Minister urges target model readiness for smooth launch

Energy minister Costis Hatzidakis has urged all target model officials – including RAE, the Regulatory Authority for Energy; power grid operator IPTO; the energy exchange and EnExClear – to have resolved any pending issues so that a smooth launch of the model may be achieved on November 1.

Describing the upcoming date as historic for Greece’s energy sector, the minister was essentially conveying concerns of energy producers, traders and suppliers, not yet fully convinced that all market systems will be in full working order for the imminent launch.

The balancing market, in particular, remains a concern. The energy exchange is overseeing the day-ahead and intraday markets and IPTO will manage the balancing market.

Simulated dry-run testing of these markets, conducted for a period of over two months to test their limits and operating ability ahead of the target model launch, was completed about a fortnight ago.

Greece’s lead-up to the EU target model has been affected by a series of delays. Hatzidakis, the energy minister, is clearly determined to see the target model procedure through, not only because it is an EU commitment but also because of its prospective market and consumer benefits.

The target model will result in market coupling, or harmonization of EU wholesale markets, the intention being to eliminate market distortions and intensify competition.

A final full-scale test of all market systems is scheduled for October 27 while all is anticipated to be ready on October 30 ahead of the November 1 launch.

EuroAsia project moving again, Egypt present with EuroAfrica

Development of the wider region’s two major electricity grid interconnections, the EuroAsia Interconnector, to link Greece, from Crete, with Cyprus and Israel, and EuroAfrica Interconnector, a complementary project to link Cyprus with the African continent via Egypt, was discussed at a meeting in Nicosia yesterday between Greece’s energy minister Costis Hatzidakis and his Cypriot counterpart Natasa Pilides.

Progress at EuroAsia Interconnector, whose launch is scheduled for late in 2023, was held back by a Greek-Cypriot dispute prompted by Greek power grid operator IPTO’s withdrawal of the wider project’s Crete-Athens segment from EuroAsia Interconnector, a consortium of Cypriot interests.

The Crete-Athens segment is now being developed as a national project by IPTO and subsidiary Ariadne Interconnection.

EuroAsia Interconnector and EuroAfrica Interconnector promise to develop Cyprus into an electricity hub. A 310-km cable from Israel and a 498-km line from Egypt will converge at coastal Kofinou, in Cyprus’ south. From this hub, an 898-km cable is planned to link Cyprus with Crete before reaching Athens.

At yesterday’s meeting, the Greek and Cypriot energy ministers primarily focused on EuroAsia Interconnector, the Crete-Cyprus-Israel project, at a more mature stage.

Budgeted at 2.5 billion euros, this project, regarded as an EU Project of Common Interest, will promote regional energy security and further RES penetration in all three participating countries, Hatzidakis noted. The EU, it is estimated, will need to contribute at least half the project’s value.

Cyprus is the only EU member state without electricity grid interconnections.

Germany’s Siemens was awarded a procurement contract last May for EuroAsia Interconnector’s HVDC converter stations, budgeted at 623 million euros.

EuroAsia Interconnector was initially planned to offer 2 GW but this capacity has been halved, for the time being, as the other 1 GW will be used for the Crete-Athens grid interconnection.

EuroAsia Interconnector’s Israel-Cyprus segment is budgeted at 900 million euros while the cost of the bigger Cyprus-Crete section is estimated between 1.6 and 1.8 billion euros.

 

New market dry-run testing to end this week, target model launch on Nov. 1

The dry-run testing procedure for market systems ahead of the forthcoming target model launch, scheduled for November 1, will be finalized at the end of this week, RAE, the Regulatory Authority for Energy, the energy exchange and power grid operator IPTO have jointly decided.

Dry-run testing of the day-ahead, intraday and balancing markets began on August 3 to test their limits and operating ability ahead of the target model’s launch, aiming for market coupling, or harmonization of EU wholesale markets.

Market coupling, to increase competition and lower wholesale energy prices, will ultimately lead to energy union, the EU strategy seeking to offer consumers secure, sustainable, competitive and lower-cost energy.

All domestic parties involved, as well as the energy ministry, have ascertained the Greek launch will take place on November 1 following previous delays.

Even during these final days of simulated testing, day-ahead market prices have, at times, continued to display discrepancies with Day-Ahead Schedule price levels.

