Retail power prices among EU’s lowest, wholesale prices high

Retail electricity prices in Greece, during the second half of 2019, were among the lowest in the EU, while the country registered the second biggest drop in household electricity cost, down by 5.8 percent during this period, compared to the EU average of a 1.3 percent increase, according to official Eurostat data.

However, Greece’s wholesale price level, or more specifically, day-ahead market price, is one of the highest in south and southeast Europe.

The cost of electricity for households in Greece averaged 155 euros per MWh in the first half of 2019, compared to the EU average of 216 euros per MWh, the Eurostat data showed. The cost of electricity in Greece, including taxes and surcharges, was ranked 21st among the EU-27.

The cost of electricity for enterprises in Greece was below the EU average, placing Greece in 12th place with an average price of 108 euros per MWh compared to the EU’s 117 euros per MWh in the first half of 2019, the Eurostat data showed.

A recent study conducted by the European Commission’s Directorate-General for Energy showed that Greece’s day-ahead market price averaged 41 euros per MWh in the first half of 2019, well over the average of 34 euros per MWh in south and southeast Europe.

Market officials attributed this discrepancy to Greece possessing just a day-ahead market, forcing all electricity amounts to be channeled through this one market. In other parts of the EU, wholesale electricity markets also feature intra-day, forward, balancing reserve and capacity markets. As a result, electricity producers and importers operating elsewhere also retrieve costs from other markets, which is not possible in Greece.

Expanded energy efficiency upgrade program planned

A new subsidy program for domestic energy efficiency upgrades, to replace a preceding Saving at Home model in autumn, will feature more ambitious objectives than those set in the National Energy and Climate Plan, be constantly open for applicants, carry greater capital, and apply for a wider range of energy efficiency interventions, including smart home technology installations, deputy energy minister Gerassimos Thomas has pointed out in an interview with Greek daily to Ethnos.

Over the past decade, some 130,000 homes were upgraded at a cost of 1.3 billion euros, but a swifter rate will be sought through the new subsidy program, the minister noted.

The achievement of national energy policy objectives will require some 60,000 domestic energy efficiency upgrades per year and approximately 8 billion euros in funds until 2030, Thomas explained, adding that Greece will seek greater capital amounts through the EU recovery fund.

“Due to the requirements created in the context of the recent macroeconomic conditions and forecasts, we are working on a modern and much more ambitious framework to reinforce household energy upgrades for a transition to a support system offering energy upgrades and autonomy,” Thomas noted. “The new program is a direct government response to the post-pandemic era, the aim being to boost economic activity in domestic value-added sectors such as construction, manufacturing of building materials and solar systems, and also strengthen households by reducing energy costs.”

An even wider base of households will be eligible for the new subsidy program, while increased subsidy rates will be offered if predetermined energy efficiency targets are achieved by interventions, he added.

 

Cyprus wants unchanged cost agreement for link with Crete

Though a new application submitted by EuroAsia Interconnector, a consortium of Cypriot interests, to the EU’s Connecting Europe Facility for funding support concerning an electricity grid interconnection project to link the Greek and Cypriot systems has yet to be examined or reciprocated by the European Commission, Greece and Cyprus have already begun talks on how to divide the remainder of the project’s costs not covered by the CEF.

The Cypriot side, which took the initiative for these talks, appears determined to ensure that Greece will stick to its share of the cost under the terms agreed to when the project also included the Athens-Crete link as part of a wider plan to interconnect the Greek, Cypriot and Israeli systems.

EuroAsia Interconnector head the wider Greek-Cypriot-Israeli plan. Greek power grid operator IPTO withdrew the Athens-Crete segment and is now working on it as a national project. IPTO is aiming for swifter progress on this section, urgently needed to resolve Crete’s pressing energy sufficiency issues.

Cyprus’ Regulatory Authority for Energy, RAEK, has forwarded to its Greek counterpart RAE a text presenting its cost-related views. RAEK wants to ensure that a Cross Border Cost Allocation agreement signed by the two sides late in 2017 for the Greek-Cypriot link, running from Crete to Cyprus, remains valid, despite Greece’s withdrawal of the Athens-Crete section.

According to the CBCA agreement, Cyprus will take on 63 percent of the cost of the Crete-Cyprus link and Greece will be responsible for the other 37 percent, under the condition that 50 percent of the total cost will be covered by EU funds, through the CEF.

The Crete-Cyprus interconnection is budgeted at 1.5 billion euros, meaning Greece’s share will be approximately 280 million euros.

This amount will be incorporated into IPTO’s accounts and need to be recovered through network surcharges included in consumer electricity bills, seen as a delicate matter by the Greek government.

