DEPA Commerce 5-year business plan includes turn to RES sector

Gas company DEPA Commerce’s five-year business plan for 2020-2024, containing investments estimated at 200 million euros, aspires to broaden the company’s interests by also incorporating renewable energy projects totaling 200 MW, either through independent development or acquisitions of mature plans.

Privatization fund TAIPED and the energy ministry are expected to approve the DEPA Commerce business plan within July.

DEPA Commerce was formed by gas utility DEPA as a new entity for its privatization procedure.

Besides RES projects, the DEPA Commerce business plan also includes hydrogen and biomethane projects, as well as electromobility initiatives.

The company’s expansion of business activities is expected to lead to greatly increased EBITDA and profit figures.

Once finalized and approved, the DEPA Commerce five-year business plan will be included in the due diligence package for prospective bidders.

Just Transition Fund excludes support for all gas projects

The EU’s Just Transition Fund, takings its cue from the European Investment Bank, has left natural gas projects of its funding list, noting it will not provide financial support for any investments concerning production, processing, distribution, storage or consumption of fossil fuels.

This exclusion creates issues for all the country’s natural gas projects, big or small, which authorities would have wanted to be supported by the Just Transition Fund.

They include a power utility PPC plan for a combined gas-fueled cooling, heat and power plant in Kardia, northern Greece, for coverage of the west Macedonia region’s telethermal needs, announced by the energy minister Costis Hatzidakis just days ago.

Other Greek project plans such as the Alexandroupoli FSRU and the development of an underground natural gas storage (UGS) facility at a virtually depleted offshore gas field south of Kavala have already been rejected by the EIB, unless hydrogen is incorporated into their plans to convert them into eco-friendly projects.

Natural gas, emitting approximately half the amount of CO2 produced by coal, also spills out methane, an undesired greenhouse gas.

Climate protection advocates insist new natural gas units could end up operating for decades, which would threaten the EU objective for zero emissions by 2050.

Hydrogen factor needed for financing of South Kavala UGS

Development of an underground natural gas storage facility (UGS) in the almost depleted South Kavala offshore natural gas field will require a solution incorporating hydrogen into the investment, estimated between 300 and 400 million euros, which would categorize the project as eco-friendly and facilitate European Investment Bank financing.

As has been made clear by the energy ministry, Greek privatization fund TAIPED, currently conducting a cost-benefit analysis, will need to consider this prospect and plan for a storage facility holding hydrogen or a mix of this fuel with natural gas. Installation of carbon-capture and storage technology may also be helpful.

The EIB will stop financing conventional natural gas projects as of 2022. The bank may exempt from this rule projects limiting their emissions to 250 grams per KWh of energy produced.

This emission limit can only be achieved if natural gas is mixed with hydrogen, a prospect requiring higher-cost technologies but aligning the UGS with EU policies for full decarbonization in Europe by 2050.

The privatization fund has just launched an international tender for the South Kavala UGS in an effort to achieve EU funding for the project before a crucial EU funding deadline expires.

As a Project of Common Interest, this UGS is eligible for funding through the EU’s Connecting Europe Facility, vital for the investment’s sustainability. However, investors behind the project will need to submit their CEF application by the end of 2020.

The UGS South Kavala is intended to serve as energy infrastructure that will enhance supply security in the Greek market as well as  southeastern Europe.

 

Gas firms look to hydrogen for maintenance of EU funding

Natural gas distribution and trading companies around Europe, including Greece, are turning to eco-friendly hydrogen in an effort to overcome European Commission financing prohibitions, following 2021, for fossil fuel-linked pipelines and other infrastructure.

Greece’s gas grid operator DESFA and gas utility DEPA are currently seeking ways to secure financial support for projects through EU funding and the European Investment Bank.

Converting these investment plans into eco-friendly projects by turning to hydrogen, a RES-generated fuel, is one alternative.

DESFA, counting on the experience of its main shareholders, Snam, Fluxys and Enagas – the trio’s Senfluga consortium controls the operator with a 66 percent stake – is examining the prospect of transmitting hydrogen through the national gas grid, the Greek gas grid operator’s chief executive Nicola Battilana told the four-day Delphi Economic Forum, ending tomorrow.

