finance ministry

Extra budget sum needed for special a/c’s widened deficit

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Lower natural gas price levels in recent times and the subsequent drop in wholesale electricity prices have reduced retail electricity tariffs but widened the deficit of the Public Service Compensation (YKO) special account, meaning additional state budget money will be needed to fill the gap.

This special account’s revenues have decreased, while outlays subsidizing electricity used by consumers on the country’s non-interconnected islands and by low-income households have remained steady.

Just weeks ago, energy ministry and finance ministry officials determined, during talks, that a sum of roughly 300 million euros would need to be drawn from the state budget to partially cover the Public Service Compensation (YKO) special account’s deficit. However, given latest conditions, an additional sum of at least 100 million euros in budget money will be needed.

The two ministries reached an initial agreement on the state-budget sum required in mid-February, but ensuing calculations following a significant drop in wholesale electricity prices revealed that the Public Service Compensation (YKO) special account’s deficit has widened further.

The additional state-budget sum of at least 100 million euros needed for this account may require officials to revise an earlier plan dividing its deficit, estimated at 700 million euros, into three parts for gradual coverage between this year and 2026.

Ministry to seek state budget support for special a/c deficit

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The energy ministry plans to seek state budget support for the public service compensation (YKO) special account’s deficit, now close to 600 million euros and widened by 300 million euros in a year.

This special account, normally subsidizing high-cost electricity production on non-interconnected islands through YKO surcharges included in all electricity bills, experienced a wider deficit last year as a considerable proportion of its inflow was channeled into the Energy Transition Fund to fund electricity subsidies offered by the government to all consumers as an energy-crisis measure.

The energy ministry hopes this will be the final time state budget support will be needed to keep the YKO special account balanced. The ministry expects major YKO special account savings to result from the prospective Crete-Athens grid interconnection, planned for commercial launch in 2025.

The Crete-Athens grid interconnection project is expected to lead to an YKO special account surplus of 150 million euros in 2026.

Firm Spanish interest for more RES investments in Greece

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Spanish renewable energy companies have expressed firm interest for further investments in the Greek market, making clear their intentions at an investment-promoting event held just days ago in Madrid and co-organized by Enterprise Greece, the official investment and trade promotion agency of the Greek State, and the Greek Embassy, with support from the Madrid Chamber of Commerce and the Spanish-Hellenic Chamber of Commerce.

Highlighting the event’s resounding success, officials of Enterprise Greece and the Greek Finance Ministry held direct talks with representatives of seven Spanish groups and agencies.

All in all, roughly 70 Spanish enterprises and institutional agencies took part in the conference.

Carlos Piñar Celestino, CEO of the Spanish group Elmya, one of the event’s speakers, offered a positive account of his company’s investment experience and success in Greece.

Both the Elmya chief executive and Luis Picas Asmarats, Investment Director of Hotel Investment Partners Group, another of the conference participants, spoke highly of Greece’s investment environment, the constructive role of Enterprise Greece as a one-stop-shop, and their cooperation with Greek government agencies.

The Office of Economic and Commercial Affairs of the Greek Embassy in Madrid informed that executives of several Spanish companies expressed interest for further talks in order to push ahead with plans regarding their investment prospects in Greece.

Also taking part, Nikos Stamos, Enterprise Greece’s Director of Investment Attraction in Energy, Environment and Services, dedicated a large part of his speech to the RES sector, as well as the food and beverages industry.

Nikos Sergis, Director of the Public-Private Partnerships Unit of the Ministry of Finance, spoke extensively on the institutional framework of PPPs and investment opportunities that exist in Greece for public-private partnership projects, mainly infrastructure projects.

 

Energy exchange PPA platform proposal by end of the month

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A Greek energy exchange proposal for the formation of a platform facilitating green-energy power purchase agreements is expected to be delivered to the energy ministry within the next two to three weeks, energypress sources have informed.

The energy exchange’s proposal will be forwarded to the ministry once joint research with professional services firm Grant Thornton is completed and the study’s findings have been considered. The search for a standardized format for PPAs is a key issue of the research.

Banks have also expressed preferences and become involved in the process.

The European Federation of Energy Traders long ago established a template for corporate PPAs, but, according to Greek energy exchange sources, this model contains several issues that need to be addressed.