This has been attributed to the absence, from dry-run testing, of many traders who participate in the Day-Ahead Schedule, meaning the price levels of the two situations are based on different data.

Though balancing market prices have improved considerably as the simulated testing has progressed, following discrepancies, conclusions cannot be made until actual market conditions come into effect.

Meanwhile, public consultation by RAE on a market monitoring mechanism and a market surveillance mechanism for the new markets is due to be completed next Monday.

The market monitoring mechanism will seek, through structural and performance indicators, to evaluate levels of concentration and the market power of each participant, while the market surveillance mechanism will focus on identifying and combating strategies detrimental to competition.

The next step, once the new markets are launched, will be to market couple, initially with the Italian market, by the end of the year, followed by the Bulgarian market, in the first quarter of 2021, Greek energy minister Costis Hatzidakis recently informed.

 

 

Cross-industry climate change effort emphasized by CEO Alliance

The CEO of multinational power company Enel, Francesco Starace,  and chief executives from eleven European companies, have joined forces for a zero-carbon future and a more resilient Europe, Enel has announced in a statement.

The European Union is committed to net zero emissions by 2050, which is in line with the CEO Alliance companies’ own decarbonization strategies, the statement noted.

All members support the Paris 2050 goals, the EU Green Deal and the ambition to raise EU climate targets. They represent different industries, generate a combined 600 billion euros in annual revenues and employ 1.7 million people. The CEO Alliance channels their decarbonization efforts: it connects sectors and strategies, identifies potential for collaboration, and fosters projects and investments for a sustainable economy and society.

At its inaugural meeting in Stuttgart, the cross-industry alliance underscored: “The climate targets of the European Union are feasible. Our industries do not block, but rather foster the shift toward a carbon-neutral economy. We see growth potential for all industries in the long run. If we manage this historic transformation successfully, sustainable development and new future-proof jobs will be the result. Together, we will support all efforts to reach a social consensus for more sustainability.”

With yesterday’s start, the CEO Alliance becomes an association of action that unites corporate strategies, industries and societies on the road to a carbon-neutral Europe.

All members believe the new climate targets of the European Commission, envisaging emission reductions of 55% by 2030, are manageable.

On the industry side, the CEO Alliance members have already pledged to invest more than 100 billion euros in their respective decarbonization roadmaps over the next years to help reach these targets.

Every member has defined its own strategy to address decarbonization, by reducing carbon emissions across the relevant value chains and by offering sustainable products and services to customers. For reaching the respective CO2 targets, each member and each sector is dependent on other members and sectors, which especially calls for cross-sector activities.

Collaboration potential of the Alliance was identified in six fields: in energy systems, renewable power generation must be scaled up rapidly and power grids must be modernized. In terms of mobility and transport, the EV charging infrastructure must be expanded and the low-carbon transport or shipping of goods intensified. Zero-impact production – in particular for renewable power generation components – and sustainable battery production are key aspects in manufacturing and industrial processes. In terms of buildings and urban environments, the focus is on zero-emission offices and sustainable green city planning. In regard to new business models, the focus is on carbon tracking with digital technologies in the supply chain. The field of sustainable finance will also offer new opportunities.

The members also agree that the transformation towards a net-zero carbon future needs to be based on a broad public consensus. The CEO Alliance is willing to contribute to this consensus, and to establish a social contract, by intensifying the dialogue between stakeholders from the private sector, public sector and civil society. At the same time, the members call on political leaders to create the necessary political support and incentives. At the inaugural meeting, the dialogue started with a discussion with Frans Timmermans, Executive Vice President of the European Commission.

The CEO Alliance is convinced that ambitious decarbonization and cross-sector collaboration require ambitious and cross-sector policy frameworks, for example carbon pricing with a minimum floor price in the EU Emissions Trading System, a reform of the energy taxation system, and driving demand for sustainable, innovative and digital solutions, among other things by using renewal schemes, public procurement and investments.

The CEO Alliance represents members from key industry sectors: ABB, AkzoNobel, Eon, Enel, Iberdrola, A.P. Møller Maersk, Philips, SAP, Scania, Schneider Electric, Siemens and Volkswagen.

Following an initial joint letter to the European Commission in June 2020, the first face-to-face meeting underscored the commitment to act fast and to recognize the urgency of the necessary transformation for future competitiveness.

