Copelouzos holds Balkan, Italy talks for GREGY Interconnector

Copelouzos group president Dimitris Copelouzos has been involved in a series of meetings with leading energy-sector officials in the Balkans and Italy to explore the level of interest by energy groups and funds for investments concerning the Greek-Egyptian GREGY Interconnector and development of 9.5 GW in RES projects in Egypt, sources have informed.

Meetings held by the Greek entrepreneur with the energy ministers of Bulgaria, Romania and Serbia in their respective capitals, as well as in Italy with Italian Deputy Prime Minister Matteo Salvini and top-ranked officials of Italian energy company Enel, have indicated a strong interest by all for renewable energy production from Africa’s north, as well as the establishment of PPAs.

The Copelouzos group recently founded a subsidiary named Elica to  promote the Greek-Egyptian GREGY Interconnector, a link that would facilitate transportation of Egyptian RES production to Europe.

The next few months will be crucial for GREGY Interconnector’s progress on a technical level as documents for related tenders are currently being prepared. Tenders will be staged to select consultants and designers who will undertake four main studies estimated to cost between 35 and 40 million euros, of which 50 percent will be sought through EU funds.

The series of tenders, expected to begin in April and May, will include a technical study, a geophysical and geotechnical study, as well as a seabed mapping study, the most challenging of all, covering a 954-km route in the eastern Mediterranean.

Highlighting the significance of the GREGY Interconnector and RES projects to be facilitated by this link, the EU and Egypt have issued a joint statement.

“Given the new energy and geopolitical reality, the EU and Egypt recognize the need to strengthen energy security, and, therefore, have agreed to intensify their cooperation with a focus on renewable energy, energy efficiency, as well as other low-carbon technologies, building on Egypt’s significant potential for more efficient expansion of renewable electricity generation through projects such as the GREGY Interconnector,” the joint statement noted.

Retail electricity prices below EU average in first half of ’23

Retail electricity price levels in Greece were well below the EU average in the first half of 2023, giving the country a 17th place ranking for most expensive low-voltage electricity among member states, Eurostat data has shown.

Greece ended the six-month period with retail electricity prices averaging 233 euros per MWh, compared to the EU average of 289 euros per MWh over the same period.

Calculations for these figures include taxes and other charges, but not subsidies offered to consumers.

The Netherlands topped the list with an average price of 475 euros per MWh in the first half of 2023, while Bulgaria was placed at the bottom end with an average price of 114 euros per MWh.

As for EU member states ranked slightly above Greece, Lithuania averaged 281 euros per MWh, Sweden followed with 269 euros per MWh, Austria was next 265 euros per MWh, Ireland’s average was 248 euros per MWh, and Finland, one place above Greece, ended the first half last year with an average price of 238 euros per MWh.

On the contrary, electricity supply for non-residential consumers in Greece, averaging 213 euros per MWh, was slightly above the EU average of 210 euros per MWh. Even so, Greece’s ranking remained the same, 17th most expensive, for this category.

Romania topped the list of most expensive non-residential electricity with an average of 329 euros per MWh, while Iceland ranked lowest with an average of 78 euros per MWh in the first half last year.

 

TTF hike raises concerns over perceived ‘return to normality’

A steady rise in the TTF index over the past few days, following more than a year of decline, has market players concerned about the direction natural gas prices could take for the rest of this year.

The TTF, Europe’s gas benchmark, had fallen to as low as 23 euros per MWh a few weeks ago but has now rebounded, reaching a level of 28 euros per MWh yesterday. Gas futures dated December, 2024 and onwards are currently priced at over 30 euros per MWh.

The rising trend comes following a very mild winter of low consumption, which, however, was higher compared to last year.

Market players do not appear to be fully convinced by Europe’s extension of measures aiming to reduce demand for yet another year, until the end of next winter.

The recent insecurity that has crept into the market appears to stem from Europe’s anticipated loss of Russian gas imported via a Ukrainian corridor. A five-year pipeline gas transit agreement between Kyiv and Moscow for Russian gas supply to Europe via Ukraine expires at the beginning of 2025. Ukraine has declared it does not intend to renew this agreement.

This bilateral agreement’s end is expected to reduce the EU’s total gas imports by 5 percent. The loss will need to be offset by an increase in LNG shipments.

Unfavorable news from across the Atlantic has further unsettled market players. Natural gas producers such as EQT have decided to reduce output as a result of extremely low gas prices in the domestic market.

The downward trajectory of the TTF in recent months was driven by weak demand in Asia, including China, a trend whose continuation cannot be depended on. Also, the EU cannot count on next winter being as mild as the previous two winters.

 

EU energy-crisis concerns over Ukraine corridor ‘manageable’

European fears of further energy-crisis woes that could result from the nearing end of a five-year pipeline gas transit agreement between Kyiv and Moscow for Russian gas supply to Europe via Ukraine, appear to be manageable, as long as a series of specific measures are implemented, most EU ministers responsible for energy agreed at an Energy Council in Brussels yesterday.

The bilateral agreement between Ukraine and Russia expires at the beginning of 2025. Ukraine has declared it does not intend to renew this agreement.

Further energy-crisis concerns as a consequence of this agreement’s conclusion, expected to reduce the EU’s total gas imports by 5 percent, can be prevented if EU member states speed up their development of roughly 20 LNG facilities planned from Europe’s north to south; renewable energy investments gain further momentum; energy-savings measures are continued; natural gas consumption reductions continue at the current rate; and LNG imports are increased to make up for reduced Russian gas imports, energy ministers of most EU member states agreed at the Brussels meeting.

