energy

Energy, infrastructure investments on Hollande’s agenda

Posted on by admin

French President Francois Hollande’s scheduled official two-day visit to Athens this Thursday and Friday for a series of meetings with local political figures will focus on investments, energy and infrastructure included, as indicated by his delegation’s make-up, comprised of a large number of officials representing some of France’s biggest corporations such as Vinci, EdF, GdF Suez, Veolia, and Total.

A host of French companies are already well established in the Greek market, while others are planning to enter through  prospective privatizations in Greece. These include French state-run companies such as SNCF, which has already expressed interest in acquiring railway company TRAINOSE, and GdF Suez, holder of sizeable stakes in EYDAP, the Athens Water Supply and Sewage Company, and EYATH, the Thessaloniki Water Company. GdF Suez is awaiting expected privatization procedures for both EYDAP and EYATH.

French business interest is believed to be strong in the infrastructure and road network development sectors, logistics, land registry development, tourism, and defense.

The country’s interest in Greece’s energy sector concerns hydrocarbons exploration as well as electricity market acquisitions. French company Total declared an interest to explore offshore areas in the Ionian Sea by submitting a license bid to a tender that expired last summer.

Also, EdF is already active in Greece’s renewable energy sources (RES) market. The company also maintains interests in Greece’s conventional electricity market through subsidiary firm Edison. EdF has been regarded as a key contender for a stake in main power utility PPC in the event that privatization procedures were launched. However, the Syriza-led Greek coalition has ruled out such a possibility as part of its plan to maintain the state’s control of the country’s utilities.

A team of highly-ranked SEV (Hellenic Association of Industrialists) officials paved the way for the upoming Hollande-led trip by visiting Paris for business meetings late last month. French investment interest was expressed in a range of fields, including manufacturing, construction, IT, communications, energy, banking, defense, pharmaceuticals, retail activity, and industrial production. The SEV trip to Paris was topped off by the signing of an agreement between SEV and MEDEF, France’s largest employer federation, to encourage bilateral investment activity between Greek and French corporations.

Bilateral trade between Greece and France is currently worth approximately three billion euros, annually. Over 120 French companies are active in the Greek market, investing a total of about three billion euros over the past few years.

Lack of replacement plan for RAE board threatens market

Posted on by admin

As Environment and Energy Minister Panos Skourletis presses on with preparing prior actions needed in the energy sector to help secure Greece’s next subtranche from lenders, while also engaging in ongoing gas pipeline diplomacy, he seems to have forgotten one crucial issue that threatens to affect the energy market’s proper functioning. He has yet to publish a recruitment notice for new board members at RAE, the Regulatory Authority for Energy, whose seven-member board will soon be down to three members as the terms of four officials expire over the coming weeks. A majority vote for decision making at RAE would not be possible if just three of seven members are left on the board.

The tenures of two board members, Giorgos Lagaris and Kyriakos Vlahos, end on November 20, while the terms of two more members, Mihalis Thomadakis and Miltos Aslanoglou, expire on December 2.

Even though this concern comes at a crucial time for the country’s energy sector, facing a series of major reforms, little attention has so far been given to RAE’s board. A recruitment notice needs to be published urgently if the authority is to be able to continue operating normally.

Based on regulations, as a first step, the notice would need to remain posted for 30 days before a further 30-day period is provided for the energy minister to consider candidates. Then, the new recruits will need to be approved by Parliament’s Committee on Institutions and Transparency. All this boils down to meaning that even if the recruitment notice were to be published tomorrow, the procedure would not be completed until the end of December.

As for the current board’s membership, all members hail from within the authority’s ranks. Not a single member with a market background is on the board. This is a concern for many energy officials who believe private-sector interests are not being represented on the RAE board.

Government lacking energy sector plans, ex-minister supports

Posted on by admin

Yiannis Maniatis, the former energy minister in the pre-Syriza coalition government, has condemned the country’s current administration for lacking energy-sector plans and objectives. He was speaking at a conference, Investing in Energy 2015.

Maniatis told the conference that Prime Minister Alexis Tsipras, during a recent policy speech, made no reference to hydrocarbons exploration, energy development on the islands, and the much-delayed digital power meters installation program.

The ex-minister also criticized the government’s commitment to reduce main power utility PPC’s market share without anything in return for the utility.

Maniatis also questioned whether an adequate level of funds for energy-efficiency projects would be drawn from the new National Strategic Reference Framework (NSRF), an EU funding program.

Energy Ministry’s secretary general resigns from post

Posted on by admin

The energy ministry’s Secretary General Apostolos Alexopoulos resigned from his post last Friday for reasons that currently remain unknown, energypress sources have informed.

It is suspected Alexopoulos’s departure may be linked to his diminished role in major energy ministry issues following the re-election of Panos Skourletis at the ministry’s helm.

Alexopoulos, a former Syriza MP, had assumed the energy ministry’s secretary general post immediately following the party’s first election victory, last January.

He served under the then-energy minister Panagiotis Lafazanis, a radical leftist who eventually quit Syriza to form his own anti-eurozone party, Popular Unity, ahead of last month’s snap elections. It failed to reach the three percent electoral threshold in order to be represented in Parliament.

Free CO2 emission rights would boost investments, PPC chief tells

Posted on by admin

Reducing electricity costs, the provision to Greece of free carbon emission rights as of 2016 being a key aspect of the effort, was discussed at a weekend meeting between main power utility PPC chief Manolis Panagiotakis and Greek members of European Parliament, held to exchange ideas on crucial PPC matters and the energy market.

Greek officials fear that if the country is not granted free carbon emission rights, based on the size of Greece’s GDP now being below 60 percent of the EU average, then the cost of electricity will sharply increase and lignite-fired electricity production will cease being economically feasible, subsequently endangering local energy supply.

The PPC chief official told the meeting free carbon emission rights for Greece would boost sector investments and help achieve an overall environmental upgrade through the replacement of old lignite-fired stations with new, more efficient, environmentally friendly facilities.

PPC wants lignite-fired production to be maintained at a level of 35 percent of local production over the next twenty years as a means of ensuring supply security.

The meeting’s officials, representing a range of center-to-left Greek political parties, described the IPTO power grid operator’s assets as prized and irrreplacable assets belonging to parent company PPC.

