European Commission

TCF, compensating industry for crisis cost, to be approved

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The European Commission is preparing to approve, next week, a Temporary Crisis Framework, designed to compensate energy-intensive industry in the EU for losses incurred during the energy crisis as a result of elevated energy costs, sources have informed energypress.

The TCF is expected to offer eligible producers subsidies reaching up to 50 euros per MWh in 2023, beginning March 1.

The aim of the framework’s implementation is to alleviate the financial burdens that the industrial sector has faced during the energy crisis. These additional costs have had a significant impact on the viability and competitiveness of various industries, particularly those involved in steel, aluminum, glass, and paper production.

The TCF funds will stem from the Energy Transition Fund and will be provided once the framework has been approved by the EU’s Directorate-General for Competition.

In Greece, the TCF was announced by the previous leadership of the energy ministry before the country’s general elections in May and June. However, at that time, the TCF had not been finalized and officially approved. It is now anticipated that the current leadership of the energy ministry will soon take steps to finalize and approve this support framework.

Ministry planning offshore wind farm pilot projects

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The energy ministry appears determined to press ahead with the development of one or two pilot projects for offshore wind farms at Greek territorial waters over the next few years, until market conditions for this sector have matured and technological advancements allow for bigger projects that are sustainable, based on market terms, a situation not expected before the end of this decade.

Ministry officials are exploring the possibility of EU funding for these pilot projects, but have yet to identify any specific sources.

These potential pilot projects are not related to bottom-fixed offshore pilot projects in the Alexandroupoli area, northeastern Greece, already being developed through a different procedure.

Support measures ensuring the sustainability of offshore wind farms, a RES sub-sector still at a nascent stage, are necessary, as was highlighted by a recent auction in the UK, which failed to attract any bidders. Without support, renewable energy growth rates may be impacted.

The energy ministry plans to soon complete an institutional framework, publish related maps, announce tenders and measure wind speeds.

Measurement details concerning all areas considered for offshore wind farms, not just those to host the pilot projects, are expected to be made available to investors so that they can have a complete picture for overall investment plans.

The country’s updated National Energy and Climate Plan (NECP), currently being prepared ahead of its imminent submission to the European Commission for approval, will include revisions highlighting the Greek State’s objective of fostering robust growth for the offshore wind farm sector.

Speaking at the recent Thessaloniki International Fair, deputy energy minister Alexandra Sdoukou expressed a determination to dispel doubts about the offshore wind farm sector’s future in Greece. “Our wind [energy] potential is incomparably superior to that of our neighbors”, she noted.

Great depths encountered at Greek territorial waters will make it virtually impossible to install bottom-fixed wind turbines at most areas, meaning investors will need to opt for floating units as a means of exploiting the country’s rich wind potential, especially in the Aegean Sea.

 

Electricity subsidies overhaul to introduce income criteria

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A new electricity subsidies model being prepared by the energy ministry for launch in January will offer consumers subsidies on a selective basis, taking into account criteria such as income, electricity usage levels, property ownership and, possibly, geographical location of consumers, as opposed to the current system, offering universal support.

The European Commission is pressuring for an end to universal electricity subsidies and wants a new model that would ensure energy-cost support is offered to households in real need.

The government had mildly modified its electricity subsidies model earlier this year, in February, restricting subsidies to monthly consumption of up to 500 KWh, after subsidizing all consumption in the preceding 18 months.

The new, overhauled subsidies model being shaped by the energy ministry for Greece’s electricity market is expected to share similar traits to the income-based formula offering heating fuel subsidies, which also includes geographical location and number of persons per household as factors.

If geographical location of consumers is incorporated into the new subsidy model for electricity subsidies, different subsidy rates will be applied for different regions.

Capacity boost to 1,000 MW for RES units with batteries

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The energy ministry is preparing to increase the total capacity of an operational support framework offered at auction for wind and solar energy units with batteries from 200 MW to 1,000 MW.

The ministry will need to enter discussion with the European Commission for revisions to the existing support system, already approved by Brussels.

Under the current format, the support framework provides for operational support of RES projects with a total capacity of 4,145 MW, of which 3,750 MW concern standard PV and wind energy units without energy storage systems.

Increasing the capacity of renewable energy projects equipped with batteries is a proactive measure favored by local authorities to address issues related to grid overloading and the curtailment of green energy output.

