial enterprises were placed on stand by for implementation of the demand response mechanism if the pressure on the grid worsened. This alert ended up not being triggered as temperatures registered sharp rises of more than five degrees Celsius between 11 am and 1 pm.

 

Domestic natural gas consumption strikes new high of 290,000 MWh

Natural gas consumption in Greece struck an all-time high yesterday to reach 290,000 MWh from a previous high of 260,000 MWh set in 2017. The new record was driven by full-capacity operations of electricity producers and natural gas companies.

Gas consumption is expected to remain high today, estimates putting the figure at 270,000 MWh.

Energy market authorities have assured the country does not face any energy security concerns, noting the important sufficiency roles played by the Revythoussa LNG terminal’s increased gasification capacity and the increased ability of the Kipous gas grid interconnection in Evros, at Greece’s northeastern tip, to cover the country’s needs through inflow measuring 48,000 MWh per day.

Despite the reassurances, Greece’s grid has been stretched to its limits over the past couple of days. The country’s lignite and natural gas-fueled power stations have needed to operate at full capacity to meet the elevated electricity demand – along with crucial hydropower, electricity import and RES injections during peak hours.

Highlighting the system’s strain, the main power utility PPC’s lignite-fired power station, still operating despite the expiration of a European Commission time limit, is among the facilities contributing to cover the higher electricity demand.

 

Kavala UGS project to cost €240m, RAE official estimates

An underground gas storage facility planned to be developed from a depleted natural gas field in northern’s Greece’s offshore South Kavala region will cost approximately 240 million euros and offer a transmission capacity of 360 million Nm3 per year, with a potential to be doubled, according to RAE (Regulatory Authority for Energy) official Nektaria Karakatsani, who discussed the project at a recent conference.

However, details concerning the investment cost’s recovery remain unclear, it was noted.

The UGS project has already secured a place on the European Commission’s PCI list, offering EU financing support and favorable terms. The inclusion highlights the underground gas storage facility’s significance for Europe’s strategy aiming to unify energy markets.

The UGS will greatly reduce the threat of energy crises for Greece should inflowing gas supply happen to be irregular, she underlined.

Greece launched a balancing platform for natural gas on July 1 and is currently planning its development into an organized gas market envisioning the country’s establishment as a regional commercial gas hub.

New gas entry points, besides the TAP route, which is scheduled to be launched early in 2020, will be needed to secure sufficient gas quantities and flexibility during this transition, the RAE official pointed out, adding the role to be played by the Kavala UGS during this stage will be vital.

IPTO signs Crete-Peloponnese link contracts, a major energy security step

Power grid operator IPTO has taken a major step in resolving Crete’s energy sufficiency threat feared as of 2020 by signing contracts with four companies, Fulgor, Hellenic Cables, Prysmian Powerlink and Terna, for the development of Crete’s grid interconnection with the Peloponnese.

Energy minister Giorgos Stathakis, who attended the signing ceremony in Kissamos, northwest Crete, described the island’s interconnection project as a historic step that paves the way for Crete’s transformation into a green energy island of minimal environmental impact, while also ensuring energy security and growth prospects for the island.

A European Commission extension for diesel-fired power stations operated on the island by the main power utility PPC expires at the end of 2019.

Ending Crete’s energy isolation by linking the island with the mainland’s grid has been discussed since the 80s, when the required technology and means were not yet available, Stathakis noted, adding conditions have now changed and led to an acceleration of grid interconnections.

The Crete-Peloponnese grid link, expected to be completed in 2020, represents the first step of a wider link, from Crete to Athens, planned to be completed in 2022.

Elsewhere, the first of three grid interconnection stages in the Cyclades has been completed while the other two are said to be making swift progress.

 

DEPA placing extra LNG order for bigger Revythoussa terminal

Gas utility DEPA is making arrangements with Algeria’s Sonatrach for a considerable additional LNG order to fill a new third storage tank at the upgraded LNG terminal on the islet Revythoussa, just off Athens, once the facility’s imminent commercial launch is staged.

This LNG shipment, entailing part of a 130,000-cubic meter order, comes as an addition to scheduled deliveries for the winter season’s heightened demand.

DEPA is now awaiting the LNG terminal’s launch, which has been delayed by a few weeks, to proceed with its extra Sonatrach order. The gas utility is keen to move ahead with the order as soon as possible to avoid any price fluctuations in the European energy market, currently volatile.

According to latest estimates, the upgraded Revythoussa terminal is expected to begin operating – commercially – in the second half of December, despite a preceding official launch ceremony, planned for November 22.