TAP’s commercial launch now on the final stretch

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

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

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

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

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

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

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

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

 

‘Target model tο improve markets, local peculiarities need to go soon’

The target model – the wholesale electricity market model being implemented by virtually all European countries with an aim to gradually harmonize markets, through coupling, for a unified EU electricity market, a key EU objective – promises to improve the operating ability of markets, Sotiris Hatzimichael, power utility PPC’s General Manager of Strategy & Transformation, has noted in an article published as part of an energypress target model special ahead of Greece’s forthcoming launch of new market systems.

Electricity companies will, as a result of the target model, not only have access to national markets but also bigger regional markets, initially, before eventually also gaining access to a European market, the PPC official noted, explaining that this extroversion promises benefits such as broadened customer bases and revenue and profit boost opportunities.

This extroversion will also subject electricity companies to greater competition, forcing optimization, cost minimization and performance maximization, all of which will ultimately benefit energy consumers and the economy, Hatzimichael pointed out.

The results of this effort to restructure wholesale markets will become apparent over time, while, for the Greek market, the target model’s implementation of four market systems – forward, day-ahead, intraday and balancing – will offer benefits to producers, suppliers and consumers and also present a series of challenges, the PPC official noted.

The target model’s four new markets will require new infrastructure, software and hardware, new risk management procedures, as well as many specialized individuals qualified to take on jobs demanded by the target model, Hatzimichael noted.

The transition will be crucial and needs to be handled with great care to avoid market turmoil and instability, he added.

However, true convergence of the Greek market with those of other EU member states will require the swift removal of any local peculiarities that have been incorporated into the Greek version of the target model, such as forward market participation limitations, Hatzimichael stressed.

Pending issues crucial for industrial energy cost savings

A series of issues concerning prospective industrial energy cost savings that have surfaced either as industrial-sector requests or government announcements remain unresolved, creating insecurity within industrial circles.

New industrial electricity tariffs, currently being negotiated but with much ground still to cover for convergence, are at the very top of this list for industrialists.

One energy-intensive industrial producer has already abandoned power utility PPC after rejecting the industrial electricity tariff prices the utility had to offer.

Industrialists also want a public service compensation (YKO) surcharge reduction.

On another front, the sector expects a special consumption tax rate for mid-voltage industrial consumers with annual consumption levels of more than 13 GWh to be equated with the special consumption tax rate offered to high-voltage industrial enterprises. This revision, concerning approximately 170 factories, has been announced by Prime Minister Kyriakos Mitsotakis.

Another matter for the industrial sector concerns exempting major-scale industrial units from a series of additional electricity supply surcharges, in accordance with European Commission directives.

Industrialists also want a special consumption tax exemption on electricity used for mineral processing in cement and glass production, which would align Greek law with an EU directive from 2003.

The industrial sector is also anticipating a new mechanism to offset CO2 emission right costs.

Industrial consumers rebated for gas network usage surcharge

RAE, the Regulatory Authority for Energy, has delivered an official decision vindicating the industrial sector, after a four year wait, in a dispute concerning temporary natural gas distribution surcharges imposed on consumers by ordering offsetting measures leading to rebates for the period in question, between August 14, 2015 to December 1, 2016.

EVIKEN, the Association of Industrial Energy Consumers, challenged the introduction of this temporary gas distribution surcharge for industrial gas consumers, deemed as a breach of EU rules. It burdened industrial gas consumers at a rate of 4 euros per MWh.

Industrial consumers will receive rebates, based on a specific formula, covering the aforementioned period, according to the RAE decision, published in the government gazette yesterday.

According to industrial sector estimates, the surcharge sum to be returned to industrial consumers is estimated between 2.5 million and thee million euros. The rebate may be distributed in installments over a period of up to five years.

This surcharge did not reflect the costs of operators, arrived as a disproportionate cost for certain consumer categories using the network, and should have been determined and introduced by RAE, not through a legislative procedure, EVIKEN argued in its case before being vindicated by RAE as well as the European Commission’s Directorate-General for Energy.

Discrepancies observed exceeded 100 percent for most energy-intensive industrial enterprises.

The industrial sector will not tolerate any breach of EU rules concerning the new market’s framework, Antonis Kontoleon, the head official at EVIKEN, stressed.

