European Commission

Revised NECP sets more ambitious targets for 2030

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Greece’s revised National Energy and Climate Plan, forwarded to the  European Commission and published on its website, sets new 2030 targets of 23.5 GW for all forms of renewables, 5.3 GW in energy storage, 7.7 GW in natural gas-fueled power stations, zero lignite presence, as well as a fleet of 460,000 electric vehicles.

In the RES sector, the country’s new NECP sets goals for 2030 of 9.5 GW in wind energy capacity, including 1.9 GW in offshore wind farms; 13.4 GW in solar power capacity; and 0.6 GW in other RES technologies.

Onshore wind farm capacity is planned to expected to increase by 12 GW between now and 2030, from 11.5 GW at present to 23.5 GW in 2030. The 2030 capacity goal for hydropower plants has been set at 3.8 GW.

The energy storage goal of 5.3 GW is expected to consist of 3.1 GW in batteries and 2.2 GW in pumped-storage hydropower stations.

Total annual electricity production is expected to reach 64.6 TWh in 2030, while electricity imports are forecast to be slashed to no more than 3 percent of Greece’s overall electricity generation, according to the revised NECP.

Renewables are planned to represent 44 percent of energy consumption by 2030, up from 35 percent in the previous NECP. Also renewables have been set an objective to contribute 80 percent of electricity production by 2030, significantly higher than the current NECP’s level of 61 percent, and close to 95 percent from 2035 onwards.

The revised NECP includes a zero-carbon emissions target in electricity generation from 2035 onwards.

Carbon emissions have already dropped significantly in 2023 as a result of the withdrawal of lignite-fired power stations.

PPC lignite package sales suggest hedging strategy rise

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The results of power utility PPC’s sale of lignite packages between 2021 and 2023 – offered through forward contracts to third parties, an obligation that was recently completed, as the company announced – confirm a rising market trend in hedging strategies compared to the recent past.

An antitrust mechanism adopted in 2021 as part of a wider effort to further liberalize Greece’s energy market offered third parties access to PPC’s lignite-fired electricity production, until recently the lowest cost of generation to which the power utility had exclusive access.

The European Commission had begun expressing concerns about PPC’s monopoly in the Greek lignite market as far back as 2008.

PPC, according to the mechanism’s rules, was obliged to offer third parties quarterly electricity packages corresponding to 40 percent of its lignite-based electricity production in the equivalent quarter a year earlier.

Although the majority of PPC’s lignite packages were placed on the European energy exchange, with just a fraction made available on the Greek energy exchange, the transactions showed participants were keen to hedge.

The European energy exchange offers a far greater product range, compared to the more limited offer of products on the Greek exchange, making it more appealing for prospective buyers.

Enriching the Greek energy exchange with new products, services and activities, all of which would ensure more accurate energy price levels, is a top priority, Alexandros Papageorgiou, the exchange’s CEO, told the Athens Investment Forum earlier this week.

 

Offshore wind farm market devastated, EU looks to revive

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

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

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

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

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

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

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

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

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

Biomethane sector draft bill forwarded for consultation

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A draft bill for the development of Greece’s biomethane sector is ready and set to be forwarded for consultation, deputy energy minister Alexandra Sdoukou has told a conference organized by the Hellenic Association of Biogas Producers (HABIO/ESPAV).

Consultation on the draft bill will, according to the energy ministry plan, begin with a closed procedure involving biomethane producers, supply companies, gas operators and other public entities directly associated with the sector, to provide initial comments and observations on the draft bill for preliminary corrections.

The consultation procedure will then continue as normal with the aim of being completed by the end of the year so that legislation procedure may begin early in 2024.

The ministry opted for a double-staged consultation procedure believing it will bring the shape of the legislative proposal as close as possible to completion, having taken into account the views of market officials. A similar route was followed to update the National Energy and Climate Plan.

Investment support for the biomethane sector will be sought through the REPowerEU facility, introduced by the European Commission, in response to the 2022 Russian invasion of Ukraine, to end the EU’s reliance on Russian fossil fuels before 2030.

Prinos CCS state aid talks with European Commission begin

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Prinos CCS, a carbon capture and storage project being promoted by upstream company Energean as Greece’s first CCS facility, at a depleted underwater Prinos field, south of Kavala, is approaching the stage of development.

The Greek ministry has pre-notified the European Commission on a relevant support scheme, within the framework of Climate, Energy and Environmental Aid Guidelines, allowing exceptions to an EU ban on state aid in the climate, environment and energy sectors.

The ministry’s pre-notification is expected to initiate consultation between the two sides for the formation of a support scheme that will need to be appraised and approved by Brussels.

Greek officials have also submitted a funding request for 50 million euros through the REPowerEU facility.

Prinos CCS has been included in a sixth edition of a PCI/PMI list, which was given the green light yesterday by a relevant Brussels committee but still needs to be approved by European Parliament and the European Council.

PCI/PMI status would facilitate financing for the CCS project’s development plans through the Connecting Europe Facility, the EU fund supporting infrastructure investments in transport, energy, digital and telecommunication projects. This status could also lead to favorable borrowing terms for the project.