The terminal’s new storage tank will offer a 95,000-cubic meter capacity, boosting the facility’s overall capacity to 225,000 cubic meters. The upgrade promises to create new gas export potential to Balkan and southeast European markets.

According to a study conducted by Greek gas grid operator DESFA, the new Revythoussa terminal will be able to cover 30 percent of gas import needs in the Balkans, Slovenia and Hungary.

The US is currently seeking European gateways for shale gas exports. Besides catering to American gas trading interests, the upgraded Revythoussa terminal could, in the medium term, also facilitate gas quantities stemming from rich Cypriot and Israeli sources in the east Mediterranean.

 

Athens defies Brussels limit for Crete’s diesel power stations

The energy ministry appears to have decided not to restrict the operating capacity of Crete’s diesel-fired power stations by the end of 2019, when a European Commission extension for these high polluting units expires, as all alternatives examined to cover a consequent energy sufficiency shortage on the island are seen as high-cost solutions.

Though Greece’s interest for a further operating extension has not been officially rejected by Brussels, the European Commissioner for Climate Action and Energy Miguel Arias Canete recently made clear the country will not be granted more time.

Energy minister Giorgos Stathakis is counting on an increased level of understanding by the European Commission, given the looming energy shortage threat on Crete, as well as lengthy procedures implemented by Brussels officials in reaction to environmental violations.

A prolonged operating period of Crete’s diesel-fired power stations, covering electricity needs until a submarine power cable connection linking the island with the Peloponnese is completed, should make the energy scare manageable.

Taking into account higher electricity demand levels anticipated on the island, an additional 50 MW should be needed in 2019 and 70 MW in 2020, according to a DEDDIE/HEDNO (Hellenic Electricity Distribution Network Operator) study that was reportedly presented at an Athens meeting this week.

Small units to be transferred from Rhodes and, possibly, leasing of other units for Crete, are planned to cover this extra demand.

LNG terminal upgrade launch delay sparks mini energy alert

The commercial launch of gas grid operator DESFA’s upgraded LNG terminal on the islet Revythoussa, just off Athens, is headed for a slight delay that could place some pressure on the country’s grid as a result of the higher energy demand anticipated as winter draws nearer.

DESFA had committed itself – in writing – to a commercial launch of a third storage tank by the end of November, for a needed capacity increase at the LNG terminal, while an official launch ceremony, possibly with the participation of Prime Minister Alexis Tsipras, has been planned for November 22.  This date remains unchanged.

However, latest developments suggest the commercial launch will not be possible prior to mid-December, sparking a mini energy sufficiency alert. A meeting involving all related authorities was staged yesterday at the energy ministry.

A fifteen-day delay may not seem drastic, but it could prove pivotal for Greece’s energy-related matters this winter given the European energy market’s prevailing conditions. Under a new term, electricity producers must maintain seasonal reserves.

Brussels increasingly vigilant towards Chinese investments

The European Commission is maintaining a passive yet increasingly vigilant watch on Chinese energy-sector investments in Greece and other EU member states, Brussels officials have indicated in comments to journalists.

China’s penetration of European markets is not viewed negatively as long as the related entrepreneurial activity complies with EU law, officials in Brussels pointed out.

Highlighting this intensifying lookout, Chinese initiatives in the Greek market were raised at a Brussels news conference held by European Commission officials.

Journalists forwarded questions concerning last year’s acquisition by SGCC (State Grid Corporation of China) of a 24 percent stake in Greek power grid operator IPTO, as well as CHN Energy’s interest in an ongoing bailout-required sale of main power utility PPC lignite assets, including the Meliti and Megalopoli power stations.

“Chinese investments can take place as long as they are in line with EU law and meet all obligations regarding electricity supply sufficiency,” one Brussels official noted. “The extent to which this is being observed in Greece’s case will be evaluated when the time comes to do so.”

Canete’s deadline extension rejection for Crete diesel units raises alarm

A question forwarded by ruling Syriza party Euro MP Stelios Kouloglou to the European Commission’s climate change and energy chief  concerning project awarding procedure delays for the Athens-Crete grid link has unintentionally raised the alarm for urgent action at the energy ministry and RAE, Greece’s Regulatory Authority for Energy, suddenly both under major pressure to seek a solution that would prevent an energy shortage problem on Crete as of 2020.

Responding to the Greek MEP’s question, the European Commissioner for Climate Action and Energy Miguel Arias Canete made clear, in a public statement, Greece will not be granted any further deadline extensions beyond December 31, 2019 for diesel-fueled power stations operating on Crete.