Greek authorities have yet to respond to RAEK’s initiative as they await news from the European Commission on the CEF request.

Ministry still examining Energean Prinos rescue plan

The energy ministry is continuing its close examination of a business plan delivered by Energean Oil & Gas for the rescue of its Prinos offshore oil field in northern Greece, requiring investments totaling 75 million euros in 2020 and 2021 if the venture is to be kept afloat following the negative impact of  lower oil prices and the pandemic, according to the company.

“The ministry is continuing to examine the data provided by the company as well as the business plan. They have determined the size of the necessary funds at 75 million euros but we, too, need to verify this,” an energy ministry official informed.

Early signs of a petroleum market rebound are encouraging but this does not mean that the market has fully recovered, the official added.

The ministry acknowledges the potential damage closure of the oil field would have on the local economy and, as a result, is looking for solutions, the official added.

Energean officials have stressed that time is running out for the oil field’s rescue, urgently needing a solution to remain viable.

The government will need to utilize the EU’s temporary state aid framework to ensure financial support for the Prinos oil field, Greece’s only producing field at present, and its necessary investments.

PPC’s Agios Dimitrios I, II, III, IV phase-out starting July 1

Power utility PPC’s four Agios Dimitrios power station units in Kozani, northern Greece will be phased out as of July 1 and should cease operating, completely, well before 2022, when the facilities are officially scheduled to shut down as part of Greece’s decarbonization effort.

At this stage, it appears that Agios Dimitrios I, II, III and IV will only be available in winter to cover telethermal needs. These units will not be used for electricity generation, according to PPC’s new business plan, meaning they will be withdrawn sooner than had been expected.

Contrary to the four Agios Dimitrios units, an emission-limiting desulphurization investment now being completed at Agios Dimitrios V is expected to prolong the life of this unit as the effort’s results should meet EU emission limits.

PPC, responding to an EU directive from 2010 asking producers to inform, by 2013, on how they intended to transform high-polluting facilities, had performed a dry desulphurization process on Agios Dimitrios I, II, III and IV ahead of a June 30, 2020 deadline, but this technique failed to produce the desired results.

‘Energy ministry policies crucial in effort to revitalize economy’

The energy ministry’s policies promise to play a pivotal role in the challenge faced by the government to revitalize the national economy following lockdown, energy minister Costis Hatzidakis has noted in an article featuring in GREEK ENERGY 2020, the energypress team’s latest annual publication covering the Greek energy sector.

Action is already being taken by the ministry through a decisive energy-sector agenda that aims for growth and is fully aligned with the European Green Deal, now a key economic growth tool throughout Europe, the minister notes.

New financial tools such as an EU recovery fund, worth 750 billion euros, according to a European Commission proposal, are designed to help the EU achieve its goal of transition towards a zero-emission economy through support for the gradual elimination of fossil-fuel dependence, RES growth and energy savings, the minister writes.

Greece is ready to make the most of this EU support package, effectively an additional NSRF funding program for the country promising capital worth around 32 billion euros, in order to achieve sustainable green-energy growth, according to Hatzidakis.

Besides decarbonization and RES development, other aspects incorporated into the energy ministry’s wider plan include:  electromobility growth; a third Saving at Home subsidy program for domestic energy-efficiency upgrades; reforms for greater competition, transparency and more attractive price offers in the energy market; reduced industrial energy costs; and energy-sector privatizations, the minister notes.

 

Turkish-Libyan MoU ‘ignores’ International Law of the Sea

A Turkish-Libyan Memorandum of Understanding emphatically ignores article 121 of the International Law of the Sea (UNCLOS 1982), which recognizes Exclusive Economic Zone and continental shelf rights for island areas, and overlooks the existence of Crete, Karpathos, Kasos, Rhodes and Kastellorizo to carve out approximately 39,000 square kilometers of Greek territory south of Crete for Libya, petroleum geologist and energy economist Dr. Konstantinos Nikolaou, a former member of the board at the Cyprus Hydrocarbons Company, has pointed out in an analysis, spelling out the dangers of Turkey’s provocative behavior in the region.

Turkey misappropriates the continental shelf and EEZ associated with Crete, Karpathos, Kasos, Rhodes and Kastellorizo in the east Mediterranean, he noted on the MoU, submitted by Turkey to the UN in an effort to make gains at Greece’s expense.

Hydrocarbon licenses for plots south and southwest of Crete that have been awarded by the Greek State to Total, ExxonMobil and ELPE (Hellenic Petroleum) and published in the Official Journal of the European Union, set a precedent that backs the positions of Greece, whose division of the area is based on International Law of the Sea guidelines, Nikolaou highlighted.

