PPC reluctance ‘stalling talks with high-voltage customers’

Power utility PPC’s decision to further extend its negotiating period with industrial producers for new high-voltage tariff agreements is futile, EVIKEN, the Association of Industrial Energy Consumers has suggested in a statement, indicating the utility has no interest to compromise.

EVIKEN contended PPC’s reluctant tactics are stalling its negotiations with high-voltage customers.

PPC officially informed industrial customers of its decision to extend the negotiating period for new high-voltage tariff agreements until June 15, but, even so, as of today, has unilaterally revised existing terms, greatly reducing punctuality and advance-payment discounts offered to this consumer category.

These revisions promise to increase energy supply costs for PPC’s industrial customers by levels of between 4 to 12 percent, depending on respective profiles, according to estimates.

A preceding PPC extension for its negotiations with high-voltage customers, offering an additional two months, expired on February 28.

The power utility’s demands include increases that would result in energy-cost hikes of up to 40 percent, the cancellation of nighttime tariffs for steel industries, imposition of a clause linked with balancing market cost, as well as restrictions effectively obstructing industrial loads from market participation, the industrial energy consumers association noted in its announcement.

Despite the impasse prompted by its demands, PPC is now offering its industrial customers a new ultimatum in an effort to force them to accept unfavorable terms for new supply contracts, EVIKEN stated.

The key question is whether PPC ultimately wants constructive dialogue with industry to avoid a negotiation deadlock, which would be detrimental to all parties involved, EVIKEN noted.

The sector’s prolonged uncertainty over energy costs is hampering plans for production increases and new investments, greatly impacting the competitiveness of the country’s major producers, the association stressed.

Day-ahead market prices unusually low despite crisis conditions

Though the balancing market and its various problems since November’s launch of new target model markets may have been the focus of attention of late, irregularities have also troubled the day-ahead market, necessitating a closer look, officials have stressed.

This need was first pointed out by Alex Papalexopoulos, one of the architects of the country’s electricity system, who observed that the day-ahead market has shown signs of offers being systematically submitted at levels below actual cost. He said market dumping was taking place, referring to offers submitted by lignite-fired units.

These concerns have now also been raised by Dinos Benroubi, head of energy supplier Protergia’s electricity and gas divisions, as well as Antonis Kontoleon, the chief official at EVIKEN, Greece’s Association of Industrial Energy Consumers.

At a time of crisis, high electricity demand and calls on industrial producers to hold back on energy consumption, day-ahead market prices remain very low and full-scale electricity exports are taking place towards Italy, Kontoleon noted during a panel discussion at Athens Energy Dialogues, a conference held yesterday.

Protergia’s Benroubi took the issue a step further by noting that RAE, the Regulatory Authority for Energy, must implement a monitoring mechanism for the day-ahead market, as, despite serving as a base for the target model’s functioning, it is displaying irregularities.

RAE upper limit on balancing market offers still possible

A decision by RAE, the Regulatory Authority for Energy, on whether to intervene further following yesterday’s decisions to suspend negative prices for balancing energy market offers and limit them in accordance with minimum production levels that are technically possible will depend on how balancing market prices unfold, authority officials have pointed out.

The possibility of an upper limit for balancing energy market offers cannot be ruled out, the RAE officials explained.

Commenting on yesterday’s initiatives by RAE, electricity producers, on the one hand, and non-vertically integrated suppliers, traders and major-scale consumers, on the other, offered conflicting opinions.

The imposition of a zero-level threshold for offers was not necessary as extreme prices, or behavior, no longer exist in the balancing market to justify the measure, electricity producers contended, warning that it could prompt new market distortions.

The producers also expressed concern over RAE’s preference to not set a specific time period for the negative-price suspension’s validity.

At the other end, Antonis Kontoleon, the head official of EVIKEN, Greece’s Association of Industrial Energy Consumers, noted that RAE has taken a step back from its own proposal for an upper limit on balancing energy market offers as well as upper and lower limits for balancing capacity market offers.

Industrial energy consumers will remain dependent on whether balancing market participants exercise restraint, the EVIKEN chief underlined.

Suppliers and traders described the two RAE measures implemented yesterday as a first step in the right direction.