The commissioner’s reaction also serves as a preemptive response to any deadline extension, as has been contemplated by Athens, for Crete’s diesel-fueled power stations. Such a request has yet to be made.

According to sources, highly ranked Brussels officials visiting Athens last month had kept alive the prospect of a deadline extension for Crete’s high-polluting power stations until the energy shortage fears on the island were overcome, under the condition that this allowance was accompanied by an environmental initiative from Athens, such as the withdrawal of lignite-fired power stations operating on the mainland.

 

 

 

DESFA pledges, in writing, LNG terminal addition will be ready for winter

DESFA, the country’s gas grid operator, has pledged, in writing, that an additional third storage tank at its LNG terminal on the islet Revythoussa, just off Athens, will be ready for a commercial launch between November 15 and 20, a prospect that eases concerns of an energy supply shortage in Greece this winter.

The issue is linked to a new commitment taken on by electricity producers for maintenance of seasonal reserves.

The current storage capacity offered by the Revythoussa LNG terminal’s two existing tanks does not suffice to avert energy shortage fears, meaning that the delivery of the new third tank ahead of this coming winter is crucial.

Gas utility DEPA has demanded clarification on the third tank’s delivery date and notification, well in advance, if the commitment is not to be met so that it can press ahead with leasing arrangements for a floating LNG tanker as a temporary solution. The sooner such tankers are leased the less they end up costing.

The addition of a third storage tank, which promises to increase the Revythoussa LNG terminal’s overall capacity to 225,000 cubic meters, would rid Greece’s system of any energy shortage fears.

 

Emergency energy measures being worked on for the winter

IPTO and DESFA, the country’s respective power and natural gas grid operators, are currently working on emergency plans, based on mild and extreme scenarios, that would counter energy supply shortages, according to sources.

Pundits have already forecast European electricity and gas markets will face pressure in the coming months, especially if it turns out to be a cold winter.

The level of readiness of an additional third storage tank, whose installation is now being finalized, at the LNG terminal on the islet Revythoussa, just off Athens, will be crucial to the overall emergency effort. Extraordinary measures will most probably not be necessary if the new facility’s commercial launch is ready for the winter.

If needed, the measures being considered in Greece include leasing a floating LNG tanker, for a third year, as an extra storage facility at Revythoussa.

Local natural gas consumption has already reached high levels, lifted by the power grid’s greater reliance on natural gas-fueled power stations as a result of higher CO2 emission right costs that have made lignite-fired power stations less competitive. CO2 emission right costs have shown no signs of easing.

 

Balkan countries working on EU protective solidarity arrangements

EU member states are working on forming and signing solidarity arrangements to offer wider crisis prevention plans against electricity and natural gas supply abnormalities by December 1, based on an EU regulation issued last November.

These arrangements are intended to protect consumers and infrastructure against energy shortage threats raised by emergency conditions as a coordinated European effort rather than a series of national plans, seen as too limited to counter threats with broader implications.

RAE, Greece’s Regulatory Authority for Energy, has been tasked with heading the wider arrangement’s Balkan group, coordinating the protection plans of Greece, Bulgaria and Romania.

The solidarity arrangements are seen as a necessary form of protection in emergency situations given the interactive nature of electricity and natural gas markets, especially neighboring markets.

The solidarity arrangements will enable EU member states affected by natural gas and electricity supply problems to seek support from neighboring countries.

According to the EU regulation, gas supply sufficiency priority will be given to households, telethermal facilities and key social services such as hospitals.

In the plan’s most recent regional development, Greek and Bulgarian energy regulatory and energy exchange officials, as well as system operators representing the two neighboring countries, held a meeting early last month to establish a road map with an objective to bridge their electricity markets.

The crucial role of energy as a link promoting stability, economic growth and competition-related potential, ultimately offering mutual benefits to energy consumers of both countries, was reiterated at the meeting, according to participants.

EBRD link to DESFA sale carrying geopolitical dimension

A US effort aiming to limit Russia’s influence over European energy matters is believed to be behind the participation of the EBRD, the European Bank for Reconstruction and Development, in a tender offering a 66 percent stake of DESFA, Greece’s natural gas grid operator.

Last Friday morning, just hours ahead of an afternoon deadline set for binding bids, the EBRD board, confirming previous energypress reports, decided it would join one of the two bidding teams in contention for the DESFA stake. The team is headed by Spain’s Regasificadora del Noroeste (Reganosa) and includes Romania’s Transgaz.

This consortium is up against a team led by Italy’s Snam and also comprised of Spain’s Enagas, Belgium’s Fluxys as well as Dutch operator Gasunie, which is expected to withdraw from this four-member team.