This DESFA investment plan could be revealed as part of the operator’s next ten-year business plan, now being put together.

DEPA chief executive Kostas Xifaras also spoke of the opportunities offered by hydrogen. The Greek gas utility and its Italian partner Edison are believed to be open to the prospect of establishing partnerships with third parties for hydrogen transmission through the prospective East Med pipeline.

Hydrogen has the potential to play a key role in energy transition and climate-change objectives, noted Aristotelis Chantavas, head of Enel Green Power Hellas.

Representatives of eight EU member states, Greece, Bulgaria, the Czech Republic, Hungary, Lithuania, Poland, Romania and Slovakia, among them Greek deputy energy minister Gerassimos Thomas, recently stressed the significance of maintaining EU funding support for natural gas projects.

 

Solar-based hydrogen output considered for Ptolemaida PVs

The government and its energy ministry are considering a solar-based hydrogen production initiative through major-scale photovoltaic facilities planned at state-controlled power utility PPC’s lignite fields in northern Greece’s Ptolemaida area, on the way out as a result of Greece’s decarbonization plan.

Discussions for solar-based hydrogen production are still at an early stage. However, if pursued, the initiative would be launched in the Ptolemaida area, until now a lignite-dependent local economy.

Major-scale photovoltaic facilities such as a 230-MW project being planned by PPC in Ptolemaida, as part of a wider 2-GW initiative for the region, are considered ideal for solar-based hydrogen production, requiring considerable amounts of energy.

Solar-based hydrogen production utilizes photovoltaic (PV) cells in combination with water electrolysis. The resulting hydrogen can be stored and used to reproduce electricity whenever needed by the grid.

Current electricity production costs linked to this technology are high. However, technological developments such as the mass production of electrolytes could lower power production costs and lead to economies of scale, making such an investment feasible.

Greece is already taking part in a European initiative looking to promote hydrogen production. Germany, preparing to take over the EU’s rotating presidency from Croatia in July, appears determined to push ahead with hydrogen production initiatives.

Operators must plan hydrogen projects to seek PCI funds

Greece’s network operators need to pursue projects concerning the development of networks designed to carry and distribute hydrogen, the new clean fuel whose rise is leading to major changes.

Companies such as Greek gas grid operator DESFA, gas utility DEPA and distributors will need to include hydrogen-related projects in their next network development programs. Hydrogen projects are expected to be eligible for favorable EU funding.

A fortnight ago, EU energy commissioner Kadri Simon informed European Parliament’s Committee on Industry, Research and Energy that a new regulation for projects of common interest (PCI) will place emphasis on hydrogen networks, carbon capture, domain bridging, storage batteries and smart networks.

In addition, a German government official recently declared that hydrogen will become the new gasoline, noting Germany will play a leading role in its overall development.

Quite clearly, national governments and major energy companies around Europe are working to establish hydrogen as a key fuel in the adjustment needed to achieve decarbonization goals.

In Greece, network operators will need to seize the opportunity and plan hydrogen projects eligible for a share of the EU’s PCI funds.

 

 

Gov’t to hasten hydrogen market development amid investment interest

Procedures leading to the establishment of Greek hydrogen market appear set to progress faster than expected, the government’s strategic decision for greater renewable energy penetration of the energy market, investment interest and Germany’s upcoming EU presidency being catalysts. The government will aim to implement related regulatory framework by July.

Hydrogen tariffs, sector support, technical prerequisites for the infusion of hydrogen into the natural gas network, as well as the determination of maximum mix levels for the two fuels are among the issues included in the new framework, to be accompanied by a sustainability study on related facilities.

Feasibility studies examining the level of competitiveness of such infrastructure as well as costs do not exist at present. They need to be conducted so as to enable authorities to determine the number of units that can enter the Greek market.

Hellenic Petroleum (ELPE) has publically expressed interest to develop the country’s first hydrogen refueling station for vehicles. Greek utility DEPA and Italy’s Snam have also expressed interest. Snam reiterated its interest at a New Year company event staged yesterday by Greek gas grid operator DESFA. Snam is a main shareholder, along with Enagas and Fluxys.

A recent McKinsey study commissioned by Snam for the Italian market showed that hydrogen can cover 23 percent of domestic energy demand in 2050 amid a 95 percent decarbonized market.