Once a finalized format has been prepared, it will be rediscussed with banks, to play a crucial role in the success of the PPA platform and PPAs, in general.

DAPEEP collections pivotal in budget revenue returns boost

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A state budget revenue refunds increase for the first half has been largely attributed to amounts collected by DAPEEP, the RES market operator, provisional budget execution data has shown.

State budget revenue refunds in the first half of the year totaled 3. 389 billion euros, 586 million euros over the target, set at 2.802 billion euros, with approximately 220 million of this influx injected into the state budget via DAPEEP collections facilitated by a temporary mechanism for partial returns of day-ahead market revenues, according to the provisional state budget data.

Also, a 367 million-euro sum was secured for the Energy Transition Fund from windfall earnings returns by energy producers between October 1, 2021 and June 30, 2022.

The Greek state budget recorded a primary surplus of 2.166 billion euros in the January-June 2023 period, up from a budget target for a surplus of 415 million euros and a primary deficit of 3.425 billion euros in the same period last year, the data showed.

Electricity suppliers windfall tax back on track after voting

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A joint ministerial decision needed from the energy and finance ministries so that RAAEY, the Regulatory Authority for Waste, Energy and Water, can proceed with a formula taxing any windfall earnings accumulated by electricity suppliers since August, 2022, when emergency measures were introduced in the retail electricity market, is close to being finalized.

The recently re-elected conservative New Democracy party’s government had planned to implement the tax measure prior to the country’s recent two rounds of general elections, in May and June, but election-related interferences delayed the plan.

At this stage, it is not clear if the tax measure’s planned duration, from August to December, 2022, will be maintained or extended to also cover part of 2023. Related legislation for the original five-month period has been ratified. A legislative revision would be required if authorities decide to extend the tax measure’s duration.

A longer windfall taxation period would ensure a fairer balance of amounts electricity suppliers may need to pay.

A 25-euro per MWh upper limit subjecting supplier earnings beyond this level to the windfall tax had been established prior to the elections and seems unlikely to be changed.

Suppliers’ windfall earnings recovery formula before vote

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The energy ministry is striving to soon issue – definitely ahead of the country’s May 21 legislative election – a joint ministerial decision, along with the finance ministry, providing the details of formula for the recovery of windfall profits earned by electricity suppliers over a five-month period from August to December in 2022.

A joint ministerial decision is needed so that the recovery mechanism, legislated by the energy ministry last November, can be implemented.

The energy and finance ministries have finalized their text co-authored for the joint ministerial decision, which includes a supplier earnings cap of 25 euros per MWh, sources informed.

This earnings cap, to subject any excess amounts earned by electricity suppliers to the windfall recovery mechanism, was adopted by the two ministries following a proposal made by RAAEY, the Regulatory Authority for Waste, Energy and Water.

Once the overall procedure leading to the introduction of the recovery mechanism has been completed, no political decisions will be needed for its extension into 2023 as the measure will have been largely standardized. Its implementation ahead of the May 21 legislative election promises to safeguard the measure should the election fail to produce a new government.

RAAEY proposes €25/MWh cap for supplier windfall earnings

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RAAEY, the Regulatory Authority for Waste, Energy and Water, has proposed setting an earnings rate limit of 25 euros per MWh for electricity suppliers, meaning anything above this level would be regarded as windfall earnings and need to be recovered by the state.

This limit is the final pending detail in the energy ministry’s new formula for calculating windfall earnings concerning electricity suppliers.

Once finalized, the formula will be applied to supplier earnings covering a five-month period from August to December in 2022.

It remains unclear when this windfall earnings recovery mechanism will be implemented. The energy and finance ministries still need to issue a related ministerial decision. Also, the current pre-election period ahead of next month’s general elections may delay the plan.

The 25 euros per MWh limit proposed by RAAEY takes into account overall supply sector averages for operating costs, bad debt provisions, and a reasonable profit margin.

Suppliers will be expected to return 60 percent of any windfall earnings resulting from the formula as an initial payment before returning the other 40 percent at a latter date.

 

 

Fund not yet chosen for roof-mounted solar panel subsidies

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Despite a series of government announcements in recent months declaring the imminent arrival of a subsidy support program for roof-mounted solar panel installations, the finance ministry has yet to decide on a fund to provide the required sum, which has been boosted from 200 million euros to 230 million euros.