This approach aims to enhance the flexibility and reliability of the power grid while minimizing the need to curtail renewable energy generation during periods of high production.

The expectation is that renewable energy source output cuts will become more frequent in the future as a result of continued growth RES penetration.

RES units equipped with batteries also promise to serve as an antidote for grid saturation points anticipated in coming years.

 

Brussels forecasts lower gas prices, concerned about oil

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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.

Authorities reject claims linking electricity network with fires

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Authorities have ruled out any connection between the country’s electricity network and recent wildfires that ravaged the country, especially Evros in the northeast and Mount Parnitha, north of Athens, as has been claimed, mainly on social media.

Short circuits or damages to the power grid may have occurred as a result of the fires, but confusion over cause and effect has led to false conclusions and may have even encouraged arsonists to set fires at or near utility poles, as suggested by the arrest, in early August, of a man who was found setting fire to dry grass under a distribution pole in Agios Stefanos, authorities have noted.

Greece’s recent wildfire events prompted various claims and reports, which, besides blaming the electricity network, also suggested fires were being set for the development of wind-turbine projects at mountain locations, consequently demonizing a pivotal aspect of the Greek and European energy transition effort.

Europe will need investments worth 584 billion euros in new electricity infrastructure by 2030 so that a high RES penetration rate may be maintained, the European Commissioner for Energy Kadri Simson recently wrote in an article for the Financial Times. Europe’s current electricity network of 11 million kilometers needs to be upgraded as swiftly as possible, she noted.

Small-business subsidy returns solution sought for electricity suppliers

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The energy ministry and ESPEN, the Greek Energy Suppliers Association, have held talks in search of a solution that would reimburse electricity suppliers for electricity subsidies they have provided, on behalf of the Greek State, to small businesses supplied up to 35 kVA, as well as all bakeries, regardless of supply capacity.

The total amount owed by the Greek State to electricity suppliers is estimated to have reached 800 million euros and has been pending for many months, despite the fact that this outstanding sum has been fully recognized, including legally.

Under the current reimbursement procedure, the Greek State only reimburses electricity suppliers for customers who have submitted formal declarations to RES market operator DAPEEP, managing the Energy Transition Fund that covers subsidies, once these formal declarations have been checked.

However, most customers tend to neglect filling in and forwarding these required formal declaration forms, hindering the reimbursement procedure.

An initial Brussels-approved subsidy support program for small businesses ran from February to November last year and has since been extended on a monthly basis.

Additional €795m REPowerEU funds sought for key projects

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A request just submitted by Athens to the European Commission for amendments to the Resilience and Recovery Fund includes a new RePowerEU section worth an additional 795 million euros, intended for support to key projects. If approved by Brussels, some of these projects may commence development this year, with full-scale development planned for next year.

Indeed, the successful implementation of these projects will depend on the efficiency and agility of the Greek public administration. As projects progress to the next stages, the need for accelerated procedures and effective management will become increasingly crucial to meet critical milestones and secure funding.

Most of these additional funds, a 560 million-euro majority, are planned to be allocated to new rounds of subsidy support for energy efficiency upgrades of residential properties and businesses.

A 150-million sum is planned to be made available for pilot projects concerning biomethane production and, primarily, carbon capture and storage (CCS) initiatives.

The remaining amount, 85 million euros, is planned to be offered to investors for energy storage system installations.

Focus on germanium, antimony mining, vital mineral resources

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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.

IPTO in deal with Israeli fund for Euroasia Interconnector

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Power grid operator IPTO has reached a preliminary agreement with an Israeli fund facilitating its entry into the equity capital of Euroasia Interconnector, the developer of the Crete-Cyprus grid interconnection, with a share of up to 33 percent, according to confirmed information.

This development seems to have injected new life into the project, which has encountered notable challenges in recent times, namely strict warnings by the European Commission over schedule delays and, even more crucially, the developer’s inability to produce a sound financial plan, an issue that has prompted the Cypriot State to seriously reassess its participation in the project.

Highlighting the urgency of the matter, it should be noted that, on the basis of a contract signed recently by Euroasia Interconnector with Norwegian company Nexans for the construction of a cable for the Crete-Cyprus interconnection, Euroasia Interconnector faces a September 7 deadline for a 50 million-euro payment.

