Industrial officials enraged by PPC energy-negotiation demands

Industrial producers are reacting against terms and demands tabled by power utility PPC in ongoing negotiations for new high-voltage tariffs and agreements that take into account new market conditions ushered in by the target model.

Energy-intensive producers, unappeased by PPC’s recent decision to extend its negotiating period by three months – thereby extending the validity of existing agreements with industrial customers until June – claim the power utility is not making any effort to achieve compromise solutions.

The industrial sector is already in crisis, and, furthermore, the recent disruption of operations at steel producer Halyvourgiki and state-controlled nickel producer Larco, leaving PPC with enormous unpaid electricity bills, illustrates the power utility is not adopting government policies for a strategic recovery of the country’s industrial sector, officials at energy-intensive industrial enterprises have complained.

Although industrial energy costs area already too high, PPC is proposing high-voltage tariff increases in the range of 40 to 50 percent, industrial firm officials have noted.

Despite their obvious feelings of discontent, officials at energy-intensive consumers appear willing to keep negotiating with PPC in search of solutions that can enhance the competitiveness of industries.

However, some industrial sub-sectors, such as heavy industry, appear to be far less tolerant. Officials at iron, copper, cement and steel industries believe their proposals are not being considered at PPC.

They want balancing cost and take-or-pay clauses removed from any new agreements. Heavy industry cannot assume such risks and, at the same time, remain productive and competitive, officials stressed.

PPC extends industrial tariff negotiations until June

Power utility PPC has extended by three months its negotiating period for new high-voltage industrial tariffs following a request by a number of energy-intensive producers, energypress sources have informed.

The negotiating sides acknowledge pandemic-related problems have prompted the need for additional time, during which  compromise solutions will be sought.

PPC had given industrial enterprises until February 28 to accept a new high-voltage tariff pricing formula. The previous system’s validity expired December 31.

Industrial electricity charges for the first two months of 2021 have been based on the terms of expired agreements.

According to sources, tariff levels are of secondary importance in these negotiations, the prime concern being a new pricing system sought by PPC, which, if implemented, would bring an end to fixed tariffs and volume discounts.

PPC contends that the target model and its accompanying energy exchange markets, such as the balancing market, need to be taken into account for new pricing formulas.

The negotiating sides appear determined to reach agreements that would bolster the competitiveness of industrial producers without obligating the state-controlled power utility to supply high-voltage electricity at below-cost levels.

EDA THESS network expansion lowers distribution cost up to 56%

Gas distributor EDA THESS, covering the Thessaloniki and Thessaly regions, has, besides boosting its total revenue, managed to reduce distribution costs shared by consumers as a result of the company’s swift and well-planned distribution network expansion.

The gas distributor’s household, business and industrial consumers in Thessaloniki and Thessaly are now benefitting from significant distribution cost reductions that have reached as much as 56 percent, as the network expansion is enabling EDA THESS to impose smaller distribution charges on an increased number of consumers.

Since January 1, the company’s distribution costs dropped a further 14.8 percent in Thessaloniki and 21.9 percent in Thessaly, compared to the previous regulatory period.

The company’s industrial consumers have benefited most as their distribution costs have fallen by 45 percent in Thessaloniki and 56 percent in Thessaly, compared to distribution costs up until November, 2020.

“Our job is to distribute gas to as many regions as possible and broaden its use as much as possible,” EDA THESS general manager Leonidas Bakouras told energypress in response to a related question.

Looking ahead to further expansion, EDA THESS has begun implementing a new development plan for 2021 to 2025, estimated to be worth 156 million euros.

SBE, the Federation of Industries of Greece, in a related statement, welcomed this considerable distribution cost reduction.

Retroactive enforcement of balancing market rules sought

Non-vertically integrated electricity suppliers are seeking retroactive implementation of measures introduced recently by RAE, the Regulatory Authority for Energy, to contain balancing market prices at rational levels.

Balancing market costs rose sharply in the weeks following November’s launch of new target model markets, prompting an escalation of wholesale electricity prices that severely increased the purchasing costs of non-vertically integrated electricity suppliers.

These suppliers are now determined to seek returns from RAE and power grid operator IPTO for additional outlays prompted by flaws in balancing market rules that were not detected until after the launch of new markets.

