europe

Energy groups, industry agree on energy transition issues

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Support for industry expressed by Greek power utility PPC and other major European energy utilities through the recent Antwerp Declaration illustrates a common understanding of existing energy-transition problems, or common acceptance that zero-carbon goals in Europe may be right but roads leading to their achievement are not.

PPC is one of many signatories backing the Antwerp Declaration for a European Industrial Deal. It was presented in February following an agreement between seventy-three industry leaders and has since been endorsed by nearly 570 companies representing twenty industrial sectors, as well as 803 organizations and 186 associations and unions.

Besides PPC’s CEO Giorgos Stassis, the Antwerp Declaration has also been endorsed by CEOs of other energy utilities and companies, including Patrick Pouyanné of TotalEnergies, Luc Rémont of EDF, and Adriano Alfani of the ENI group.

The declaration underlines the commitment of industry to Europe and its transformation and outlines urgent industry needs to make Europe competitive, resilient, and sustainable in the face of dire economic conditions.

Industry’s concerns are justified as, despite the sector’s willingness to invest in new clean technologies, European bureaucracy often acts as a deterrent, forcing some industries to consider establishing new bases beyond the continent.

The declaration has brought together major players across Europe who agree that energy costs on the continent are too high and exacerbated by too many regulatory burdens. The consensus expressed by these signatories highlights that Europe is right in pursuing zero carbon targets, but doing so by de-industrializing is wrong.

Next step taken for gas system upgrade’s market test

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Gas grid operator DESFA is preparing to take a next step towards a binding stage for a market test concerning an upgrade and expansion of the Greek gas transmission system by putting the procedure’s guidelines to public consultation, energypress sources have informed.

Based on the foreseen procedure, the guidelines, along with all project proposals, will be submitted to RAAEY, the Regulatory Authority for Waste, Energy and Water, for approval ahead of the beginning of the market test’s binding stage, planned for May.

The market test’s overall procedure began last year with a non-binding stage that attracted grid-capacity requests covering 2024 to 2050 from a total of 27 companies.

Seventeen of the 27 requests were submitted by companies from abroad, mainly central and southeast Europe, as well as the USA. This turnout highlights Greece’s upgraded role on the regional energy map. The other ten requests were submitted by Greek companies.

Authorities are less confident of a solid turnout by investors in the binding phase as demand for natural gas has been on the decline.

 

Doubled TAP capacity by 2030, not 2027 as initially planned

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A Trans Adriatic Pipeline (TAP) plan to double the pipeline’s capacity to 20 billion cubic meters by 2027 now appears likely to be delayed until 2030, Stefano Venier, CEO of Italian energy infrastructure company Snam, one of the TAP consortium shareholders, has indicated.

The ability to double the pipeline’s capacity depends more on the availability of gas in Azerbaijan than on demand, the Snam chief executive noted during a presentation of the company’s business plan until 2027.

The aim is to increase capacity gradually so that the pipeline can operate at full capacity sometime between 2027 and 2030, the latter being most probable, the official noted.

In previous announcements, the TAP consortium, in which Snam holds a 20 percent stake, had said the pipeline’s capacity would be doubled by 2027.

Participants in a market test being staged to measure whether demand is sufficient face a January 31 deadline to submit binding bids.

TAP, an 878-kilometer link crossing Greece, Albania and the Adriatic Sea to Italy, is developing from a pipeline of strong Italian and Greek interests to one with a crucial pan-European role as a result of the energy crisis of the last two years, a condition that has further highlighted the importance of energy security and gas supply, Snam noted.

 

Gas demand slump prompting LNG shipment cancellations

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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.

Global supply chain under pressure, PV sector impacted

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The global supply chain is under pressure as numerous container ships have been rerouted around southern Africa to avoid the Suez Canal as a result of attacks on vessels on the western coast of Yemen by Houthi rebels, aligned with Iran and declaring they have attacked ships in response to Israel’s bombardment of Gaza.

The situation, potentially adding three to four weeks to product delivery times, also spells trouble for Europe’s solar energy sector, officials have told energypress.

Though the PV sector is currently enjoying record-low cost for equipment, the drama unfolding in the Red Sea and at the Suez Canal threatens to greatly impact the global supply chain and alter favorable conditions currently benefiting the PV sector.

The European market’s PV needs are mostly covered by Chinese manufacturing. Any disruption to transportation routes would result in sector shortages on the continent.

PV officials in Europe are already warning the current rerouting of numerous container ships could increase market pressure for solar panels in the coming months.

Gas prices will not fall as market still tight, experts note

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LNG prices will not decline, market experts have forecast, noting the global market remains tight, new production-related investments will not be completed before 2025, while a cold winter could quickly deplete European gas reserves.