Turkey is using its state-run petroleum corporation TPAO as a tool to exercise foreign policy for territorial gains, Nikolaou added.

Natural gas discoveries in the east Mediterranean serve as a major driving force behind the actions of Turkey, whose energy sector is import-dependent, he pointed out.

Greece, Cyprus, Israel, with US, plan for EastMed meeting next month

The energy ministers of Greece, Cyprus and Israel plan to stage a trilateral meeting next month, with US involvement, for talks on the prospective EastMed gas pipeline, to transport gas from Israeli and Cypriot fields to Europe via Greece and Italy.

It remains uknown if Francis Fanon, the US Assistant Secretary of State and head of the country’s energy portfolio, will participate at this meeting.

It also remains unclear if participants will stage a virtual conference as a result of pandemic measures or meet in person.

The Greek, Cypriot and US governments were waiting for the new Israeli government to be sworn in before shaping plans for the EastMed meeting, to also serve as a second energy conference between the four nations following an inaugural session in Athens last August.

Yuval Steinitz has been reappointed at Israel’s top energy post, meaning the line-up of last year’s session between the Greek, Cypriot and Israeli energy ministers can be repeated at the next meeting. Greece’s Costis Hatzidakis and Cyprus’ Giorgos Lakkotrypis are still at their posts.

The Greek, Cypriot and Israeli government officials are expected to reaffirm the commitment of their respective countries to the EastMed gas pipeline, as well as commitment to cooperation for regional peace and prosperity, sources said.

Also, the energy ministers of Greece, Cyprus and Israel, along with the session’s US representative, will seek to send Turkey a unified message on its provocative actions against Greece as well as increased aggression in the wider southeast Mediterranean region.

A trilateral EastMed gas pipeline agreement was approved in Greek Parliament last January.

Israel could soon reach a decision on the financing of some of the studies needed for the international pipeline’s link to the national grid.

Also, IGI Poseidon, a consortium comprising Greek gas utility DEPA and Italy’s Edison, is moving ahead with studies for the pipeline’s underwater and overland route between Greece and Italy. IGI Poseidon wants to make an investment decision on this project within the next two years. Meanwhile, Cyprus is making progress on licensing matters.

Flight reconnections, geopolitics key for IPTO sale rescheduling

Rescheduling details of a privatization plan for the sale of an additional stake in power grid operator IPTO will depend on the restart of the Athens-Beijing flight route, the reestablishment of face-to-face contacts blocked by the pandemic, as well as a reduction in geopolitical tension between China and the west.

IPTO’s strategic partner State Grid Corporation of China (SGCC), holding a 24 percent stake in the Greek operator, has expressed interest to boost this share. The Chinese company maintains first-offer rights in the event of a further sale.

Skillful diplomacy will clearly be needed to overcome any EU and US objections to an increased SGCC share in IPTO. Video conferences would prove insufficient. Greek foreign ministry officials will need to make at least one trip to China for related talks.

Greek governmnent officials intend to travel to Beijing for work on various matters following the summer, sources informed energypress. Bilateral issues have accumulated during the several months of lockdown. Many cancelled meetings need to be rescheduled.

More crucially, in the lead-up, the Greek side will need to prepare for these Beijng meetings by working through related matters with officials in Brussels and Washington.

First stage of RES licensing simplification done, rest on way

A day after Greek Parliament’s ratification of a bill radically simplifying the first stage of the RES licensing procedure by granting project developers production licenses online and instantly if all requirements are met, authorities have begun work to simplify the rest of the licensing procedure, all the way to the issuance of RES unit operating licenses, energypress sources have informed.

The energy ministry’s secretary-general Alexandra Sdoukou, heading a special committee tasked with this project, has asked agencies representing various green energy technologies to forward updated proposals by Monday.

Then, days later, on Friday week, the committee, comprised of energy ministry officials, licensing authorities and market representatives, will stage a teleconference to discuss a number of issues, simplification of all other RES licensing procedures – beyond the first step now ratified – being at the top of the agenda.

Energy ministry officials are expected to table a groundbreaking proposal that would abolish installation licenses but maintain operating licenses. This proposal will be examined by the committee and implemented if deemed feasible.

The committee will shoot for the delivery of an initial plan before summer. Once ready, it will be forwarded for consultation. Any revisions during this process will make up the content of a draft bill finalizing the RES licensing simplifications.

Greece is striving to align with an EU directive requiring a RES licensing procedure time limit of two years for most projects and three years for special projects by June next year, deputy energy minister Gerassimos Thomas told parliament.

DEDDIE investments boosted to reach €350m, annually

Distribution network operator DEDDIE/HEDNO’s investment amounts concerning its business plan from 2020 to 2028 will be gradually boosted to reach annual levels of 300-350 million euros, up from 150-170 million euros, the operator has decided.