If IPTO’s agreement with the Israeli fund goes ahead, it confirms, on the one hand, Israel’s increased interest in the project, which will potentially interconnect the Greek, Cypriot and Israeli power grids, and, on the other hand, it should provide a solution to the existing financial gap that has generated doubts over the project.

IPTO and the Israeli fund’s equity participation in Euroasia Interconnector promises sufficient equity capital for the project, which in turn could facilitate project borrowing from the European Investment Bank, while also formulating a comprehensive financing plan for the project.

 

NECP revisions in consultation for October Brussels delivery

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The energy ministry has shared an updated National Energy and Climate Plan with market officials for their input in consultation until August 28.

Notably, this updated NECP incorporates revisions to 2030 targets that were initially outlined by the ministry in January pertaining to the installed capacity of power stations and energy storage units.

The targets outlined in the proposal, which indicate the expected status of each technology within the national electricity system after a decade, should be viewed as preliminary. In the final version of the text, the energy ministry is expected to incorporate further amendments to the relevant figures after having taken into consideration the insights and suggestions provided by various market players.

In contrast to its earlier presentation in January, the updated NECP now features a comprehensive full-text structure. Notably, it encompasses projections detailing the anticipated trajectory of consumer electricity prices up until 2030 and 2050. Additionally, this refined version incorporates estimations regarding the necessary levels of investment and consumer expenditures required to align with the objectives of climate targets.

The draft currently undergoing consultation includes a slight correction concerning the projected involvement of Renewable Energy Sources (RES) in the energy mix for 2030. Specifically, RES participation in gross final energy consumption has been adjusted to 44%, a marginal decrease from the previously presented 45% in January.

Additionally, RES contribution to electricity generation has been refined to 79%, reflecting a minor adjustment from the earlier figure of 80%.

The revised NECP includes a significant cut in batteries, whose installed capacity in 2030 has now been set at 3.1 GW, from 5.6 GW. The target for pumped-storage units has also been reduced to 2.2 GW from 2.5 GW.

On the contrary, the 2030 target for installed gas-fueled power stations has been increased to 7.7 GW from 7 GW, while lignite-fired power stations are expected to be fully withdrawn by 2030.

The ministry aims to soon finalize its revised NECP for submission to the European Commission by October. The finalized plan will include road maps for 2030 and 2050, as is expected of all member states.

 

 

 

Revised Nabucco pipeline hopes fade, Sofia drops pro-Turkish stance

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A Russian initiative to establish Turkey as a central gas hub, through a revival of a revised version of the old Nabucco project plan, as the transitional government in Bulgaria had attempted to do last spring, appears to have hit an impasse and is unlikely to progress further.

Under the leadership of Bulgarian Prime Minister Nikolai Denkov, who assumed office in June, the new government in Sofia has veered away from the pro-Turkish stance of its predecessor. Instead, it has embraced a more pro-Western orientation in the realm of energy policy.

Also, the European Commission has not shown any interest to financially support the project, dubbed Solidarity Ring.

The ambitious plan had received the backing of certain political circles in Bulgaria keen to exploit Azerbaijan President Ilham Aliyev’s intention to more-than-double his country’s gas exports to the EU from 11 to 27 bcm by 2027.

Bulgaria, Romania, Hungary and Slovakia signed an MoU in Sofia in early May, in the presence of Aliyev, for increased gas supply to central Europe via the Solidarity Ring route.

However, talks in support of this gas pipeline project have ceased, despite its supposed intention to help end Europe’s energy reliance on Russia, EU sources have informed.

Athens, along with other major international energy players, contributed to this impasse. In a letter forwarded to the European Commission in May, Athens noted the project would degrade Greece’s role on the international energy map, upgrade Turkey’s, and serve Russia’s efforts to regain access into the European market, indirectly, by supplying Russian gas as Azeri gas.

This is possible as the Solidarity Ring would bypass Greece and follow a Turkish-Bulgarian-Romanian-Hungarian-Slovakian route into central Europe, meaning Ankara could use Turk Stream, the Russian pipeline running through Turkey, to feed Solidarity Ring.

 

Crucial studies for Greek-Egyptian GREGY link in autumn

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Extensive attention paid to the prospective grid interconnection that would link Greece and Egypt through the 3.5 billion-euro GREGY Interconnector project at a meeting yesterday between Greek Prime Minister Kyriakos Mitsotakis and Egyptian President Abdel Fattah Al Sisi in El Alamein reaffirms the strategic importance of this project.