This projection was highlighted by executives representing some of the world’s biggest LNG companies at the 23rd World LNG Summit & Awards, hosted in Athens. Participating officials generally agreed that gas prices will remain relatively high this year due to a number of factors, including geopolitical instability, inflationary pressure and, most importantly, the absence of additional international production capacity.

“Natural gas reserves in Europe are high, accounting for 30 percent of demand in winter. However, if this winter season is cold, these reserves will diminish quite fast,” Anatol Feygin, executive vice president and chief commercial officer of Cheniere Energy, told the event, adding that no significant number of new LNG plants will come on stream in 2024.

Europe is not expected to encounter supply issues this winter as European countries can afford high prices and, as a result, will be able to attract significant volumes for yet another winter, unlike less affluent countries in other parts of the world.

Feygin, along with other LNG industry officials, agreed that LNG prices cannot de-escalate to pre-energy crisis levels if Russian pipeline gas remains sidelined from many markets.

 

EastMed boosted by ENI discovery, Cypriot leader’s comments

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Italian multinational energy company Eni’s discoveries at block 6 of the Cypriot EEZ and favorable comments by Cypriot President Nikos Christodoulides have come as a boost for the development prospects of the natural gas pipeline EastMed, planned to transport natural gas from fields in the eastern Mediterranean to Italy and central Europe via Cyprus and Greece.

The Cypriot president, in comments made just days ago, linked Eni’s recent findings at block 6 of the Cypriot EEZ with the revival of the pipeline.

According to sources, ENI, which has rights to seven of ten licensed blocks at the Cypriot EEZ, estimates that it will be able to shape a development plan for the field and proceed with its exploitation early in 2024, once drilling confirming the discovery is conducted, most probably in January.

If the plan is confirmed, the block will be the first to be developed in the Cypriot EEZ since 2011, when Aphrodite was discovered, followed by four more discoveries.

In an interview last Thursday with Italian newspaper La Repubblica, the Cypriot president, citing ENI’s discovery, noted that EastMed “has always been one of the strategic options for the implementation of an energy corridor linking the Eastern Mediterranean with Europe, facilitating the export of energy resources through Italy”.

 

EastMed pipeline market test in early 2024, project feasible

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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.

 

Energy firms dominate Fortune 500 Europe list’s top spots

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European energy firms have bounced back, as highlighted by their dominant rankings on the first-ever Fortune 500 Europe list, published yesterday.

The Fortune 500 Europe list dispels myths about the continent and also reads like a throwback to the 20th century, when energy and automotive industries were the prime players in the global economy – and companies were led by men.

The list’s top spot is held by British energy giant Shell, with six energy companies and three automotive companies featuring in the top 10. This is starkly different to the US list, where three Big Tech companies—Amazon, Apple, and Alphabet—feature in the top 10. In Europe, the largest pure tech company is SAP, at No. 114, followed by 1990s powerhouses Ericsson (No. 141) and Nokia (No. 147).

One would have to go back to the late 1990s to find a Fortune 500 akin to what the Fortune 500 Europe looks like today. Twenty-five years ago, GM topped the US list with Ford and Chrysler not far behind, and Exxon, Mobil (and GE, to a lesser extent) representing the energy sector in the top 10.

The list of Europe’s largest companies, based on revenue, includes four Greek energy companies, Motor Oil, at No, 213, Helleniq Energy, formerly Hellenic Petroleum (ELPE), at No. 243, power utility PPC, at No. 298, and Mytilineos, at No. 444.

On the diversity front, too, Europe lags the US. Just 7 percent of Fortune 500 Europe companies are led by a woman, compared to 10 percent on the US list, a statistic that questions the continent’s progressive image.

The Fortune 500 Europe list includes companies from 24 different countries, ranging, in size, from Germany’s MTU Aero Engines, with revenues of $5.6 billion, at No. 500, to London-based oil and gas giant Shell ($386.2 billion) at No. 1.

Combined, the 500 European companies generated $13.94 trillion in revenue in the most recent fiscal year.

 

European energy storage startups on rise despite costs

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Energy storage, a key factor in the effort for a green, carbon-free transition, entails high cost as most current storage solutions depend on lithium-ion batteries, which are powerful but relatively expensive.

This high cost, as pointed out by the Financial Times’ sifted.eu, has restricted the ambitions of some companies, but others are putting energy-storage technology to good use.

For example, Polarium – a startup in Sweden’s booming battery industry – provides lithium-ion backup power to the telecom and commercial sectors. The company notes its ability to efficiently convert DC power generated by solar panels into AC power required by most devices is its unique selling point.

Dozens of companies are looking beyond lithium, according to the sifted.eu report. This trend has increased since last year’s sharp rise in raw materials for lithium.

Investment in new batteries in Europe is forecast to reach 30 billion euros by 2030 as the continent prepares for a renewable energy future.

The search for a stable, cost-effective lithium alternative is widespread. Startups including France’s Tiamat are making salt-based batteries. Sodium, next to lithium on the periodic table of the elements, is not only similar, but more abundant and cheaper.