A month has elapsed since the government delivered a guide offering details of the support program, but its launch is being postponed from week to week, despite obvious political benefits the government stands to gain ahead of the May 21 general elections.

It remains unclear if the finance ministry, currently dealing with other priorities, will opt to fund the support program via the Recovery and Resilience Facility (RRF), the National Strategic Reference Framework (NSRF), some other source, or a combination of sources.

The government increased the value of the support program for roof-mounted solar panel installations to 230 million euros, from an initial amount of 200 million euros, as a result of the strong interested it has generated.

This increased sum promises to increase the number of eligible parties from 30,000 to between 33,000 and 35,000 as well as the resulting total capacity to be installed from 150 MW to 170 MW.

 

Athens continuing with subsidy model despite Eurogroup request for cuts

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The Greek government will continue offering electricity subsidies universally, to all consumers, based on a model it introduced in 2022, despite a Eurogroup proposal earlier this week for more restricted coverage giving priority to low-income households.

Finance minister Hristos Staikouras, commenting from Davos, and energy minister Kostas Skrekas, both ruled out any possibility of electricity subsidy cuts for now.

Greek elections are due within the next few months. Though electricity subsidies are keeping energy costs under control for consumers, they have hampered economic growth, as highlighted by GDP figures for 3Q in 2022.

The country’s subsidy strategy adopted in 2022, one that primarily supports households, as well as businesses, and which covered the majority of the energy crisis’ additional energy costs last year, without significant fiscal cost, will be continued, Staikouras, the finance minister, asserted from Davos.

Meanwhile, Skrekas, the energy minister, ruled out any chance of subsidy cuts until electricity suppliers are able to set retail prices at levels of 15 to 16 cents per KWh. He was fielding questions at a news conference on Greece’s revised National Energy and Climate Plan.

Given the current market conditions, suppliers are not too far off being in a position to set electricity prices at such levels. Their nominal prices for February, to be announced tomorrow – based on recent market rules requiring suppliers to announce their prices for each forthcoming month by the 20th of the previous month – are expected to be slashed by as much as 50 percent compared to January, to levels of around 20 cents per KWh. At such nominal levels, the government will chip in with subsidies not exceeding 6 cents per KWh.

In Greece, energy subsidy support offered in 2022 has been estimated to be worth 2.3 percent of the GDP, above the EU average of 1.3 percent of GDP, seen falling to 0.9 percent this year.

Fuel sales up 2 percent in 2022, higher heating fuel prices in ‘23

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Retail fuel sales rose by a marginal 2 percent in 2022, compared to the previous year, a rise attributed to higher auto and heating fuel demand.

Gasoline sales fell by 2 percent, compared to 2021, the biggest drop occurring in the second half of 2022, which, however, was offset by higher demand for diesel and heating fuel, market officials noted.

Demand for auto diesel increased by an estimated 3.5 to 4 percent, driven higher by the country’s continuing rise in tourism, as well as by the economy’s robust performance in 2022.

Heating fuel demand increased as a result of lower prices compared to other heating sources. Heating fuel sales increased by 6 percent as consumers rushed to make the most of government subsidies, ahead of cuts, and discounts offered by refineries.

The finance ministry cut heating fuel subsidies by 10 cents per liter, reducing state subsidies for this fuel to 15 cents per liter from 25 cents per liter.

Also, according to sources, Helleniq Energy, formerly ELPE, will not continue offering a discount of 0.0375 euros per liter for heating fuel to suppliers in the new year.

The combined effect of these revisions is expected to lead to a gradual rise of 14 cents per liter in heating fuel retail prices.

 

 

 

Extraordinary tax on producer windfall profits to raise €460m

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A new joint ministerial decision by the finance and energy ministers has introduced a formula for a temporary extraordinary tax on windfall earnings accumulated by vertically integrated energy groups during the nine-month period between October, 2021 and June, 2022.

The windfall tax, whose coefficient has been set at 90 percent, is expected to result in a collection of approximately 460 million euros.

The joint ministerial decision, published in the government gazette, overcomes a delay in the delivery of certified data by a certified accountant to RAE, the Regulatory Authority of Energy, as was foreseen in the original joint ministerial decision. It enables preliminary calculation by RAE, based on the uncertified data, so that a provisional extraordinary levy can be paid immediately by all electricity producers.

Specific amounts, and any corrections needed, will be calculated at a latter date, based on data that will have been certified.