So, too, does the involvement of Nikos Tsafos, the Greek PM’s special adviser on energy matters, and two Egyptian ministers, Tarek El-Molla, minister of petroleum and mineral resources, and Mohamed Shaker, minister of renewable energy, in working groups staged during the visit.

The GREGY Interconnector was recently favorably assessed by the European Commission for inclusion on its PCI/PMI list, but a series of challenging steps lie ahead.

Three crucial studies considered pivotal for the project’s prospects are planned to be staged in autumn – an environmental study, a final engineering study, and a seabed mapping survey, the trickiest and costliest of the three that will involve imaging of the seabed with a special vessel along the project’s 954-kilometer subsea route.

This latter survey is expected to require at least six months to complete. A vessel to take on the seabed mapping is expected to be commissioned in autumn through a tender.

Great water depths, such as those to be encountered in this East Mediterranean region, require expertise and experience possessed by few companies in the world.

Elica, a subsidiary of the Copelouzos group established to promote the Greek-Egyptian GREGY Interconnector, has come up with a budget estimate of 15 million euros for the seabed scan.

However, given the survey’s deep-sea nature and the fact that the proposed route’s seabed remains largely unknown as the area it covers has never before been scanned in detail, survey costs could escalate beyond initial estimates. Bad weather could also delay the effort. At best, a Final Investment Decision should not be expected before mid-2024.

Germany pursuing hydrogen-based generation as sun, wind substitute

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Germany is pursuing the ambition to become a global frontrunner in green hydrogen technology, a strategic endeavor rooted in the belief that harnessing fuel generated from renewable energy sources can play a pivotal role in mitigating worldwide carbon emissions. Furthermore, this endeavor is anticipated to fortify Europe’s biggest economy.

In this context, the German Federal Ministry for Economic Affairs and Climate Action (BMWK) announced that it has agreed with the European Commission on a strategy for German hydrogen power plants.

The German government aims to have its electricity supply almost entirely based on renewable energy sources – mainly solar and wind – by 2035.

Nonetheless, during periods known as “dunkelflaute,” characterized by the absence of wind and sunlight required for energy production, power plants must be equipped to generate electricity using renewable fuels like hydrogen in order to meet demand.

Berlin’s agreement with the European Commission includes planned tenders for 8.8 GW of new hydrogen power plants and up to 15 GW of power plants to be switched to hydrogen operation by 2035.

 

Eurogas: Energy crisis threat not yet over for Europe

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The energy-crisis threat on the continent has not yet passed, despite lower prices, according to Didier Holleaux, chairman of Eurogas and vice-president of France’s Engie, who has warned that the risks will remain for at least the next four winters, and, in doing so, advised authorities, governments and organizations to avoid complacency.

EUROGAS is a European organization involving the participation of a significant number of major energy companies from all over the EU.

Europe managed to overcome the threat of energy shortages last winter, while a sharp fall in natural gas prices over the past six months has provided a welcome respite for consumers.

European contracts at the Dutch TTF hub are currently being established at levels of between 20 and 30 euros per MWh, just a fraction of last August’s peak of 340 euros per MWh, prompted by a drastic cutback in supply of Russian pipeline gas.

Over the past year, EU officials have adopted a series of measures to reduce natural gas prices. Holleaux, in comments to Natural Gas World, warned that last year’s unusually mild winter was the catalyst behind the price reductions.

He acknowledged the European Commission’s gas storage requirements for EU member states also played a role in subduing prices in Europe, adding, however, that current prices remain considerably higher than levels that were regarded as normal prior to the pandemic.

PPC’s Kotsovolos takeover would reshape energy market

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Power utility PPC is believed to be looking to take over appliance retail chain Kotsovolos, a member of the Currys group, as a means of boosting earnings to make up for an anticipated shortfall from a European Commission competition-related requirement that has been imposed on the power company to reduce its retail market share to 49 percent.

Though PPC officials have not yet confirmed the power utility’s interest in Kotsovolos, certain sources claim the company’s administration has already been granted access to the appliance retail chain’s financial data.

PPC also believes that a takeover of Kotsovolos would help the power utility achieve targets, set through its business plan, for the green transition and provision of energy services.