Greek gas grid operator DESFA is supporting the effort to secure PCI/PMI status for the Prinos CCS project.

DESFA’s role in the project’s development would entail constructing a network for collecting CO2 quantities. Industries operating in the wider Athens area would be connected to this network.

CO2 amounts would be liquefied and temporarily stored at a facility near the port of Elefsina, west of Athens, then loaded onto CO2 tankers and shipped out to the Prinos CCS.

Energean holds a license for the Prinos facility, currently running until August, 2024. As a next step, the company will need to secure a social and environmental impact study. Its approval would enable Energean to take a next step and apply to EDEYEP, the Hellenic Hydrocarbons and Energy Resources Management Company, for a CO2 storage license, which would make the company its operator.

Energean plans to start operating the Prinos CCS in late 2025 or early 2026 at a first-phase level for storage of up to 1 million tons of CO2 per year.

 

Brussels to request 2024-26 interim targets for wind energy

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The European Commission is preparing to set interim targets between 2024 and 2026 to highlighting the extra effort needed in the EU if wind-energy goals set for 2030 are to be achieved.

Brussels is currently preparing its preliminary version of a Wind Power Package, expected to be presented today.

Though still just a draft, the package, it has been indicated, will highlight that growth in Europe’s wind-energy sector is well behind schedule, as has been pointed out on a number of occasions by Brussels-based wind energy industry association WindEurope.

According to the draft of the wind power package, obtained by energypress, the European Commission will call on EU member states to commit, by the end of 2023, to specific wind-energy targets that offer clarity on what lies in store for the sector’s development over the next few years.

These commitments would be incorporated into the European Commission’s ambitious target of 111 GW in offshore wind farms across the EU by 2030, the draft plan notes.

The package also expects wind-energy additions to National Energy and Climate Plans.

The European Commission plans to deliver recommendations concerning licensing matters and long-term renewable energy planning in December, after having assessed National Energy and Climate Plans submitted by member states.

In doing so, Brussels will seek to encourage member states to reinforce and specify national plans, especially on matters concerning wind energy.

In Greece, ELETAEN, the Greek Wind Energy Association, had responded to the country’s revised NECP, published in the summer, by noting that onshore wind farm goals were greatly reduced.

 

Licensing, financing upgrade for EU wind energy model

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

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

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

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

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

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

Natural gas seen remaining key power price-setter in 2030

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

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

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

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

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

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

Brussels rejects Greek proposal for Green Pool model

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The European Commission has rejected a Greek proposal for a Green Pool model intended to keep green-energy PPA prices at competitive levels for the country’s energy-intensive industries.

Though Brussels’ Directorate-General for Competition has yet to announce its rejection of the plan, it informed the Greek energy ministry of its decision late last week, energypress sources informed.

Evaggelos Mytilineos, President and chief executive of the Mytilineos group, expressed his disappointment over the decision during a TV interview on CNBC.

“Unfortunately, on Friday, we heard the bad news that the Green Pool plan, which is a combination of a carbon exemption and support for energy-intensive industries, has been rejected by the European Commission after a year of negotiations. Every country, every economy, is trying to achieve economies of scale. It’s really difficult,” Mytilineos commented.

Negotiations on the Green Pool plan began soon after the Greek government had forwarded its proposal to the Brussels authority in September, 2021.

The European Commission is believed to have rejected the plan on the grounds that it could be regarded as a tool subsidizing electricity generated by fossil fuels.

No sum for energy-crisis support in 2024 draft budget

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Consumers face a challenging winter in terms of energy costs, as indicated by a number of revisions included in the 2024 draft budget, just submitted to Parliament.

Besides the absence of horizontal energy-support measures, the budget draft does not provide for any special reserve that would cover energy-crisis situations.

Fiscal concerns expressed by the European Commission, pressure by the ECB for an end to generous support that is cancelling out monetary policy, as well as the normalization of energy market conditions are key factors behind these budget restrictions for energy consumers, who were offered substantial support in 2022 and 2023.

A senior member of the government’s economic staff, responding to questions during a briefing yesterday on budget figures, admitted that no energy-related safety cushion for consumers was included in the country’s financial package for 2024. However, the official did point out that corresponding action would be taken to meet any potential needs, should they arise.

This essentially means that certain support measures offered last winter would only be recalled if deemed necessary, to avoid burdening the budget in advance.

For the time being, the only emergency amount included in the draft budget is a 600 million-euro sum for natural disasters.

Contrary to last winter, the draft budget for 2024 does not include any sum for heating fuel subsidies. If any support, on this front, is eventually offered to consumers, it would result from initiatives taken by refineries. Clarity is expected around mid-October, when the heating-fuel trading season commences.

Also, horizontal electricity subsidies, for all consumers, will cease to apply as of January, when electricity suppliers will be introducing new pricing policies, to include indexation clauses or similar pricing tools.

Horizontal support for natural gas purchases also appears set to be scrapped as of January, given the gas market’s currently subdued prices.

The absence of any reserve amount for potential energy crises stands as the draft budget’s fourth major energy-related change, compared to last winter. If needs do arise, they will seemingly be dealt with via the Energy Transition Fund, not the budget.

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.