Electricity producers windfall tax now imminent

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Joint ministerial decisions needed by the finance and energy ministries for the implementation of a 90 percent windfall tax on recent extraordinary gains achieved by vertically integrated electricity producers are set to be signed by the two ministries, energy minister Kostas Skrekas has told a news conference.

RAE, the Regulatory Authority for Energy, has delivered its report for electricity producer earnings covering a six-month period from October, 2021 to March, 2022, to be subject to the new windfall tax.

As for a second period to be subject to this extraordinary tax, a three-month term covering April to June this year, RAE has requested further details from the energy groups on discounts offered as well as returns linked to bilateral agreements. These details will be delivered to RAE once they have been approved by a certified public accountant.

 

New subsidy sources needed, energy prices seen persisting

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Energy prices are forecast to remain elevated and turbulent for at least another year or so, until early 2023, according to a number of market reports, including one by the European Commission, which means that the government faces the challenge of finding new support fund sources for consumers and businesses, scrambling to meet exorbitant energy prices brought about by the energy crisis.

Until now, the government has relied on Energy Transition Fund money generated by carbon emission right auctions to offer consumers subsidies, but will need to resort to the state budget should this money eventually run out.

Finance minister Christos Staikouras made this need clear in an interview with Greek media outlet Real. “The finance ministry may now possibly need to make available funds from the state budget, not the Energy Transition Fund, for adverse scenarios in the second half of 2022, in order to subsidize households and businesses,” the minister noted.

IPTO grid projects set to receive €195m in recovery fund support

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Two major grid projects planned for development by power grid operator IPTO in order to boost the country’s grid capacity and energy security are set to receive a total of 195 million euros in funding through the recovery and resilience fund, following a joint ministerial decision by the energy and finance ministries.

The joint ministerial decision secures financial support, through the recovery and resilience fund, for the fourth and final phase of the Cyclades interconnection and reconstruction of the Koumoundourou high-voltage center along with a 400kV line linking the facility with the Corinth high-voltage center, west of Athens.

The two projects are budgeted at a combined total of 482 million euros. The fourth phase of the Cyclades interconnection, budgeted at 393 million euros, is expected to receive 165 million euros through the recovery and resilience fund.

The Koumoundourou high-voltage center, whose budget is estimated at 89 million euros, is expected to receive 30 million euros in financing through the recovery and resilience fund.

Electricity cost support in 2022 to be limited by fiscal deficit

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Electricity bill subsidies are expected to be extended into 2022 but will not be offered universally for all household income categories, as has been the case this year, as a result of the fiscal deficit, seen closing 2021 at approximately 7 percent of GDP, despite GDP growth that is projected to exceed 8 percent.

The resulting lack of leeway has been pointed out by officials at Greece’s finance ministry as well as the European Commission, which has called for targeted energy-crisis support for lower-income households.

The government is preparing for a new round of negotiations with Brussels for household energy support measures in 2022.

In recent months, Athens has offered electricity-bill subsidies to all household consumer categories, regardless of income level, worth 39 euros per month for the first 300 KWh of consumption.

Given the projected fiscal deficit, the government has little financial leeway to keep offering a universal energy support package in 2022.

The administration needs to find new ways of supporting households unable to cope with exorbitant energy costs if price levels remain high next month.

Brussels hesitant on hedging mechanism for energy prices

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A Greek proposal for the EU’s adoption of a temporary hedging mechanism as a means of easing the burden of sharply risen energy costs on consumers, to be tabled at a Eurogroup meeting of EU finance ministers today, will be met with hesitancy as the European Commission would not want to bring to the negotiating table issues linked to the Emissions Trading System, fearing any potential need of a compromise with member states opposed to the ETS, such as Poland, well-informed sources anticipate.

The European Commission has fought hard to establish the ETS as a means of combating climate change.

The temporary hedging mechanism would draw funds from the Emissions Trading System’s auctions of CO2 emission rights.

The hedging mechanism was proposed several weeks ago by Greek energy minister Konstantinos Skrekas and will be officially presented by Greek finance minister Hristos Staikouras to his European counterparts at today’s Eurogroup meeting.

The EU finance ministers will be focusing on the alarming increase in energy prices, prompted by a combination of international factors, though finalized decisions at this session are considered unlikely.