PPC has already begun transforming its own retail outlets, while the addition of 95 new outlets that would be offered through an acquisition of Kotsovolos promises to further consolidate its presence around Greece. Kotsovolos’ logistics, ready to be applied, would serve as another bonus.

The impact PPC’s possible acquisition of Kotsovolos would have on the retail energy market is being likened to the transformation of Greece’s telecommunications market when mobile operator Cosmote acquired phone accessories retailer Germanos nearly two decades ago.

A takeover of the Kotsovolos chain would increase PPC’s annual EBITDA by an estimated 50 million euros, sources noted.

A price tag of between 200 and 300 million euros is expected to be placed on the possible takeover, the sources added.

Italy gas storage injections of no use, DESFA auctions show

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Gas grid users have fully reserved the capacity offered at the country’s Nea Mesimvria entry point in the north after expressing great interest in gas grid operator DESFA’s annual auctions, staged on July 2 and requiring over 24 hours to be completed as a result of the big turnout.

The capacity reservation level at the gas grid’s Nea Mesimvria entry and exit point is crucial for gauging, with clarity, natural gas amounts Greece should store away at Italian storage facilities ahead of next winter as, in the event of disruptions to Greece’s gas import schedule, the stored quantities could only be used if free capacity exists at the aforementioned entry point.

Last year, Greece had resorted to an uncommitted capacity at the Nea Mesimvria entry point in its negotiations with the European Commission for a gas-storage rule exception. It enables EU member states with a shortage of gas storage facilities, such as Greece, to keep storage requirements at 15 percent of the average consumption level over the past five years.

Uncommitted capacity at the Nea Mesimvria entry point last year worked out to 7,522 MWh per day, which resulted in a viable gas storage total in Italy of 1.14 TWh, from the start of November until the end of March.

This year, given the country’s fully reserved capacity at Nea Mesimvria, the prospect of storing gas in Italy would offer Greece no help in meeting domestic needs in the event of disruptions to the country’s gas supply.

DESFA gas auctions pivotal for winter’s storage requirements

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Gas grid operator DESFA’s annual gas auctions, taking place today to offer capacities at the grid’s entry and exit points, will play a pivotal role in clarifying and determining to what extent Greece could reduce gas quantities that will need to be stored away at Italian and Bulgarian facilities between November and March for energy security next winter.

The outcome of the auctions will shape Greece’s negotiating position in talks with the European Commission for the country’s gas storage needs.

If the vacant grid capacity left over from today’s auction process is small, then Greece will seek a smaller gas-storage requirement from Brussels authorities.

Greece’s gas storage requirement last winter was limited to 1.14 TWh, based on the country’s vacant capacity at the Nea Mesimvria grid entry point, in the north.

An exception offered by the European Commission to EU member states with a shortage of gas storage facilities, such as Greece, enables storage requirements to be kept at 15 percent of the average consumption level over the past five years.

 

Minor revisions to new NECP, aligned with European targets

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Greece’s new National Energy and Climate Plan, passed on by the caretaker government’s energy minister Pantelis Kapros to the re-elected conservative New Democracy party’s new energy minister Theodoros Skylakakis, includes mild adjustments aligning the plan to EU targets but no major changes, energypress sources have informed.

“Together, with Mrs. [Alexandra] Sdoukou, [the ministry’s secretary general, in the previous and new energy ministry] and the other officials, we assembled a team and drafted a pending NECP plan. The work, of course, had been done during the ministerial term of Konstantinos Skrekas. An initial text was authored, as the deadline is on June 30,” Kapros noted.

Minor revisions to a draft originally announced in January have been made, without any change of direction, including for the role of natural gas in the energy mix, or distribution of RES technologies, the sources noted.

The amendments were prompted by revised EU targets seeking greater RES penetration and energy savings, the sources added.

The EU energy-mix target for the RES sector has been raised to 42.5 percent from 40 percent, still lower than a 45 percent target ratified by European Parliament.

The European Commission, driven by Russia’s war on Ukraine, had proposed a European energy savings target of 14 percent, up from 9 percent, before European Parliament ratified a target of 13 percent and an agreement for 11.7 percent was finally set.

It remains unclear if Skylakakis, Greece’s newly appointed energy minister, will move swiftly to forward the revised NECP draft to Brussels by the June 30 deadline or opt to hold on to it for a few more days.