A set of new rules just introduced by RAE constitute recognition by the authority of the abusive behavior practiced by producers prior to the intervention, the suppliers contend.

Non-vertically integrated electricity suppliers are pushing for even stronger measures. They believe the new rules rely too much on the goodwill and cooperation of producers, still able to return to irrational behavior and consequently threaten the sustainability of firms and financially pressure consumers.

On the same wavelength, EVIKEN, the Association of Industrial Energy Consumers, has criticized RAE for backing away from its own proposals, noting industrial energy costs currently depend on whether balancing market participants will exercise pricing restraint.

Industry still awaiting mid-voltage energy tax cut four months on

Industrial enterprises of the mid-voltage category are still waiting for the implementation of a special consumption tax (EFK) reduction more than four months after the measure was first announced by the government.

Though this tax cut would have minimal impact on the government’s tax revenue, it is important for a large number of companies – approximately 170 with annual energy consumption levels of more than 13 GWh.

Last July, Prime Minister Kyriakos Mitsotakis announced the special consumption tax for mid-voltage industrial firms would be lowered from 5 euros per MWh to 2.5 euros per MWh, the level imposed on high-voltage producers.

The measure’s total cost, estimated at 3 million euros, promises some energy-cost relief for mid-voltage industrial enterprises.

Producers have not received any further news on the consumption tax cut measure since it was announced in July, prompting concern and frustration among industrial circles.

Energy cost represents a considerable part of total production costs for energy-intensive producers.

Wholesale electricity prices in Greece are 47 percent higher than the EU average and nearly 70 percent higher than the lowest price level in the EU, according to official European Commission data.

Producers seeking lower-cost industrial electricity alternatives

Industrial electricity consumers of the high and mid-voltage categories are securing lower-cost agreements with independent suppliers, while energy-intensive consumers, currently negotiating with power utility PPC for new tariffs to take effect January 1, are pushing for better deals.

These developments are reshuffling the industrial electricity market, previously dominated by PPC.

Independent energy company Heron and Macedonia Paper Mills (MEL) recently announced an electricity supply agreement that includes a package of services for energy efficiency, electromobility and RES coverage of the producer’s energy needs.

Cement producer Heracles had previously reached an electricity supply agreement with Protergia, a member of the Mytilineos group, paving the way for further agreements between producers and independent suppliers.

These developments have had a wider knock-on effect, including for mid-voltage supply, as demonstrated by an agreement between energy supplier NRG, a member of the Motor Oil group, with the country’s other cement producing giant, Titan.

Following losses in 2018 and 2019, PPC is believed to be turning its focus on more profitable sectors and is no longer interested in maintaining a high share of the industrial electricity market – both high and mid-voltage.

Industrial sector wants PPC’s older 10% hike scrapped, discounts kept

Industrial energy consumers, currently negotiating new tariffs with power utility PPC, want a ten-percent hike that was imposed in March, 2019 to be scrapped – also retroactively, from the beginning of 2018 – as they contend lower generation costs now enable price cuts.

The industrial sector is also demanding the maintenance of size and consumer profile-based discounts as well as a discount offered by PPC for punctual payments of electricity bills and advance payments.

In its ongoing negotiations with PPC for new tariffs, to come into effect January, 2021, the industrial sector has highlighted that wholesale electricity prices registered a record decline in the first eight-month period of 2020.

The System Marginal Price, or wholesale electricity price, fell to 42.88 euros per MWh in August this year following levels of 61.71 euros per MWh in 2018 and 64.37 euros per MWh in 2019.

CO2 emission rights, which have a neutral effect on energy-intensive industrial producers as a result of offsetting benefits, have averaged 23.83 euros per ton this year, slightly down from 24.87 euros per ton last year.

PPC has drastically reduced its high-cost use of lignite-fired power stations this year to 3,625 GWh, from 10,418 GWh last year.

The power utility appears willing to support the industrial sector by minimizing its profit margin but has made clear it will not sell below cost to any customer.

PPC planning industrial tariff discounts, reflecting lower cost

Power utility PPC intends to offer discount tariffs, as generous as its finances can permit, to industrial consumers in a move that would represent key complementary support for the government’s plan to reduce industrial energy costs.