On the other hand, the energy density of sodium is relatively low, which means that batteries using salt need to be larger and heavier than their lithium counterparts.

Europe faces tough opposition in the energy storage sector. China dominates lithium-ion production and is making efforts to dominate the sodium-ion supply chain.

US battery manufacturers, meanwhile, can receive significant tax credits – up to 30 percent of system installation costs, courtesy of the Inflation Reduction Act (IRA) supporting climate investment. Manufacturers can also benefit from a 20 percent bonus available if certain requirements are met, such as the use of household components.

Regulatory stability is critical to ensure the scaling up of capital-intensive energy storage projects. However, vague definitions of energy storage have led to some confusion about whether it is a consumer or producer of electricity. And this often leads to double taxation.

On the positive side, this sector offers tremendous potential and is attracting investors. Venture Capital funding in European energy storage is up 7 percent in 2023 compared to 2022.

 

 

Egypt’s LNG exports to Europe in danger of being zeroed out

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The widened Middle East conflict has greatly impacted Egypt’s LNG export ability, intensifying European fears of shortages on the continent this coming winter.

Production at Israel’s Tamar gas field, yielding 10 bcm per year, has been disrupted. This comes as a setback for Europe as a proportion of Israel’s production at the Tamar field is distributed to Egypt, which, in turn, exports to the continent in the form of LNG. Egyptian LNG exports were already down prior to this development.

As a result of these two factors, Egypt must now focus on covering its own energy needs, which relegates its LNG export interests to secondary status, analysts noted, warning that supply from Egypt could even be zeroed out.

LNG supply from Egypt is not negligible. Last year, Egypt exported 4.6 bcm, covering 5 percent of Europe’s needs.

Egyptian LNG exports have been severely restricted since October 7, when the current conflict was instigated by a Hamas attack on Israel, forcing the country to halt production at Tamar as a precautionary measure.

For the first time in years, Egypt’s LNG flow could reverse, transforming the country into an LNG importer rather than an LNG exporter.

Gas supply to Egypt has dropped by 70 to 80 percent since the closure of Tamar, a gas field that was producing at a rate of 23 million cubic meters a day during the year’s first eight months, an International Energy Agency analyst highlighted.

 

 

Power suppliers project sharp price rises if conditions persist

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Domestic electricity prices will inevitably rise by up to 15 percent as of January – when energy-crisis measures are planned to be lifted, reactivating indexation clauses – if current unfavorable international trends continue, local electricity market officials has projected.

Upward trajectories of natural gas and CO2 emission right prices, as well as the danger of a further rise in already-elevated interest rates, are worrisome factors whose combined effect could push up electricity prices, one official pointed out.

In Greece, wholesale electricity prices have soared by 80 percent over the past three days. On Sunday, wholesale electricity was priced at 93.49 euros per MWh, rose to 127.75 euros per MWh yesterday, before reaching 168.43 euros per MWh today.

Worse still, these wholesale electricity prices have yet to factor in October’s sharp rise in the price of natural gas, up approximately 30 to 35 percent in the first half of the month, to a peak of 56 euros per MWh, as Greece’s wholesale electricity market factors in gas prices from a month earlier.

Natural gas holds the dominant share of Greece’s energy mix, at 43.35 percent, followed by renewables, well below with a 21.37 percent share.

Though still well below last year’s astronomical price levels, natural gas prices of as low as 30 euros per MWh, recorded early this month, now seem to be a thing of the past.

The Israel-Gaza war and threat of a wider conflict in the Middle East – a negative development that has already disrupted operations at Israel’s Tamar gas field, from where gas quantities are delivered to Egypt and processed into LNG for export to Europe – is already impacting prices.

Price levels have been hit even harder by last week’s discovery of damage to the Estonian-Finnish Baltic-connector gas pipeline and telecommunications cable.

As for CO2 emission right prices, they have skyrocketed to levels 500 percent higher than pre-energy crisis levels, reaching approximately 90 euros per ton and, according to analysts, are projected to remain elevated over the next three years.

Hamas attack on Israel raises energy security questions

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The weekend’s shock attack by Hamas on Israel, which has cast doubts over the capabilities of Israel’s secret services while also proving the country’s Iron Dome air defense system inadequate as it failed to respond to thousands of rockets launched from Gaza, has, inevitably, also spilled over into the energy sector, raising security fears about Israel’s Exclusive Economic Zone.

Israel’s defense shortcomings, combined with the likelihood of an escalation of the current situation involving other Arab organizations, raise concerns about the country’s ability to protect critical infrastructure such as platforms and gas pipelines.

Upstream companies operating within Israel’s EEZ need to feel secure about the safety of their personnel and investments in the region.

For the time being, production at facilities operated by Greece’s Energean have not been disrupted.