The impact of the measure limiting offers in accordance with minimum production levels that are technically possible cannot be quantified, they noted, adding the zero-level threshold measure will prevent sharp price rises but would prove insufficient if, for any reason, self-restraint stops being observed in the balancing market.

One trader noted that the zero-level threshold, to prove effective, must be maintained until power grid operator IPTO completes the “western corridor” grid in the Peloponnese.

EVIKEN requests balancing market restrictions for at least 6 months

EVIKEN, the Association of Industrial Energy Consumers, wants a price ceiling imposed for at least six months in the balancing market, warning producers are seeking to elevate industrial electricity tariffs despite the absence of any corresponding production cost increases.

Restrictive measures for a three-month duration, as proposed by RAE, the Regulatory Authority for Energy, in its related public consultation procedure would not suffice, EVIKEN warned.

The association, in a letter submitted to the public consultation procedure, also requested retroactive implementation of a price ceiling in the balancing market, beginning November 1, 2020.

Balancing market costs have risen sharply since the launch of new target model markets six weeks ago, pushing up wholesale and retail electricity prices.

The electricity market’s current structure enables oligopolistic practices that are not subject to monitoring, EVIKEN noted in its letter.

Industry opposes bilateral contract restrictions

EVIKEN, the Association of Industrial Energy Consumers, has expressed opposition to an energy exchange proposal, delivered through public consultation, calling for the imposition of restrictions on bilateral contracts reached by suppliers.

In its letter, EVIKEN notes that an upper limit restricting supplier bilateral contracts to 20 percent of total sales, if suppliers hold a retail electricity market share greater than 4 percent, ensures conditions of liquidity in the day-ahead market and prevents a squeeze on prices.

The association, in its letter, proposes that this regulatory measure be abolished in the day-ahead market given the extremely high price levels registered, noting its maintenance over an extended period threatens to create oligopolistic conditions in the market.

Legal action, even at an EU level, could be taken over the matter, crucially important for the industrial sector, EVIKEN indicated.

EVIKEN chief warns of wholesale market crisis impact on industrial sector

The head official of EVIKEN, Greece’s Association of Industrial Energy Consumers, has warned of dangers faced by the industrial sector as a result of higher wholesale electricity prices and serious balancing market issues.

Balancing market costs have spun out of control amid the pandemic, whilst the market, as currently structured, enables players to achieve windfall profits by differentiating their offers in the day-ahead and balancing markets, Antonis Kontoleon, the EVIKEN chief, pointed out in comments to energypress.

Players are overstating grid needs or understating RES output projections, or doing both, a tactic that further increases the need for far greater energy quantities and leads to higher energy prices, Kontoleon warned.

 

Gas distributors want surcharge rebate decision cancelled

Gas distributors DEDA, EDA Thess and EDA Attiki will seek the nullification of a decision by RAE, the Regulatory Authority for Energy, requiring them to gradually reimburse industrial enterprises for increased network surcharges  between August 14, 2015 and December 1, 2016.

The RAE ruling was delivered following a complaint by EVIKEN, the Association of Industrial Energy Consumers.

The amount that needs to be returned by the three distributors to energy-intensive industries is estimated to be between 2.5 and three million euros.

As a first step, DEDA, EDA Thess and EDA Attiki will apply for the RAE decision to be nullified and, if unsuccessful, will then resort to legal action, including at the Council of State, Greece’s Supreme Administrative Court.

A bill ratified in 2015 enabled the gas distributors to impose a temporary network surcharge of 4 euros per MWh, prompting a reaction from energy-intensive industries.

EVIKEN argued that the increase in distribution charges did not reflect the costs of each distributor, was a disproportionate burden for certain categories of network users, while adding that distribution charges should be set by RAE, not through legislation.

According to the RAE decision, the gas distributors will need to introduce measures reimbursing industrial consumers for higher network surcharge payments over the aforementioned 16-month period. Payment of the reimbursements, to be determined by a specific formula, will be possible through installments over a period of as long as five years, according to the RAE decision.