 

 

 

Major energy reforms left for next subtranche from lenders

Posted on by admin

No major energy-sector reforms have been included in an omnibus bill containing prior actions needed in October for Greece to receive the next two-billion-euro subtranche from its lenders.

The development confirms previous reports that the energy reforms had not been finalized. These energy-sector reforms are intended to open up the electricity market through plans to reduce main power utility PPC’s market share by 25 percent in the immediate future, lower industrial energy costs, and privatize IPTO, the power grid operator, or provide an alternative plan offering equivalent market results, were not ready.

However, the multi-bill does include amendments to a gas market reform bill ending regional gas supply monopolies. All other energy-sector reforms have been left for later and are expected to be linked to the next subtranche from lenders.

The energy ministry has assembled committees to work on a series of energy-sector prior actions demanded by the bailout agreement.

These include new transitionary and permanent CATs; the reintroduction of a Variable Cost Recovery Mechanism, locally acroymed MAMK, to prevent certain power stations from operating below cost by helping cover their start-up costs whenever they are called into action to help meet the grid’s needs; offsetting debt issues between PPC and market operators; gas market reforms; implementation of a “disruption management” plan to enable energy cost savings for major-scale industry in exchange for shifting energy usage to off-peak hours whenever required by IPTO, the power grid operator (an existing pre-Syriza model will be used); PPC cost-based tariff revisions for consumers and the elimination of a 20 percent discount offered to energy-intensive industrial consumers; introduction of NOME-type auctions to reduce PPC’s wholesale and retail market shares by 25 percent by offering wholesalers access to PPC’s low-cost lignite-fired production; and privatization of IPTO, or an alternative plan offering equivalent results.

 

 

First LAT-MED forum on energy, infrastructure in Rome next month

Posted on by admin

LAT-MED, the first high-level forum of businesses and institutions hailing from Latin America and the Mediterranean region and active in the sectors of energy and infrastructure, an event being organized by K.IN.G, a Greek company, is scheduled to take place in Rome on November 27.

The forum, which has a networking character and will include b2b meeting services, will be staged at the Spazio Europa (Via IV Novembre n.149, ground floor), a venue managed by the European Parliament Information Office in Italy and the European Commission Representation in Italy.

For more information visit the forum’s website, www.latmedforum.com.

 

Energy officials battle to meet October 15 bailout deadline

Posted on by admin

The Energy and Environment Ministry is battling against time to meet bailout energy sector requirements ahead of an October 15 deadline. The deal’s energy sector package, one of 48 prerequisites that were discussed at last Friday’s Euro Working Group, will also be on the agenda of today’s Eurogroup meeting of eurozone finance ministers.

The Greek energy ministry, along with RAE, the Regulatory Authority for Energy, serving as the country’s technical advisor in the effort, are expected to make certain announcements within the current week, as proposals for many of the energy matters are believed to be ready.

The Euro Working Group list of items agreed to for delivery by Greece this month includes a NOME-type auction plan to be discusssed with European Commission officials.

A transitionary and permanent CAT mechanism for power stations, to replace a preceding version, will also need to be prepared. Discussions with the European Commission for a permanent mechanism are expected to be stretched beyond October.

Moreover, revisions are expected to the wholesale electricity market so as to avoid below-cost operations at power stations.

An agreement offsetting debt issues between the main power utility PPC and operators is also expected.

Gas market reforms, including an issue concerning distribution cost increases, also need to be prepared for the October deadline.

In addition, a “disruption management” plan to enable energy cost savings for major-scale industry in exchange for shifting energy usage to off-peak hours whenever required by IPTO, the power grid operator, must be introduced.

PPC must implement cost-based tariffs and abolish subsidized rates such as those offered to farmers.

Finally, PPC needs to replace its 20 percent discount offered to industry with customized tariffs reflecting the respective profiles and needs of industrial consumers.

Gov’t applying delay tactics to bailout deal energy demands

Posted on by admin

The government appears to be resorting to delay tactics on energy-sector reforms agreed to in the latest bailout package as it meanders for alternative solutions that may produce equivalent results to those of plans specified by lenders. The administration’s objective is to maximize the state’s control in the sector, especially main power utility PPC, as the Syriza party has pledged.

Many government officials may have not yet fully realized that if the administration’s alternative options fail to produce the market results demanded by creditors, then an abrupt outcome of tough and undesired measures will inevitably follow. These could include the part-privatization of PPC.

So far, the government has sought hybrid, middle-of-the-road solutions such as reducing PPC’s market share, as is demanded by the bailout, without selling any company units or downsizing the power utility. Another seemingly impossible combination being pursued by the country’s administration entails achieving competitive conditions for grid networks, far away from any PPC intervention, without, however, privatizing the power utility’s subsidiary firm IPTO, the power grid operator.

Environment and Energy Minister Panos Skourletis is seemingly reiterating, almost every day, what he views as the need to maintain a strong and state-controlled PPC.

The government’s imminent NOME-type auctions plan, intended to break PPC’s market dominance, as well as its IPTO proposal – both of which appear unrealistic and will soon be submitted to the European Commission – are probably being used as components of the administration’s delay tactics. The meandering is serving one main objective, which is to test the limits of lenders, especially the European Commission.

The government’s foot-dragging is also part of an attempt to incorporate energy-sector matters into the wider framework of political negotiations between the administration and lenders. The intention here is to further complicate energy reforms.

However, it remains to be seen what may follow if the lenders react ruthlessly and the country’s prospective bailout tranches end up depending on pending energy reforms. Energy ministry officials do not have an answer to this possibility.

PPC appears increasingly unwilling to lower its starting price for the NOME-type auctions, which will provide wholesalers access to the utility’s low-cost lignite-fired electricity production. The aim is to immediately reduce PPC’s retail electricity market share by 25 percent and down to 50 percent by 2020. Electricity wholesalers will not be drawn to the NOME auction process if starting prices are set at 59 euros per MW, as PPC is insisting.

In other words, it is now widely believed, in advance, that the NOME effort is slowly being driven towards its ultimate debacle. However, in its effort to appear punctual towards its bailout commitments, the government is nevertheless preparing to submit its NOME plan to Brussels and waste more time.