DEDDIE chief executive Anastassios Manos has presented the operator’s upgraded investment plan to board members.

It incorporates and fine tunes the distribution network strategy included in the business plan for power utility PPC, the operator’s parent company.

The upgraded DEDDIE business plan will be finalized once RAE, the Regulatory Authority for Energy, has cemented its regulatory framework.

DEDDIE’s investments have continuously dwindled in recent years.  Contrary to other EU operators, the company’s Regulatory Asset Base (RAB) value has subsequently diminished during this period of contraction as new investments each year have been outweighed by the depreciation levels of previous projects.

The operator’s new investments will focus on upgrading and expanding the network to facilitate the RES sector’s growing needs and broadened network presence, as well as ambitious electric vehicle targets.

The overall upgrade will include network digitization projects for advanced grid management and smart meter installations.

Common EU RES auctions discussed at informal video conference

EU energy ministers discussed the prospect of common RES auctions for all EU member states during an informal video conference staged this week to examine the impact of COVID-19 on the energy sector.

Participants also discussed the need to ensure energy-sector fund access for all EU member states amid the pandemic’s new conditions.

The topic of bank loan terms and credit policies enabling governments and banks to offer support to enterprises for green energy development was also tabled.

Tools and strategies to be implemented should be developed in a spirit of solidarity between EU member states, not only in dealing with emergencies, but also as a preventive measure, according to a report issued following the meeting.

In the report, the EU also urges member states to prepare for various challenges that may arise from now on as a result of the pandemic.

The EU also stressed the need for ambitious energy sector targets to be maintained, while taking into account differences between member states.

Green energy to remain a catalyst for Greek economic growth

Local authorities, in the coming months, will focus on reigniting green energy investment interest expressed by many international funds until February, when the coronavirus outbreak began halting plans.

The restart could be a challenging task as certain funds may hold back following losses on stock exchanges.

Even so, the pandemic’s impact on green energy markets is expected to be far milder compared to other sectors.

Market analysts throughout the continent believe prospective investments in renewable energy, waste management, energy efficiency upgrades for buildings, as well as decarbonization initiatives, will serve as key factors for economic growth in Europe, including Greece.

The European Green Deal, aiming for a climate-neutral EU of zero greenhouse gases by 2050, will not be endangered by the current pandemic-induced crisis as it is a short-term condition that pales by comparison to the grander plan set out for the next 30 years, energy ministry sources told energypress.

However, a slight regression of green energy investment plans is initially anticipated, compared to positions in February.

Between 70 and 80 percent of foreign investors are expected to remain interested in Greece’s green energy sector in the months ahead, analysts believe.

 

 

Brussels concerns delay flexibility remuneration mechanism

A government proposal for a transitory flexibility remuneration mechanism (TFRM) is being delayed by European Commission concerns, holding back progress despite a legislative initiative taken by the energy ministry to hasten the approval process.

The Greek government forwarded its flexibility mechanism proposal to the European Commission in December, requesting it remains valid over a transitional period. The request has obviously prompted concerns in Brussels, as suggested by an ongoing question-and-response procedure.

Many EU member states no longer use TFRMs. Prior to the request in December, Greek officials had informed the European Commission that flexibility in the country would be remunerated through the Target Model, once it is implemented, not separately.

Approval by Brussels is needed before Greece’s energy ministry can issue a ministerial decision formalizing the transitory mechanism.

The energy ministry, in an effort to limit the overall delay, has attached a related legislative revision to a wider draft bill covering environmental matters, now headed for parliament.

Otherwise, the ministry would need to submit a separate legislative revision to parliament once Brussels has given its green light. Such a course would further delay the mechanism’s implementation.

Electricity market security fund gradually being pieced together

A security fund intended to offer protection to the electricity market against an extended period of tightened liquidity is gradually being pieced together amid great difficulties and continual consultation with European Commission authorities.

An amount totaling between 500 and 600 million euros has been secured for the market’s security fund so far, according to sources.

This figure will not be enough to get the electricity market’s players through the coronavirus pandemic’s devastating financial impact, seen continuing until autumn or even the end of this year. If so, an amount of over one billion could be needed to cover electricity supplier deficit figures.

It is too big an amount to be lifted from the national budget, limited and vulnerable following a decade of recession in Greece. As a result, government officials are looking for complementary support from EU funds to establish a security fund worth a total of about one billion euros.

Deputy energy minister Gerassimos Thomas and deputy finance minister Theodoros Skylakakis are heading this task.