PPC’s ability to deliver on this industrial energy discount plan will very much depend on the fate of the corporation’s compensation request forwarded to the European Commission for the utility’s gradual withdrawal of its loss-incurring lignite-fired power stations between 2021 and 2023. PPC has requested compensation of 200 million euros, annually.

A Brussels decision on this request is not expected any sooner than late November. If this PPC initiative fails to produce a positive result, Greece’s ten-year dispute with the European Commission over the country’s continued reliance on lignite for electricity generation could drag on.

Greece cannot be expected to adopt a mechanism offering state-controlled PPC’s rivals access to lignite-based output if the European Commission refuses to approve cost-offsetting measures for the utility, as has been the case in other EU member states, local sources contend. Germany and Dutch energy companies have benefited from such offsetting measures in the past.

Whatever the outcome, state-controlled PPC seems determined to support the industrial sector by minimizing its profit margin for new electricity supply contracts, to come into effect January, 2021. However, the corporation has made clear it will not sell below cost to any industrial consumer.

Industrial enterprises believe a 10 percent tariff increase agreed to in March, 2019 for a three-year period covering 2018 to 2020, can no longer be justified as electricity production costs have since fallen, meaning tariffs must follow suit.

Ministry examining industrial energy cost-cutting measures

The energy ministry is examining a series of energy cost-cutting measures for the industrial sector, including reductions to system usage surcharges and the special consumption tax for the mid-voltage category, plus discounts for major-scale energy consumers making energy-efficiency investments.

The subject of lower energy costs for the industrial sector will feature at a meeting today between energy minister Costis Hatzidakis and energy-intensive industry representatives.

Speaking at an Economist conference just days ago, Hatzidakis expressed a determination to take all measures needed to reduce industrial energy costs.

Previously, in mid-July, Prime Minister Kyriakos Mitsotakis declared the special consumption tax rate for mid-voltage industry would be reduced.

The energy ministry and industrial sector have since been exchanging ideas in search of measures that could partially close the substantial gap between industrial energy costs in Greece and the rest of Europe.

Greek wholesale electricity prices are, by far, the highest in Europe, recent first-half data showed. Greece’s wholesale electricity price level for the first half averaged 42.47 euros per MWh. Belgium registered 23.98 euros per MWh, Germany’s average was even lower, 22.86 euros per MWh. Prices ranged between 32 and 34 euros per MWh in neighboring Balkan countries.

Pending issues crucial for industrial energy cost savings

A series of issues concerning prospective industrial energy cost savings that have surfaced either as industrial-sector requests or government announcements remain unresolved, creating insecurity within industrial circles.

New industrial electricity tariffs, currently being negotiated but with much ground still to cover for convergence, are at the very top of this list for industrialists.

One energy-intensive industrial producer has already abandoned power utility PPC after rejecting the industrial electricity tariff prices the utility had to offer.

Industrialists also want a public service compensation (YKO) surcharge reduction.

On another front, the sector expects a special consumption tax rate for mid-voltage industrial consumers with annual consumption levels of more than 13 GWh to be equated with the special consumption tax rate offered to high-voltage industrial enterprises. This revision, concerning approximately 170 factories, has been announced by Prime Minister Kyriakos Mitsotakis.

Another matter for the industrial sector concerns exempting major-scale industrial units from a series of additional electricity supply surcharges, in accordance with European Commission directives.

Industrialists also want a special consumption tax exemption on electricity used for mineral processing in cement and glass production, which would align Greek law with an EU directive from 2003.

The industrial sector is also anticipating a new mechanism to offset CO2 emission right costs.

‘Energy ministry policies crucial in effort to revitalize economy’

The energy ministry’s policies promise to play a pivotal role in the challenge faced by the government to revitalize the national economy following lockdown, energy minister Costis Hatzidakis has noted in an article featuring in GREEK ENERGY 2020, the energypress team’s latest annual publication covering the Greek energy sector.

Action is already being taken by the ministry through a decisive energy-sector agenda that aims for growth and is fully aligned with the European Green Deal, now a key economic growth tool throughout Europe, the minister notes.