Headquartered in London, the EBRD, established in 1991 during the dissolution of the Soviet Union, is currently owned by 65 countries and two European institutions – the European Investment Bank (EIB) and the EU. The role of the US, one of the EBRD’s co-owners, in the bank’s decisions is highly influential.

DESFA’s sale has taken on a geopolitical dimension, as was made apparent at last week’s Athens Energy Forum event. US energy-sector interests in the wider region were made clear at the event. As has been the case in the past, the US, closely monitoring regional developments, is continuing to place major emphasis on a policy pushing for energy source diversification and retreat from the Russian sphere of political and economic influence.

A leading US embassy finance official, speaking at the Athens Energy Forum, noted that the exploitation of energy-sector matters as a means for applying political pressure is a classic Moscow strategy.

The diplomat noted that the two pillars supporting Europe’s energy strategy – source diversification and supply security – are reducing the continent’s dependence on Russia and limiting the ability of any country to exploit the energy sector as a political tool.

Such thoughts strongly suggest that the EBRD’s involvement in the DESFA tender carries a geopolitical dimension, besides boosting the Reganosa-led consortium’s chances.

The levels of the binding offers submitted by the two remaining participants last Friday afternoon are expected to be announced within the next few days.

It remains to be seen whether the wider developments surrounding DESFA are in any way related to growing rumors of a planned capacity increase of over 10 bcm for TAP, as soon as construction of this natural gas pipeline, running across northern Greece, is completed.

 

 

 

European countries exploring energy futures with RES growth in mind

Though Norway has just announced plans to further develop its infrastructure for exploration and exploitation of new natural gas and oil deposits in the Arctic Ocean’s Barents Sea, in an effort to compete with Russsia, neighboring countries in Europe’s north are shaping their future energy plans with a focus on renewable energy.

The Norwegian plan, just announced by the country’s energy minister Terje Soeviknes, is planned to begin with hydrocarbon exploration in the northern part of the Barents Sea, believed to be holding huge unexploited deposits. This plan is expected to be submitted to Norway’s parliament for ratification in 2020.

Enormous natural gas amounts are being extracted in this sea area, shared by Russia and Norway since 2010, especially Russia’s Rosneft.

Norway’s state hydrocarbons fund, whose surplus has exceeded one trillion euros, had recently decided to pursue RES investments, but the turn towards hydrocarbon exploration was deemed necessary given the competition with Moscow. The US is keeping a close watch on developments here.

Recent tenders, staged independently, without any state funding, for the development of offshore wind parks in Europe’s north, had generated hopes that the dependency of electricity prices on state aid, whose cost is ultimately passed on to consumers, is approaching its end.

The UK faces major decisions in choosing between energy sources, one reason being the country’s continuously growing electricity demand for cars. The resistance of local communities against shale gas extraction has severely delayed such activity. The approach has been banned in Scotland.

UK investments in the RES sector fell by 56 percent in 2017, to 10.3 billion pounds from 23.4 billion pounds a year earlier. The UK government has announced that subsidies for RES development in the country will end once an amount of 557 billion euros, currently available, has been spent.

In Germany, a battle is still being waged over the use of lignite. A total of 148 lignite-fired production plants will keep using lignite until 2050. Officials contend this long-term use is needed to protect 20,000 jobs in the sector, adding that low-cost energy will be necessary once the country’s nuclear power stations have been closed by 2022.

Numerous countries, including the UK, Canada and France, decided last month to stop using carbon by 2025. As is widely known, Greece is facing pressure to limit its lignite use. Germany has promised a 40 percent reduction of its CO2 emissions, compared to levels in 1990, by 2020. At present, 40 percent of electricity used in Germany is lignite-produced.

 

 

 

Gas-fueled power producers take on LNG tanker security measure costs

Natural-gas fueled electricity producers will assume the cost of a RAE (Regulatory Authority for Energy) decision to hire a tanker for additional storage capacity at the Revythoussa islet LNG terminal, just off Athens, as a precautionary gas supply measure for this winter season.

The details concerning the cost coverage of this measure have been included in an energy ministry amendment of a bill drafted for the establishment of energy communities, promising decentralized, locally generated energy solutions.

According to local regulations, licensed natural-gas fueled electricity producers need to maintain agreements with DESFA, the natural gas grid operator, as well as natural gas reserves.

Costs to be covered by natural-gas fueled electricity producers include the tanker’s hiring and operational costs.