Industrial consumers rebated for gas network usage surcharge

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

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

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

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

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

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

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

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

 

 

 

Ministry awaiting Brussels nod for demand response, TFRM

The energy ministry, anticipating the European Commission’s approval of Greek government proposals for a demand response mechanism and a transitory flexibility remuneration mechanism (TFRM), has decided to sign related ministerial decisions, possibly even today, so that the mechanisms can be immediately implemented once Brussels has given the green light.

Though the two sides have come closer on the mechanisms, it still remains unclear when the European Commission will go ahead with its approval.

Over the past few days, government officials have needed to respond to a series of questions from Brussels, seeking explanations and clarification on details concerning both mechanism plans.

The European Commission’s Directorate-General for Competition is treating both mechanism proposals as one package.

Domestic energy-intensive industries are urgently awaiting the package’s approval in the hope that Greek power grid operator IPTO can stage a demand response auction before July is out.

Under terms agreed to so far, IPTO will be permitted to offer up to 800 MW through demand response auctions, down from 1,030 MW allowed through the preceding plan.

Also, the demand response mechanism will be made accessible to a greater number of companies, including smaller players, through a reduction of a consumption lower limit.

In addition, the demand response mechanism is expected to be valid for a one-year period, not two years, as was requested by EVIKEN, the Association of Industrial Energy Consumers.

The TFRM is expected to be divided into two stages, the first running until the launch of target model markets, scheduled for September 17, under the same terms that applied for a mechanism that expired in March, 2019.

The TFRM’s second stage is seen running from the launch of the target model until a permanent flexibility mechanism is introduced. Its capacity is expected to be drastically reduced to 750 MW from 4,500 MW. Remuneration levels are also expected to drop.

 

Ministry preparing for Brussels demand response, TFRM approvals

Anticipating the European Commission’s approval of government proposals for a demand response mechanism and a transitory flexibility remuneration mechanism (TFRM), the energy ministry is preparing ministerial decisions for immediate signing once Brussels has given the green light.

These decisions will need to be signed by Greek officials before the two mechanisms can be implemented. The ministry is preparing the ground to have both mechanisms launched as soon as possible.

Brussels and Athens have reached an agreement on the mechanisms, prompting the energy ministry to deliver a finalized version of the demand response plan to the European Commission’s Directorate-General for Competition, ahead of this mechanism’s reintroduction.

The energy ministry expects power grid operator IPTO to be able to stage its first auction for demand-response capacities in July.

According to the agreement reached with Brussels, IPTO will be permitted to auction demand response capacities of up to 800 MW, below the previous limit of 1,030 MW.

Also, a greater number of participants will be eligible as enterprises with capacities of at least 2 MW will be able to take part, down from 3 MW in the previous mechanism. Troubled nickel producer Larco will not be excluded.

In addition, the new mechanism will run until September 30, 2021, not for two years as had been requested by EVIKEN, the Association of Industrial Energy Consumers.

As for the TFRM, it will remain valid until the implementation of a permanent CAT mechanism, which the energy ministry expects to launch in March, 2021.

The TFRM will be divided into two stages, the first running until the launch of target model markets, scheduled for September 17, under the same terms that applied for a mechanism that expired in March, 2019.

The TFRM’s second stage will run from the launch of the target model until a permanent flexibility mechanism is introduced. Its capacity is expected to be drastically reduced to 750 MW from 4,500 MW. Remuneration levels are also expected to drop.

Big CO2 cost drop for PPC mid, high-voltage consumers, clause abolished

Power utility PPC’s abolishment of a CO2 emissions cost clause concerning its mid and high-voltage consumers, a long-standing demand by EVIKEN, the Association of Industrial Energy Consumers, has resulted in a considerable reduction of CO2-related costs for these consumer categories.

CO2-related costs for mid and high-voltage consumers fell sharply to 6 euros per MWh in April, down from levels of 13.40 euros per MWh in January, 13.56 euros per MWh in February and 11.14 euros per MWh in March. CO2 emission costs have dropped considerably, internationally, in recent times.

The CO2 cost level is expected to remain unchanged for May as lignite-based generation has been restricted.

 

Brussels recognizes EVIKEN case on excess distribution surcharges

An ongoing effort by EVIKEN, the Association of Industrial Energy Consumers, calling for natural gas distribution operators to return excess surcharges to industrial consumers has – for the first time since the case’s launch four years ago – been recognized by the European Commission and included in its latest report on the Greek economy.

