Power utility PPC is paying the price for a paradoxical and distorted business model combining retail electricity market dominance with a low share of electricity generation – a structure created by the state-controlled corporation and supported by a succession of governments over the years – latest financial results have indicated.
The power utility’s retail electricity market share remains dominant, at 73.9 percent, but its share of electricity production is far lower, at 43.4 percent.
The inability of the power utility’s power stations to generate sufficient electricity needed to cover its retail needs has forced the corporation to make high-cost wholesale energy purchases.
This, combined with NOME auctions, obligating PPC to offer lower-cost electricity to rival suppliers over the past three years; high-priced CO2 emission rights, needed as a result of the utility’s considerable lignite-based production; a sharp drop in hydropower output; as well as a sharp price increase of fuel and gas, all contributed to the disappointing first-half results.
PPC’s overall cost for fuel, gas, CO2 emission rights and lignite surcharges increased by a total amount of 494.1 million euros, or 42.3 percent, in the first half compared to the equivalent period a year earlier, the first-half results showed.