Prinos field rescue effort now at the finance ministry

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A government effort to rescue offshore Prinos, Greece’s only producing field, in the north, is now in the hands of the finance ministry following preceding work at the energy ministry, sources have informed.

The field, like the wider upstream industry, has been impacted by the pandemic and plunge in oil prices.

Deputy finance minister Theodoros Skylakakis is now handling the Prinos rescue case following the transfer of a related file from the energy ministry.

According to the sources, three scenarios are being considered. A financing plan through a loan with Greek State guarantees appears to be the top priority. A second option entails the utilization of an alternate form of state aid. The other consideration involves the Greek State’s equity participation in the Prinos field’s license holder, Energean Oil & Gas.

The European Commission will need to offer its approval to any of these options as they all represent forms of state aid.

Energy ministry sources have avoided offering details but are confident a solution is in the making.

Crisis’ impact on Prinos looked at, Energean up against time

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The energy ministry has turned to specialized consulting firm assistance for a detailed analysis on the pandemic’s financial impact on the Prinos offshore oil field in northern Greece, the country’s only producing field at present.

The energy ministry’s secretary-general Alexandra Sdoukou, handling the matter on behalf of the ministry, is currently holding talks on a daily basis with officials at Energean Oil & Gas, the field’s license holder.

The company wants emergency government support amid the extraordinary market conditions, energypress sources have informed.

The two sides are believed to be closely examining related data to determine the extent of the financial damage, for this project, due to the plunge in international oil prices, prompted by lower demand amid the widespread lockdown.

Energean Oil & Gas has invested 50 million euros between September, 2019 and May to keep production flowing at Prinos, an aging field, sources noted.

Sustainability is becoming a growing challenge at this venture, employing a workforce of approximately 270 employees, market authorities have noted. A cutdown in operating costs is seen as essential.

A cash injection for “Epsilon”, a fresher field in the area also licensed to Energean, could be made as a support for the company. Another option may entail financial support by the Greek State in exchange for a stake in Energean. Alternatively, state guarantees could be offered for a bank loan.

The finance ministry is also expected to become involved in the Prinos rescue effort. Much work lies ahead before any decisions can be reached. These will require European Commission approval.

PPC public service return for 2011 from 2020 national budget

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The government has decided to cover a power utility PPC a public service compensation (YKO) payment of 195 million euros, endorsed by RAE, the Regulatory Authority for Energy, through the 2020 national budget, energypress sources have informed.

Though this solution, agreed to by energy minister Costis Hatzidakis and the finance ministry, does not promise instant relief for state-controlled PPC, burdened by poor finances, it does secure a prospective cash influx that will be taken into account by Ernst & Young, the utility’s certified auditor, scheduled to deliver a report on the Greek power utility on September 24.

This amount is expected to contribute to a sum of over 800 million euros needed by PPC over the next 12 months, according to new chief executive Giorgos Stassis.

RAE’s initial calculations for PPC’s 2011 public service compensation resulted in a sum of 160 million euros before this amount was revised to 195 million euros. PPC originally sought a sum of between 650 and 700 million euros before settling for RAE’s far lower figure.

Ministries in rush for €195m PPC public service payment

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Energy and finance ministry officials, working against the clock, are scrambling to ensure a payment to power utility PPC for an outstanding public service compensation (YKO) concerning 2011 ahead of the next report on the utility’s results by certified auditor Ernst & Young, scheduled for September 24.

Meetings involving energy ministry, RAE (Regulatory Authority for Energy) and finance ministry officials have increased in frequency over the past few days as a solution is sought.

The officials are seeking to determine if the amount, calculated at 195 million euros by RAE, can be covered via the national budget without the need to impose YKO hikes on electricity consumers.

The amount is needed by PPC, struggling with poor finances, if further bad news from Ernst & Young is to be avoided in the next report.

The officials are also looking at whether PPC could receive this amount as one lump sum or through installments, until 2021, to avoid impacting the budget and consumers.

Initial calculations by RAE, the Regulatory Authority for Energy, had estimated a sum of between 160 and 200 million euros before the authority finalized the figure at 195 million euros.

A legislative revision giving RAE full authority over the matter is needed before PPC can receive the amount.