If the NOME effort fails to reduce PPC’s market share and lenders demand an alternative route, as is stipulated in the bailout agreement, the government does not appear to have prepared a Plan B, despite leaked information of an alleged solution entailing the sale of PPC power stations and establishment of partnerships with private-sector companies for existing facilities.

The European Commission has so far avoided offering any comments on the ordeal. Greece has been granted an unofficial deadline extension for energy reforms ahead of the first review in November. Despite having remained silent to date, officials in Brussels are closely following developments, including the energy sector’s coverage by local media.

 

 

TAP, IGB can turn Greece into energy hub, Tsipras highlights

Posted on by admin

Greece’s potential as an energy hub in the wider region if, among other initiatives, the strategically important TAP and IGB natural gas pipelines are fully utilized was highlighted by Prime Minister Alexis Tsipras during a meeting with US Secretary of State John Kerry.

The two officials, along with Kerry’s Greek counterpart, Nikos Kotzias, also discussed the current refugee crisis, a leading item on their agenda. The Greek Prime Minister requested US mediation, especially with Turkey, as part of an effort that may make the neighboring country more cooperative on its handling of the influx of refugees on the Greek islands. Tsipras also called for US support of a UN refugee relocation plan.

Progress on the Cyprus issue, in which the US’s role is highly influential, was another issue on the agenda, while the name issue concerning the Former Yugoslav Republic of Macedonia (Fyrom) was also discussed. Kerry indicated that the US intends to apply its influence to help resolve the dispute as a means of allowing the neighbouring country to join the EU and NATO, as Washington would like.

During the meeting, Tsipras also elaborated on Greece’s bailout negotiations during his administration’s first seven-month tenure, and the deal that was eventually reached with creditors. He thanked Kerry for the US’s support during the process, while adding Greece’s debt needs to be restructured, a stance backed by the US, which may influence Berlin on the matter.

National energy cost, at 25bn euros annually, ‘must be lowered’

Posted on by admin

Energy costs in Greece amount to 25 billion euros, annually, representing a far greater percentage of GDP compared to such costs in Germany, Vassilis Tsolakidis, president of CRES, the Center for Renewable Energy Sources and Saving, locally acronymed KAPE, told a biogas event yesterday at the Greek-German Chamber of Commerce and Industry in Thessaloniki.

The deep recession experienced in Greece over the past six years has led to little change in this field, Tsolakidis noted.

“Total consumption of primary energy supply in Greece may have declined during the crisis but remains at very high levels compared to other countries,” Tsolakidis remarked. “It has remained at 2.1 tons of oil equivalent (TOE) per capita when, in Germany, for instance, an energy-intensive country with elevated export activity, the figure is 3.7 TOE per capita,” the CRES chief continued. Greece’s TOE per capita figure was 2.7 TOE per capita prior to the crisis, he noted.

Tsolakidis stressed the figures clearly display the burden for Greece’s national economy, considering that roughly 45 percent of the national energy cost is comprised of taxes.

“Every Greek citizen pays [an average of] around 1,200 euros per year on taxes generated by energy consumption, when the equivalent for German citizens is 550 euros,” Tsolakidis told the event, attended by an audience of Greek and German entrepreneurs, authorities, representatives of the sector’s five biggest companies, as well as Germany’s consul general in Thessaloniki, Dr. Ingo Von Voss. “One can imagine how great an obstacle energy-related taxation is for economic growth,” he added.

The figures highlight the need to reduce energy costs in Greece, based on a stategy that will reduce energy imports, especially fuels, decrease high energy taxation rates, and replace mineral fuels with renewable energy sources (RES), Tsolakidis noted.

Despite the crisis, RES penetration over the past few years has increased the sector’s share in the country’s energy balance, the CRES chief noted. The RES sector has served as one of the most significant draws for investments, which have amounted to eight billion euros for the sector amid the crisis, Tsolakidis said. Objectives have almost been reached despite planning errors committed in Greece’s RES sector, he added.

The actualization of investments, including plans granted permits, is being “obstructed primarily by an insufficient and problematic legal framework,” the CRES chief noted.

 

Crucial meeting tomorrow for bailout-linked energy reforms

Posted on by admin

Various committees assembled to press ahead with a series of bailout-related energy reforms for the energy ministry are currently finalizing their proposals ahead of a crucial local meeting tomorrow, during which pending details on more pressing and developed reforms such as the new CATs, NOME-type auctions and the “distruption management” plan, are expected to be tackled.

At this point, energy ministry officials consider the new CATs and the Variable Cost Recovery Mechanism, to help cover independent power station start-up costs, as less demanding tasks than the efforts concerning the NOME-type auction plan, intended to open up the retail electricity market, and the privatization effort for IPTO, the power grid operator.

Greece has committed itself to seven energy-sector reforms by the end of this month. The deadline may be informally extended to mid-October.

These bailout commitments include implementing temporary and permanent CATs; introducing a new Variable Cost Recovery Mechanism, locally acronymed MAMK; adopting measures to offset debt issues between the main power utility PPC and the electricity market operator; making gas market reforms; introducing the “distruption management” plan, which will enable energy cost savings for major-scale industry in exchange for shifting energy usage to off-peak hours whenever required by IPTO, the power grid operator; revising PPC tariffs based on production costs, in place of a 20 percent discount offered to high-voltage consumers; and discussing, with the European Commission, a plan for NOME-type auctions with the aim of reducing PPC’s retail and wholesale electricity market shares by 25 percent. If an agreement on the NOME-type auctions is not reached by the end of October, Greek officials will need to agree on alternative measures offering equivalent results with regards to PPC’s market shares.

No grace period for re-elected government on energy matters

Posted on by admin

The Production Reconstruction, Environment and Energy Minister to be appointed in the newly re-elected Syriza-led government will not have a single day of spare time as eight of 26 bailout agreement measures that need to be made by the end of September concern the energy sector.

Highlighting the pressure, the interim government’s caretaker energy minister Ioannis Golias formed seven committees last week, just four days before yesterday’s Greek snap elections, to keep matters running on the required energy-sector reforms. This move should have been made a lot earlier.