 

Industrial players push ahead with Green Pool plan details

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Industrial players are moving full steam ahead to help shape a finalized Green Pool model whose purpose will be to keep green-energy PPA prices at competitive levels for the country’s energy-intensive industries, energypress sources have informed.

The new government to emerge from the general election’s second round of voting on June 25 should be be handed a Green Pool plan ready for consultation. The plan is expected to be fine-tuned and finalized by September or October before it is forwarded to the European Commission for approval.

Brussels has offered its tentative approval of the plan but details that emerged following negotiations still need to be shaped and incorporated into the Green Pool’s finalized version.

Though developments have remained stagnant at political and institutional levels as a result of the general election procedure’s two rounds of voting, industrial consumers, who will represent the bulk of the Green Pool, have tasked the Grant Thornton consultancy group with studying plan details, including the share of cost for participants.

The state, according to the plan’s current shape, would cover 85 percent of the Green Pool’s cost, while market participants would cover the other 15 percent. If cost-related changes are eventually made, they will not be dramatic and could be revised for an 80-20 division.

Further energy-crisis alleviation projected by EC report

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The European Commission has projected a further de-escalation of the energy crisis for the rest of the year in its assessment of the impact of measures on Greece’s GDP.

This observation has been included in a post-program surveillance report covering the state of the Greek economy and its developments, just published along with a package of recommendations in the so-called European Semester, part of the EU’s economic governance framework.

Given the rapid decline in energy prices since autumn 2022, expenditure on energy-crisis measures is now expected to be significantly lower than expected, Brussels noted in its report.

The overall cost of energy-crisis measures implemented in autumn, 2022 represented 5.8 percent of GDP, but is now estimated to drop to 0.9 percent of GDP as a result of reduced energy prices, according to the report.

The net cost of energy measures is expected to fall to 0.2 percent of GDP, revised downwards since a 0.5 percent forecast projected last autumn, as a result of a new solidarity levy imposed on refineries.

Brussels approval of support system enables supplier reimbursements

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The European Commission’s approval of an updated Greek energy-sector support system paves the way for the reimbursement of electricity suppliers who have covered, over the past seven months, state subsidies offered on a monthly basis to farmers and small businesses using up to 35 kVA.

The revised support system will also increase its overall budget by 600 million euros for a total of 1.4 billion euros.

The initial version of Greece’s support system, approved by the European Commission late last year, covered the period running from February to November, 2022.

In the case of small businesses using up to 35 kVA, a category numbering approximately 1.25 million businesses, electricity suppliers also needed to use their own company funds to cover state subsidies announced by the energy ministry for December, 2022 and January, 2023. These subsidies were stopped from the following month onwards.

As for state subsidies offered to farmers, electricity suppliers have needed to cover the cost of support for this vocational category over a longer period. Subsidies for farmers have not been interrupted. They have been set at 15 euros per MWh for June.

Brussels wants Egyptian RES progress to fund Greek link

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The European Commission wants to see clear progress in Egypt’s RES development plan before committing to any financial support for the Greek-Egyptian GREGY Interconnector, a 3.5 billion-euro project being promoted by Elica, a subsidiary of the Copelouzos group, reliable sources have informed energypress.

Brussels has informed all parties involved in the GREGY Interconnector of its prerequisite for funding support, the sources noted.

Europe needs green energy, which is why the European Commission is backing Egypt’s electricity interconnection with Greece, but investment plans for the development of RES projects in Egypt need to proceed and this progress should be reflected and confirmed by concrete data, the sources informed.

European officials consider the GREGY Interconnector to be feasible as the cost of green energy in Egypt is much lower and EU demand for low-priced electricity is high.

However, the European Commission is also taking into account Egypt’s slow development of electrified RES projects, totaling just 6 GW, a modest figure given the country’s size and rich solar and wind energy potential. Greece, a far smaller country, has so far amassed almost double the capacity of operating RES facilities, currently offering 10 GW.

Egypt, according to the country’s official energy strategy, plans to develop RES projects with a total capacity of 61 GW by 2035. Brussels will be waiting to see clear signs of this plan’s implementation.

 

Emergency measures expiring, Athens seeks extension

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The energy ministry has forwarded an official request to the European Commission seeking an extension, until the end of the year, of emergency electricity market measures that were introduced last summer to combat energy price rises and are set to expire on July 1. Brussels has yet to respond to Athens’ request.