A tanker loaded with 120,000 cubic meters of LNG arrived at Revythoussa at the beginning of this year and will remain docked at the facility until the end of February to offer supply security should high-demand conditions emerge, as was the case last winter, when the system was stretched to its limits.

LNG tanker, an energy security measure, on way to terminal

An LNG tanker leased by DEPA, the Public Gas Corporation, planned to dock at the LNG terminal on Revythoussa, an islet just off Athens, as an emergency gas storage facility during the high-demand winter months, is expected to arrive tomorrow or Friday.

The tanker will be used to help maintain a regulation requiring gas-fueled electricity producers to be prepared to operate for five consecutive days if needed by the system. This regulation has not been implemented to date. It was scrapped about seven years ago when the LNG terminal’s storage capacity was deemed inadequate to support the measure.

Certain electricity production units – Elpedison’s two units and a smaller facility run by Heron – have been designed to be able to switch from natural gas to petrol, if necessary.

All other licensed units in operation have agreed to maintain LNG reserves so as to be able to function for five consecutive days.

The five-day reserves requirement will now apply for all electricity production units not equipped to switch from gas to petrol.

The LNG tanker plan, expected to safeguard the country against a repeat of last winter’s energy crisis, is estimated to cost approximately 6 million euros. The measure will be covered through the reimposition of a special supply security surcharge previously included on consumer gas bills.

The surcharge was lifted following the accumulation of a surplus worth between 9 and 10 million euros. Consumers can expect this surcharge to soon reappear on their natural gas bills. It will be maintained until the coffers at DESFA, the natural gas grid operator, are sufficiently filled to cover the cost of the precautionary LNG tanker measure.

Industrial enterprises linked to the demand response mechanism (interruptability) – it enables them to be compensated when the TSO (ADMIE/IPTO) requests that they shift their energy usage by lowering or stopping consumption during high-demand peak hours so as to balance the electricity system’s needs – will be exempted from the supply security surcharge.

Meanwhile, market players have reacted strongly against an additional measure that will require suppliers and producers to sign gas supply contracts for extended periods of roughly two and a half months.

 

Local market still unaffected by Austria gas hub explosion

Greece’s energy market has remained unaffected, without any danger of supply shortages and increased prices, for the time being, following yesterday’s blast at Austria’s Baumgarten gas hub, which killed one person and injured at least 18, according to police reports.

The blast at Baumgarten, one of Europe’s main distribution hubs, prompted a 23 percent increase in wholesale natural gas prices within minutes of the explosion to reach a four-year high, but the effects have not reached as far as Greece.

This may be explained by the fact that Greece’s natural gas market does not feature many buyers and sellers, nor does it serve as a gas hub, but, instead, is supplied directly via a route stretching from Ukraine all the way to the Greek-Bulgarian border.

However, it is still too early to rule out any impact on the small Greek market over the next few days, especially if repair work at the damaged Austrian facility is delayed and European gas demand levels remain high as a result of the winter conditions.

Market officials noted LNG prices may rise if the damage at Baumgarten proves extensive. No further affects are anticipated for the time being, according to authorities.

Besides the lignite-fired power stations currently on hand in Greece – four of five units at the main power utility PPC’s Agios Dimitrios facility, as well as the utility’s Megalopoli III and IV and Amynteo II – the country’s grid is also being supported by gas-fueled facilities in Aliveri, Lavrio, Megalopoli V, a Heron facility, Elpedison’s unit in Thisvi, as well as units operated by Protergia and Korinthos Power.

To date, no gas import shortages, or exports, to cover increased needs in central Europe, have been registered.

Austria’s Baumgarten facility, on the Slovakian border, supplies one tenth of total European demand and is a key distribution center for gas hailing from Russia and Norway.

A Bloomberg report described the incident as a warning that highlights the age-factor of much of Europe’s key energy infrastructure.

Just hours prior to the explosion in Austria, an underwater pipeline connection transfering natural gas from the North Sea to northern Europe needed to be temporaily closed after a minor rupture was detected. Also, gas storage facilities in the UK are frequently forced to shut down as a result of ageing pipelines.

The majority of Europe’s natural gas infrastructure was developed between 1960 and 1980, during a period when the former Soviet Union was exploiting new Siberian deposits for increased gas exports to west Europe.

Ageing gas infrastructure requires increased attention and maintenance over time. Increased demand also accelerates deterioration.

Lower natural gas and oil prices have prevented any talk of replacing some of Europe’s ageing energy installations.

The UK has been impacted most, in terms of prices, by the Baumgarten gas hub explosion, which coincided with increased demand from northern Italy to Scandinavia as a result of the drop in temperatures.