Brussels’ Directorate-General for Energy had supported EVIKEN on all aspects of the dispute through a surveillance report delivered in November, essentially preannouncing the RAE decision.

 

 

 

EU solar generation up 15% in first half, Greece also on upward trajectory

EU solar generation, resisting pandemic-related impact, increased by more than 15 percent in the first half of 2020 to reach 68 TWh, from 59 TWh during the equivalent period a year earlier, according to a new study by EnAppSys, an energy market specialist.

The study, which examined data from 2015 to 2020, found that solar generation in the EU increased by 70 percent over the five-year period.

Developments in the Greek solar market reflect the EU’s upward trajectory, attributed to the global trend for a reduced ecological footprint and continual technological developments that have slashed RES equipment and generation costs.

New solar energy projects with a total capacity of approximately 130 MW were connected to the Greek network during the first half of 2020, while the bulk of new additions is expected in the second half. Though a precise figure is difficult to forecast, some market officials expect a second-half tally of over 200 MW in Greece.

The country has set an ambitious solar energy capacity target of 6.9 GW by 2030.

 

 

 

RAE, competition committee set to establish closer ties

RAE, the Regulatory Authority for Energy, is set to sign a memorandum of cooperation with Greece’s Competition Committee for more effective coordination and monitoring of the market.

RAE’s newly appointed chief executive, Thanasis Dagoumas, took the initiative to propose closer relations between the two authorities. The Competition Committee appears to have responded favorably. Its leader, Giannis Lianos, has met with the new RAE chief, while the two officials are believed to have agreed to soon sign an agreement for cooperation.

RAE and the competition committee will retain their responsibilities, as stipulated by law, but will seek greater coordination and collaboration on closely related matters involving both authorities.

Meanwhile, officials are also working to establish a network linking all the market’s independent authorities, including the National Committee for Telecommunications and Post Offices, RAE, the Competition Committee, as well as the regulatory authorities for the country’s ports and railways. Further collaboration, joint action and exchange of knowhow is being sought through this initiative.

In addition, Dagoumas, the new RAE boss, plans to soon meet with the leadership at ACER, Europe’s Agency for the Cooperation of Energy Regulators, signaling the Greek authority’s willingness to adopt a more extroverted role.

The new RAE administration is keen to participate in the decision-making process for Balkan and European matters, not just implement EU directives and ACER decisions, Dagoumas recently told Greek Parliament’s permanent committee on institutions and transparency.

Tension rises as Turkish vessel enters Greek continental shelf

The situation concerning the Turkish research vessel Oruc Reis, which entered the easternmost point of the Greek continental shelf yesterday, is unchanged today, the Athens-Macedonian News Agency has reported.

Oruc Reis is accompanied by Turkish naval units, while the situation is being monitored by the Greek Armed Forces, the Greek news agency has reported.

Tension has re-escalated in the east Mediterranean since yesterday afternoon, with Turkey disputing, in practice, the Greek-Egyptian EEZ agreement through the presence and maneuvering of its Oruc Reis research vessel and Turkish warships.

Turkish survey systems are believed to be ready for application, but, according to Greek estimates, research work cannot proceed as a result of noise being generated by nearby ships, both Greek and Turkish.

Greek navy units, lined up opposite the Turkish ships, are seeking to prompt a Turkish withdrawal. The Greek Air Force and Army are also on standby.

Posting on Twitter, Cagatay Erciyes, a senior Turkish Foreign Ministry official, noted that Greece has created problems because of a 10-square-kilometer Greek island named Kastellorizo, which lies 2 kilometers away from the Turkish mainland and 580 kilometers from the Greek mainland.

“Greece is claiming 40,000 km2 of maritime jurisdiction area due to this tiny island and attempting to stop the Oruc Reis and block Turkey in the eastern Mediterranean.

“This maximalist claim is not compatible with international law. It is against the principle of equality. Yet Greece is asking the EU and US to support this claim and put pressure on Turkey to cease its legitimate offshore activities. This is not acceptable and reasonable,” he said.

Cyprus has responded by issuing a Navtex of its own, effective from today until August 23, through which it notifies that the Turkish research vessel Oruc Reis and accompanying vessels are conducting illegal operations within Cyprus’ EEZ.

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.