New financial tools such as an EU recovery fund, worth 750 billion euros, according to a European Commission proposal, are designed to help the EU achieve its goal of transition towards a zero-emission economy through support for the gradual elimination of fossil-fuel dependence, RES growth and energy savings, the minister writes.

Greece is ready to make the most of this EU support package, effectively an additional NSRF funding program for the country promising capital worth around 32 billion euros, in order to achieve sustainable green-energy growth, according to Hatzidakis.

Besides decarbonization and RES development, other aspects incorporated into the energy ministry’s wider plan include:  electromobility growth; a third Saving at Home subsidy program for domestic energy-efficiency upgrades; reforms for greater competition, transparency and more attractive price offers in the energy market; reduced industrial energy costs; and energy-sector privatizations, the minister notes.


Industrial energy cost reduction measures planned, deputy tells

The government is preparing to reduce a special consumption tax for energy-intensive mid-voltage companies and also push through a series of other measures aiming to reduce industrial energy costs, deputy energy minister Gerassimos Thomas has revealed in an interview with Greek daily Kathimerini.

The deputy minister said he is confident a Greek proposal seeking extensions for the country’s demand response mechanism and transitory flexibility remuneration mechanism (TFRM) will be approved by the European Commission.

The special consumption tax for energy-intensive mid-voltage companies will be reduced to the level offered to high-voltage companies, the deputy minister informed.

Also, a new public service compensation (YKO) mechanism offering benefits for high and mid-voltage industries will be introduced, he said.

Power grid operator IPTO needs to design and launch new demand response products in compliance with EU directives, the deputy minister noted while addressing the forthcoming launch of the target model in Greece.

The objective is to provide incentives to private-sector producers and industry for equal participation in the balancing and energy markets, he explained.



CO2 cost coverage up to 100% for 8 industrial categories

New EU directives concerning CO2 emission cost coverage for industrial enterprises could lead to significantly increased support that may fully offset this cost.

The directives, planned for the period between 2021 to 2030, have just been forwarded for public consultation.

This greater carbon emission cost offsetting support is expected to enable power utility PPC to extend the operating period of at least one of its lignite-fired power stations for continued electricity supply to energy-intensive industries eligible for the offsetting measure.

The European Commission proposal aims to increase the offsetting percentage of CO2 emission costs for aluminum and steel industries until 2030 to a level of as much as 100 percent.

The number of eligible industrial categories is expected to be reduced from 14 at present to eight, according to the Brussels proposal.

Aluminum, iron, steel and ferroalloy production are among the categories proposed for carbon emission cost offsetting eligibility.

EU industry seeking ETS revisions to remain competitive

A transformation plan seeking cost-recovery revisions for a more competitive European industrial sector has been presented to the European Commission by a group established in 2015 and represented by industries, EU member states and various agencies.

The group is pushing for energy cost-recovery revisions that would make European energy-intensive industrial enterprises more competitive against rivals with lower costs and, as a result, repel the need for relocations to non-EU bases.

Revisions requested by the group include ETS (Emissions Trading System) cost recovery adjustments effective all the way through to 2030.

At present the ETS system, operating on a voluntary, short-term basis, is on a downward trajectory. EU member states can opt to not implement this cost recovery system.

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.


Elvalhalcor power plant decision in first half of 2020, RES options considered

Elvalhalcor, the Hellenic Copper and Aluminium Industry, anticipating an imminent approval of its license application for gas-fueled electricity production, will decide whether it will develop a power plant during the first half of 2020, sources have informed.

This plan, however, could be put on hold if Elvalhalcor ends up deciding to pursue renewable energy options, either through acquisitions of existing units or development of its own.

Reduced RES installation and equipment costs have attracted the attention of Elvalhalcor officials, currently examining the company’s options.

Elvalhalcor’s application for a gas-fueled electricity production, submitted to RAE, the Regulatory Authority for Energy, last July, caught the market by surprise, pundits, until then, believing the construction of new power plants would be limited to energy groups.

The Elvalhalcor power plant, if developed, would be constructed in Thisvi, Boetia, slightly northwest of Athens, as a 566-MW facility, to cover the industrial enterprise’s sizable energy needs.