Over the past nine months, the extraordinary measures have proven effective in subduing electricity prices for households and businesses at levels well below those created by the energy crisis.

The energy ministry imposed a wholesale price cap on electricity, interrupted indexation clauses concerning retail tariffs, and has been subsidizing electricity. Also, in an effort to stimulate competition, the ministry set a rule requiring power suppliers to announce their nominal tariffs – not including subsidies – for each forthcoming month ten days in advance, and has given electricity users the freedom to switch suppliers without any penalty costs.

The Greek request forwarded to the European Commission wants this entire package of measures extended until the end of 2023, as protection against any new wave of energy price rises.

Though energy prices have deescalated over recent months, analysts have not ruled out a rebound and reemergence of energy sufficiency issues in Europe next winter.

Russia’s ongoing war in Ukraine and Europe’s inconclusive plan regarding alternative energy sources are the main factors nurturing these concerns.

Athens troubled by Bulgaria’s Solidarity Ring project

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Athens intends to soon raise concerns, to the European Commission, over Bulgaria’s Solidarity Ring project, planned to transport natural gas of ambiguous origins to central Europe through a route bypassing Greece, crossing Turkey and benefiting, it seems, Russia.

Greek government officials are now preparing a letter for the European Commission in which a series of crucial questions regarding the Bulgarian project will be raised, including who stands to be its true beneficiary and whether the use of European funds for the revival of a version of the failed Nabucco pipeline would be appropriate.

The Nabucco pipeline had been planned to bypass Greece for the transportation of Caspian gas along a route running from Turkey to Austria, via Bulgaria. However, the TAP project, which connects with the Trans Anatolian Pipeline at the Greek-Turkish border, crosses northern Greece, Albania and the Adriatic Sea to southern Italy, prevailed in 2013.

Besides sidelining Greece, Bulgaria’s Solidarity Ring project would also exclude Greek gas grid operator DESFA, gas company DEPA, a partner in the Greek-Bulgarian IGB gas pipeline, as well as the TAP project’s shareholders.

The Solidarity Ring project, local authorities suspect, could be used to export Russian gas, disguised as Azerbaijani gas, to the EU via Bulgaria and Turkey.

 

Full support for GREGY Interconnector’s PCI/PMI bid

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The GREGY Interconnector, a 3.5 billion-euro project being promoted by Elica, a subsidiary of the Copelouzos group, to link the Greek and Egyptian grids, is fully backed by the Greek energy ministry, RAE, the Regulatory Authority for Energy, Egypt and Bulgaria, a presentation in Brussels last Friday of European projects seeking PCI/PMI list inclusion has shown.

This Greek-Egyptian grid interconnection, whose cable is planned to cover a 950-km distance, promises to transmit green energy to Europe.

Greece, it has become apparent, favors the development of the GREGY Interconnector over the Eunice Group’s alternate GAP Interconnector for a Greek-Egyptian grid link.

Hundreds of European projects seeking PCI/PMI list inclusion, which will secure EU support funds, were presented at last Friday’s Brussels event, staged by the European Commission’s Directorate-General for Energy.

Support for PCI/PMI list candidate projects by relevant ministries, respective national regulatory authorities, as well as states involved will weigh heavily in the European Commission’s overall assessment.

The GREGY Interconnector should score highly in this department, given the comprehensive support of the project by all parties involved.

Besides official Greek and Egyptian support, the GREGY Interconnector has also received Bulgaria’s backing as it promises to export Egyptian-generated green energy to the country.

Brussels’ shortlist of PCI/PMI projects is expected to be announced in June, while a finalized list should be announced late in the year.

 

Hefty REPowerEU proportion for standalone batteries

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The energy ministry is earmarking a significant share of grants Greece stands to receive through REPowerEU to further increase the first wave of standalone batteries that will be installed and also to support the country’s early-bird ventures in the renewable gas sector.

From the outset, the energy ministry’s intention has been to use part of these REPowerEU funds, totaling 769 million euros, to further promote energy storage. However, the final amount to be allocated has been somewhat reduced to 90 million euros, compared to 100 million originally envisaged, an adjustment made to ensure sufficient funds remain for other actions.

The REPowerEU financial injection promises to boost by about one-third a sum of approximately 200 million euros secured through the Recovery and Resilience Facility (RRF) as investment support for standalone batteries.