Last year, approximately 14 bcm of Russian gas was transported through the Ukrainian corridor to countries such as Austria, Hungary and Slovakia.

Numerous EU member states achieved renewable energy production all-time highs last year. In Portugal, renewables covered 61 percent of the country’s energy needs in 2023. RES coverage of Greece’s energy needs reached 57 percent. In Germany, RES units met 52 percent of the country’s energy needs, while in Belgium the figure reached over 30 percent.

Activity abounding for €1.9bn Great Sea Interconnector

Greek power grid operator IPTO, project promoter of the Great Sea Interconnector, a 1.9 billion-euro project planned to link the power grids of Greece, Cyprus and Israel, is engaged in talks with the European Investment Bank for a loan of approximately 500 million euros.

IPTO plans to soon stage a teleconference with EIB in order to provide additional information supporting this project as an optimal solution for Cyprus’ energy sufficiency in an effort to remove feasibility reservations expressed by the bank in the past.

Also, IPTO’s chief executive Manos Manousakis and associates have scheduled a series of meetings in Nicosia tomorrow, including with Cyprus’ finance minister Makis Keravnos, for the Cypriot state’s entry into the GSI project with an equity amount of up to 100 million euros. These meetings will be the latest of regular meetings agreed to with Cyprus for talks on the project’s progress.

Besides Israel fund Aluma and Abu Dhabi-based fund TAQA, other investors, both from the wider region as well as the USA, are believed to be interested in becoming project stakeholders.

In addition to the 500 million-euro loan for the GSI being discussed with EIB, a further 500 million euros in loans is expected to be extended by Greek banks, currently in talks with IPTO, while 657 million euros in EU funding is also anticipated.

Adding to the overall activity concerning the GSI’s development, a team of leading officials from Norwegian company Nexans is scheduled to visit Athens on March 13 for talks with IPTO’s leadership. Nexans has begun manufacturing work for the project’s cable.

Greek PM’s India visit to once again raise IMEC corridor plan

The war in Gaza may have stalled India’s ambitious project for a trade and energy corridor to the Middle East and, from there, to Europe, but the world’s most populous country has not stopped looking for trade routes to the West.

The prospect of Greece playing the role of European gateway for India, as geographically, Greece is the EU’s closest member state to India, is expected to be raised once more during meetings between Greek Prime Minister Kyriakos Mitsotakis and his Indian counterpart Narendra Modi in New Delhi this Wednesday and Thursday.

India’s PM had discussed the matter at a meeting with the Greek leader in Athens last August, and is expected to do so again, even though the plan’s prospects have weakened as the war in Gaza has changed the geopolitical balance and ruptured crucial Israel-Saudi relation without any signs of normalization in the foreseeable future.

Everything concerning the India-Middle East-Europe Economic Corridor (IMEC) will depend on the outcome in Gaza and the stance of Israel, refusing to discuss an independent Palestinian state, as Saudi Arabia is demanding in order to establish diplomatic relations with Israel.

India’s envisaged trade and energy corridor, a 4,800-km corridor planned to link the ports of Mumbai and Haifa, already controlled by Indian investors, remains on the table, but is at the mercy of geopolitical developments due to Gaza.

 

Community Agrivoltaics: A new application of social and climate justice

The recent demonstrations of farmers, from Poland and France to Greece, bring back to the public debate the urgent need to (re)develop our agricultural policy. From the European Common Agricultural Policy (CAP), and the imbalanced farmer-agro-industry power relations in supply chains, the issue is multifaceted. Let us focus on one aspect of it: access to cheap – and clean – energy. The dependence of agricultural production on fossil fuels (see motorization, equipment, irrigation) puts a significant burden on the budget of the farmers themselves, and also leads to revaluations (see the ‘fossilflation’ phenomenon) in the supply chain – with consumers as the ultimate ‘victims’.

Subsidies for solar projects by farmers, a policy with years of implementation in Greece and Europe, can provide an additional income stream, while at the same time significantly alleviating a farmer’s operating costs. Supporting farmers to engage in RES projects (e.g., photovoltaics or biomass) is therefore a clear win-win solution for society and the climate. But could we move the equation one step further?

Agrivoltaics: combined and more efficient use of space

Meeting national (and EU) climate targets will require massive investment in new renewable energy systems. In particular, the Revised Renewable Energy Directive provides for a significant increase in the share of renewables in the energy system, while establishing “Renewable Energy Acceleration Areas” (Article 15c). At the same time, the Nature Restoration Regulation provides for the protection and restoration of 20% of the land and seas of each Member State. As a result, the next decade will be defined by increasingly intense conflicts and disputes over the use of an otherwise finite resource: land. Research by the European Commission’s Joint Research Center has shown that if we covered 1% of Europe’s agricultural land with agrivoltaics, we could produce 1TW of energy – thus exceeding the EU targets for solar energy by 2030, without compromising agricultural production.

Widely used in countries such as France, Spain and Germany, the term “agrivoltaics” describes the combined production of energy and food on a specific plot of land. The benefits are numerous: some crops (e.g., tomatoes and potatoes) perform better in lower temperature and shade conditions, which is what the installation of elevated photovoltaic systems can provide. Transpiration from the crops meanwhile helps to reduce the temperature of the photovoltaics, thus increasing their efficiency. The panels can be moved dynamically, for example to allow rain to pass through to the ground thus watering the crops, or horizontally to reduce hail damage or to regulate the soil temperature depending on the weather. The combined use of land also benefits biodiversity.