 

TAIPED awaiting ND position on ELPE, DEPA privatizations

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The privatization fund TAIPED is awaiting the newly elected conservative New Democracy government’s strategy on energy sector privatizations so that it can reshape, from scratch, as it appears, the sale procedures for Hellenic Petroleum ELPE and gas utility DEPA.

The newly appointed energy minister Costis Hatzidakis may have highlighted the importance of these two privatizations during proceedings at the ministry’s recent handover ceremony, describing both sales as agenda priorities. However, everything concerning both will need to be placed on hold as emphasis must currently be placed on the troubled power utility PPC and the effort to find a successor for chief executive Manolis Panagiotakis, who resigned from his post at the state-controlled company shortly after the ND’s victory in the July 7 election.

TAIPED officials also need to stage a first meeting with finance minister Hristos Staikouras, during which talks on the shape of the new ND government’s privatization strategy preferences can be discussed.

ELPE’s future administrative shape, following the recent failure of an initial privatization effort, remains in the dark. Pundits have already ruled out the possibility of a repeat of this sale effort – that is, a concurrent sale of stakes by the petroleum group’s two main shareholders, the Greek State, holding 35.5 percent of ELPE, and the Latsis Group’s Paneuropean, holding 45.5 percent. It is also unknown, if not doubtful, if Paneuropean will be willing to participate in any new ELPE sale procedure.

For the time being, ELPE’s administration is focused on the preparation of the group’s first-half results, expected to be officially reported in late August, as well as an imminent approval in Greek Parliament of hydrocarbon exploration and production licenses secured – as part of a consortium also involving ExxonMobil and Total – for two offshore blocks west and southwest of Crete.

All is currently quiet along the DEPA front. The ND party, according to party sources during the lead-up to the elections, believes the gas utility must be privatized as one entity, not two, through a split of its commercial and infrastructure divisions, as was envisioned by the previous leftist Syriza government.

The DEPA-related intentions of ELPE, holding a 35 percent share of the gas utility, will be pivotal.

 

 

 

 

 

NOME starting price rise to at least €56 per MWh expected

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A study prepared by RAE, the Regulatory Authority for Energy, proposes a NOME auction starting price increase to just over 56 euros per MWh, a significant rise from the current level of 36.34 euros per MWh, primarily as a result of a sharp rise in CO2 emission right costs.

The new NOME starting price could even reach as much as 58 euros per MWh if a two-euro lignite surcharge ends up being added. This will be decided by finance minister Euclid Tsakalotos and energy minister Giorgos Stathakis.

RAE has forwarded its NOME study to the two ministers.

CO2 emission right costs have risen from five euros per ton approximately a year-and-a-half ago to 25 euros per ton.

If a ministerial decision is delivered swiftly then a new NOME starting price will apply for the next auction on July 17, to offer participants 500 MWh/h as well as at the ensuing October 16 session offering 767 MWH/h.

NOME auctions were introduced about three years ago as a means of offering independent players access to the main power utility PPC’s lower-cost lignite and hydropower sources.

PPC, ND opposition party dread utility’s first-half results

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Power utility PPC’s trajectory towards a poor first-half performance, expected as a result of disappointing first-quarter figures and looming very bad results for the second quarter, are a concern for both the company itself and the main opposition New Democracy party, if it is voted into power at the July 7 elections, as the recent European election results have indicated.

There are no signs of a late second-quarter rebound for PPC within the next fortnight or so, when the first-half period is completed.

Not surprisingly, the ND party has remained quiet on PPC, marginalizing the power utility on its pre-election agenda.

Cash flow problems are dreaded at PPC, a corporation with 16,747 staff members on the payroll, a senior company official recently acknowledged in comments to reporters.

PPC’s first-half results, to be published in autumn, as is customary, will provide a clear picture on the course of the company, which has relied heavily on cash injections from the State for support but has not received any new amount of late.

Most recently, PPC was expecting a cash injection of 250 million euros for public service compensation (YKO) concerning 2011. The prospect, which would have offered PPC some relief, was blocked by finance minister Euclid Tsakalotos.

 

 

PPC to miss €250m public service return, a new setback

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The energy ministry, working overtime to prepare a series of legislative revisions it will seek to have ratified in parliament tomorrow, ahead of the July 7 snap elections, does not, at this stage, intend to include in its package an amendment that would enable the main power utility PPC to claim an older public service compensation (YKO) amount concerning 2011, sources have informed.