Electricity bill collections have fallen by 30 percent, a trajectory seen costing suppliers an overall sum of 650 million euros if the trend continues for a further three months, electricity suppliers pointed out a fortnight ago.

 

RES generation in EU captures record share of energy mix

Renewable energy generation captured a record-high 35 percent share of the EU’s energy mix in the fourth quarter of 2019, up from 31 percent a year earlier, primarily as a result of record generation levels registered by the hydropower and wind energy sectors, latest European Commission data has shown.

Hydropower production rose significantly, by over 16 TWh year to year, while major gains were achieved by the wind energy sector, whose onshore wind farms grew by 9 TWh, or 9 percent year to year, and offshore wind farms registered a record year-to-year increase of 3.3 TWh, 18 percent.

Overall RES generation in December totaled 105 TWh, a new record level for the month, as a result of favorable conditions for wind farms and record hydropower production levels.

On the contrary, the energy mix share of fossil fuel fell to 39 percent in the fourth quarter of 2019, down from 42 percent a year earlier.

Greenhouse gas emissions in EU electricity generation fell by approximately 12 percent in 2019 as a result of the increase in RES production and a turn from coal to gas.

CO2 emission right costs increased by 57 percent year to year, to 25 euros per ton, according to the European Commission data.

 

 

Work on Crete-Athens grid link nears launch after approvals

The Court of Auditors has approved contracts offered to winning bidders for installation of the Crete-Athens grid interconnection’s four cable segments, enabling the signing of contracts for the one billion-euro project’s biggest stage, budgeted at 615 million euros, probably within the month, energypress sources have informed. Work will then be able to commence.

Prysmian, Nexans and Hellenic Cables-NKT were awarded contracts for the project’s four cable segments. Prysmian secured two of these four contracts.

On another front, the Court of Auditors is expected to approve a contract for the project’s other key stage, the design, supply and installation of two converters and a substation, in June, according to sources.

Siemens – Terna, a member of the GEK TERNA group, submitted an improved bid of 370 million euros late last month to be awarded this contract by power grid operator IPTO’s fully-owned subsidiary Ariadne Interconnection, the project promoter.

The Court of Auditors’ approval of contracts for the project’s four cable segments follows a recent decision by the environment and energy ministry endorsing the 1,000-MW project’s environmental terms.

EU funding for the project through the NSRF (2014 – 2020) is expected to be approved within the next week to ten days, according to reliable sources. This would subsequently also offer IPTO access to bank financing.

New NSRF funds for decarbanization effort to reach at least €600m

EU funds to be made available to Greece through the new National Strategic Reference Framework (2021-2027) for the country’s decarbonization effort are estimated to reach at least 600 million euros, sources have informed.

The NSRF amount is expected to be double the 300 million euros to be received by Greece through the Just Transition Fund, also for decarbonization projects.

The national contribution, expected to range between 10 and 20 percent, or roughly 150 million euros, will take the overall decarbonization amount to about one or 1.1 billion euros.

These funds will be used to fund a smooth post-lignite transition for Greece’s west Macedonia region in the country’s north and Megalopoli in the Peloponnese, both lignite-dependent local economies.

Two or three major foreign investments are expected to also draw private capital.

A change of mentality will be needed in both regions for sufficient post-lignite project development enabling full absorption of the support funds.

NSRF absorption in the entire west Macedonia region has been limited to just 200 million euros over the past few years.

 

Operating status decision on Kavala gas storage unit later

The energy ministry is considering to soon launch a tender for the development of an underground gas storage facility at a depleted offshore gas field in the south Kavala region and defer a crucial decision on whether the facility will operate as an independent or national grid project for a latter date, energypress sources have informed.

The ministry wants to move ahead as fast as possible to meet EU funding deadlines for this project, on Brussels’ PCI list.

Prospective investors should not be concerned about the impact of this decision on their investment plans as the project’s status, whether independent or part of the national grid, will not affect the tender’s participation terms and conditions, energy ministry sources contended.

However, this element of ambiguity could unsettle investors and cause further delays, pundits have warned.

The pending decision on whether to classify the facility as an independent or national grid project appears to be the reason why the energy ministry has delayed issuing a related ministerial decision.

A ministerial decision is needed to clarify legal matters concerning the project as well as its pricing policy, regulated earnings and minimum yield. Privatization fund TAIPED needs this information to launch the tender.

Operators must plan hydrogen projects to seek PCI funds

Greece’s network operators need to pursue projects concerning the development of networks designed to carry and distribute hydrogen, the new clean fuel whose rise is leading to major changes.

Companies such as Greek gas grid operator DESFA, gas utility DEPA and distributors will need to include hydrogen-related projects in their next network development programs. Hydrogen projects are expected to be eligible for favorable EU funding.