According to sources, details on the new coalition government’s line-up are expected within the next few hours. If Panagiotis Skourletis is re-appointed energy minister, his choice would minimize any transition time loss as the official was already familiarized with the sector in the previous Syriza-led government. Skourletis had replaced Panagotis Lafazanis on July 20, about a month before Prime Minister Alexis Tsipras called snap elections to seek a fresh four-year mandate, which he gained last night.

No matter who is appointed energy minister, the energy-sector reforms will need to be pursued at a relentless pace, even if the European Commission ends up granting Greece a one-month extension in light of the eight measures that need to be implemented over the next ten days.

Some of the eight actions that need to be taken include establishing mobile teams charged with imposing the law to fight fuel smuggling activities; implementing temporary and finalized CAT’s; introducing a new Variable Cost Recovery Mechanism to help cover hefty start-up costs of independent power stations; revising power utility PPC tariffs based on production costs, in place of 20 percent discounts offered to energy-intensive consumers; and discussing – with the European Commission – the establishment of NOME-type auctions with the aim of reducing PPC’s wholesale and retail electricity market shares by 25 percent. If an agreement on the NOME-type auctions is not reached by the end of October, then alternative measures producing the equivalent results will need to be implemented.

Looking beyond these specific energy-sector actions, the new coalition will also need to decide on broader energy-sector issues, such as hydrocarbons exploration, a front that has essentially been left unattended. Neither Skourletis nor his predecessor, Lafazanis, had sufficient time to seriously deal with the domain. Three bids submitted on July 14 for offshore blocks in an international tender offering twenty blocks in the Ionian Sea and south of Crete have remained unprocessed.

The new government will also need to focus on the renewable energy sources (RES) sector. Market officials expect an upcoming RES support model – which, according to the bailout agreement, will need to be adopted by the end of this year – will reinvigorate the  RES market. Indicative of the overall anticipation, LAGIE, the Electricity Market Operator responsible for wholesale activity, has factored in considerable PV-related impetus into its RES special account forecasts for 2016 and 2017.

Officials preparing the RES support model face the challenge of providing improved tariffs for PV production in order to spur investments. At the same time, officials will need to avoid creating new RES special account deficits, and, by extension, not be forced to increase emission reduction tariffs (ETMEAR) paid by energy-intensive industries to support the RES sector.

 

GEK Terna chief urges local enterprises to repatriate capital

Posted on by admin

Giorgos Peristeris, CEO at the GEK Terna Group, has urged Greek enterprises, primarily, as well as individuals, to repatriate capital and savings to Greek banks. The corporate group’s head official made the plea during the presentation of the GEK Terna Group’s first half results.

While commenting on the Greek banking system’s problems, such as the capital controls imposed this summer, and overall lack of liqudity, Peristeris highlighted: “Throughout the crisis, we have continuously chosen to keep the total amount of our deposits at Greek banks. I don’t think many Greek enterprises acted likewise.”

The CEO also stated that the Greek crisis is affecting the GEK Terna Group’s operations abroad, where the company, like other Greek enterprises, does battle to take on projects on unequal terms as Greece currently lacks a strong and stable domestic banking system.

“From the very first moment [of the crisis] we made a difficult but correct decision to actively support Greek banks and the Greek economy, contrary to the trends and advice we were given. We have persisted with this decision of ours throughout the crisis – even during the most extreme stages – have invested over 1.5 billion euros amid the recession, and kept all our money at Greek banks,” Peristeris noted. “We believe that all Greek enterprises ought to have done the same. In any case, even now, Greek companies and individuals must mass-repatriate their funds. Serious Greek entrepreneurship cannot exist without immediate support for the Greek banking system.”

Peristeris added that Greek enterprises would have achieved very little abroad, such as the Balkan region, if they had not received support from Greek banks.

“If there is no immediate support for Greek banks, it will be extremely difficult to maintain the extroverted orientation of Greek firms,” he said.

Besides Greece, the GEK Terna Group, active in fields such as renewable energy, mining, construction, waste management, and real estate, maintains considerable business interests abroad, including in the USA, Poland, and Bulgaria.

 

 

 

Lafazanis: Energy sector will drive Greece out of recession

Posted on by admin

The country’s energy sector will help drive Greece out of the deep recession, Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis told an energy conference in Athens today.

Commenting on a bilateral agreement that was recently signed by Greece and Russia to make official their interest in developing “Greek Stream”, the local natural gas pipeline segment to be incorporated into the prospective Southern European Pipeline, Lafazanis said the project will be completed by the end of 2018.

The minister noted the pipeline’s construction will create about 20,000 jobs, offer fiscal benefits to the national economy as a result of significant revenues to be collected by the prospective Greek state company that will be established to co-manage the gas pipeline, and, on a wider scale, upgrade the country politically and geopolitically.

The Southern European Pipeline stands as an exemplary model of fair and balanced cooperation between countries, Lafanis noted, while adding its construction will be funded by Russian capital.

Lafazanis also told the conference – titled “Natural Gas Market Penetration in Greece” and organized by the ESCP Europe business school’s Research Center for Energy Managament (RCEM) – that total energy security and low-priced energy sources, which he described as key aspects for peace, stability and economic growth in Europe, stand as the ultimate objectives at his ministry.

The energy minister expressed hope that an international tender for exploration and exploitation of twenty offshore blocks in the Ionian Sea and south of Crete, whose deadline expires next week, on July 14, will produce desirable results. He rejected reports that a new deadline extension will be offered, as a result of the adverse market conditions, following an extension granted earlier this year.

Lafazanis also noted the government intends to further utilize the country’s lignite deposits, which he described as significant for Greece’s energy future.

The hard-line leftist, who heads the radical Left Platform wing within the coalition’s main party, Syriza, reiterated, yet again, that public energy corporations in Greece will not be privatized, while noting private-sector investments in the sector are welcome.

Offering his views on the bankruptcy-threatened country’s current economic turmoil as Prime Minister Alexis Tsipras and his team appear to be pushing for a last-minute bailout deal with creditor representatives, Lafazanis noted that last weekend’s resounding “No” vote in the Greek referendum  – which rejected a previous round of harsh austerity measures proposed by lenders to Greece – would not be transformed into a humiliating “Yes” for a new agreement.