Some practical applications in Greece

Two interesting initiatives come to combine technological innovation with social innovation and highlight through practical applications a new paradigm of land use, aiming at strengthening the agri-food sector and empowering local rural communities.

In Ioannina, the first urban community agrι-photovoltaic project in Greece is already being planned and a replication will follow in Skopje, North Macedonia. It is an urban vegetable garden that will be combined with the production of clean energy from special photovoltaic panels. The pilot will be coordinated by the local energy community CommonEn and the design will follow participatory procedures with the involvement of citizens and local stakeholders. The project is primarily funded by the German Federal Foundation for Environment (DBU) and co-funded by the Onassis Foundation. In parallel, the project is supported by the Municipality of Ioannina and the Solar Hub project.

The Solar Hub project is a Greek-Turkish Excellence Hub that aims to promote solar energy technologies, with a focus on agrivoltaic and solar thermal systems and their applications in the agri-food sector. The Greek ecosystem, coordinated by the Centre for Research & Technology Hellas (CERTH), promotes networking, solution development, training, and knowledge transfer activities.

A Holistic Approach

At the state level, the ongoing revision of the National Energy and Climate Plans (NECPs) across Europe, as well as the upcoming law on agri-photovoltaics (in Greece), should foresee support measures for such projects developed specifically by energy communities and other collective schemes. Promoting social and technological innovation can provide incentives, especially for young people, to return (or remain) in rural areas, thus also contributing to reversing population desertification.

CommonEn’s project in Ioannina will be small in size but large in symbolic value. It reflects the view that environmental solutions must include elements of social and economic justice – only then will they be socially accepted. Solutions and policies in the context of a holistic planning for rural development should be co-designed by farmers and local communities in the countryside themselves, and should be co-owned by them – as can be done through energy communities.

Christos Vrettos, Electra Energy, European Federation of Citizen Energy Cooperatives (REScoop.eu)

Dimitris Kitsikopoulos, Electra Energy

 

 

 

 

 

 

New EU plan targets 90% greenhouse gas cut by 2040

The European Commission has presented a plan aiming to slash net greenhouse gas pollution in the EU by 90 percent by 2040, compared to 1990 levels, with a focus on carbon dioxide from burning fossil fuels and gases from agriculture and land use.

Market officials have described the plan’s goal of coming close to climate neutrality ten years before 2050 as highly ambitious.

The 2040 targets are a first step for energy legislation proposals concerning buildings, transport, alternative green fuels, industry and renewables.

Extending energy legislation beyond 2030 promises to serve as a major catalyst for development of technologies and investments.

The European Commission’s proposals, announced ahead of elections in June, will activate a new energy policy cycle, as was the case, years ago, when 2030 targets were set, triggering spectacular growth in the renewable energy, energy saving and electromobility sectors.

The new 2040 targets will be even more challenging as the 90 percent greenhouse gas reduction target will require tremendous change in the energy, agriculture and land-use domains, amongst others.

The European Commission plan’s proposals are based on extremely detailed simulation of the respective energy systems of EU member states and projections made through exclusive usage of PRIMES, a mathematical model developed at the National Technical University of Athens for all of Europe – it has been consistently applied since 1995 for all EU energy policy proposals – and studies conducted by the Athens-based E3 Modelling scientific team for energy and transportation.

 

Big interest in Greece-North Macedonia gas pipeline tender

A tender offering a contract for the construction of a gas pipeline linking the Greek and North Macedonian systems has attracted considerable interest, including companies from abroad and the neighboring country, energypress sources have informed. Interested parties had until yesterday to submit offers.

Officials expect work on the gas pipeline’s development to begin this coming spring, while the project’s delivery is anticipated within 2025.

The gas pipeline is planned to cover a total distance of 125 kilometers. Its Greek segment will stretch 57 kilometers, beginning from Nea Mesimvria in the country’s north, while the North Macedonian segment’s 68 kilometers will reach Negotino.

The pipeline’s initial capacity will be 1.5 billion cubic meters, annually. It will be built according to technical specifications enabling transportation of renewable gas, entirely.

Greek gas grid operator DESFA and its North Macedonian equivalent, Nomagas, signed an agreement for the project in September, 2023 as a follow-up to a bilateral agreement reached between the Greek and North Macedonian governments in March, 2021.

The European Investment Bank plans to extend funds worth 2.48 billion euros for the Greek-North Macedonian gas pipeline through the EU’s Western Balkans Investment Framework (WBIF).

 

Gas demand slump prompting LNG shipment cancellations

A significant decline in natural gas demand has prompted a number of gas companies to cancel shipments planned for the Revythoussa LNG terminal on the islet just off Athens, a complete contrast to the frenzy and congestion experienced at the terminal last winter, energypress sources have informed.

Low gas demand, the country’s mild winter weather, so far, and still-full gas storage units around Europe have made many previous orders unnecessary, sources at Greek gas grid operator DESFA, operating the Revythoussa LNG terminal, have explained.

DESFA is monitoring the situation to ensure gas-order cancellations do not impact operations at the Revythoussa LNG terminal, the sources noted.

The decline in natural gas demand, which ended 2023 21.6 percent down year-on-year, according to latest DESFA data, is expected to continue in the first quarter of 2024.