A fortnight ago, EU energy commissioner Kadri Simon informed European Parliament’s Committee on Industry, Research and Energy that a new regulation for projects of common interest (PCI) will place emphasis on hydrogen networks, carbon capture, domain bridging, storage batteries and smart networks.

In addition, a German government official recently declared that hydrogen will become the new gasoline, noting Germany will play a leading role in its overall development.

Quite clearly, national governments and major energy companies around Europe are working to establish hydrogen as a key fuel in the adjustment needed to achieve decarbonization goals.

In Greece, network operators will need to seize the opportunity and plan hydrogen projects eligible for a share of the EU’s PCI funds.

 

 

South Kavala gas storage facility facing tough PCI schedule

Despite being regarded as pivotal infrastructure for the country’s energy sector, a prospective underground gas storage facility at a depleted offshore gas field south of Kavala has remained stagnant in recent months, prompting fears that the required momentum needed for utilizing related wider developments could be lost.

The project’s inclusion on the EU’s PCI list offers financing opportunities, which, according to certain analysts, are crucial for the investment’s sustainability. However, this privilege comes with a strict schedule that must be maintained.

If the underground gas storage project is to qualify for funding offered by the EU’s Connecting Europe Facility (CEF) program, then authorities must submit a related application within 2020.

This essentially means a project promoter must be selected to prepare a business plan and apply for financing, all within the second half of this year.

Also, a tender for the storage facility’s privatization will need to be staged by privatization fund TAIPED by the end of the first half, experienced officials have pointed out.

A joint ministerial decision establishing a legal framework for the facility’s operation will need to precede the sale procedure. In addition, RAE, the Regulatory Authority for Energy, must, prior to the privatization, establish general guidelines determining pricing policy, regulated earnings, WACC, and a minimum capacity vacancy level that investors will need to maintain for national security reasons.

The chances of CEF financing are now starting to tighten up as the month of January is just about gone and there is no sign of a joint ministerial decision. When delivered, it should serve as a catalyst for ensuing initiatives.

 

 

 

 

 

DEPA signs EIB loan agreement to build LNG supply tanker

Gas utility DEPA has signed a loan agreement with the European Investment Bank for the construction of an LNG supply tanker with a 3,000 cubic-meter capacity, sources have informed.

This loan agreement follows a funding agreement reached between DEPA and the Innovation and Networks Executive Agency (INEA) for EU co-financing – through the new BlueHUBS program – of the LNG tanker to be built by the utility.

Planned to adopt new environmentally friendly shipping fuels,  the LNG tanker promises to be the first of its kind in Greece and the east Mediterranean. It will be designed to meet LNG supply needs at Piraeus port and also transport LNG to other major ports around the country.

DEPA, a wide supporter of LNG usage in shipping, is coordinating the BlueHUBS program (2019-2022), aiming for the development of LNG supply carriers.

Jointly supported by Greece and Cyprus, BlueHUBS represents the continuation of the Poseidon Med II program and has a total budget of approximately 66 million euros, of which 30 percent is being provided by the EU.

Colossal task ahead for decarbonization goal

Greece faces a colossal task – in terms of money needed, level of complexity and coordination – to reach ambitious post-lignite objectives set by the government.

The effort could require as much as 4.4 billion euros in EU funds, deputy energy minister Gerassimos Thomas noted yesterday, plus many more billions from the private sector.

Greece is entitled to a considerable sum in EU funds for the country’s decarbonization effort but, as a first step, a cohesive master plan will need to be submitted to Brussels. It will then need to be executed. The plan’s rate of execution will depend on the country’s ability to absorb EU funds made available.

An inter-ministerial committee involving seven ministers and deputies and established to oversee the entire effort will stage its inaugural meeting today.

A collective effort will need to be made involving teamwork of at least five ministries (finance, environment & energy, development, interior and agricultural development), two regional authorities (west Macedonia and Peloponnese), and no less than four municipalities (Florina, Kozani, Amynteo and Megalopoli). The local economies of these regions are lignite-dependent at present.

A national action plan must now be swiftly prepared. Its specific project proposals will then need to be tabled to the European Commission for approval before any investment activity can commence.

Personnel retraining, heightened research activity and development of new technologies are other necessities.

 

IPTO, ministry, RAE seeking common ground for Ariadne tender

Officials at power grid operator IPTO, the energy ministry and RAE, the Regulatory Authority for Energy, are seeking common ground that would pave the way

a tender to offer a minority 39 percent share in IPTO subsidiary Ariadne Interconnector, an SPV established for the development of the Athens-Crete electricity grid interconnection.