“Having reached this stage, we know that all options are difficult. However, the worst, or most exhausting, humiliating, and unbearable agreement of all would be one of surrender, plunder, and submission of the country and its people,” Lafazanis stressed. “We will never make this choice, not only because it would cause even greater hardship for Greek citizens, but also because it is a choice without any future prospects.”

Playing down the overall panic caused by the ongoing closure of Greek banks, which have now been closed for a week, the energy minister contended the country is not out of control, but instead has many options to choose from. The energy minister described a recent adjustment made by the European Central Bank (ECB) to the emergency liquidity assistance (ELA) mechanism for Greece, which prompted last week’s forced closure of local banks, as a criminal act.

Lafazanis said no nation and its people had been subjected to such degree of suffering and blackmail by “so-called partners” during a time of peace as Greece had over the last five or so years. “Greece can also win this major and unfair battle like so many others it has fought heroically and won in the past,” said Lafazanis.

 

Capital controls already devastating market activity

Posted on by admin

Imposed just yesterday, capital controls are already making widespread negative impact on the Greek market. The effects are being felt by locally based energy-sector companies, big and small, all trapped amid the overall uncertainty and prospect of a possible Greek default and exit from the eurozone.

Both local and multinational enterprises operating here have presently frozen all activity. Investment plans, orders, and all types of transactions, including tax obligations and payments to suppliers and staff, have stopped. It is all swiftly developing into a major shock for the market.

Although enterprises are making an effort to remain composed, the underlying panic cannot be hidden. Both local firms and multinational subsidiaries are preparing to activate emergency plans.

Trading ties between local and foreign companies have been devastated as a result of the sharp increase of distrust from abroad. Any exisiting favorable credit terms offered are vanishing. Officials at locally based companies of all sizes are already reporting that foreign suppliers are demanding full advance payments for all orders before providing products and services. Under the current stifling conditions brought about by capital controls, this is simply impossible.

Responding to the alarming and intensifying negative market developments, entrepreneurial representative groups – SEV (industrialists), ESEE (merchants), SETE (hoteliers), and GSEBEE (small and medium-sized businesses) – joined forces yesterday to seek an emergency meeting with Prime Minister Alexis Tsipras. A meeting was initially scheduled for today but later postponed as a result of the Prime Minister’s overloaded schedule of other urgent matters.

It has already become perfectly clear that companies without funds abroad will encounter serious operational problems in Greece amid the current conditions. Enterprises that have transferred their headquarters and funds abroad, as well as multinationals supporting local subsidiaries, will be favorably positioned.

Energy market also struck by effects of capital controls

Posted on by admin

The imposition of capital controls in Greece, pushing the country closer to bankruptcy and out of the eurozone, also threatens to stifle numerous energy-sector enterprises. Consequently, it is feared that energy companies will not be able to pay foreign trading partners for products and services. Also, questions hang over the fate of the few investments, minor and major, either in progress or at the planning stage.

“The daily operation of the market is interwoven with the Greek banking system. Over the past few hours, foreign suppliers have been contacting us panick-stricken, asking how we will be able to pay them as of today because of the capital controls. There is huge concern,” noted Mathios Rigas, CEO at Energean Oil & Gas. “In the case of Prinos [oil deposit in northern Greece], our production may be sold to BP and payments deposited into a Greek account. The big question at Energean concerns the new drilling investment plan, scheduled to soon begin. If we can’t pay suppliers for the equipment needed we will be forced to disrupt,” he continued.

Other important investment plans are also at risk as a result of the capital controls imposed. These include a plan by main power utility PPC to develop a new power station in Ptolemaida, northern Greece, current investents at wind-energy parks, as well as the tender offering export and exploitation licenses for twenty sea blocks in the Ionian Sea and south of Crete, expiring on July 14. A new extension to the deadline now appears possible.

The shock to the market caused by the credit controls imposed is widespread, affecting both private-sector and public-setor companies, such as PPC, IPTO (power grid operator), DEPA (Public Gas Corporation), DESFA (natural gas grid operator), and ELPE (Hellenic Petroleum), all wondering how they will be able to cover their respective obligations and maintain credibility.

The situation is even worse for smaller enterprises. Take the hundreds of photovotaic parks for example. Sector companies being supplied by foreign firms are already reporting that the limited credit terms offered amid the crisis will now stop completely. Until now, these local enterprises were forced to cover between 30 and 60 percent of orders with down payments. It now appears that foreign supppliers will demand entire amounts at the time of purchase. Of course, bigger energy companies will be in a better position as they had transferred amounts into foreign bank acounts well ahead of the capital controls, and are therefore in a position of still being able to manage transaction payments.

As a Greek exit from the eurozone draws closer, the major debt levels burdening many local enterprises threaten their survival. It is not just the smaller firms holding loans with Greek banks that need to worry. On a bigger scale, PPC, for example, has issued bonds worth billions of euros to foreign creditors for loans. In the event of a currency switch, the amounts owed by the power utility will grow enormously as a result of the inevitable depreciation of the local currency amid a devastated national economy. This will severely stifle operational ability.

Conference to examine Greece as development, stability source

Posted on by admin

The 3rd “Natural Gas and Electricity” Conference, a noteworthy event to be held under the title “Greek energy market: Power of development and stability in Southeastern Europe”, will be held on July 9, 2015 (8am-8.30pm) at the Grande Bretagne hotel in Athens.

The subject matter of the conference – organized by the Research Centre for Energy Management (RCEM) of ESCP Europe, under the auspices of the Technical Chamber of Greece, and with official support provided by the law firm Metaxas and Associates – will include the latest developments in the Greek energy market as well as the prospects it offers for the country’s financial development and its establishment as a leader and main agent of stability in the greater Southeast European region. Moreover, emphasis will be placed on the role of research and innovation with regard to new technologies in the energy sector.

Dr. Antonis Metaxas, V. Professor of Energy Law, IHU, Μanaging Partner of Metaxas and Associates, has been invited to participate in a panel discussion on the topic “Dvelopments in the electricity sector and the role of innovation and new technologies”. Also taking part in this panel discussion will be Manolis Panagiotakis, CEO of PPC, the Public Power Corporation; Emmanuel Koroniotakis, Chairman and Deputy Executive Officer at IPTO, locally acronymed ADMIE; Nikolaos Hatziargyriou Chairman and CEO at HEDNO, the Hellenic Electricity Distribution Network Operator, locally known as DEDDIE; Andreas Tzouros Chairman of ELPEDISON; Dinos Benroubi, Deputy Managing Director at PROTERGIA; Nikos Frydas, Manager Planning Section, European Network of Transmission System Operators for Electricity (ENTSO-E); and John Dimitropoulos Director at KPMG.