The developments also extend into the political sphere. Earlier this year, Israel and Lebanon reached an EEZ delimitation agreement that enabled Lebanon to begin hydrocarbon exploration on its side. Total, Eni and QatarEnergy took on the project and are expecting initial results a few weeks from now.

The agreement between Israel and Lebanon, a politically sensitive one, gives Israel a 17 percent share of revenue from the Qana gas field.

Israel has also been considering the prospect of conducting drilling efforts off Gaza in collaboration with the Palestinian Authority and Egypt.

As for Europe, which saw in the Middle East an opportunity to escape from the dangers associated with Russian natural gas, this latest escalation comes as a reminder that energy security remains a difficult equation.

 

 

Romania’s Transgaz taking on 15% stake in Volos’ Argo FSRU

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Romanian gas grid operator Transgaz has agreed to take on a 15 percent stake in the Mediterranean Gas consortium, promoting the Argo FSRU project at Volos, on the mainland’s east coast, a move that further boosts the LNG terminal’s development prospects as it promises the terminal a gas supply route to Balkan and central European markets.

Mediterranean Gas has lodged an application to Greek authorities for an equity make-up revision facilitating Transgaz’s entry into the consortium with the 15 percent share.

Mediterranean Gas is also holding discussions with other potential partners to further expand its shareholder base, while developments on the matter are expected soon, sources informed.

A recent first-phase market test conducted by Greek gas grid operator DESFA to gauge a capacity increase for the country’s gas grid highlighted Volos’ prospective FSRU as one of the interconnection points of greatest interest for users.

Romania’s natural gas market is one of considerable size as it can absorb up to 13 bcm. Also, the country’s gas network offers interconnectivity with neighboring countries as well as with central European markets, and, as a result, offers potential for transportation of significant gas quantities to the north.

Transgaz operates a gas network totaling 25,000 km, has acquired the Moldovan network, and manages 7 bcm in gas storage facilities.

The Argo FSRU, which will be designed to supply up to 4.6 bcm of natural gas, annually, is planned to begin operating in early 2024.

LNG facility strikes in Australia raise European concerns

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Strike action at three LNG facilities in Australia, a key player in the global LNG market, has raised concerns in Europe as the ongoing dispute between employers and employees could have a significant impact on global gas supply and, by extension, the price of the Dutch TTF futures contracts.

The strike action, taking place at facilities that account for roughly 10 percent of global supply, has destabilized the European natural gas market over the past few weeks.

Europe needs to prepare for the possibility of further instability and price rises as it remains unclear how the ongoing dispute at the LNG facilities in Australia will play out, the Institute for Energy Economics and Financial Analysis (IEEFA) noted in a report.

North West Shelf, an LNG facility run by Woodside Energy, and two Chevron-run facilities, Gordon and Wheatstone, could be affected by the ongoing strike action, IEEFA warned. All three facilities, combined, represent roughly 10 percent of global LNG supply.

Australia, along with Qatar and the USA, represent nearly 60 percent of global LNG supply. Although the majority of Australian LNG exports are destined for Japan, China and South Korea, the disruption caused by the strikes will lead to Asia and Europe competing for LNG.

Wholesale power highest in Europe at €154.63/MWh

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Greece’s wholesale electricity prices have risen sharply today, up 34.68 percent to an average of 154.63 euros per MWh from yesterday’s level of 114.81 euros per MWh, making them Europe’s highest.

The minimum price in Greece today will fall to an average of 96 euros per MWh, while the highest will peak at 377.18 euros per MWh.

Romania has registered Europe’s second-highest wholesale electricity price today, at 150.69 euros per MWh, followed by Bulgaria, at 150.13 euros per MWh.

Meanwhile, major European markets have registered significantly lower wholesale electricity prices today. Italy’s average wholesale price today is at 120.36 euros per MWh and Germany’s is 118.67 euros per MWh.

Norway has registered Europe’s lowest wholesale electricity price today, averaging 40.21 euros per MWh, followed by Turkey, at 82 euros per MWh, Sweden, at 87.6 euros per MWh, and Spain and Portugal, both registering an average of 89.66 euros per MWh.

As for Greece’s energy mix, natural gas-fueled power stations will cover 42.26 percent of the country’s energy needs today, followed by renewables, at 21.56 percent, electricity imports, at 20.26 percent, hydropower, at 7.91 percent, and lignite-fired power stations, at 2.62 percent.

The country’s electricity demand today is projected to reach 161.213 GWh, peaking at 7,946 MW at 12.30 pm.

 

Energy-intensive electricity demand down in Europe

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The International Energy Agency has issued a report projected a drop in global electricity demand this year, especially in Europe, where demand is seen falling for a second consecutive year to a two-decade low.

The agency expects electricity demand in the EU to drop by 3 percent in 2023, the rate at which it had also fallen in 2022.