IPTO is looking to attract an investor, or investors, for a minority stake in Ariadne as financial support for the costly project.

IPTO wants to maintain a majority stake in its subsidiary as the operator is determined to control the construction of a project it will eventually operate.

State Grid Corp of China (SGCC), holding a 24 percent stake of IPTO, is expected to participate in the tender. The Chinese company has already expressed interest for a 20 percent stake in Ariadne and has signed a related memorandum with IPTO.

If SGCC’s interest is limited to a 20 percent stake, then a second equity package carrying a further 19 percent is likely to be offered to other investors.

EuroAsia Interconnector, a consortium of Cypriot interests heading a wider PCI-classified project planned to link the Greek, Cypriot and Israeli grids, was expected to acquire a 39 percent in Ariadne. However, a dispute with IPTO over control of the wider project’s Crete-Athens section has distanced EuroAsia.

Energy minister Costis Hatzidakis and IPTO chief executive Manos Manousakis are both confident concerns raised by RAE over the tender’s procedure will be overcome and enable a launch of the competition within the first months of this year.

RAE is worried about complications that could arise and trouble the tender as a result of SGCC’s stake in IPTO. If not handled appropriately, the tender could spark protests from rival bidders claiming unfair competition, RAE fears. Also, the authority is well aware of Brussels’ sensitivity to the prospect of a wider Chinese presence in EU infrastructure.

 

Bioethanol, Iran tension lift gasoline prices by four cents per liter

Motorists, in recent days, have faced the prospect of gasoline price hikes of as much as three to four cents per liter, compared to December 31 levels, escalating tension in the Middle East following the assassination of Iranian military commander Qasem Soleimani in a US drone attack ordered by President Donald Trump and the event’s impact on the international oil market being a key factor.

Another – less publicized and possibly more important – factor also leading to fuel price rises concerns an EU law requiring greater use of bioethanol, produced from a renewable source. Over the past year, a new EU law for cleaner energy has obligated refineries to include biofuels in their fuel mix.

As a result, the percentage of bioethanol included in conventional gasoline mixes has increased as of January 1, increasing gasoline production costs.

Subsequently, the price of gasoline at local refineries has risen from 1,173.59 euros per cubic meter on December 31 to 1,198.59 euros in prices registered January 1 and 2. This represents an overnight price increase of 25 euros per cubic meter or 2.5 cents per liter. The price rise will begin taking effect at petrol stations today, the end of the extended festive season in Greece.

The rising concerns in the Middle East combined with the cleaner auto fuel initiative will result in a retail price increase of approximately four cents per liter.

Worse still, a retaliatory attack by Iran on Saudi facilities, or an effort by Tehran to block the Strait of Hormuz, a corridor through which 20 percent of global oil is transported, would prompt far sharper price hikes. The latter scenario would lift oil prices to over 150 dollars a barrel, according to a report by research company Capital Economics.

 

 

Gov’t Council being assembled for support to lignite-dependent areas

The country’s administration is assembling a government council to be tasked with preparing a Just Transition Plan for Greece’s lignite-dependent areas needing support to offset the effects of the government’s planned withdrawal of all coal generators by 2028, including all existing units by 2023.

A Council of Ministers Act enabling the establishment and operation of the government council, to be headed by energy minister Costis Hatzidakis, has just been approved.

The west Macedonia region in Greece’s north as well as the Megalopoli area in the Peloponnese, both lignite-dependent local economies, will need support while adjusting to the post-lignite era.

The government council to work on the Just Transition Plan will be comprised of top officials from a number of ministries, which, besides the environment and energy ministry, include the finance, interior, development and investments, as well as agricultural development and food ministries.

“Ending the economy’s dependence on polluting lignite fuel is a key energy policy priority,” noted energy minister Costis Hatzidakis. “However, the withdrawal of all lignite units by 2028 must be done in a coordinated and responsible manner. The government’s top priority is to make the transition to the post-lignite era a fair one for western Macedonia and Megalopoli with claims of all necessary funds from Brussels,” he added.

A comprehensive, multidimensional and forward-looking plan will be presented by the new government council in mid-2020, the minister said.

Besides national and private funding, Greece will also seek EU support funds, including from the Just Transition Fund.

 

 

Decarbonization body top post the focus of cabinet meeting

Talks on the appointment of a chief official who will coordinate an inter-ministerial body tasked with managing the government’s ambitious decarbonization plan, primarily concerning west Macedonia, Greece’s main lignite area, will figure at the top of the agenda of a cabinet meeting today.

It is unclear if this new body’s chief coordinator will be announced today or following the Christmas break.