Greece has ‘not adapted to competition in energy market’

Posted on by admin

Consumers in Greece are paying more for electricity than citizens in fellow EU states because of the lack of competition in the energy market, the European Commissioner for Climate Action & Energy, Miguel Arias Cañete, noted today.

Canete offered the remark as a response to a question posed by a Greek Euro MP – Maria Spyraki, hailing from the main opposition conservative New Democracy party – on the Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis’s refusal to comply with EU law demanding competition in the energy market.

Opening up energy markets to competition stands as an EU priority, the commissioner said, noting that Greece is not cooperating and is among the EU member states that have yet to adapt to free market systems in the energy sector.

Canete reminded that the European Commission had determined, from as far back as 2008, that the main power utility PPC’s exclusive access to Greece’s lignite deposits, the country’s lowest-cost energy source, is obstructing competition, which is why a suit against Greece was filed at the European Court.

In another question asked by the same Greek MP on RAE, Greece’s Regulatory Authority for Energy, and its independence, currently under threat, if the energy minister’s remarks are to go by, Canete noted that the independence of such bodies is vitally important.

Greek energy technocrats make themselves available to gov’t

Posted on by admin

The Greek Energy Forum, a group of UK-based Greek energy technocrats sharing common interest in the broader energy industry in Greece and Southeastern Europe, has published an article offering proposals to the Greek government on how to go about developing the country’s energy policies.

The proposals focus on measures concerning energy savings, liberalization of the  electricity and gas markets, market mechanisms for the renewable energy source (RES) sector, cooperation with leading enterprises, development of hydrocarbon research, and promotion of bilateral energy trade.

“We believe in the undeniable comparative advantages of the Greek energy sector. We have full faith in the forces of healthy competition and strongly support private-sector initiatives and entrepreneurship,” the GEF group noted. “We highlight the need for the independence of institutions charged with the supervision and proper management of the energy market,” it continued.

 

Uncertainty over lender views on energy reform proposals

Posted on by admin

It remains unknown whether Greece’s energy-sector proposals in the bailout negotiations meet demands that had been set by the European Commission and its fellow lenders for market liberalization and adjustments complying with EU and energy unification regulations.

As has been well publicized, energy sector privatizations, with main power utility PPC’s part-privatization and IPTO, the power grid operator, at the forefront, are fundamental in the European Commission’s drive aiming to liberalize markets, generate competition, and create a unified European energy market.

According to an article published by Greek daily Kathimerini, the government’s reform proposals for the energy sector comprise natural gas market revisions, a commitment to reshape the CAT system, currently pending, PPC tariff revisions, based on production costs, as well as the adoption of NOME-type auctions by PPC, offering lignite access to private-sector suppliers.

The Greek package of proposals also includes an electricity market roadmap leading to the “target model”, adjusting the local market to EU regulations. It also includes a proposal for full compliance with EU laws in ownership unbundling, breaking monopolies.

Greek officials, according to the Kathimerini report, have also committed to preparing a new legal framework offering support to renewable energy source (RES) enterprises, and implementing energy-sector tax revisions. Another commitment concerns a pledge by the Greek state to settle amounts owed to PPC, as well as financial support and independence for RAE, the Regulatory Authority for Energy.

Greek authorities have also committed to providing a specific development plan for the RES sector and implementing an EU directive concerning energy efficiency, beginning with ratification of related legislation and the introduction of a new plan to upgrade the electricity network with the aim of improving efficiency and reducing costs for all consumer categories.

Energy-sector firms anxiously awaiting bailout developments

Posted on by admin

Energy-sector authorities contacted by energypress have all expressed deep concern over today’s crucial bailout talk developments as the possibility of a break in ties between Greece and its lenders has not yet been ruled out, while certain members of the leftist Syriza led coalition, including from its junior partner Independent Greeks, appear to want a rift.

The concern is not only linked to the concerns of the business sector – certain entrepreneurs, as a result of the nature of their particular fields, believe a Greek exit from the eurozone would benefit their operations – but, more crucially, the social, political, and economic upheaval that would be prompted by a breakdown in today’s negotiations.

Last week’s enormous outflow of deposits from Greek banks was countered with capital injections from the European Central Bank (ECB). If the negotiating sides fail to reach a deal, the ECB will stop providing liquidity, which would prompt a collapse of the local banking sector and leave banks unable to cover deposits. Implementation of capital control measures would be necessary, placing in danger social composure, the state’s smooth functioning, services, the economy, production, even national security. In addition, in the event of an unfavorable deal for the government, it would be forced to head for elections.

Certain energy sector officials told energypress that a temporary deal between Greece and its lenders would avert the danger of immediate collapse, but, essentially, the country and economy would fall further behind on commitments for the remainder of this year, increasing the difficulty of any prospective restructuring.

Both the Greek government and all creditor representatives need to act based on mature political insight for a wide-reaching and sustainable agreement. Only such a deal could restore faith in the economy and unlock investment as a preliminary step towards the economy’s revival.

The series of energy-sector demands set by the country’s creditor representatives include part-privatization of PPC, the main power utlity; privatization of IPTO, the power grid operator; gas market reforms; PPC tariff revisions based on production costs, which would lead to increases and decreases, depending on category; adoption of NOME-type auctions for lower-cost electricity; CAT revisions; energy tax revisions; and preparation of a legal framework supporting the renewable energy source (RES) sector.

 

 

Athens energy conference to focus on country’s key SE Europe role

Posted on by admin

The Research Center for Energy Management (RCEM) at the ESCP Europe Business School will stage an energy conference titled “Greek Energy Market: Power of development and stability in the region of SE Europe” on July 9 at the Grand Bretagne Hotel in Syntagma, Athens, Dr. Kostas Andriosopoulos, the research center’s director, and vice chairman of DEPA (Public Power Corporation), who will head the event, has announced.