Though last year’s lower gas demand did show signs of a rebound in the final quarter of 2023, this was not enough to make up for weakened demand in the year’s previous quarters.

A year ago and, even more so in the autumn of 2022, high demand for slots at the Revythoussa LNG terminal had resulted in bids of as much as 4 million euros for a slot at DESFA’s related auctions.

At the time, the role of the Revythoussa LNG terminal was upgraded by the EU’s efforts to counter the energy crisis and end Europe’s reliance on Russian natural gas. As a result, Revythoussa became a strategic entry point for European gas imports.

DEPA, Gazprom talks stand better chance of agreement

Long-running negotiations between Greek gas company DEPA Commercial and Russia’s Gazprom, which commenced late in 2022, now stand a better chance of resulting in an agreement, energy ministry sources have informed.

The talks between the two sides are dealing with possible price revisions as well as a compensation claim, by Gazprom, concerning an existing agreement running until the end of 2026.

DEPA Commercial is seeking a greatly improved supply price for 2024 as well as a retroactive price decrease from January 1, 2023, while Gazprom is pushing for a compensation payment based on a take-or-pay agreement signed with the Greek company.

The Russian company is demanding compensation over DEPA Commercial’s alleged failure to fully absorb an agreed 17 TWh gas quantity in 2023.

The Greek side has refused to acknowledge the Russian claims, arguing that its non-absorption of specific quantities has resulted from a violation of the contract by Gazprom.

The contract requires the Russian company to supply DEPA Commercial at a price ensuring a competitive advantage over rivals in the Greek market, but this has not been achieved for quite some time, local sources contended. Gazprom has been supplying both lower-priced LNG and natural gas to at least one of DEPA Commercial’s domestic competitors for months, the sources pointed out.

Despite these dealings, Greece’s energy ministry insists the country is pushing to completely end its reliance on Russian gas, in line with the overall EU strategy.

 

Brussels looks to block uncertain RES projects from outset

The European Commission has taken a further step aiming to free electricity grid capacities from uncertain projects by calling on energy regulators throughout the EU to establish disincentives and filters blocking indefinite investments from the beginning of application processes.

Brussels has decided to take action as a considerable number of RES investment plans in the EU have remained stagnant, including in Greece, needlessly occupying precious grid capacities.

The European Commission has issued instructions calling for national energy regulatory authorities to establish rules discouraging RES projects from the outset if investors behind the projects do not have serious intentions.

New stricter rules should be introduced throughout the EU to stop investors from submitting applications if they are not certain about follow-up action, Brussels has urged.

 

Brussels planning European green-energy PPAs platform

A European Commission draft for electricity market revisions, whose text has been obtained by energypress, includes a plan for an EU platform to host green-energy PPAs.

Preliminary discussions on electricity market revisions are currently taking place in Brussels and expected to continue at a session tomorrow ahead of a second round of talks planned for mid-December.

It should be noted that tripartite meetings, or trilogues, between European Parliament, the Council and the Commission, will need to be completed by early February if the draft is to be adopted and published in the EU’s Official Journal ahead of the forthcoming European elections.

The European Commission, according to the draft plan, will consider establishing a European platform for PPAs by assessing the interaction prospects of such a platform with other existing electricity market platforms and a potential market pooling role.

The platform, according to the plan, will operate on a purely voluntary basis for participants and will be developed through cooperation between the European Commission, ACER, Europe’s Agency for the Cooperation of Energy Regulators, and EU member states.

The draft agreement calls on EU member states to promote the adoption of PPAs by removing any unnecessary barriers, unjustified procedures or fees that may exist in order to ensure price visibility and achieve objectives included in their respective National Energy and Climate Plans.

The European Commission may issue a specific directive to remove barriers hindering PPAs, the plan notes. It recommends an assessment by January, 2026, followed by inspections every two years, to determine whether barriers remain and whether transparency in PPA markets is sufficient.

EastMed pipeline market test in early 2024, project feasible

A market test for the EastMed gas pipeline, planned to transport natural gas from fields in the eastern Mediterranean to Italy and central Europe via Greece, will be held in the first quarter of 2024, energypress sources have informed.

Market players are already expressing interest in the project ahead of the anticipated market test, expected to take about one month to complete.

Both producers and suppliers interested in utilizing the prospective pipeline to transport gas quantities from the east Mediterranean to European markets via Greece are expected to submit offers to the market test.

Though the test’s initial round will be non-binding, its outcome will help shape the project’s developments prospects, which have fluctuated for a number of years.

Competent sources note that the technical feasibility of the pipeline – to offer an annual 21 bcm capacity and cover 2,000 kilometers, of which over 1,400 kilometers will run underwater – has been proven and clarified through a number of studies.

However, questions linger over the project’s cost. Its budget, estimated at 6.1 billion euros, is likely to increase as development costs have risen considerably since the previous evaluation.

Discussions on EastMed date back nearly fifteen years. The project has been on the EU’s PCI list since 2013, a status it is expected to retain when the new and revised list is soon officially present, most probably within November.

 

Crucial DEPA, Gazprom talks on gas price, take-or-pay clause

Greek gas utility DEPA’s negotiations with Gazprom on new natural gas prices for 2024 and the Russian company’s insistence on activating a take-or-pay clause for a payment of approximately 400 million euros as compensation for unused gas quantities in 2022 and 2023 have reached a crucial stage and could end up in court.