One thing for certain, the official to be chosen for the inter-ministerial body’s chief coordinating role will be a high-profile figure, as has been the case with appointments of head officials for other ambitious projects, including a campaign to phase out single-use plastic bags.

Energy minister Costis Hatzidakis will head this new inter-ministerial body.

Details concerning the master plan for the decarbonization drive remain at a preliminary stage. Their shape will much depend on EU funds expected from a Just Transition Fund.

This fund’s current balance, believed to be under 10 billion euros, is nowhere near enough to cover the decarbonization needs of more than 40 EU regions looking to terminate lignite as an electricity generation source.

The new European Commission president Ursula von der Leyen has pledged far stronger support for this fund. Otherwise, the European Green Deal will remain an unfulfilled prospect.

Tough competition is expected between EU member states in their efforts to draw amounts from the Just Transition Fund. Besides Greece, Germany, Poland, the Czech Republic, Romania and other EU members will be vying for decarbonization support from this fund.

Not unintentionally, Greek Prime Minister Costis Mitsotakis pointed out Greece’s high lignite dependence at a recent EU summit meeting. Just days ago, Hatzidakis, the energy minister, noted Greece will need further support to decarbonize.

DEPA, Edison firm on East Med amid Turkish provocation

Italy’s Edison, part of the Poseidon consortium formed with Greek gas utility DEPA for the development of the East Med gas pipeline – planned to transport natural gas from Israeli and Cypriot fields to the EU via Greece and Italy – has decided to accelerate pre-construction procedures following escalating provocation from Turkey, energypress has reported.

A decision was reached at a recent Poseidon meeting in Milan to assign all needed project studies, financially backed by the EU, within the next two months for swifter completion of preliminary procedures, and, by extension, the project itself, a 2,000-km pipeline.

Greece’s energy minister Costis Hatzidakis and his Israeli counterpart Yuval Steinitz reiterated their support for the project at a recent meeting.

Turkey, seeking to block the project, recently reached a maritime border agreement with Libya, which EU leaders are set to reject as invalid, insisting the pact interferes with the rights of other countries bordering the Mediterranean Sea.

Cypriot Foreign Minister Nikos Hristodoulidis has received reassurances from Israeli government officials that the country is not involved in talks with Ankara for the development of an alternative gas pipeline, according to a Cypriot newspaper report. Israel remains committed to the East Med plan, it added.

DEPA’s Poseidon stake will be transferred to the Greek gas utility’s division for international projects. DEPA is being split ahead of its upcoming privatization.

JinkoSolar signs deal with COSCO for Piraeus port as distribution hub

JinkoSolar, one of the largest and most innovative solar module manufacturers in the world, has signed an agreement with COSCO (China Ocean Shipping Company) to use the Greek Port of Piraeus as a distribution hub for the shipment of its renewable energy products in Europe, and in particular for Greece, the Balkans and the EMEA region, the company has announced in a statement.

COSCO holds a controlling 51 percent stake in the Piraeus Port Authority, operator of the port.

“The Port of Piraeus is the ideal distribution hub to strategically expand JinkoSolar’s logistics and distribution network in Europe,” said Frank Niendorf, General Manager of JinkoSolar Europe. “This partnership with COSCO will enable us to work very closely with our clients in the region by providing an optimized logistics solution that will not only be reliable, timely but most of all, cost-efficient.”

Xudong Su, Managing Director of COSCO SHIPPING Lines (Greece) commented, “Today’s agreement is an important milestone for COSCO. This partnership reflects the trust JinkoSolar has in our experienced team and operations to provide the highest quality E2E Supply Chain Solutions through the distribution hub in the Port of Piraeus. This is a historic collaboration for both companies as we jointly work to generate long-term sustainable growth.”

 

Kavala gas storage framework revision to unblock project

An article unblocking a tender for an underground gas storage facility in the offshore South Kavala region, to be developed through the utilization of a depleted natural gas field, has been attached to a multi-bill submitted to parliament by the ministry of health.

The article empowers RAE, the Regulatory Authority for Energy, to recover part of the gas storage facility’s required revenue from the domestic market.

The proposed amendment clarifies and supplements the existing framework concerning the underground gas storage and regulatory, according to a report supporting this specific article.

The new regulation is considered appropriate and necessary as, unlike LNG facilities, there is no provision for the possibility of total or partial recovery of the required revenue, the report added.

Greece is the only EU member state without an underground gas storage facility despite the country’s considerable gas-fueled electricity generation, the report notes.

EU member states store at least 20 percent of annual gas consumption at underground gas storage facilities.

This amendment was needed by privatization fund TAIPED for its launch of the asset’s privatization procedure as investors want to know the framework details concerning pricing and revenue recovery ahead of bidding.