Greece’s heavy industry has been driven towards electricity production as a result of high energy costs – wholesale energy in Greece is Europe’s most expensive – delays in the implementation of the target model, power utility PPC’s most recent failure to sell lignite units, and Europe’s political turn to cleaner energy sources.

PPC’s new strategic business plan, expected soon, as well as Greece’s revised National Energy and Climate Plan, to shape the country’s energy-sector developments over the next decade, will both be pivotal factors in Elvalhalcor’s decisions.


EVIKEN warns of new market distortions, costlier electricity

EVIKEN, the Association of Industrial Energy Consumers, has warned of the institutionalization of new market distortions, through the adoption of the target model, that could significantly affect power utility PPC and ultimately prompt even higher costs for electricity consumers.

Greece’s industrial sector has persevered elevated electricity costs over the past decade, far higher than levels offered to European competitors, EVIKEN sources noted.

The association primarily attributed the country’s higher electricity costs to what it described as the “continual institutionalization of a series of measures that have led to the establishment of a regulated oligopoly in a market flooded by distortions and regulatory obstacles, along with the delayed launch of the new electricity market and market coupling with the neighboring markets of Italy and Bulgaria, as part of the target model’s framework.”

Revisions called for by EVIKEN include a balancing market that will operate through a unit-based central dispatching model.

Ministry wants post-NOME measures for supplier protection

The energy ministry has asked RAE, the Regulatory Authority for Energy, for a detailed assessment on how the planned termination of NOME auctions would impact Greece’s electricity market as well as a proposal for normalization measures during the transition period leading to the target model, if the authority deems measures will be necessary.

Energy ministry officials already appear convinced measures will be needed for the pre-target model transition period as a means of covering the electricity needs of independent suppliers, protecting smaller non-vertically integrated players against possible collapse, and avoiding sharp energy cost increases for industry, especially high-level consumers in the mid-voltage category.

Legislative measures obligating power utility PPC into offering short-term contracts to suppliers, possibly even major-scale electricity consumers, for prices slightly below the wholesale price level, will probably be needed as an imminent arrival of an organized futures market at the energy exchange does not appear feasible.

At a recent meeting with deputy energy minister Gerassimos Thomas, retail electricity market representatives requested an adequate NOME replacement tool – if the auctions are abolished – that would enable hedging at competitive prices until the target model’s implementation.

Independent electricity suppliers fear a cancellation of this year’s final NOME auction in October, as is wanted by the energy ministry, would expose them to high prices that could affect their sustainability.

Viohalco electricity deal with PPC sets standard for industry

Leading metal processing company Viohalco, Greece’s second-biggest electricity consumer, has reached an electricity supply agreement with the main power utility PPC following many months of negotiations, achieved following concessions by both sides and the constructive role of two crucial factors that set standards for the wider industrial sector.

Viohalco accepted a 10 percent tariff increase in exchange for an extended three-year agreement, from 2018 to 2020, offering clarity and foreseeable electricity costs until the end of this period, the biggest benefit of the deal. The industrial enterprise’s electricity consumption reaches 1.2 TWh, representing a considerable part of its overall expenses.

A government pledge, expressed publically, ensuring Viohalco energy cost-savings and competitive electricity tariffs through an extension of Greece’s demand response mechanism (interruptability), was a second crucial factor leading to the industrial player’s three-year deal with PPC.

The measure compensates major-scale electricity consumers when the TSO (IPTO) asks them to shift their energy usage (lower or stop consumption) during high-demand peak hours, so as to balance the electricity system’s needs.

Industrial energy consumers group to step up action over CO2 costs

EVIKEN, the Association of Industrial Energy Consumers, is planning to file a complaint to RAE, the Regulatory Authority for Energy, over a formula applied by the main power utility PPC to calculate CO2 emission costs, seen as unfair and lacking transparency by the industrial sector.

The association intends to step up the pressure following the PPC’s maintenance of CO2-related costs for industrial consumers at 18 euros per MWh in February.

Industrial sector officials argue this price level should have been reduced as actual CO2-related costs at PPC have fallen because the utility has recently relied less on lignite for its electricity production.

A previous letter forwarded by EVIKEN to RAE highlighting flaws in the formula determining CO2 costs for monthly industrial electricity bills was not answered by the energy authority.