A current price agreement between the two sides, signed in 2021, is 80 percent linked to the TTF index at the Dutch energy exchange and 20 percent linked to the price of oil.

DEPA is seeking an improved price level for 2024 as well as a retroactive price cut from January 1, 2023, which, if agreed on, would result in a reimbursement.

Also, DEPA disagrees with Gazprom’s insistence on triggering a take-or-pay clause in response to the Greek company’s failure to absorb a minimum natural gas amount of 17 TWh per year. DEPA contends its shortfall resulted from the Russian company’s failure to honor a crucial price-related term for gas supply at a price level that would ensure a competitive advantage for DEPA in the Greek market.

Over the past few months, Gazprom has supplied LNG and natural gas to at least one other customer in Greece at price levels lower than those offered to DEPA, sources at the gas utility have claimed.

Despite the introduction of EU measures designed to restrict Russian gas imports into Europe, they remain high in Greece, representing approximately 40 percent of the country’s overall gas imports – both LNG and pipeline gas – compared to just 9 percent in the EU.

Greek energy minister Thodoris Skylakakis, responding to journalists’ questions, contended he remains unperturbed by Gazprom’s dispute with Bulgaria over the Russian company’s refusal to meet a Bulgarian network usage surcharge demand of 10.2 euros per MWh.

Though this dispute could result in a disruption of Russian supply to Bulgaria and, by extension, Greece, the outcome would rid Greece of Russia’s high-cost demands, the minister contended.

The cost of the DEPA-Gazprom take-or-pay clause for 2022 is 150 million euros and is estimated to reach 300 million euros in 2023, according to the minister.

 

Offshore wind farm market devastated, EU looks to revive

Offshore wind energy company shares have continued to plummet, as highlighted by the equity performance of key Danish player Orsted, whose share price slumped 23 percent yesterday, falling to a seven-year low. Higher interest rates and a rise in the cost of materials have been cited as key factors.

The slide was preceded by the cancellation of two major projects in the USA as a result of unfavorable market conditions.

Orsted’s share price peaked at 1,350 kr in 2021 and is now worth less than a quarter of that, 259 kr.

The plight of the Danish company, Denmark’s biggest energy company, mirrors the performances of other energy groups with offshore wind energy interests.

Vestas’ share price has fallen from 312 kr to 150 kr over the past couple of years, the Siemens Gamesa share has slumped from 41 euros to 15 euros, Ming Yang’s share is down to 15 yuan from 34 yuan and the Nordex share price is at 10 euros from 24 euros.

Share prices in the RES sector, overall, have also been affected up to a certain degree, but the offshore wind sector has certainly been hit hardest.

As put by Bloomberg columnist Javier Blas: “If you are building something big, requiring lots of financing, plus steel, copper and plastic, perhaps it would be not such a bad idea to hedge some of that interest rate and commodity price risk”.

Attention has turned to a major wind energy package announced by the European Commission just days ago, its aim being to achieve a capacity of 420 GW in wind energy by 2030, as part of the REPower EU initiative.

This support will certainly help the offshore wind sector, but it remains to be seen if it can compensate for the adverse economic climate and high interest rates.

Industry partially satisfied with gov’t energy-cost strategy

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

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

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

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

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

 

Licensing, financing upgrade for EU wind energy model

Additional non-price criteria are among a number of changes planned by the European Commission for the EU wind-energy model as part of an effort to establish a more uniform system around the continent. Brussels’ Wind Power Package proposals will be presented tomorrow.

The package includes significant changes to the project licensing procedure, the focus being on simplification and acceleration as well as the provision of additional financial tools compensating for investment risk.

A draft of the Wind Power Package, obtained by energypress, includes six key initiatives designed to bolster the European wind energy industry against challenges currently faced. These include: accelerating project development through increased predictability and faster permitting; improvements to the auction model; improved access to finance; creating a fair and competitive international environment; and commitments from industry and member states.

The main initiatives proposed by the European Commission through the wind power package on the auction model concern the introduction of quality criteria and measures that will maximize the delivery of projects.

In addition, certain initiatives address cybersecurity risks and data security, while another action is foreseen to strengthen the European “Global Gateway” initiative.

Non-price criteria for the auctions model are expected to be delivered in the form of recommendations and guidelines by the end of March, 2024, following consultation between the European Commission member states and partners.

EU adequately prepared for winter ahead, ACER notes

 

The EU is adequately prepared to cover its energy needs this coming winter, despite the effects of prolonged efforts that were needed last winter to overcome unprecedented challenges, data provided by ACER, Europe’s Agency for the Cooperation of Energy Regulators, has indicated.

The EU’s gas storage facilities are already 90 percent full, two months ahead of a November deadline.

Also, in the first two quarters of 2023, a target set for a 15 percent reduction in gas demand was achieved, while LNG import capacity has expanded by 20 percent, with the global market remaining well supplied, courtesy, in part, to limited demand growth from China.

Increased LNG imports and reduced demand have been key parts of the EU’s energy-crisis strategy.

LNG imports into the EU-27, as a percentage of overall natural gas imports,  doubled from 20 percent in 2018-2019 to 40 percent between August, 2022 and July, 2023. This percentage rise has been greatly attributed to LNG imports from the USA, up six-fold to 600 TWh.

Furthermore, solar, wind and pumped-storage energy solutions are being developed at a faster pace and contributing, slowly but steadily, to Europe’s reduced reliance on natural gas.