IEA’s anticipated electricity demand reduction for the EU indicates Europe’s energy-intensive industries have yet to make a recovery following last year’s drop in production levels, as highlighted by a 6 percent slump in the EU’s overall electricity demand during the first half of 2023.

The IEA report notes that a drop in high-voltage industrial electricity demand, not milder weather conditions, is the main factor behind the EU’s reduction in power demand.

Many industrial producers reduced or stopped production in 2022, the IEA report noted. Primary aluminium (-12%), crude steel (-10%), paper (-6%) and chemicals (-5%) were among the energy-intensive sectors that significantly reduced production in 2022 due to plant closures and production cuts, according to the IEA report.

Declining domestic chemical production led to Europe becoming a net importer of chemicals in 2022, as key industry players such as BASF and OCI reduced production in the region.

The fertilizer industry is also experiencing a sharp decline with major European producers such as Yara and Grupa Azoty cutting back production of ammonia, urea, nitrates and NPK (nitrogen, phosphorus and potassium) fertilizers.

Steel production in Europe has fallen significantly as companies such as ArcelorMittal have temporarily closed furnaces in France, Poland, Spain and Germany.

Aluminium producers have been severely affected by increased electricity prices given the industry’s electricity intensity, with several companies such as Speira GmbH and Alro reducing production.

 

Athens records Europe’s biggest tariff drop in May, HEPI study shows

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Europe’s biggest reduction in residential electricity tariffs last month was recorded in Athens, a monthly study conducted by the Household Energy Price Index, covering European 33 cities, has shown.

Residential electricity tariffs in Athens fell by 11 percent in May compared to April, aided by the government’s ongoing subsidy support policy, while prices in most other cities surveyed remained virtually unchanged, the HEPI study showed.

Its authors noted that electricity price trends around Europe in May mark the end of a continual reduction in electricity prices since last October.

May’s residential electricity tariffs averaged 26.40 cents per KWh in Athens, placing the Greek capital 14th among the 33 cities surveyed.

The EU average for May was 26.52 cents per KWh, while the average tariff level for the 33 cities surveyed was 25.10 cents per KWh.

Dublin’s residential electricity tariff level for May was the highest among the 33 cities surveyed, reaching 47.12 cents per KWh, followed by London, at 46.23 cents per KWh, and Rome, at 42.81 cents per KWh.

Besides Athens’ 11 percent reduction in electricity tariffs last month, prices fell by 3 percent in Copenhagen and Stockholm, followed by Amsterdam, Berlin and Prague, where tariffs eased by 2 percent.

The biggest tariff increase last month was recorded in Riga, rising 16 percent. It was followed by Belgrade, where tariffs rose by 7 percent, and Helsinki, registering a 4 percent rise last month, as a result of the country’s reintroduction of a 24 percent VAT rate on electricity.

Europe favorably placed ahead of next winter’s gas storage refill

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Favorable conditions last winter have placed Europe in an advantageous position of being able to fill, to full capacity, its natural gas storage facilities even if Russian supply is completely cut off.

Europe needs to store away approximately 35 billion cubic meters of natural gas between now and the end of October, well below the average figure of roughly 55 bcm over the past decade, in order to fill its energy storage facilities at 90 percent of capacity, the European goal set for next winter.

A year ago, Europe needed to purchase approximately 70 bcm of natural gas to fill its storage facilities. This was one of the factors that pushed prices up to all-time highs.

Fortune went Europe’s way last winter as temperatures remained mostly mild, significantly subduing energy usage, while China’s zero-Covid policy enabled the continent to import substantial LNG quantities which, otherwise, would not have been available.

As a result of these factors, Europe’s gas storage facilities were left 55 percent full by the end of last winter, well above the previous decade’s average of 33 percent.

Despite the favorable news for Europe, the market remains susceptible to dangers as a result of increased natural gas usage in the industrial sector and revitalized demand in Asia, factors that have led analysts to forecast a wholesale gas price rebound that could exceed 100 euros per MWh.

Also, the milder weather conditions could have negative impact in the long run. Low rainfall and snowfall in many parts of Europe could lead to a hot and dry summer, increasing energy demand for cooling purposes, and prices. This could make Europe’s energy-storage refilling effort slightly more challenging.

Local tariffs down in March, reflecting European trend

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As was the case in most parts of Europe last month, retail electricity prices also fell in Greece in March, monthly research conducted by HEPI, the Household Energy Price Index, covering 33 European cities, has shown.

The study attributed this price drop to lower wholesale electricity prices, prompted by mild weather conditions and lower demand, as well as subsidy support measures adopted by governments throughout Europe to ease the energy crisis’ cost burden on households.

In Athens, the average price of electricity tariffs, both fixed and floating, dropped by 1 percent in March, compared to February, reaching 30.48 cents per KWh, above the EU average of 27.47 cents per KWh.