RAE, the Regulatory Authority for Energy, will reach a decision imminently, within May, according to the Brussels report.

EVIKEN launched its case in June, 2016. Industrial consumers were charged excess gas distribution surcharges for a 16-month period beginning in August, 2015.

EU law was breached by legislation ratified to enable the excess surcharge, upped to 4 euros per MWh, universally, regardless of company profile. This placed major-scale industrial producers under pressure.

A decision on this overcharging case has remained pending since 2016 despite wide recognition of the violation authorities at all levels, from RAE to the European Commission’s Directorate-General for Energy.

RAE, over an extended period, has needed to respond to rigorous questioning from the DG-Energy on various aspects concerning the matter.

RAE is now expected to calculate the precise excess surcharge amount that needs to be returned by operators to industrial consumers through an offsetting of accounts.

“Our case may have been forgotten if it weren’t for the DG-Energy leadership’s decisive intervention that prompted RAE to overturn all the unsubstantiated legal interpretations by natural gas distribution operators,” noted Antonis Kontoleon, the head official at EVIKEN.

Industrial sector needs delayed demand response mechanism

The country’s energy-intensive industrial enterprises are keen to accept a solution that would also offer independent electricity suppliers access to power utility PPC’s lignite-based generation, acknowledging that delays in the government’s ongoing negotiations with the European Commission on across-the-board lignite issues will consequently delay Brussels’ approval of Greece’s request for an extension of the demand response mechanism, a key energy-saving tool for the industrial sector, and threaten the sustainability of a number of producers.

EVIKEN, the Association of Industrial Energy Consumers, recently informed the energy ministry of its position in writing.

Greece’s lignite-issue negotiations with the European Commission have dragged on for some time. Athens has received a list of new questions after responding to a dense set of previous questions.

The government’s proposal for an extension of the demand response mechanism was forwarded to Brussels late December following lengthy consultation with European Commission officials to ensure its details would be aligned with Brussels’ directives.

Even so, Greece’s industrial enterprises have been left without the support of demand response mechanism since February 7. Worse still, a new measure promising to reduce the cost, for industry, of a RES-supporting ETMEAR surcharge, has yet to be implemented.

As a result, certain industrial sectors, namely steel and cement, have slid further in terms of competitiveness while, in some cases, sustainability and job maintenance are also at stake.

Pundits believe Brussels has bundled together all of Athens’ pending energy sector issues.

Limit on target model electricity contracts, consultation soon

An upper limit is expected to be imposed on the amount of electricity production companies will be entitled to negotiate for target model contracts, according to a decision by authorities to be forwarded for public consultation within the next few days.

The implementation of an upper limit restricting the amount of electricity a company is permitted to negotiate in the futures market is foreseen in the target model plan. The remainder of electricity will need to be channeled into the day-ahead market to ensure that necessary amounts are available.

For months now, officials have speculated about the level of the upper limit. A clearer picture is expected within the next few days, when terms are forwarded for consultation.

Power utility PPC and independent companies have offered differing views. PPC has insisted on an elevated maximum level, an opinion shared by industrial figures, including EVIKEN, the Association of Industrial Energy Consumers, who believe low-level limits would not enable them to establish contracts with PPC for electricity amounts fully covering their needs.

PPC given a month for CO2 surcharge transparency requirements

Power utility PPC is not honoring code of conduct requirements concerning transparency of information provided to consumers on CO2 emission cost surcharge calculations, RAE, the Regulatory Authority for Energy, has noted in a letter to the utility.

PPC has been asked to inform RAE on corrective action within a month or face a fine, according to the letter.

This development supports a recent complaint expressed by EVIKEN, the Association of Industrial Energy Consumers, disapproving a CO2 surcharge cost formula applied by PPC to its mid and high-voltage power supply.

In its letter to PPC, forwarded just days ago, RAE has asked the power utility to comply – promptly and fully – with industry regulations by providing necessary billing information to its consumers.

EVIKEN is maintaining an aggressive stance, insisting that the power utility’s information to consumers on surcharges imposed continues to lack detail.