Despite the overall progress, Europe cannot afford to become complacent. According to Brussels-based economic think tank Bruegel, energy shortage fears have subsided but prices remain high.

Also, ongoing global instability could impact the industrial sector and the EU economy, the think tank warned.

The global LNG market, and, by extension, the natural gas market, will remain tight until more liquefaction plants come into play, Bruegel noted.

Encouragingly, new US LNG facilities to offer an annual capacity of 336 TWh, equivalent to half the EU’s LNG imports from Russia, are planned to begin operating in 2024.

Natural gas seen remaining key power price-setter in 2030

Natural gas will continue being a key price setter of the system marginal price, or wholesale electricity price, in Europe in 2030, with a degree of influence similar to that of the present, despite the deepening penetration of renewables in the continent’s energy mix, a latest study by the European Commission’s Joint Research Center has projected.

Natural gas-fueled power plants will continue being an influential price-setting technology for wholesale electricity prices in 2030, despite covering only 11 percent of the generation mix, the study determined. Last year, natural gas-fueled power plants, covering 19 percent of total EU electricity demand, set system marginal price levels 55 percent of the time.

Greece is a prime example of the anticipated trend as, in 2030, natural gas is projected to be the price-setting technology for the system marginal price more than 80 percent of the time.

Natural gas will continue playing a leading role as a price-setting technology in Europe in 2030 as natural gas-fueled power stations are seen replacing higher-emitting lignite and coal-fired power stations, the study noted.

Renewables are projected to keep gaining a bigger share of Europe’s generation mix, from 46 percent at present to 67 percent by the end of the decade, the study projected.

Also, increasing cross-border grid interconnectivity in the EU will lead to lower wholesale prices and price convergence within the European market, the study pointed out.

EU reaches agreement on electricity market reforms

Germany has taken a step back permitting France to use state subsidies to fund its nuclear power plants, a development that has enabled EU member states to establish a wider agreement on electricity market reforms.

As part of the new EU rules, governments will be free to use funding structures known as contracts for difference (CfD). These set a minimum price guarantee for electricity suppliers, as well as a price ceiling, above which the state can recover any revenue.

EU member states backed the reforms almost unanimously at yesterday’s EU energy council, Hungary being the only member state to vote against the electricity market revisions.

It was agreed that CfD contracts will be mandatory, with certain exceptions, when public funds are used in long-term contracts.

Also, CfDs will be used for electricity generation investments using photovoltaic, geothermal, hydro and nuclear technologies, in order to provide predictability and stability.

The EU energy council agreed to provide flexibility in how member states can distribute revenues generated by CfD contracts. As a result,  these revenues will be able to be distributed to consumers and also to finance mechanisms reducing electricity costs.

CfD regulations will be implemented following a three-year transitional period for all electricity production sectors except offshore wind farms, to be given a five-year transitional period.

EU ministers have been negotiating reforms to the bloc’s electricity market for months, the objective being to offer RES developers better investment signals and secure consistent electricity supply to prevent price spikes.

Nuclear plants, Baltic pipeline on energy council agenda

Electricity market reforms, the energy situation in Ukraine, progress on revised National Energy and Climate Plan appraisals, energy-efficiency financing matters, Europe’s preparations for winter, the shutdown of the Baltic-connector pipeline, CO2 emission rights, as well as nuclear power plant support are among the agenda items to be discussed at today’s EU energy council.

On the electricity market reforms front, support for nuclear power plants will be a key agenda topic. France and nine other EU member states are expected to call for two-way Contracts for Difference. Germany has already expressed reservations, fearing the impact of CfDs on the rest of the market if unconditionally applied.

This disagreement needs to be resolved as quickly as possible so that the revised market structure can be finalized and adopted by the end of the year. Market players are confident a compromise solution will be found before the end of this month.

European Commissioner for Energy Kadri Simson is expected to update EU energy ministers on how assessments of revised NECPs are progressing.

Also, Finland and Estonia will inform fellow EU members on any findings of an investigation conducted to determine the cause of damage discovered last week at the Baltic-connector gas pipeline, used by the two countries for access to an underground gas storage facility in Latvia. Suspicions of sabotage have been raised.

IPTO submits Green Aegean proposal to ENTSO-E

Greek power grid operator IPTO has submitted a Green Aegean grid interconnection plan, envisaged to run from Greece to Germany’s south, to the ten-year development plan of ENTSO-E, promoting closer cooperation across Europe’s TSOs to support the implementation of EU energy policy and achieve Europe’s energy and climate policy objectives.

The project’s inclusion in the development plan of ENTSO-E, representing operators from all of the EU’s 27 member states, would represent a significant first step towards PCI/PMI status for the project, securing EU funding, as planned by IPTO.

IPTO prefers a HVDC-technology subsea route for the Green Aegean grid interconnection that would pass through the Adriatic Sea to Slovenia, followed by an overland route to Austria and Germany’s south.

IPTO recently held related talks with TenneT, Germany’s biggest power grid operator, and Slovenian operator ELES.

TenneT has expressed strong interest in the Green Aegean grid interconnection and the prospect of collaborating with IPTO on the project’s development for a link with Germany’s grid in the southern part of the country.

HVDC-technology enables transmission of large quantities of electricity over long distances via submarine cables, as well as fast and accurate control of power flow, enhancing grid stability.

 

NSRF support worth over €40m for energy communities

The National Strategic Reference Framework has announced an EU funding program worth over 40 million euros to support energy communities in five Greek regions – west Macedonia, Crete, the north Aegean, south Aegean, and the Peloponnese.