According to the HEPI study, electricity tariffs in March also fell in Rome (-14%), Vienna (-8%), Talin (-7%), Copenhagen, Dublin, Madrid, Riga and Stockholm, all down 5%, while, like in Athens, tariffs also fell by 1% in Berlin, London and Oslo.

On the contrary, some cities registered electricity tariff increases. They rose 14% in Helsinki, 2% in Nicosia, and 1% in Brussels and Paris.

Athens’ average price for floating tariffs was 26.38 cents per KWh, well below an average of 32.51 cents per KWh resulting from a sample of 15 European cities, the HEPI study showed.

Athens promoting domestic RES equipment production

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The government is promoting support programs for Greek production of RES-sector equipment, from batteries to energy storage systems, production and assembly of solar panels, as well as equipment concerning the hydrogen and electromobility sectors, energy minister Kostas Skrekas revealed to energypress in a wide-ranging interview held as part of the recent Power & Gas Forum in Athens.

In the interview, given to energypress editor-in-chief Thodoris Panagoulis and Capital’s managing editor Haris Floudopoulos, the minister, amongst other things, referred to the finalization of the National Energy and Climate Plan, which, he stressed, will be set within a more realistic framework, based on respective adjustments at European level.

Skrekas also referred extensively to developments in the retail and wholesale electricity markets, noting the supply code must be changed. He also pointed out the government’s imminent support to energy-intensive industry through a program promoting self-production and energy storage.

The minister highlighted the government’s emphasis on green energy, noting Greece, for the first time, has a RES-sector advantage over European countries of the north and must utilize the country’s ample sunshine to the benefit of household and professional energy consumers.

“The strategy we have developed over the past three years, and for going forward, is about the rapid penetration of renewables in our energy mix. Of course, in order to achieve this, reforms were needed and many steps still need to be taken,” the minister noted, adding further development of RES units and storage, as well as networks, must be addressed to reach a point where all energy consumed is derived from renewables.

Greece is playing a leading renewables role on many fronts, the minister said, making note of the country’s greater licensing speed, highlighted by doubled installed RES capacity within three to four years, from 5-5.5 GW in 2018 to over 10 GW in 2022, which, he added, has resulted in doubled electricity generation from renewable sources.

Asso.subsea joins forces for GAP Interconnection

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ATHENS – March 28, 2023 – The GAP Consortium and Asso.subsea have announced the signing of a Memorandum of Understanding (MoU) for cooperation on the two-gigawatt (2 GW) electrical interconnection between Greece and Egypt (Greece-Africa Power Interconnector – GAP).

GAP project, founded by the Eunice Energy Group, is leading the transnational consortium between Greece and Egypt that aims to contribute to regional energy security and stability by facilitating intercontinental clean energy transfer. As part of the consortium, Asso.subsea, a leader in submarine cable installation, protection, repair, and support operations, has established a constantly updated long track record of participations, not only in domestic, but also in worldwide projects. It will be providing expertise in design and construction guidance for the project.

Andreas Borgeas, Greece-Africa Power (GAP) CEO said: “This is a partnership that significantly strengthens the international consortium for the construction of GAP. The memorandum of understanding (MoU) between Asso.subsea and the Consortium is a step further to ensure energy independence for Greece and Europe.” 

Alexandros Tziotakis, General Manager of Αsso.Subsea Limited added: “We are delighted with the opportunity to work with the GAP Consortium and to contribute together to the effective implementation of a critical infrastructure for the wider region. The subsea interconnector is considered to be vitally important for the Greek and European energy market.”

About Αsso.subsea

Asso.subsea Limited is a subsea utilities’ installation contractor offering offshore solutions on a worldwide basis with more than 40 years of experience in the offshore industry market. It is the technical and engineering division of the Greek-owned ASSO Group of Companies. The latter wholly owns a fleet of specialized in offshore works vessels and equipment and a technical base in Attica, Greece with an in-house R&D for the design and production of tools.  The ASSO Group of Companies provides for an in-house engineering offering tailor-made solutions as well as specialized personnel for the offshore execution and support during operations. Asso.subsea with a plan for major investments in assets and manpower is a key player in the offshore energy market aiming to a continuously increased capacity and capabilities.  www.assogroup.com.

Greece to back gas usage cut extension at Energy Council

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Greek energy minister Kostas Skrekas is expected to back a European Commission proposal for a 12-month extension of a measure supporting a 15 percent reduction of natural gas usage at today’s Energy Council of EU energy ministers.

The group of 27 energy ministers will seek to reach a political agreement on the measure’s proposed extension, from April 1, 2023 to March 31, 2024, so that Europe may also be prepared for next winter should EU member states face gas supply issues or even disruptions.

This measure, first introduced on August 1, 2022, is set to expire in a few days’ time, on March 31. It called for a 15 percent reduction of gas usage during this period, compared to the previous five-year average during the equivalent eight-month periods. Greece exceeded the measure’s target by reducing its natural gas usage by 20.9 percent.