This development comes as a major concern for PPC both in terms of its cash flow and financial results.

The power utility had initially sought an amount of between 650 and 700 million euros but authorities have planned to return a sum of about 200 to 250 million euros, which would offer a major financial boost to PPC, facing various challenges.

Over the past few days, the state-controlled power utility’s administration has urged finance ministry and other government officials for a solution ahead of tomorrow’s parliamentary discussion of the energy ministry’s amendments.

As its next step, PPC will seek to convince RAE, the Regulatory Authority for Energy, the matter can skip parliament. PPC officials believe the authority is legally entitled to reach a decision on the matter without legislative backing.

RAE has already recognized PPC’s right to an amount stemming from YKO returns between 2008 and 2011, as the power utility was deprived of a year’s worth of money.

Further delays in full implementation of fuel smuggling measures

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Measures designed to clamp down on illicit fuel trade will require an additional three-year period to be fully implemented, the heads of a fuel traders association were told at a meeting yesterday with Giorgos Pitsilis, the head official at AADE, the Independent Authority for Public Revenue, a finance ministry division.

The measures, intended to prevent fuel smuggling activity said to be worth as much as 250 million euros annually, were originally presented in 2009, meaning their full implementation by December 31, 2021, as traders were told, will have required 12 years to achieve, if achieved.

The plan includes a cash inflow-outflow tracking system for petrol stations and the installation of GPS systems on fuel trucks to monitor their movements.

Petrol stations installed the required technology for cash inflow-outflow monitoring between 2014 and 2016 but AADE has not fully utilized incoming data. The authority has limited its activity to random checks.

Complicating matters even more, AADE intends to commission a firm for inflow-outflow tracking system inspections in autumn, as part of a re-certification process. Any systems found to not meet required standards will need to be reinstalled, according to this plan.

This could cause additional confusion and unrest as petrol station owners and fuel companies spent over 100 million euros between 2014 and 2016 to have cash inflow-outflow monitoring systems installed.

NOME starting price set for big hike, new setback for suppliers

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The NOME auction starting price, revised every June by RAE, the Regulatory Authority for Energy, and shaped by a number of key factors, appears set to rise sharply to a level of at least 55 euros per MWh//h from the 36.34 euro per MWh/h set last June, according to pundit calculations.

The revised NOME starting price is expected to apply for the year’s third and fourth sessions scheduled for July 17 (500 MWh/h) and October 16 (767 MWh/h).

This would come as a major setback for the country’s independent electricity  suppliers, already facing uncompetitive electricity market conditions in their effort to gain market shares at the cost of the main power utility PPC, still dominating.

Higher NOME auction prices reached at the previous two NOME auctions have severely restricted the ability of independent power suppliers to compete seriously against PPC.

PPC’s tariffs have remained unchanged despite a rise in wholesale prices. The power utility wants to increase its tariffs by introducing a clause enabling hikes if certain CO2 cost upper limits are exceeded and reducing a 15 percent punctuality discount. It remains unknown if and when the government will permit these moves.

The NOME starting price is reset every June following a joint ministerial decision by the energy and finance ministries, based on the results of a RAE study on the matter.

The forward price for CO2 emission rights at the European Energy Exchange and PPC’s cost-related data concerning variable costs are the two main factors taken into account by the energy authority when reviewing the NOME starting price.

 

Ministry proposes law revision for ELPE sale’s public offering dispute

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Greece’s finance ministry has proposed a legislative revision as a solution exempting the ELPE (Hellenic Petroleum) privatization from law concerning public offering procedures.

The Capital Market Commission, locked in a dispute with the ministry and TAIPED, the state privatization fund, has insisted that the ELPE privatization cannot be exempted from public offering procedures as, besides the Greek State, selling 20.5 of its 35.5 percent stake, the sale also involves a private-sector company, Paneuropean, ELPE’s main shareholder, which owns 45.47 percent and is selling a 30.47 percent stake. Subsequently, the sale cannot be regarded as one of exclusive interest to the public sector, the Capital Market Commission has contended.

Insiders believe the finance ministry’s revision proposal will not be easy to achieve as the law concerning public offers is clear.

The dispute has prompted a deadline delay for binding bids, now expected to be extended until no sooner than December.

Dutch enterprise Vitol and Switzerland’s Glencore are the two contenders in an international tender offering 51 percent of ELPE.