Security fund initially limited to operators, suppliers must wait

A security fund being established by the energy ministry as financial protection for electricity market players from the pandemic’s repercussions will, for the time being, be limited to covering the needs of market operators.

A wider package also including protection for suppliers, as was initially intended, will need to be examined later on as its cost, estimated anywhere between 600 million and one billion euros, is considered too substantial by authorities.

Limiting the security fund’s coverage for market operators will require an amount of between 100 and 200 million euros, it has been estimated.

The security fund’s sum promises to compensate power grid operator IPTO, distribution network operator DEDDIE/HEDNO and RES market operator DAPEEP for regulatory surcharges not expected to be received under the current conditions.

Consumer electricity bill payments, which include regulatory surcharges, are projected to fall by approximately 30 percent over the next two to three months.



PPC eagerly awaiting right time to launch securitization plan

Power utility PPC is ready to pounce on the first opportunity it will get to launch its securitization plan for unpaid receivables owed by customers.

Extraordinary market conditions resulting from the coronavirus pandemic’s wider impact have delayed the plan, whose various technical details and negotiations with investors have been completed.

The terms of the securitization effort would be too costly for PPC if the utility were to launch the plan under the present conditions.

PPC’s electricity bill collections have dropped by a level estimated between 25 and 30 percent over the past 20 days, latest company data has indicated.

However, the extent of the coronavirus-related impact on this reduction in electricity bill payments is unclear as Hellenic Post (ELTA) has experienced delays in posting hundreds of thousands of bills to customers during this same period.

A clearer picture on the pandemic’s impact on PPC’s unpaid receivables is expected towards the end of this month.

RAE, the Regulatory Authority for Energy, and the energy ministry have both requested updated collection figures from all the country’s power supply companies.

Electricity market security fund gradually being pieced together

A security fund intended to offer protection to the electricity market against an extended period of tightened liquidity is gradually being pieced together amid great difficulties and continual consultation with European Commission authorities.

An amount totaling between 500 and 600 million euros has been secured for the market’s security fund so far, according to sources.

This figure will not be enough to get the electricity market’s players through the coronavirus pandemic’s devastating financial impact, seen continuing until autumn or even the end of this year. If so, an amount of over one billion could be needed to cover electricity supplier deficit figures.

It is too big an amount to be lifted from the national budget, limited and vulnerable following a decade of recession in Greece. As a result, government officials are looking for complementary support from EU funds to establish a security fund worth a total of about one billion euros.

Deputy energy minister Gerassimos Thomas and deputy finance minister Theodoros Skylakakis are heading this task.

Electricity bill collections have fallen by 30 percent, a trajectory seen costing suppliers an overall sum of 650 million euros if the trend continues for a further three months, electricity suppliers pointed out a fortnight ago.


PPC’s deficit haunts of last July may return, support needed

Power utility PPC is in danger of falling back into a potentially devastating financial hole the company was in just over a year ago, in July, 2019, when a financial gap of approximately one billion euros needed to be covered.

Until just weeks ago, the company was moving on with an effort to wipe out this deficit figure, which had reached 957 million euros to be exact, by the end of this year. But it could now worsen as a result of the coronavirus pandemic’s impact.

Access to state guarantees worth hundreds of millions of euros will be needed if such a scenario is to be avoided.

The government has already announced a one billion-euro support package for the sector as a whole, but details remain pending. This delay is intensifying the concerns at PPC.

Electricity bill collections are expected to fall by levels of between 25 and 30 percent as a result of the coronavirus lockdown, PPC and market officials have projected.

Such a reduction over a three-month period – assuming the lockdown lasts this long – would collectively deprive Greece’s electricity suppliers of revenue worth approximately 650 million euros.

As the market leader with a retail electricity market share of 70 percent, the cost for PPC would be between 350 and 400 million euros.

Last July, PPC took a number of measures worth a total of 490 million euros for some cash flow relief, including increased tariffs.


Operator set to execute electricity supply cut orders

Distribution network operator DEDDIE/HEDNO has avoided executing electricity cut orders issued by suppliers since early March, when the coronavirus pandemic’s restrictive measures truly began stifling economic activity in Greece, but this tolerant stance is about to change, beginning this week, energypress sources have informed.