Energy-intensive industrial consumers have questioned CO2 surcharges of 12.65 euros per MW/h for high-voltage supply and 13.09 euros per MW/h for mid-voltage supply concerning December, 2019. Consumers have requested full details on these charges.

EVIKEN, comparing lignite production figures for April and November, believes the CO2 surcharge rate for December should have been less than 12 euros per MW/h. It has demanded related and fully transparent data for every month of 2019.

 

PPC’s CO2 cost clause still a key issue for industrial energy consumers

The elimination of a formula applied by power utility PPC to calculate CO2 emission right costs included in industrial electricity tariffs, seen as lacking transparency, represents a key issue for major-scale energy consumers in 2020.

EVIKEN members, at a general meeting held by the association ahead of the festive season, questioned the CO2 surcharge formula applied by PPC to cover its costs resulting from CO2 emission right cost shifts.

Electricity bills issued by state-controlled PPC do not include an analysis of how this cost is calculated, EVIKEN members pointed out during the session.

This is not a new development. Over the past year or so, EVIKEN has demanded details on the CO2 calculation method from PPC. However, this request has not been met.

The issue has generated issues between the energy ministry, SEV, the Hellenic Association of Industrialists, and PPC as an offsetting measure offered to industries has not sufficed to cover this CO2-related cost.

EVIKEN responded by forwarding a series of letters to RAE, the Regulatory Authority for Energy, on the matter, claiming lack of transparency. The authority, an independent body, subsequently ruled that the CO2 surcharge seriously breaches the supply code.

All but two of PPC’s major-scale customers, who signed supply contracts exempting them from the power utility’s CO2 price clause, have been overcharged by a sum of approximately 20 million euros, according to EVIKEN.

As a result of the EVIKEN pressure, PPC appears likely to eliminate this CO2 clause from major-scale supply contracts.

Upper limit for target model agreements a contentious issue

Imposing an upper limit on day-ahead market bilateral agreements has developed into one of the most contentious issues in the lead-up to the target model.

Opposing views were voiced, once again, last Friday at an IENE (Institute of Energy for Southeast Europe) conference.

Industrial sector officials fear the implementation of a single-digit upper limit, as requested by ESAI/HAIPP, the Hellenic Association of Independent Power Producers, would not provide industrial enterprises with enough space to reach agreements with power utility PPC as a means of covering their needs.

Imposing an upper limit on PPC’s forward contracts would cancel out the industrial sector’s accessibility to such products, EVIKEN (Association of Industrial Energy Consumers) board member Antonis Kontoleon told the IENE event.

The imposition of such a limit on PPC should be matched for all vertically integrated players, Kontoleon added.

Such a limit would prevent producers from establishing forward agreements with their own supply firms.

ESAI/HAIPP chief official Giorgos Stamtsis noted that the structure of the Greek market is characterized by the presence of one dominant company with exclusive access to lignite, major-scale hydropower facilities, as well as a very high market shares in the retail market, over 70 percent, as well as the wholesale market.

 

EVIKEN warns of new market distortions, costlier electricity

EVIKEN, the Association of Industrial Energy Consumers, has warned of the institutionalization of new market distortions, through the adoption of the target model, that could significantly affect power utility PPC and ultimately prompt even higher costs for electricity consumers.

Greece’s industrial sector has persevered elevated electricity costs over the past decade, far higher than levels offered to European competitors, EVIKEN sources noted.

The association primarily attributed the country’s higher electricity costs to what it described as the “continual institutionalization of a series of measures that have led to the establishment of a regulated oligopoly in a market flooded by distortions and regulatory obstacles, along with the delayed launch of the new electricity market and market coupling with the neighboring markets of Italy and Bulgaria, as part of the target model’s framework.”

Revisions called for by EVIKEN include a balancing market that will operate through a unit-based central dispatching model.

Details of PPC’s CO2 rights clause enable ‘tariff hikes only’

Technical details of a clause triggering electricity tariff hikes when CO2 emission right costs increase to certain levels will not enable price adjustments in the opposite direction, for tariff reductions should emission right costs deescalate, power utility PPC’s chief executive Giorgos Stassis is expected to explain to the company board at a meeting tomorrow.