This program is planned to offer RES installation expense support to energy communities active in a number of domains.

They include public utilities and municipal water supply and sewerage companies, primary schools, kindergartens, nurseries, high schools, clinics, hospitals, municipal and public sports facilities and buildings, local authority buildings, as well as low-income households living below the poverty line.

The biggest share of the support program’s sum, worth 41.8 million euros, has been allotted to the west Macedonia region, a lignite-dependent area, eligible for 16.4 million euros in support through this program. The Peloponnese is entitled to 10.5 million euros, followed by Crete (€6.4m), the north Aegean (€6.2m), and the south Aegean (€2.3m).

The application procedure is now underway at http://logon.ops.gr. Eligible parties face a March 28, 2024 deadline.

IPTO favors subsea route, HVDC for Green Aegean

Power grid operator IPTO has settled on proposing a subsea route for the Green Aegean grid interconnection, a pivotal project envisaged to run from Greece to Germany’s south, which, according to the operator’s preferred route, would pass through the Adriatic Sea to Slovenia, followed by an overland route to Austria and Germany’s south.

The operator has abandoned an alternative overland western Balkans route for the project, through Montenegro, Croatia and Slovenia, over cost-related concerns. This route would entail upgrading pylons at outdated networks in these countries, making the venture financially unfeasible.

As a result, IPTO is now holding talks with TenneT, Germany’s biggest power grid operator, for its proposed underwater route, a more independent passage that would not require the usage of networks at any neighboring countries and be equipped with HVDC technology.

If IPTO’s envisaged route is finally adopted, then Prime Minister Kyriakos Mitsotakis’ proposal for the establishment of a European Grid Facility to fund upgrades of outdated Balkan networks and, subsequently, enable a Green Aegean crossing, will no longer apply. Mitsotakis presented his proposal during an EU summit last March.

Usage of HVDC technology for such projects is crucial as it enables transmission of large quantities of electricity over long distances via submarine cables; fast and accurate control of power flow, enhancing grid stability; and the interconnection of incompatible networks.

 

Energy crisis brings fossil fuels back to the forefront

The energy crisis has brought about a revival of the hydrocarbons sector, as highlighted by a growing number of energy companies that have decided to reactivate exploration and production projects that had been put on hold as a result of climate-target pressure. Much of this reignited upstream activity is occurring in Europe. Greece must not be left behind.

Yesterday, French oil and gas giant TotalEnergies announced it would boost fossil fuel output over the next five years, a contrast to its reduced production in recent years.

Earlier in the week, on Wednesday, the UK’s North Sea Transition Authority approved plans for production at the new Rosebank oil and gas field in the North Sea, estimated to contain approximately half a billion barrels of oil.

Norwegian upstream giant Equinor, holding the biggest stake in the Rosebank field, estimates production will begin in 2030, with initial investments seen reaching roughly 3.8 billion dollars before totaling approximately 10 billion dollars by 2051.

Two two months earlier, UK Oil & Gas Plc had announced it would recommence production at its Avington oil field, estimated to contain 60 million barrels. Production at this field had been disrupted at an embryonic stage six years ago, with output having reached just several hundred thousand barrels.

In late August, Norway, which has captured the biggest share of Russia’s lost natural gas supply to the EU, announced that a latest round of tenders for licenses at 92 locations, 78 in the Barents Sea and 14 in the Norwegian Sea’s northwest, had attracted interest from 25 companies, including majors such as Shell, ConocoPhillips, Equinor and Aker BP.

The heightened interest expressed by majors highlights a turnaround of their green-focused investment policies of recent years. Shell, for instance, has announced it will disrupt an investment cutback plan of between 1 and 2 percent, annually, until 2030, adding it will increase investments in natural gas.

The hydrocarbons sector is also making a comeback in regions closer to Greece, Italy being a prime example. Italy had stopped issuing new licenses for many years but took a turn in November, when officials announced the country will be holding tenders offering ten-year licenses that offer total production potential of 15 bcm in natural gas from deposits in the Adriatic Sea.

Quite soon, companies operating in Greece will receive results from seismic surveys conducted west and southwest of Crete (ExxonMobil – HelleniQ Energy); Gulf of Kyparissia (Helleniq Energy); Ionian Sea (HelleniQ Energy); and Northwest Ionian (Energean – HelleniQ Energy).

In addition, Energean is awaiting an environmental permit to proceed with exploratory drilling in the Zitsa area, close to Ioannina, northwestern Greece.

Given the international developments and Greece’s energy needs – 6 bcm of natural gas a year and 300 barrels of oil per day – imported at lofty prices, the Greek State must facilitate, it has become clear, the endeavors of companies seeking to move ahead with their projects.

Milder, lower-cost gas storage measures planned for winter

This winter season’s Preventive Action Plan for natural gas supply security in Greece is expected to be significantly lower in cost as it will be limited to a basic set of milder precautionary measures, energypress sources have informed.

The Preventive Action Plan will be determined by the outcome of a risk study currently being conducted for the upcoming winter, deputy energy minister Alexandra Sdoukou recently informed.

Though the study’s results are not yet out, it has already become apparent that drastic energy security measures such as those taken for last winter – among them the rental of an additional FSU at the Revythoussa LNG terminal just off Athens – will not be necessary, well-informed sources have contended.