Late last week, DEDDIE officials contacted electricity supply companies to ask if previous power cut orders targeting consumers behind on electricity bill payments remain valid and, if so, whether suppliers still want the operator to pull the plug on them.

In general, suppliers seem to want action but will remain lenient with customers whose bad payment records are strictly linked to the coronavirus-related lockdown. No tolerance is expected to be offered to customers who have been unreliable for extended periods.

Electricity suppliers have accumulated enough data to be able to distinguish between customers directly impacted by the current lockdown and those exploiting the situation to avoid payments, even if financially capable, and, in a number of cases, affluent.

This targeted strategy is expected to be pursued by the independent electricity suppliers as well as power utility PPC, the market’s main player.

DEDDIE has made clear to suppliers that it will bear no responsibility for executions of electricity cut orders.

Ministry seeking to meet relief requests made by suppliers

The energy ministry is looking to satisfy, wherever possible, electricity supplier demands facilitating operations and will seek to establish the biggest possible liquidity protection mechanism, given the market’s extraordinary conditions, deputy energy minister Gerassimos Thomas has made clear during a virtual conference with sector officials.

Measures set for implementation include making electricity supplier employees eligible for an 800-euro allowance, for 45 days, offered to workers whose work contracts have been temporarily suspended.

Also, electricity supplier outlets will receive financial support through a wider support package.

In addition, the ministry is preparing to reduce the level of guarantees suppliers must provide to distribution network operator DEDDIE/HEDNO in order to access the non-interconnected islands. This cost will be reduced by 30 percent for the six-month period running from April to September.

The ministry is also pushing for the swifter delivery of a ministerial decision enabling electricity suppliers and operators to offset amounts owed to each other.

RAE, monitoring market, wants weekly updates from suppliers

RAE, the Regulatory Authority for Energy, carefully monitoring the energy market in an effort to offer protection against wider repercussions amid the extraordinary conditions, has requested weekly updates from all the country’s electricity suppliers on their unpaid receivables figures and relay of surcharge collections to distribution network operator DEDDIE/HEDNO and power grid operator IPTO, sources have informed.

Suppliers are now receiving letters carrying related instructions. RAE, in an unprecedented move, is requesting details on a variety of matters, which, besides unpaid receivables figures and payment delay periods, include requests for number of customers and energy amounts consumed as well as amounts received for electricity consumption and surcharges.

RAE will use the data collected to offer suppliers greater flexibility for payment of regulated charges. This is expected to include an extension of the current 30-day period to 60 days.

“Any such decision in the electricity market is difficult as it involves tens of millions of euros and has consequences. Therefore, decisions cannot be made without documentation and putting figures into context with actual market data,” a highly ranked RAE official told energypress. “From the data we collect from suppliers, we will see what the urgent needs are and then determine if further improvements are needed,” the official added.

The energy ministry, also considering the collection of data a necessary move, is coordinating its efforts with RAE.


Electricity market may need €1bn in working capital support

The country’s electricity market estimates it will need working capital totaling one billion euros to financially survive a worst-case coronavirus scenario requiring a lockdown beyond June.

A projection made just weeks ago estimating that the sector’s collective revenues would fall by 650 million euros over a three-month period could be outdated within the next few weeks, meaning  even greater support measures may be necessary.

A one billion-euro support amount will most likely be needed to compensate for cash-flow shortages whose ramifications could overwhelm the entire electricity market, pundits told energypress.

State guarantees are a solution. They would enable enterprises to secure loans with favorable terms for periods of three to four years or issue bonds with an interest rate of between 1 and 2 percent.

This support amount would offer protection to players of all sizes, especially smaller firms more vulnerable to the adverse conditions.

E-billing registration, offering discount, on the rise at PPC

Power utility PPC’s revised discount policy, which includes a five-euro cut on e-bills, is proving popular among customers, registering for online billing at an average of 4,000 per day.

The discount offer, which also features lower tariffs and free fixed costs, applies for both new and existing customers.

Customer online payments have increased by 30 percent since the offer was introduced.

The changing mindset of many PPC customers – households and businesses – is establishing a modernized, online customer base for the utility’s future operations once the coronavirus crisis has been resolved.

PPC stands to benefit from considerable postage and printing cost savings as a result of the growing willingness of customers to conduct their electricity billing transactions online.

However, the diminishing ability of customers to pay their electricity bills amid the coronavirus lockdown, financially impacting the masses, remains a concern for PPC as well as the country’s independent electricity suppliers.