“This clause will not apply for any other situation [other than CO2 emission right cost increases],” the utility’s boss’s address is expected to note.

The resulting extra charges will not be subject to any discount offered by PPC, not even the remaining 5 percent of its punctuality discount, being lowered from 10 percent.

PPC, under financial pressure, is adopting a series of measures designed to boost the  company’s revenues.

EVIKEN, the Association of Industrial Energy Consumers, has criticized the power utility for lack of transparency in its calculations of the CO2 emission right costs clause for the medium and high-voltage categories.

Adding to the negative reaction, it is believed that RAE, the Regulatory Authority for Energy, has forwarded a related letter to PPC contending its CO2 emission right costs formula is not fully substantiated.

 

EVIKEN requests RAE hearing for gas network distribution fees

EVIKEN, the Association of Industrial Energy Consumers, has asked RAE, the Regulatory Authority for Energy, for copies of European Commission documents delivered to the authority as responses on temporary natural gas network distribution fees.

EVIKEN lodged an official complaint to the European Commission in June, 2016 over temporary network distribution fees of 4 euros per MWh that were imposed for a 16-month period on all industrial consumers in Greece, regardless of respective profiles.

In November of that year, RAE determined the levels of permanent network distribution fees, which showed a major discrepancy compared to the temporary network distribution fee levels.

EVIKEN has since asked RAE to exercise its authority and offset the difference.

The industrial energy consumers association noted that the European Commission is awaiting a response from RAE on whether and how it will offset this gap.

EVIKEN has asked for a RAE hearing  to present its views on the matter at the authority’s board.

 

RAE decisions on network fees, industrial sector hike in June

RAE, the Regulatory Authority for Energy, is expected to decide on the levels of regulated charges for gas distribution networks in the wider Athens area, Thessaloniki and the rest of Greece within June, sources have informed.

It is believed that these charges will essentially remain unchanged. A minor reduction could be made.

A decision on a 4-euro per MWh distribution charge set for the industrial sector in the summer of 2015 will be a key a factor in setting the new regulated charges. Action taken by EVIKEN, the Association of Industrial Energy Consumers, against this charge at a European Commission level was successful.

This charge increase was implemented across the board for all industrial consumers, regardless of profile.

RAE is expected to reach a decision this summer on a five-year development plan covering 2019 to 2023 for gas distribution companies. It is waiting for related data from the DEDA and EDA Attikis distributors.

PPC requested to improve CO2 surcharge transparency

RAE, the Regulatory Authority for Energy, has requested greater billing details from the power utility PPC on its CO2 emission surcharges for medium and high-voltage consumers.

RAE president Nikos Boulaxis informed PPC’s chief executive Manolis Panagiotakis of the authority’s transparency request in writing several days ago.

This had been preceded by complaints from EVIKEN, the Association of Industrial Energy Consumers, on the CO2 emissions formula applied by PPC for medium and high-voltage consumers.

The lack of billing information does not ensure transparency for industrial consumers, EVIKEN had noted in a letter forwarded to RAE in February, while urging the authority to intervene.

Industrial energy consumers group to step up action over CO2 costs

EVIKEN, the Association of Industrial Energy Consumers, is planning to file a complaint to RAE, the Regulatory Authority for Energy, over a formula applied by the main power utility PPC to calculate CO2 emission costs, seen as unfair and lacking transparency by the industrial sector.

The association intends to step up the pressure following the PPC’s maintenance of CO2-related costs for industrial consumers at 18 euros per MWh in February.

Industrial sector officials argue this price level should have been reduced as actual CO2-related costs at PPC have fallen because the utility has recently relied less on lignite for its electricity production.

A previous letter forwarded by EVIKEN to RAE highlighting flaws in the formula determining CO2 costs for monthly industrial electricity bills was not answered by the energy authority.

The formula applied by PPC to determine CO2-related costs for mid and high-voltage consumers breaches the supply code as it does not factor in most recent cost developments, EVIKEN will highlight in its complaint, sources informed.

Swift Brussels response on CAT plan promised by Moscovici

Greece has been promised solid indication of the European Commission’s intent on the country’s effort to secure CAT remuneration for two lignite-fired power stations, Megalopoli and Meliti, included in main power utility PPC’s bailout-required disinvestment of lignite units.