The measure’s gas usage restrictions are voluntary but would become binding should higher-alert conditions come about.

Europe’s natural gas savings stand to reach 60 billion cubic meters over the next twelve months if the EU’s 27 energy ministers agree on a one-year extension of the measure for an annual 15 percent reduction of natural gas usage.

Skrekas, Greece’s energy minister, also plans to present, at today’s Energy Council, the country’s proposal for an EU power grid capacity boost and expansion to facilitate electricity flow from south to north, as part of a wider plan envisaging RES flow from north Africa to Greece and the rest of Europe, via the western Balkans.

 

Overdevelopment danger for LNG terminals in Europe, IEEFA warns

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Major LNG terminals being developed in various parts of Europe, including Greece and Germany, in response to reduced Russian gas supply, could fail to achieve full commercial potential as the continent may end up possessing a far greater number of such facilities than required by 2030, the Institute for Energy Economics and Financial Analysis (IEEFA) has warned.

If REPower EU objectives are attained and Turkish gas demand remains steady, then European demand for LNG will be restricted to a level of just 150 billion cubic meters in 2030, down from 175 bcm in 2022, IEEFA pointed out. At such a level in 2030, LNG terminals in Europe would operate at less than 40 percent of capacity.

IEEFA also stressed that European gas operators have an incentive to over-expand their infrastructure and asset base in order to deliver profits to shareholders, even if projects do not end up being fully utilized.

Existing legislation provides operators with guaranteed revenues collected through tariffs, IEEFA pointed out. Evidence strongly suggests the Russian attack on Ukraine has accelerated Europe’s energy transition by dramatically boosting the penetration of green technologies that reduce demand for gas and LNG, the institute added.

 

GAP Interconnector promising additional Greek-Egyptian grid link

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The GAP Interconnector project, planned to link Egypt with Greece, via Crete, promises to serve as a further step towards transforming Greece into an exporter of green energy to the rest of Europe, officials of the Eunice Group, heading the project, budgeted at 1.3 billion euros, have highlighted at a news conference.

It represents an additional Greek-Egyptian grid interconnection project, following the GREGY Interconnector, a 3.5 billion-euro project being promoted by Elica, a subsidiary of the Copelouzos group.

The GAP Interconnector project promises to reinforce Greece’s geostrategic role, making it a transmission hub to the rest of Europe for RES-generated electricity from Egypt, Andreas Borgeas, the project’s chief executive and a former California Senator, told journalists.

A feasibility study has already been conducted for the GAP Interconnector, as have oceanographic studies to map the areas concerning the project’s route, the Borgeas informed.

Two cables to offer a 2,000-MW capacity and run from coastal Matruh in Egypt to Crete’s Atherinolakko, a distance of approximately 450 kilometers, will serve as the project’s backbone. Converter stations will be installed at both these locations.

The project, whose subsea cable installations will reach as deep as 4,445 meters off Crete and 3,500 meters off Egypt, was described as “challenging” by Borgeas, the project chief, who added advanced deep-sea cable installation technology is now available.

The aim is to establish a multinational consortium for the GAP Interconnector project and induct, as a first step, the US company McDermott, one of the world’s biggest developers of subsea projects, Borgeas informed. French, Greek and Italian companies are also expected to soon join this consortium, the official added.

The GAP Interconnector project and the GREGY Interconnector are not rival projects but they will compete for points concerning PCI-PMI lists, Borgeas pointed out.

A direct, straight-line connection from Egypt to Crete planned for the GAP Interconnector offers it a comparative advantage as it is shorter and subsequently lower in cost, Borgeas noted, adding the project lies entirely within the boundaries of the Greek-Egyptian exclusive economic zone (EEZ).

It is planned to be complemented by the Southern Aegean Interconnector (SAI), a 1.5 billion-euro project to connect Athens, the Dodecanese islands, and Crete.

European electricity prices fall, demand down, RES output up

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European energy market price levels fell last week, influenced by lower demand as well as increased renewable energy output by wind and solar farms.

Energy markets across southeast Europe recorded noteworthy price reductions last week that averaged 17.44 percent, compared to a week earlier. Favorable weather conditions in this region led to a 60 percent increase in RES output, wind farms being the main contributor.

Serbia posted the biggest week-to-week price reduction in southeast Europe, a 21.34 percent drop in wholesale electricity prices, followed by Greece, where the week’s drop averaged 20.31 percent. Bulgaria and Romania both recorded average price reductions of 19.16 percent last week. Prices in Turkey have also been on a downward trajectory.

In central Europe, spot markets fell to weekly averages of less than 135 euros per MWh. The weekly average, for this region, was lowest in Germany, at 119.05 euros MWh, a 12.61 percent reduction compared to a week earlier as a result of lower demand and increased wind energy output.