Energy minister Costis Hatzidakis made note of this troubling trend last week.

Electricity bill payment collections at most suppliers fell by levels of between 25 and 30 percent over the past ten days, market sources have informed. This trend is expected to last about three months, the projected duration of the coronavirus adversity.

Electricity, gas supply company employees valid for allowance

Electricity and gas supply company employees are being added the government’s long list of enterprises whose staff members are each entitled to state allowances of 800 euros as a result of the coronavirus pandemic’s ramifications.

Furthermore, a government decision also making electricity supply companies eligible for a guarantees mechanism, established as a protective umbrella by the development ministry, is also expected. This measure could be announced today.

Through this double move, the government intends to protect both energy supply companies and their employees from a liquidity crisis now threatening the sector. Its tightening liquidity is expected to worsen as a result of an imminent loss of tourism-related earnings.

April will be crucial month as it will reveal the size of a new wave of electricity bill debtors, a government official told energypress.

The government’s allowance program now also being made available to the energy sector will offer working capital worth up to 3 billion euros. The Greek State will cover 80 percent of this funding program while the other 20 percent will be provided by banks.

Energy bill payments may fall by up to 50%, suppliers warn

Energy bill payments could plunge by as much as 50 percent, supply firm representatives have told highly-ranked energy ministry officials during a teleconference yesterday, the second in a few days.

The session, headed by the energy ministry’s deputy Gerassimos Thomas and secretary-general Alexandra Sdoukou, was staged to address details of a new mechanism plan promising State guarantees to banks so that they, in turn, can offer loans with favorable terms to energy supply firms.

Energy suppliers, heavily impacted by the repercussions of the coronavirus pandemic, expressed concerns about the currently adverse market conditions and ongoing deterioration.

The government’s intervention will aim to prevent a knock-on effect in the market and ensure shareholders of listed firms that a safety net does exist.

The administration plans to legislate its plan for a support mechanism once it has been approved by the European Commission, the two ministry officials told the teleconference participants.

Futures market launched in adverse conditions, PPC the market maker

The energy exchange’s futures market begins operating today, far sooner than planned following considerable efforts from all agencies and authorities involved, but the launch comes at a time of adverse conditions.

Authorities, given the currently unfavorable abnormal market conditions, will be content to see this new platform operate without technical glitches. Trial runs ahead of today’s launch did not produce problems.

The current pressure felt by financial markets and electricity suppliers has reined in early expectations.

Power utility PPC will assume the crucial role of market maker, bringing in the embryonic market’s first futures products.

The early launch of the futures market was promoted by the energy ministry to help cover electricity supplier needs following the premature termination of NOME auctions.

Electricity suppliers financially pressured by coronavirus crisis

Electricity suppliers are feeling the financial effects of the coronavirus crisis, threatening to increase the level of electricity bill arrears amid reduced consumption and lower sales.

Consumers are now contacting suppliers to request installment-based payment arrangements, or, worse still, expressing an inability to meet electricity bill payments, energypress has been informed.

Retailers and small businesses whose operations are being stifled by the coronavirus lockdown are particularly feeling the pressure.

Electricity suppliers maintaining a dominant mid-voltage customer base are very concerned as the coronavirus spread has already begun inflicting financial damage on sectors such as tourism, hotels and restaurants, all expected to be particularly affected by the ongoing crisis.

Retailers, too – except for supermarket chains, registering rising sales figures – are also under severe pressure. Their position will deteriorate further as a result of a government decision temporarily shutting down most shops as of today.

Electricity suppliers are more or less helpless at present. Distribution network operator DEDDIE/HEDNO would not execute any electricity-cut orders amid these extraordinary conditions.

Subsequently, suppliers are calling for a delay of their payments to operators such as power grid operator IPTO, DEDDIE, and RES market operator DAPEEP for network usage fees, a RES-supporting ETMEAR surcharge and other such obligations.


RAE set to officially announce new cost-clause rules for suppliers

RAE, the Regulatory Authority for Energy, has prepared a list of cost-clause guidelines for electricity suppliers, the objective being to offer consumers greater transparency and improve price-comparing ability.

Electricity suppliers typically include cost-related clauses in electricity bill agreements as cover for various unanticipated cost shifts. However, some of these clauses, usually included in fine print, have tended to confuse or astonish consumers, prompting complaints.