CAT remuneration for the power stations is seen as a crucial incentive to draw investors to the sale.

Though Brussels is not expected to deliver its decision on Greece’s CAT plan any sooner than April, which stretches well beyond the schedule of PPC’s ongoing disinvestment effort, the European Commissioner for Economic and Financial Affairs Pierre Moscovici, who met yesterday with Greek energy minister Giorgos Stathakis, is believed to have promised a swift response in the form of notification.

PPC has already announced it will upload this notification, regarded as the European Commission’s final position with virtually absolute certainty, into the disinvestment’s data room for investors to appraise. The European Commission’s views on the Greek CAT proposal’s details, including duration, remuneration levels and procedures, are expected to be included in the notification.

Stathakis, the energy minister, also held another important meeting yesterday with officials of EVIKEN, the Association of Industrial Energy Consumers, to discuss the government’s efforts aimed at securing  Greece’s demand response mechanism (interruptability), a pivotal energy cost-saving tool for industry.

EVIKEN officials emerged content from the meeting and confident the energy ministry is committed to this effort. Details concerning the ministry’s moves to be made on the matter have not been disclosed.

Industrialists reject ministry offer including 10% power tariff hike

Following weeks of negotiations, EVIKEN, the Association of Industrial Energy Consumers, has rejected an economy and development ministry proposal concerning new  industrial consumer terms for electricity supply by the state-controlled main power utility PPC.

The alternate minister of economy and development Stergios Pitsiorlas (photo) proposed extending volume-based electricity discounts as well as punctuality discounts for industrial consumers but incorporated these offers with a 10 percent increase of industrial tariffs.

According to sources, the industrial consumers association made clear it cannot accept a 10 percent electricity tariff hike as it has already been burdened by CO2-related cost increases of 20 percent.

On October 10, Pitsiorlas promised he would deliver an energy cost savings package for industrial consumers within ten days.

This impasse brings the negotiations back to square one. The industrial sector will be hoping RAE, the Regulatory Authority for Energy, eventually looks seriously into charges made by the sector against PPC for discriminatory treatment and be vindicated. At the other end, the government faces the challenge of finding an energy cost solution for industrial enterprises in support of their sustainability.

 

Brussels forwards list of some 30 questions on Greek CAT proposal

The European Commission has forwarded a list of some 30 questions to Greece’s energy ministry over the country’s permanent CAT remuneration mechanism plan proposed by Athens and currently being examined and discussed by Brussels authorities.

European Commission officials have already met with government and main power utility PPC authorities to discuss details included in the country’s new CAT plan. The European Commission has also invited other interested parties, including industrialists, to Brussels to listen to views and objections concerning the CAT plan. A series of such meetings are expected to begin this week.

The industrial sector has already warned it cannot accept a CAT mechanism that does not incorporate a demand response system, as was reiterated just days ago by Antonis Kontoleon, a leading figure at EVIKEN, the Association of Industrial Energy Consumers, at an IENE (Institute of Energy for Southeast Europe) conference.

The industrial sector has not ruled out legal action if a demand response system is excluded from the CAT mechanism.

Demand response systems enable major industrial enterprises to be compensated when the TSO (ADMIE/IPTO) requests that they shift their energy usage by lowering or stopping consumption during high-demand peak hours so as to balance the electricity system’s needs.

At the other end, state-controlled PPC and the government are looking for a swift Brussels approval of the new CAT mechanism, seen as pivotal for the prospects of PPC’s bailout-required sale of lignite units.

Lignite units are planned to be eligible for CAT remuneration, according to the Greek proposal, thereby ensuring considerable earnings for prospective buyers of the Meliti and Megalopoli lignite-fired power stations included in PPC’s sale package.

 

EVIKEN calls for gov’t response to rising industrial energy costs

EVIKEN, the Association of Industrial Energy Consumers, has called for a firm government response to rising energy costs in a harshly worded statement claiming a conscious effort is being made to undermine the Greek industrial sector’s aim of increasing its contribution to the country’s GDP, employment and investments.

Though the main power utility PPC has not been directly criticized in the EVIKEN statement, the complaints are unquestionably aimed at the utility’s board.