The formula applied by PPC to determine CO2-related costs for mid and high-voltage consumers breaches the supply code as it does not factor in most recent cost developments, EVIKEN will highlight in its complaint, sources informed.

PPC terms for Larco to guide new tariff talks with other industrial producers

Two basic terms included in the main power utility PPC’s power supply agreement with troubled nickel producer Larco promise to guide new tariff negotiations between the power utility and other industrial producers, beginning next week.

Larco, for one of these two terms, has been offered a fixed high-voltage 2 tariff and, furthermore, a volume-based discount of 18 percent for consumption of up to 75 GWh per month, or 900 GWh annually. Fixed high-voltage 2 tariffs (YT2) are reserved for a small number of industrial enterprises.

PPC’s agreement with the ailing nickel producer offers temporary protection to the power utility against any new credit misadventures by Larco, owing over 300 million euros to PPC. Both companies are state-controlled.

PPC’s main concern is to ensure Larco’s ability to cover all its electricity consumption costs from now on, and, looking ahead, reduce its existing debt amount owed to PPC if market conditions, or nickel price levels, allow.

Demands faced by Larco, in its agreement with PPC, include the need to drastically reduce output, cover – on time – the full cost of electricity consumed on a monthly basis, provide letters of guarantee, and also supply PPC 24,000 tons of lignite extracted from its mines in Kozani, northern Greece, to cover power utility fuel needs at its Kardia and Amynteo power plants.

Greek wholesale electricity cost Europe’s second highest

Wholesale electricity prices in Greece ranked as Europe’s second highest in the second quarter of 2018, 30 percent higher than the EU average, a study conducted by IOBE, the Foundation for Economic and Industrial Research, has shown.

The country’s elevated industrial energy costs stand as one of the industrial sector’s biggest disincentives, while the government’s energy policy has so far failed to deliver cost-related results, the study noted.

This is unquestionably affecting the level of competitiveness of Greece’s industrial sector, also grappling with a series of regulatory surcharges such as public service compensation (YKO), CO2 emission costs and RES-supporting ETMEAR costs. Adding to the industrial sector’s energy cost burden, the main power utility PPC is applying pressure for tariff hikes.

Acccording to Directorate-General for Energy data used in the study, second quarter wholesale electricity prices were 60.1 euros per MWh in Greece, 55.8 euros per MWh in the UK, 55.1 euros per MWh in Ireland, 36 euros per MWh in Germany and 33.9 euros per MWh in Bulgaria.

A recent PWC consulting firm study commissioned by Belgium’s regulatory authority for energy to compare the industrial electricity costs of Belgium, France, Germany and the Netherlands presented levels that were as much as 80 percent lower than those of Greece.

Industrial electricity cost up to 80% higher in Greece, PWC study shows

The cost of industrial electricity in Greece is nearly 80 percent higher than prices paid in central and northern European countries, a PWC consulting firm study conducted on behalf of Belgium’s regulatory authority for energy has shown.

The Belgian energy authority commissioned PWC to conduct a detailed study for price comparisons of industrial electricity costs in Belgium, France, Germany and the Netherlands.

Hidden subsidies and discounts virtually wiping out surcharge costs are contributing significantly to this energy cost gap between Greece and the aforementioned fellow EU member states, the study indicated. It also analyzes network and environmental costs as well as other surcharges and taxes paid by industrial consumers.

The study includes electricity costs for various industrial consumption  levels. The total electricity cost for consumption of over 200,000 MWh is 37 euros per MWh in Germany, 42.2 euros MWh in France, 39.4 euros MWh in the Netherlands and 49.7 euros per MWh in Belgium, the PWC study showed.

In Greece, the equivalent cost – including an 8 percent quantitative discount and 7 percent punctuality discount – reaches as much as 79.4 percent higher and totals 66.41 euros per MWh.



Industrialists reject ministry offer including 10% power tariff hike

Following weeks of negotiations, EVIKEN, the Association of Industrial Energy Consumers, has rejected an economy and development ministry proposal concerning new  industrial consumer terms for electricity supply by the state-controlled main power utility PPC.