RAE is expected to officially announce its new set of cost-clause guidelines, ten in total, by next Tuesday, energypress sources have informed.

The guidelines have also been forwarded to the energy ministry, which may choose to apply them for an amendment of electricity supply rules. This would make the guidelines legally binding.

Suppliers will have two months to adjust to the new guidelines, otherwise they could face penalties.

According to the RAE guidelines, electricity suppliers must include a fixed-tariff option for household and small business consumers as an alternative to an adjustable rate.

In addition, suppliers will need to set a realistic range of clause-triggering cost levels so that clause usage is limited to unusual, damage-inflicting market conditions for suppliers.

Any clauses included in supply contacts must be clearly presented along with all other terms, not in fine print. Also, clause-related charges and calculations must be clearly shown in every electricity bill.

Furthermore, electricity supplier websites must include clause examples.

Another new term states that penalty clauses for premature consumer withdrawals from supplier contracts should be limited to fixed-tariff agreements. Such a clause should not be included in supply agreements for consumers who have chosen floating tariff rates as these consumers have taken on the risk of any cost changes, according to the new RAE guidelines.

New lignite access proposal offered ahead of Brussels talks

Electricity suppliers could be granted access to power utility PPC’s lignite-related electricity production until 2023, when all the utility’s existing lignite units are scheduled to have been withdrawn, according to a new proposal forwarded by Greek authorities to the European Commission’s Directorate-General for Competition, energypress sources have informed.

The energy ministry delivered this transitional mechanism proposal to Brussels last week after a previous plan appears to have been blocked.

The initial proposal, delivered last December, called for the formation of an SPV by the country’s energy-intensive industrial enterprises to be supplied satisfactory electricity amounts from PPC’s lignite-fired power stations.

However, this proposal appears to have been rejected by Brussels as it focused entirely on industry and excluded retail suppliers, seen as a breach of competition rules because it would not help further open up Greece’s electricity market.

The new Greek proposal is expected to serve as the basis of a new round of talks with the European Commission, scheduled to begin around mid-March. It remains unclear if the new proposal stands a chance of being approved by Brussels competition authorities.

Brussels officials, for quite some time now, have made note of Greece’s failure to comply with a European Court ruling on lignite access for third parties, directly linking this shortcoming with the country’s commitment to a retail electricity market share contraction target at state-controlled PPC to a level of less than 50 percent this year.

The European Commission wants alternative measures implemented between now and 2023 as a result of Greece’s failure to sell PPC lignite units and unilateral termination of NOME auctions.

Suppliers given 2 months for cost-clause rule adjustments

Electricity suppliers have been given two months to fully comply with a list of new cost-clause rules just issued by RAE, the Regulatory Authority for Energy.

Suppliers include cost-related clauses in electricity bill agreements as cover for various cost shifts. However, some of these clauses have tended to confuse or  surprise consumers, prompting complaints.

“The authority’s objective is to protect consumers,” a highly-ranked RAE official informed, pointing out that the new regulations will help consumers make clear price comparisons of various supplier offers in straight-forward fashion.

RAE staged a public consultation procedure on the matter over many months before deciding on its new clause rules, ten in total.

Electricity suppliers must include a fixed-tariff option for household and small business consumers as an alternative to an adjustable rate. Also, cost adjustment clauses will be based on one standardized formula.

In addition, suppliers will need to set clause-triggering cost levels realistically so that clause usage is limited to unusual, damage-inflicting market conditions for suppliers.

Any clauses included in supply contacts must be clearly presented along with all other terms, not in fine print. Also, clause-related charges and calculations must be clearly shown in every electricity bill, according to the RAE guidelines.

Furthermore, electricity supplier websites must include clause examples.

Another new rule states that penalty clauses for premature consumer withdrawals from supplier contracts should be limited to fixed-tariff agreements. Such a clause should not be included in supply agreements for consumers who have chosen floating tariff rates as these consumers have taken on the risk of any cost changes, the new RAE rules note.

RAE cost-related clause rules for electricity supplier bills imminent

A RAE (Regulatory Authority for Energy) plan detailing cost-related clauses electricity suppliers will be permitted to include in their electricity bills is expected to be finalized within the next few days, possibly by the end of this week.