The conference will bring together not only representatives from all the leading energy companies in the Greek Market, but also leading academics, experts from the energy industry and government officials.

Admission to the conference is free of charge, but places are limited and allocated on a selective first-come, first-served basis. Admission to the conference dinner is only guaranteed by a personal invitation.

More information can be found at the conference website: https://energy2015.eventsadmin.com

ELPE prepares emergency fuel plan in event of Greek default

Posted on by admin

The country will be able to ensure fuel supply for a six-month period, and then manage to find alternative sources coverings its needs for an additional three months, according to an emergency plan prepared recently by ELPE (Hellenic Petroleum), in the event that Greece defaults on its payments and is forced to exit the eurozone.

According to ELPE officials, citizens should not be concerned about any danger of a fuel supply shortage for the nine-month period if the bailout talks ultimately collapse and force the country out of the eurozone.

ELPE’s preparation of an emergency plan highlights the degree of seriousness caused by the failure, so far, of Greece and its lenders to strike a deal.

Fuel supply emergency situations are divided into three levels of increasing urgency. At the first level, Greece would draw from its emergency deposits. These are maintained by all EU member states, based in European law, to cover emergencies, and would meet demand for three months.

The second level, should the situation worsen, would lead ELPE to turn to future petroleum orders, which would suffice for a further three months.

At the third level, ELPE would make additional crude oil orders and avoid monetary payment but, instead, cover the crude oil orders by supplying equivalent amounts of refined petroleum products, such as diesel. This option, practiced regularly in other countries, such as Italy and Spain, to maintain reserve levels, would offer a solution to Greece for a further three months. Some sources noted this practice could be applied infinitely.

ELPE is also keeping a close watch on developments concering the West’s embargo on Iran, which could reportedly be lifted in the near future, as well as a possible gradual restart of exports by Libya and Iraq. An end to the trade embargo imposed on Iran by the West would prompt access to an additional one million barrels of oil per day, leading to lower prices, from 60 dollars a barrel at present, and decrease order costs for ELPE.

The Greek state holds a 35.5 percent stake in ELPE. The Latsis Group controls a 42.6 percent equity share.

 

 

Greece summoned to EU court over energy efficiency directive delay

Posted on by admin

The country may be struck by a European Commision fine of 29,145.60 euros per day for delaying its implementation of an EU directive concerning the energy efficiency of buildings, as part of a wider effort to reduce energy consumption. Greece has been summoned to the European Court over the matter, the European Commision has informed.

According to the EU directive, EU member states need to attain certain energy conservation objectives for the period covering January 1, 2014 to December 31, 2020.

The directive’s content includes measures intended to improve the energy efficiency of households, buildings, industries, and transporation services. All member states had been requested to enact into national law the EU directive’s obligations by June 5, 2014.

One of the directive’s measures calls for energy efficiency-related upgrades to at least three percent of public sector buildings each year.

Last February, the European Commission had informed the country to begin legislative procedures concerning the directive’s content, but action has yet to be taken.

The 29,145.60-euro amount proposed as a daily fine by the EU’s executive body takes into account the delay and the infringement’s degree of seriousness. If no legislative action is be taken by Greece and the European Court backs the European Commission’s opinion on the matter, then the fine will become valid from the date a verdict is delivered, or any future date set by the court.

At present, all but one of the EU’s 28 member states, this being Malta, have received warnings for not having fully implemented the directive’s measures by June last year. Greece, along with Hungary, are the only two countries summoned to the European Court. Hungary received its notification in March. Greece was informed yesterday.

 

 

Greece running contrary to global trend of carbon decline

Posted on by admin

This week’s G7 meeting served to deliver yet another clear message on the future of carbon as an energy source, whose era is gradually approaching its end. The leaders of the world’s seven most industrially advanced nations expressed support for an objective to reduce carbon emissions by between forty and seventy percent by 2050, compared to levels registered in 2010.

The development was preceded, early this month, by an appeal from six major European oil and gas companies for the establishment of an international carbon emissions limit with the aim of limiting the effects of hydrocarbon-based fuels on the environment. No doubt, Europe’s big six in energy have realized that if a global deal is struck in Paris towards the end of this year, at the United Nations Climate Change Conference, their operating costs will subsequently be increased, a prospect that would charter new plans for their future investment strategies.

French energy giant Total’s turn towards a more environmentally friendly business portfolio has become apparent. Its natural gas-related activities make up almost half the company’s business dealings, compared to 35 percent a decade ago. Another key energy group, German electricity company E.ON, is shifting its business plan towards one with greater focus on renewable energy sources (RES). In addition, Enel, Italy’s biggest electricity company, has committed itself to halting all new carbon-related investments, withdrawing power stations running on hydrocarbon-based fuels, and leveling out carbon-related activity by 2050.

Greece is continuing to move in an opposite direction, despite the country’s considerable RES potential. PPC, the main power utility, is still investing in costly and polluting lignite-fueled plants, neglecting both EU objectives for the environment and the financial cost for the country and consumers in Greece. Forecasts tend to agree that the anticipated rise in the cost of carbon emission rights, expected imminently, will soon make lignite-fueled power plants unfeasible.

Greece’s energy policy even includes thoughts about relaunching an older power station, Ptolemaida 3, in Ptolemaida, northern Greece, which incurred serious damages after a fire broke out at the facility last November. This is one of Greece’s oldest and most costly lignite-powered stations. Until recently, PPC had decided to permanently withdraw the unit from the system at the end of 2015, in response to an EU directive concerning new carbon emission limits.

China, which consumes roughly half the world’s carbon, is moving away from its reliance on this energy source at an increasing pace. Consumption of the fuel fell by eight percent in the first quarter this year, compared to the equivalent period a year ago. Carbon imports in China also dropped in the first quarter, by 38 percent.

This trend is also apparent at a European level. Carbon consumption fell by nearly five percent during the same period, while the use of carbon for electricity production between 2008 and 2013 dropped by four percent, according to think-tank Carbon Tracker.

Investors, especially long-term investors, such as pension funds, are also beginning to step back from companies whose market values risk being diminished as a result of the declining trend in carbon consumption. The Bank of America recently graded carbon-related investments as among the highest-risk investments.