In its statement, the industrial energy consumers association contends an attempt is being made to end institutionalized discounts that are based on consumer profiles and operating costs at the main power utility PPC. EVIKEN also notes the power utility is seeking to impose unjustified tariff hikes.

Any demands for further cost increases, which would add to the already increased CO2 emission right costs faced by industrial enterprises, are unsubstantiated and inappropriate, while an attempt to abolish industrial tariff discounts is discriminatory, EVIKEN notes.

“We call upon the government and prime minister to take appropriate decisions so that the industrial sector’s recovery effort and target for employment growth are not endangered,” the statement concludes.

EVIKEN protests CO2 cost treatment of major consumers

EVIKEN, the Association of Industrial Energy Consumers, has filed a complaint to RAE, Greece’s Regulatory Authority for Energy, claiming discriminatory treatment of high-voltage electricity consumers by the main power utility PPC over CO2 emission right costs.

High-voltage industrial electricity consumers shoulder the full extent of CO2 emission right cost increases as these costs are included on their electricity bills as separate surcharges. On the contrary, all other consumers enjoy steady tariff levels as CO2-related charges are not included on their bills. EVIKEN has requested an explanation for this conflicting billing approach.

It is estimated that PPC’s decision to absorb higher CO2 emission costs for all other consumer categories is costing the state-controlled power utility additional costs worth between 430 and 440 million euros per year.

EVIKEN also filed a second complaint to RAE requesting an examination of lower mid-voltage tariffs for industrial consumers sharing the same energy profiles as high-voltage consumers. Mid-voltage tariffs are lower by as much as five euros per MWh compared to tariffs paid by high-voltage consumers sharing identical energy profiles.

 

 

Industry, seeking clarity, demands two-year electricity tariff deals with PPC

The country’s energy-intensive industrial sector is demanding two-year electricity tariff agreements, until the end of 2020, with the main power utility PPC, for greater clarity and stability concerning energy costs to be faced next year.

Shorter-term energy cost planning threatens the sustainability of enterprises in certain sub-sectors, industrialists have warned, adding that energy-cost support for the industrial sector, playing a vital role in Greece’s economic recovery effort, is essential.

Local industrial enterprises, appearing united and adamant, are refusing to sign PPC electricity tariff agreements limited to 2018 and insist on two-year deals.

Separate CO2 emission right cost payments, as is the arrangement at present, would be accepted, industrial sector officials have indicated.

An existing demand response mechanism (interruptability) – compensating major-scale consumers, such as industrial enterprises, when the TSO (IPTO) asks them to shift their energy usage (lower or stop consumption) during high-demand peak hours, so as to balance the electricity system needs – expires in 2019 but the new market conditions to be shaped by a succeeding permanent CAT mechanism remain unclear.

EVIKEN, the Association of Industrial Energy Consumers, has urged energy minister Giorgos Stathakis to seek European Commission approval for a continuation of the demand response mechanism in tandem with the permanent CAT mechanism.

 

Industrialists, PPC question cost impact of gas network expansion

EVIKEN, the Association of Industrial Energy Consumers, and the main power utility PPC have both raised sustainability-related objections to a gas network expansion plan covering 18 municipalities in northern and central Greece, included by gas distributor DEDA in its five-year development plan.

Participating in public consultation staged by DEDA, EVIKEN pointed out that the gas distributor’s five-year plan makes no mention of the impact on distribution network surcharges.

RAE, the Regulatory Authority for Energy, has already endorsed distribution network surcharges for central Greece, a region of heightened industrial activity. The area’s gas network is already developed but will be expanded. RAE will need to ensure that existing network charges are not increased to cover the cost of the network’s expansion, the industrial consumers association stressed in its intervention.

PPC also raised sustainability concerns regarding the gas network’s expansion to previously non-serviced areas.

RAE is expected to approve DEDA’s five-year development plan by October 10, when the gas distributor, a wholly-owned subsidiary of DEPA, the public gas corporation, plans to proceed with tenders for the development of the natural gas networks.

The DEDA tenders are planned to cover all development aspects of the projects, including procurement, project management and construction. A total of 11 or 12 tenders are being planned.