The energy authority is expected to deliver clause guidelines following months of public consultation on the matter.

Electricity suppliers will need to adjust to these new guidelines as part of an effort being made by authorities to improve the price-comparing ability of  supplier offers for electricity consumers.

Independent suppliers have warned the new RAE guidelines could once again stifle competition in the country’s retail electricity market by limiting pricing-policy leeway for suppliers and consumer choices.


IPTO set to take action over elevated supplier mark-up costs

Power grid operator IPTO is preparing to take corrective action to soften the impact of sharply increased mark-up costs on electricity suppliers over the past few months, the operator’s remedy including credit invoices for suppliers, according to market officials.

Since last October, especially during the months of November and December, the total mark-up cost for suppliers has risen from levels of 4 to 6 euros per MWh to over 8 euros per MWh.

The weighted average variable cost per production unit rose sharply from levels of between 0.7 and 6 euros per MWh to 8.2-8.5 euros per MWh over the two-month period covering November and December.

Also, miscellaneous mark-up costs have risen considerably, reaching 3.9 euros per MWh in December from previous levels that ranged between 0.5 to 3 euros per MWh.

Supplier charges have increased as the lower-limit variable cost of lignite is elevated, pundits explained.

Meanwhile, the System Marginal Price (SMP) has fallen as a result of the renewable energy sector’s high level of energy-mix participation and extremely low natural gas prices benefiting natural gas-fired power stations.

Improved weather conditions and the subsequent reduction of energy needs would probably cut supplier costs as lignite usage would decline.

Independent players want clauses for cost factors other than the SMP

Supplier cost clauses should not be limited to the System Marginal Price (SMP) as various other wholesale market factors influencing the overall cost should also be taken into account, independent electricity suppliers have agreed in a related public consultation procedure completed yesterday.

Previously, RAE, the Regulatory Authority for Energy, proposed the implementation of a standardized SMP as the only permissible clause, the objective being to simplify consumer price comparisons of supplier offers.

Though independent suppliers do not want their supply term clauses limited to the SMP, they acknowledge this factor remains relevant under the current system, ending mid-way through 2020 with the arrival of the target model.

Suppliers believe some time will be needed for observations concerning the SMP’s replacement, including day-ahead market prices.

Also, the target model’s new markets will bring about significant supply cost changes that cannot be calculated at present, suppliers noted in the public consultation procedure.

Though PPC has asked that its contribution to the public consultation procedure not be published, the utility’s opposition to the cancellation of a CO2-related clause it applies is already widely known.

Customer shifts from PPC to independent suppliers over 1M

Nearly 1.1 million electricity consumers have left power utility PPC for an independent supplier, latest market data has shown.

Besides considerable penetration into the mid-voltage market, independent suppliers are now making further gains in the low-voltage category serving households and businesses.

Approximately ten of the Greek market’s twenty or so independent suppliers represent the overwhelming majority of these 1.1 million electricity consumers who have left PPC. Three of these suppliers, vertically integrated, also operate natural gas-fueled power stations.

Independent suppliers represent approximately 16 percent of the country’s 7.57 million power meters. PPC remains the dominant player with control of 6.36 million power meters.

Electricity market competition has intensified over the past two or so years, as highlighted by the increased number of customer shifts from one supplier to another. Customer mobility nearly doubled in 2019 compared to a year earlier, rising from 338,000 to 627,000 customers.

According to data provided by RAE, the Regulatory Authority for Energy, 226,779 customers opted to switch electricity supplier during the first half of 2019.

Market officials have linked this mass movement with tariff increases at PPC.

PPC officials contend the company’s outflow of customers slowed down during the final quarter of 2019, noting some consumers have chosen to return to the power utility following short spells at independent suppliers.

Competition is expected to keep intensifying. PPC is preparing to offer new products around spring.


Independent suppliers want RAE surcharge-delay fines removed

Six independent electricity suppliers handed fines, some of these hefty, about a year ago by RAE, the Regulatory Authority for Energy, for not relaying various customer-paid regulated surcharges to power grid operator IPTO and distribution network operator DEDDIE/HEDNO, are presenting their cases to the authority in a bid to have their fines removed.

RAE imposed the fines, ranging from tens of thousands to hundreds of thousands of euros, after concluding that the electricity suppliers had not passed on to the operators a variety of surcharge amounts collected from customers such as a transmission network surcharge, a distribution network surcharge and a RES-supporting ETMEAR surcharge.