 

Energy consumption down by 6.6% in 2014, notes BP report

Posted on by admin

Overall energy consumption in Greece fell by 6.6 percent last year, the largest decline among the mineral fuels registered by natural gas, whose consumption dropped by 23.5 percent, according to the annual BP report.

Fuel consumption dropped by 2.4 percent in 2014 to 289,000 barrels per day, or 14.2 million tons. Production capacity at the country’s refineries remained steady at 498,000 barrels per day, according to the BP report.

The sharp 23.5 percent drop in natural gas consumption lowered the country’s consumption level to 2.7 billion cubic meters. Natural gas imported through pipelines reached 2.3 billion cubic meters, with Russia providing the overwhelming majority, 1.7 billion cubic meters.

As for coal, the country’s lignite deposits reached 3,020 million tons, while production fell by 8.7 percent to 6.3 million tons. Consumption fell by 7.5 percent to 6.5 million tons.

In the hydropower domain, consumption declined by 30.1 percent, while all other renewable energy sources (RES) registered an overall rise of 11.4 percent, to two million tons, if measured in petrol terms.

The overall 6.6 percent drop in primary energy consumption, to 26.1 million tons, in petrol terms, was attributed to the ongoing recession, which has prompted a downward energy consumption trajectory over the past few years. The effort made by consumers to save on energy consumption was also cited as a factor.

Commission support for Kavala LNG station vital, minister says

Posted on by admin

Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis highlighted Greece’s diversified energy policy and the importance of LNG in the overall effort being made to ensure energy security for Europe at a meeting of EU energy ministers today in Luxembourg.

Lafazanis also noted the importance of a planned floating LNG terminal station in Kavala, northerm Greece, and called on the European Commission to offer adequate financial support.

The country’s energy minister told the session that energy security may be broadly defined as the diversification of sources, suppliers, and routes. Lafazanis reminded his counterparts that Greece is being supplied natural gas by three different sources, while also being the region’s only country with an existing LNG terminal, on Revythoussa, an islet in the Saronic Gulf, close to Athens.

Lafazanis added that a series of projects now being developed promise to significantly bolster diversification and supply security for Europe and the continent’s southeast.

On the Revythoussa facility, Lafazanis noted that the station’s existence proved crucial during 2009, a crisis year, for the transmission of gas to neighboring Bulgaria.

“Greece is currently upgrading the Revythoussa facility for a total storage capacity of 225,000 cubic meters, from 130,000, and a gasification capacity of 1,400 cubic meters per hour, from 1,000 cubic meters,” Lafazanis noted.

On a more negative note, Lafazanis told the meeting’s participants that the European Commission’s support for new projects was, at best, selective, adding that equal treatment of all energy projects is crucial. Selective policies prompted by EU law need to be eliminated, the minister noted.

Elaborating on the country’s LNG propsects, the energy minister said Greece has the potential to bolster its role as a supplier of the fuel to southeast and central Europe. Development of a state-controlled floating LNG terminal station in Kavala would play a key role for such a prospect, he noted, adding the project could serve as an integral part of the Vertical Corridor towards Bulgaria, Romania, and many other countries. He described the European Commission’s support for the project as vitally important, calling for it to sufficiently fund the Kavala LNG station’s development.

 

 

 

 

 

Parliamentary committee endorses new RAE leadership

Posted on by admin

A Parliamentary Commmittee has endorsed three new candidates proposed by the Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis for the seven-member board at RAE, the Regulatory Authority for Energy, including those of chairman and deputy chairman.

The energy minister nominated Nikos Boulaxis as chairman, Sotiris Manolkidis as deputy chairman, as well as Nektaria Karakatsani as a board member.

In recent times, RAE has hobbled along dysfunctionally, avoiding taking initiatives, with four board members and no official at its helm.

The energy minister’s nominations for chairman and deputy chairman were endorsed by eight of the committee’s seventeen members. Seven voted against and two remained neutral. Karakatsani, the other new board member at RAE, was backed by nine committee members.

All three nominations hail from within the authority’s ranks with considerable bodies of widely recognized preceding work at RAE, Lafazanis noted.

Boulaxis, the new RAE chief who has been employed at the authority for fifteen years, noted that his new post carries great responsibility, adding that decisive action is needed for RAE to pursue its mission.

“RAE is an independent body but not beyond control as it reports to Greek Parliament and the people,” Boulaxis remarked.

The new RAE head, responding to a question posed by a committee member representing the opposition PASOK party as to whether a case of incompatibility existed because his wife was employed at a construction company, remarked that his spouse had already resigned from her secretarial post and was now unemployed to avoid raising any suspicions concerning vested interests.

“If somebody happens to be occupying a supportive secretarial post at a construction company, this does not mean that he or she is a key official who shares common interests with the company,” Lafazanis intervened.

The energy minister has frequently described RAE as a service protecting private-sector interests, while also noting its executive powers will be diminished, within EU limits. The European Commission is believed to be closely monitoring developments.

Energy cost reduction plan stagnant as hard-hit industry awaits

Posted on by admin

A committee assembled by the Production Reconstruction, Environment and Energy Ministry about two months ago to examine energy-cost reducing measures and swiftly deliver proposals by the end of April has yet to produce any results.

A “power disruption management” plan initiated by the country’s previous administration, which would enable energy cost savings for major-scale industry in exchange for shifting energy usage to off-peak hours whenever required by IPTO, the power grid operator, is a key topic on the committee’s agenda.

The country’s steel industry, struggling amid high energy costs and the long-running recession, has desperately held on for some favorable news that could offer some hope for survival. Making matters even worse for the steel industry, public-sector investments and construction projects have frozen amid the country’s overall uncertainty caused by the prolonged bailout negotiations with creditor representatives.

Halyvourgiki, Greece’s oldest company in the steel industry, devasated by the deep and ongoing recession, hardly operated in 2013 and 2014, essentially subsidizing workers to keep them on the payroll. The company has announced a voluntary retrenchment program for employees. According to sources, the company’s retrenchment plan offers an average of 15 months salary for every worker.

In recent years, Halyvourgiki has made investments worth 250 million euros, without any subsidized support, but, instead, regular reinvestment of company profit generated by its business activities.