Central Europe’s highest wholesale electricity prices last week were recorded in Switzerland, at 134.48 euros per MWh, despite an 11.22 percent reduction compared to a week earlier. France followed with a weekly average price of 131.07 euros per MWh, driven higher by power utility EDF strikes that reduced output at nuclear power plants, covering roughly 70 percent of the country’s energy mix.

Analysts expect new round of gas price increases this year

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Analysts are projecting an eventual rise in gas prices over the next few months as a result of the combined effect of several factors, the main one being Europe’s almost entire dependence, these days, on imported LNG.

This LNG dependence, following Europe’s drift away from Russia, along with Europe’s limited LNG gasification infrastructure, until at least 2025, will inevitably lead to price increases at some point in 2023, analysts have noted.

Natural gas prices have been falling in recent times and are expected to, once again, drop below the price level of coal. This price descent, analysts believe, will reignite industrial activity in Europe, boosting gas demand.

Also, Chinese production, currently operating at below full capacity as a result of the country’s strict adherence, until recently, to a zero-Covid policy, is also expected to get back into top gear within 2023.

In addition, if Europe avoids recession, then global gas orders will skyrocket.

Taking these factors into account, Europe needs to maintain links with pipeline gas supply if energy security is to be ensured on the continent, analysts have noted.

This highlights the significance of projects such as the East Med gas pipeline plan, now seeming to be back in favor. It promises to connect Israel, Cyprus and Greece, over a total distance of 2,000 kilometers, before crossing to Italy via the Poseidon pipeline, a 210-kilometer stretch.

TTF drop over, gas prices on the rebound, analysts forecast

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Natural gas prices, up 20 percent over the past week on levels that had plunged to less than 65 euros per MWh in the last month, are establishing a new upward trajectory, market experts believe.

Colder weather anticipated around Europe over the next few months, a slight drop in gas storage facility reserves around the continent, as well as slightly higher prices offered by Asian buyers, already attracting some LNG shipments to China, now moving again after letting go of its zero-Covid policy, are the key factors seen putting an end to the recent decline in gas prices.

The combined effect of these factors is expected to maintain natural gas prices at levels of between 70 and 80 euros per MWh. Natural gas was priced at 74.80 euros per MWh on the TTF index yesterday, a rise based on expectation rather than any substantial change in current market conditions.

Natural gas storage capacities in Europe have now dropped to an average of 83.5 percent after reaching levels of 95.5 percent of capacity in November.

Though gas prices are currently roughly 40 percent below levels of 120 to 130 euros per MWh recorded this time last year, market volatility is expected to remain a concern in 2023, market analysts told energypress.

Price levels, they have forecast, will soon climb back up to levels of more than 100 euros per MWh before falling again next autumn, when gas storage facilities have been refilled to 90 percent of capacity.

PM hopeful of a European gas price cap agreement

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Prime Minister Kyriakos Mitsotakis, on his way to today’s Council summit of EU leaders, expressed hope that a European agreement on a gas price cap could be achieved either today or next Monday, the latest, when the EU’s energy ministers are scheduled to meet.

The Greek leader stressed it is absolutely essential that Europe sends a clear message to energy markets as well as to Russia by underlining that Moscow’s exploitation of natural gas as a tool to burden European citizens and businesses will not be tolerated.

“We are close to being able to impose a price cap on gas. Our arguments are now known to all member states and I believe that, one way or another, we will find the necessary majorities to move in this direction,” Mitsotakis noted.

Greece supports the implementation of a gas price cap at 200 euros per MWh or less, applicable at all European hubs with an accompanying limit-up mechanism. Though well below the European Commission’s initial proposal of 275 euros per MWh, it seems to have gained increased acceptance by fellow EU member states.

However, a group of six EU member states – Germany, Austria, the Netherlands, Denmark, Estonia and Luxembourg – remains skeptical, fearing a low-level price cap could prompt market instability.

“In any case, regardless of European decisions, the Greek government is continuing to take all measures needed to support Greek households and businesses,” Mitsotakis noted, pointing out that 900 million euros in state budget money will be used in December to support low-income households and offer allowances for heating oil purchases.

International gas prices lowered by favorable conditions

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More favorable market conditions of late have prompted a de-escalation of international gas prices, currently on a downward trajectory. This morning, the international price for natural gas reached as low as 107.355 euros per MWh, a new four-month low.

Market officials explained that LNG is currently available in abundance with some tankers unable to secure delivery destinations as Europe’s storage facilities are close to full.

At the same time, demand for Russian gas in Asia, primarily China – where Russia has turned to as a result of restricted exports to Europe – has fallen significantly. Mild weather conditions in Europe at present have helped contain demand for gas.

This gas price drop will not become fully apparent in the retail market until mid-November – unless a new price surge is experienced – as prices are set based on the previous month’s prices.