This means that, despite the rising cost of batteries in recent months, the increased sum will be able to support the development of a portfolio of projects with a total capacity of over 1 GW.

The European Commission still needs to approve, following consultation, the REPowerEU list of actions planned by Greece. At this stage, it is believed Brussels will not raise objections as the actions planned by Greece are totally aligned with priorities set at a European level for projects that promise to accelerate the energy transition ending the continent’s reliance on Russian fossil fuels.

 

PCI listing sought for ‘South Kavala’ UGS after failed tender

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TAIPED, Greece’s privatization fund, is seeking to reignite investor interest in “South Kavala”, an almost depleted natural gas field in the Aegean Sea’s north, through inclusion in the European Commission’s project-supporting PCI list, as a prospective underground natural gas storage facility (UGS) that would now also be equipped to store hydrogen.

This move by TAIPED comes following a recently-expired tender’s failure to attract binding bids for the UGS’ development and operation over a 50-year period.

According to sources, the privatization fund submitted its PCI application to Brussels last week, in an effort to keep this UGS project alive. PCI listings promise financial support for EU projects of common interest.

TAIPED, through this latest initiative, aims to rekindle the interest of investors, especially domestic and international business groups moving to develop projects for production and transmission of hydrogen.

Industry experts believe a new “South Kavala” tender could be launched next year if the facility secures a PCI listing.

The just-ended tender, which failed to attract binding bids from two final-round qualifiers, Energean and a partnership that brought together gas grid operator DESFA and construction company GEK Terna, was launched in June, 2020 and expired last month, on March 31.

DG Energy initial assessment of PCI/PMI list projects April 21

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At least seven prospective interconnections concerning Greece and other major domestic projects for which PCI/PMI list inclusion is being sought by local officials are expected to be assessed by European Commission authorities following this weekend’s Greek Easter break.

These projects are among hundreds of energy infrastructure projects around Europe which related officials hope will be given the green light by Brussels’ Directorate-General for Energy for inclusion onto the PCI/PMI list, promising EU support funds. The list’s coverage was expanded this year to include projects also concerning non-EU countries.

Brussels officials are expected to make an initial assessment of PCI/PMI list candidate projects on April 21 before announcing a short list of candidates in June. A finalized list is scheduled to be announced in November.

As part of the initial assessment procedure, DG Energy officials will hold talks with contractors behind projects as well as government and regulatory officials for related information.

The Greek-Egyptian GREGY Interconnector, a project being promoted by Elica, a subsidiary of the Copelouzos group; an update of the Greek-Italian power grid interconnection, a project involving Greek power grid operator IPTO and Italy’s Terna; the EuroAsia Interconnector, planned to link the Cretan, Cypriot and Israeli electricity grids; an Egyptian-Cretan grid interconnection planned by the Eunice group; development of a crucial power transmission line from Filippoi to Nea Sanda in northern Greece; a pumped-storage station in Amfilohia, northwestern Greece, planned by TERNA Energy; as well as a power grid interconnection upgrade by IPTO between Meliti in northern Greece to Bitola in North Macedonia, are the seven Greek and Greek-related projects for which PCI/PMI list inclusion is being sought.

 

Wholesale electricity cap deadline extension sought

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The energy ministry has taken action aiming to secure extensions for two energy-crisis protection measures, a wholesale electricity cap and freeze of indexation clauses, beyond approaching deadlines.

As part of the effort, the ministry has lodged an application to the European Commission for an extension of a recovery mechanism concerning windfall profits gained by electricity producers in spot markets.

If this application is approved by Brussels, day-ahead and intraday market inflow into the Energy Transition Fund will be maintained. However, this ETF inflow has, in more recent months, been limited by significantly lower wholesale electricity prices. Inflow in March was limited to 56 million euros, just a fraction, for example, of an 878 million-euro amount generated by the windfall profit recovery mechanism for the ETF last August.

Brussels’ approval of the application would pave the way for the suspension of an indexation clause concerning retail tariffs throughout 2023.

The European Commission has already given the green light to Spain and Portugal for extensions, until the end of 2023, of measures taken by the two countries to contain wholesale energy prices. The validity of these measures was due to expire in March.

Under current terms, Greece’s mechanism enabling the recovery of windfall profits gained by electricity producers is set to expire on June 1.