The alternate minister of economy and development Stergios Pitsiorlas (photo) proposed extending volume-based electricity discounts as well as punctuality discounts for industrial consumers but incorporated these offers with a 10 percent increase of industrial tariffs.

According to sources, the industrial consumers association made clear it cannot accept a 10 percent electricity tariff hike as it has already been burdened by CO2-related cost increases of 20 percent.

On October 10, Pitsiorlas promised he would deliver an energy cost savings package for industrial consumers within ten days.

This impasse brings the negotiations back to square one. The industrial sector will be hoping RAE, the Regulatory Authority for Energy, eventually looks seriously into charges made by the sector against PPC for discriminatory treatment and be vindicated. At the other end, the government faces the challenge of finding an energy cost solution for industrial enterprises in support of their sustainability.


PPC probed for lower prices to Larco, Aluminium of Greece

A public prosecutor at a Court of First Instance is investigating the main power utility PPC over suspicions that it could be selling electricity at unfair, below-cost prices to its two biggest energy-intensive industrial consumers, the troubled state-controlled nickel producer Larco and Aluminium of Greece, cross-examined information has indicated.

It is believed PPC has been asked to present a series of financial details in a letter forwarded by a financial police authority, which notes, in the letter, that a preliminary investigation is being held based on a Court of First Instance order.

Documents demanded by the financial police authority include financial statements such as balance sheets and financial results from 2013 to 2017, invoices concerning transactions with energy-intensive customers from 2013 to the present, as well as price and supply agreements signed by PPC with Larco and Aluminium of Greece from 2013 to now.

The letter received by PPC does not explain what prompted the investigation, nor does it clarify its purpose, but it is firmly believed PPC’s electricity supply prices offered to Larco and Aluminium of Greece are the concern.

EVIKEN, the Association of Industrial Energy Consumers, recently contended PPC’s electricity supply pricing policy for Larco and Aluminium of Greece and the duration of these agreements are favorable, adding other industrial consumers need to counter demands such as higher CO2 emission right price, end of discount offers, and brief one-year supply agreements.

The association’s claims were made following the launch of the public prosecutor’s investigation.

EVIKEN calls for gov’t response to rising industrial energy costs

EVIKEN, the Association of Industrial Energy Consumers, has called for a firm government response to rising energy costs in a harshly worded statement claiming a conscious effort is being made to undermine the Greek industrial sector’s aim of increasing its contribution to the country’s GDP, employment and investments.

Though the main power utility PPC has not been directly criticized in the EVIKEN statement, the complaints are unquestionably aimed at the utility’s board.

In its statement, the industrial energy consumers association contends an attempt is being made to end institutionalized discounts that are based on consumer profiles and operating costs at the main power utility PPC. EVIKEN also notes the power utility is seeking to impose unjustified tariff hikes.

Any demands for further cost increases, which would add to the already increased CO2 emission right costs faced by industrial enterprises, are unsubstantiated and inappropriate, while an attempt to abolish industrial tariff discounts is discriminatory, EVIKEN notes.

“We call upon the government and prime minister to take appropriate decisions so that the industrial sector’s recovery effort and target for employment growth are not endangered,” the statement concludes.

EVIKEN protests CO2 cost treatment of major consumers

EVIKEN, the Association of Industrial Energy Consumers, has filed a complaint to RAE, Greece’s Regulatory Authority for Energy, claiming discriminatory treatment of high-voltage electricity consumers by the main power utility PPC over CO2 emission right costs.

High-voltage industrial electricity consumers shoulder the full extent of CO2 emission right cost increases as these costs are included on their electricity bills as separate surcharges. On the contrary, all other consumers enjoy steady tariff levels as CO2-related charges are not included on their bills. EVIKEN has requested an explanation for this conflicting billing approach.

It is estimated that PPC’s decision to absorb higher CO2 emission costs for all other consumer categories is costing the state-controlled power utility additional costs worth between 430 and 440 million euros per year.

EVIKEN also filed a second complaint to RAE requesting an examination of lower mid-voltage tariffs for industrial consumers sharing the same energy profiles as high-voltage consumers. Mid-voltage tariffs are lower by as much as five euros per MWh compared to tariffs paid by high-voltage consumers sharing identical energy profiles.