This winter, gas grid operator DESFA, running the Revythoussa LNG terminal, does not intend to hire an additional FSU, which, along with gas-storage facility rentals abroad last winter season by electricity producers operating gas-fueled power stations in Greece, ended up costing 160 million euros.

In the lead-up to last winter, Greece’s gas-fueled electricity producers were required to store natural gas at underground storage units of other EU member states, as domestic gas storage facilities did not suffice to cover precautionary-measure needs.

The country’s electricity producers have, this autumn, remained far more subdued on gas-storage action at facilities in fellow EU member states. Some of Greece’s major electricity producers have reached agreements to use gas storage facilities, primarily in Italy, if needed, sources informed.

Gas amounts involved in these agreements are believed to be well below levels foreseen by EU regulations and RAAEY, the the Regulatory Authority for Waste, Energy and Water.

Last winter, RAAEY, aligning itself with EU Regulations, which require all member states to store gas amounts equivalent to 15 percent of national annual consumption, set a 7.5 TWh storage requirement.

Market officials have expressed concerns as to whether this requirement still needs to be maintained, noting the Revythoussa LNG terminal could cover extraordinary needs through additional LNG shipments.

German-French nuclear dispute delaying capacity mechanism

Greek government efforts for the establishment of a capacity mechanism concerning gas-fueled power stations have been bogged down, indefinitely, by a long-running dispute between France and Germany over nuclear energy. Paris is seeking to secure a greater role for nuclear energy in the European Union’s energy revamp.

According to reliable sources, this nuclear dispute is the only unresolved issue and one remaining obstacle to the EU adopting a new set of regulations for its electricity market reforms. A text for the reforms was established at an Energy Council of EU energy ministers in June.

The new set of regulations, in the context of capacity availability mechanisms, includes a provision enabling remuneration for gas-fueled power plant availability, if these plants meet required technical specifications. The text also permits the implementation of a mechanism rewarding such power plants for flexibility.

According to the same sources, developments on these mechanisms are expected later this month, under the shadow of the German-French nuclear energy dispute, which has derailed any schedule that may still exist for the EU’s electricity market reforms.

Berlin has expressed a preference for these reforms to be completed following the EU elections next June, while Paris, in response, has demanded no less than a partial agreement before the end of 2023.

 

Brussels forecasts lower gas prices, concerned about oil

The European Commission has projected energy prices falling at a slower rate for the remainder of 2023 before rising again in 2024, especially for oil prices.

Brussels made its forecast before OPEC+ announced it would extend production cuts until the end of this year, which pushed the price of Brent up to a level of 90 dollars per barrel.

As for electricity and natural gas prices, the European Commission report notes prices have fallen since spring.

For the third quarter of 2023, the European Commission expects price levels to be 21 percent lower for natural gas and 25 percent lower for electricity, compared to its previous estimates.

Brussels has forecast an electricity price average of 109 euros per MWh in 2023 and 140 euros per MWh in 2024, down from 130 and 160 euros per MWh, respectively, in its spring report. This revision was attributed to a rapid expansion of liquefaction terminals on the continent and full gas storage facilities.

The Brussels report projects economic growth of 0.8 percent this year in the Eurozone and the EU, slightly below a previous 1 percent growth forecast, while economic growth in 2024 is seen reaching 1.3 percent, down from 1.6 percent projected in the spring report.

The German economy, Europe’s biggest, is now seen contracting by 0.4 percent this year, rather than growing 0.2 percent, as was previously projected.

EU industrial production fell by 1.1 percent in the second quarter of 2023, compared with the previous quarter, despite falling energy prices, the Brussels report noted.

Focus on germanium, antimony mining, vital mineral resources

The Greek government, along with its Ministry of Environment and Energy, is placing significant emphasis on harnessing the potential of the country’s mineral resources, with particular attention directed towards the utilization of germanium and antimony elements, both vital for industry and the energy transition.

Rockfire Resources plc, a UK-based exploration company focusing on precious metals, base metals, and critical minerals – its subsidiaries include Hellenic Minerals I.K.E. – revealed last year that it had identified germanium deposits at the Molaoi mine in southeastern Peloponnese. The company is currently awaiting EU funding to progress with the development and utilization of these resources.

The European Union’s Environment Agency has identified germanium as one of the top 20 raw materials considered critical metals by the European Commission, given the potential risk of supply shortages.

Germanium is an important semiconducting material, while its compounds are used, among other things, for telecommunications optical fibres, as polymerization catalysts and in photovoltaics, while it is also widely used in various sectors of the chemical industry and metallurgy.

Germanium holds significant importance as a semiconducting material. Its compounds find application in diverse areas, including telecommunications optical fibers, photovoltaics, and serve as polymerization catalysts. Furthermore, germanium plays a crucial role in various sectors of the chemical industry and metallurgy.

As for the country’s antimony deposits, Greece possesses great potential, Theodoros Skylalakis, the Minister of Environment and Energy, highlighted at a recent EU energy council meeting.

The EU is willing to support European antimony extraction efforts as 87 percent of the world’s production of this mineral resource hails from China.

Antimony is used in the production of refractory materials, dyes, as well as in the glass industry, batteries and semiconductors.

Deputy Minister of Environment and Energy Alexandra Sdoukou, speaking at a recent conference titled “Greek specific issues: new raw materials industrial projects in Greece”, announced the launch of a tender for the lease of a mining site in order to determine the existence and exploitation of antimony, a mineral included in all EU lists from 2011 to date as a critical strategic metal.