Once collected as part of electricity bill payments, these surcharge amounts need to be relayed to the operators by a certain date.

The independent suppliers have mainly contended they are owed bigger amounts by the operators, and, as a result, have taken the initiative to implement what they see as an informal offsetting arrangement.

RAE has refused to accept this argument but things have changed following a related legislative revision made by the government. It remains to be seen if RAE will revise its decisions and remove the fines imposed on the independent suppliers.

Power utility PPC, owing hundreds of millions of euros to the operators and handled as a separate case, was handed a fine of approximately 2.8 million euros about two years ago.

The surcharge amounts owed by the independent suppliers to operators represent just a fraction of the equivalent amount owed by PPC.

PPC’s surcharge payment delays of sizable amounts to operators are, in turn, making it difficult for operators to meet payments for producers.



RAE proposes tougher terms for universal supply service

The board at RAE, the Regulatory Authority for Energy, has decided on tougher terms for a universal electricity supply service introduced almost a decade ago to cover the electricity needs of consumers shunned by suppliers for repeatedly failing to meet electricity bill payments.

The authority, whose decisions are to be forwarded to the energy ministry in an advisory report, wants a three-month limit imposed on the universal service. No specific limit has existed until now. This has been exploited by a considerable number of electricity bill dodgers, or consumers deemed capable, even affluent, but unwilling to service accumulating electricity bills.

Under the RAE recommendation, consumers using the universal service will need to find a supplier once their three-month period has expired. Also universal service bills will need to have been settled prior to any move, according to the authority’s proposal.

RAE, in a second decision, has proposed that the market’s top five electricity suppliers – based on financial standing or market share – jointly provide the universal service if a competitive procedure fails to produce a winning bidder.

Until now, PPC has been required by law, as the dominant player, to provide this universal service because independent suppliers have been unwilling to do so.

Consumers are charged higher tariff rates for resorting to the universal service. At present, universal service tariffs are about 12 percent higher than regular tariffs.

Shorter time limit, higher rates seen for universal supply

RAE, the Regulatory Authority for Energy, and the energy ministry are working on stricter regulations for a universal electricity supply service introduced almost a decade ago to cover the electricity needs of blacklisted consumers shunned by suppliers for repeatedly failing to meet electricity bill payments.

The number of users of this universal service is estimated to have risen to 135,000. This figure is believed to include a considerable number of electricity bill dodgers, or consumers deemed capable, even affluent, but unwilling to service accumulating electricity bills.

The energy ministry is awaiting the findings of a RAE report before it takes any decisions to revise the service’s current rules, sources informed.

The introduction of a time limit, possibly three months, is one of the measures being considered, sources noted.

A tariff increase per KWh for this universal service, currently 12 percent higher than market rates, is another measure being looked at by authorities, according to sources.

Recent legislation aiming to reshape power utility PPC includes a law requiring suppliers to alternate in providing this universal service to blacklisted consumers if related competitive procedures do not produce a result.

Until now, PPC has been required by law, as the dominant player, to provide this universal service because independent suppliers have been unwilling to do so.


Growing number of energy consumers shifting amid rising competition

The country’s electricity and natural gas markets are undergoing drastic change. Tens of thousands of electricity consumers are moving to new suppliers with far less hesitation as a result of more competitive offers. Also, gas utility DEPA’s market share is sliding as energy companies are now engaging directly in natural gas orders without any intermediate involvement from the utility, besides trading in retail.

Some 627,000 households and small-to-medium businesses changed electricity supplier in 2019, a record level since the market’s liberalization and an 85 percent increase compared to 338,000 shifts in 2018, according to data presented by RAE (Regulatory Authority for Energy) official Nektaria Karakatsani at a recent industry event, Athens Energy Dialogues.

At least 20 electricity retailers offering over 40 products as a means of broadening their customer base took on these shifting consumers.

At present, at least 800,000 consumers are supplied electricity by independent firms. This, it should be noted, remains a small percentage of the Greek market’s 7.4 million total.

In the gas market, DEPA’s wholesale market share dropped to 33 percent in 2019 from 58 percent in 2018, according to the data presented by Karakatsani, the RAE official.

