Suppliers face tougher times, NOME benefits ending

The termination of NOME auctions in Greece leaves independent suppliers with enough lower-cost wholesale electricity to fully cover their needs until the end of the year but the subsequent gradual change of market conditions can be expected to begin taking effect as of January when the suppliers start being exposed to the wholesale market.

By March, 2020, suppliers will be fully exposed to the System Marginal Price (SMP), practically meaning the sector’s course will depend on the course of the wholesale market.

If LNG prices remain low to contain the SMP level, then independent retail electricity suppliers should avoid losses despite their wholesale market exposure and, as a result, will be able to compete against the power utility PPC for market share gains.

For many companies, as much as 50 percent of their profitability has been derived from trading lower-cost NOME electricity, primarily as an export product to neighboring markets. In certain cases, significant profits earned through this trading activity enabled aggressive pricing policies in the domestic market, especially the mid-voltage category.

The new market conditions will make electricity export activity more challenging as earnings will be lower. Greater exposure to SMP risk will create problems. The triggering of SMP clauses will require consumers to pay greater amounts and independent suppliers will be less competitive against PPC.

An increase of the SMP level would put some suppliers who have offered relatively low-cost mid-voltage supply contracts in the unpleasant position of needing to maintain supply to customers at below-cost levels. Mid-voltage prices offered by independent suppliers have risen in recent times but are still below those of PPC.

The tougher conditions amid a fluid market of more than 20 retail suppliers in electricity and gas – of which no more than 12 hold market shares of consideration – promise to narrow down the field.

Three takeover and merger agreements have already been reached over the past year or so, beginning with Motor Oil’s acquisition of NRG, followed by a transfer of Green’s client list to Heron, and, just days ago, Volton’s acquisition of KEN.




Green ups effort to boost market share with new campaign and call center

Green, one of a number of electricity suppliers seeking to capture an increased share of Greece’s changing electricity market, is planning to intensify its overall effort through the establishment of a new dynamic call center, launch of its first promotional campaign, and reinforcement of the company sales department.

The company is mainly focusing its campaign on businesses and professionals, as it believes it holds a comparative advantage over rivals in these sectors.

Green plans to launch a new subsidiary firm to operate its new call center.

Green’s two top officials, Hristos Vasiliou and Dimitris Bakoulis, told energypress that, based on the latest annual price levels for the local market, published just days ago by RAE, the Regulatory Authority for Energy, their enterprise is offering the most favorable deals for yet another year.

Green currently holds a 0.3 percent share of the Greek retail electricity market and has experienced a rising growth rate over the past few months.

According to sources, Green plans to soon complete acquisitions of exisiting renewable energy source facilities in the wind-energy and photovoltaic sectors.