Also, DEPA’s share of total gas imports dropped to 42 percent in 2019 from 72 percent in the previous year.


Imminent RAE decision expected to offer consumers clause clarity

Price-adjustment clauses included in electricity bills by suppliers are expected to be limited to the System Marginal Price (SMP), or the wholesale price, in an upcoming related decision by RAE, the Regulatory Authority for Energy, anticipated by the end of January, possibly within the next few days.

The energy authority, reliable sources informed, is revising clause-related rules following the completion of public consultation on the matter.

A growing number of households and businesses have lodged complaints after seeing their electricity bill costs pushed higher by clauses included by suppliers as protection against narrowing profit margins.

RAE staged a public consultation procedure over many months for feedback from disgruntled consumers. Many complaints were focused on a lack of transparency regarding the activation of clauses by suppliers.

Consumers are hoping the new RAE rules will simplify price comparisons of offers made by electricity suppliers.

Work needed for Athens-EC convergence on energy reforms

Greek and European Commission positions on energy reforms for further market liberalization remain at opposite ends, despite January being previously billed as a key month, and will require great effort if agreements are to be reached, government sources have informed ahead of a series of meetings in Athens. Both Athens and Brussels want further market liberalization but their approaches differ.

A first round of meetings is scheduled to begin next week with the arrival of Brussels technocrats for preliminary talks with government and market officials. Top-level lender representatives will then follow up a week later.

The Greek government’s basic position is centered around a swift decarbonization process at state-controlled power utility PPC, which would eliminate the need for third-party access to PPC’s monopolized lignite sources, offering lower-cost electricity.

A government proposal for the establishment of SPV partnerships with private-sector companies that would facilitate purchases of high-voltage lignite-generated PPC electricity by industrial enterprises has only been entertained by the power utility, limiting the measure’s prospects for a market share reduction at PPC, still dominant.

In preceding negotiations, the country’s lenders have indicated that decarbonization alone does not suffice. The views of the lenders on the government’s SPV proposal also differ.

The European Commission’s Directorate-General for Competition has called for wider participation in the SPV that would effectively also take on board independent electricity suppliers, not just energy-intensive industrial enterprises, for purchases of lower-cost lignite-generated electricity produced by PPC.

Opposing views are seen requiring more work for convergence, which could be achieved by the end of the first half. The implementation of the target model promises to serve as a catalyst.

Two more rounds of talks in Athens are scheduled for March and May.

Brussels pressuring for wider access to PPC lignite power

The European Commission’s Directorate-General for Competition has proposed wider participation in a Special Purpose Vehicle plan tabled by the energy ministry that would effectively also take on board independent electricity suppliers, not just energy-intensive industrial enterprises, for purchases of lower-cost lignite-generated electricity produced by power utility PPC.

Energy ministry officials began talks aiming for further electricity market liberalization in Greece in the lead-up to the Christmas break. These are expected to continue following the festive season and end by mid-January.

The energy ministry officials went into the talks having proposed the establishment of an SPV that would exclusively facilitate lignite-generated electricity purchases made by energy-intensive industrial enterprises.

This is seen as a plan that could contribute to the power utility’s market share contraction in the high-voltage category and also support emission cost savings.

Greece’s pledge for a thorough plan promising to fully liberalize the electricity market and break PPC’s ongoing dominance has been under the spotlight during these talks.

Going into the negotiations, Brussels made note of Greece’s non-compliance with a European Court ruling on PPC’s lignite monopoly.

The European Commission has remained relentless in its demand for corrective anti-monopoly measures on lignite, including, according to sources, the establishment of auctions along the lines of the NOME auctions recently abolished by the Greek government.

Brussels insists the SPV would need to be supplied electricity by PPC through auctions. Greek officials have sought to avoid discussing such a prospect given the government’s recent decision to end NOME auctions, arguing these have cost PPC plenty without delivering results in terms of market share contraction at the utility.

A proposal entailing hydropower sourced electricity supply to the SPV, in addition to lignite-generated electricity, has also been tabled at these talks. This would help limit emission costs if suppliers also enter the SPV.

The European Commission may have applauded the government’s recent decision for a swifter decarbonization process, but it has remained adamant on the necessity for third-party access to lignite – until 2023, when all of PPC’s existing lignite units are planned to have been withdrawn – as well as hydropower  if full market liberalization is to be achieved.