Monthly auctions for industrial energy-saving compensation

Industrial consumers – high and medium-voltage – will be offered energy-saving incentives through monthly auctions offering compensation for bids with the lowest compensation levels, it has been decided at an extraordinary meeting yesterday involving the energy ministry, RAE (Regulatory Authority for Energy), distribution network operator HEDNO/DEDDIE and power grid operator IPTO.

The session was staged ahead of tomorrow’s meeting of EU energy ministers, whose agenda will include talks for the establishment of a formula reducing electricity usage.

The European Commission has prepared a plan for 5 percent reduction of electricity consumption during peak hours, but, following negotiations over the past few days, this reduction rate could be cut to 3 percent. Member states are expected to seek flexible terms.

Electricity consumption restrictions, in Greece, between 6pm and 9pm are seen as a certainty following yesterday’s meeting of Greek officials. Also, an additional hour during non-peak hours will most likely be introduced, but it remains unclear whether this hour will be set in the morning, from 9am to 10am, or in the evening, from 9pm to 10pm.

Energy saving compensation for industry, incentives for households, businesses

Industrial enterprise compensation packages, offered through auctions, in exchange for lower energy consumption, and energy-saving incentives for households to be announced at the end of this month, have been included in a Greek plan aiming to achieve a European Commission order for a 5 percent reduction of electricity usage by all EU member states.

It will be up to each EU member state to decide on the details of respective formulas achieving the crisis measure’s objective set by the European Commission.

The Greek plan is greatly relying on industrial players to embrace compensation packages to be offered through auctions.

Reduced energy usage by households and businesses will be optional as, contrary to other EU countries, smart meters, offering immediate online information on energy consumption, have yet to be installed in Greece.

A promotional campaign encouraging households and businesses to use less electricity will be launched at the end of this month, immediately after the energy ministry has announced subsidy-related incentives.

 

Major industries turning to natural gas alternatives

Energy-intensive industries are abandoning, one after another, natural gas as an energy source and turning to alternatives in order to contain their operating costs.

Aluminium of Greece has switched to diesel for smelting procedures at its Agios Nikolaos facility in Viotia, northwest of Athens, while Motor Oil, has begun using naphtha for some of its energy needs, in place of natural gas, whose price levels have spun out of control.

According to sources, another major industrial player, ElvalHalcor, is also examining LPG as an alternative to natural gas, which the company uses for its aluminum and copper smelting furnaces.

However, this fuel switch cannot be carried out instantly as specialized studies focused on safety matters must precede the change. In addition, equipment needed for this fuel switch is not readily available. Also, ElvalHalcor is examining the extent of LPG availability in Greece as an industrial enterprise of its size would require big amounts.

European Commission energy crisis measures set to be announced, which will require energy savings and discourage the use of natural gas, are driving industrial players to seek energy source alternatives.

 

Eurometaux: Crisis measures needed to ease pressure on struggling industry

Europe needs to take emergency energy-crisis action to ease the growing pressure on the industrial sector, a letter forwarded to the European Commission by European industry association Eurometaux has underlined.

The letter was signed by representatives of 40 major industrial enterprises and associations, including three leading Greek industrial players, Evangelos Mytilineos, head of Mytilineos group, Panos Lolos, ElvalHalcor’s Copper Segment general manager, and Antonis Kontoleon, president of EVIKEN, the Association of Industrial Energy Consumers.

Aluminium and zinc production in Europe has been forced to drop to 50 percent of capacity as a result of high energy costs, while the copper and nickel sectors are also facing serious problems, the Eurometaux letter notes.

Reasonable electricity and natural gas prices are necessary for production of metals, the letter underlines.

Europe cannot have a successful energy and raw materials strategy if electricity and gas prices remain at current levels for an extended period of time without relief, the letter says.

The crisis requires a comprehensive package of solutions, while no option should be disregarded during such unprecedented conditions, the association notes.

An improved temporary framework for state support as well as incentives for electricity purchase agreements with RES producers are among several proposals listed by Eurometaux in its letter to Brussels.

Key industrialists asked to cut down on energy consumption

Energy minister Kostas Skrekas has asked a group of leading Greek industrialists to reduce energy consumption at their production facilities as a means of greatly contributing to the country’s wider energy-crisis effort ahead of what could be a challenging winter, energypress sources have informed.

The minister’s request, a response to Russia’s latest closure of the Nord Steam I gas pipeline, which, according to Moscow, was necessary for repairs, represents the start of the government’s gradual implementation of an emergency plan that factors in the possibility of a complete cut in Russian gas supplies.

The energy minister met last Friday with three industrialists, Dimitri Papalexopoulos, chairman of the executive committee at Titan cement group, Nikolaos Stasinopoulos, president of Viohalco, and Evangelos Mytilineos, chairman and board of the directors at the Mytilineos group, whose subsidiaries include Aluminium of Greece.

The minister, through this initiative, is striving for energy savings of approximately 15 percent as the production facilities of the three industrial groups are the country’s biggest consumers of electricity and natural gas.

Implementation of the minister’s plan is expected to help prevent power cuts to households and businesses. The three businessmen were also asked, by the energy minister, to avoid incorporating job cuts into their energy saving strategies.

 

 

PPAs through Green Pool, state subsidies to be set at 85%

A Green Pool model forwarded by the energy ministry for European Commission approval ahead of an envisaged launch at the beginning of 2023 will have the dual goal of setting energy costs for eligible industries at competitive price levels and bolstering green-energy generation through power purchase agreements.

The energy ministry hopes its plans will be given the green light as soon as possible so that industries can, immediately afterwards, establish PPAs for green energy, with state subsidies set at 85 percent.

This would enable industries to partially cover their energy needs as of the beginning of 2023 at competitive prices and also reduce their carbon footprints.

The Greek proposal was forwarded to the European Commission’s Directorate-General for Competition early this month, the aim being to make energy-intensive industries more environmentally friendly and facilitate the energy-mix entry of new RES facilities.

Rising PPA interest expressed by major-scale consumers

Major-scale energy consumers are expressing growing interest in power purchase agreements with RES producers, but supply currently remains subdued.

Banks are playing a key role in this development as they are encouraging customers to establish PPAs by offering low interest rates as an incentive, a new banking offer, as was noted by a sector official at the recent Athens Energy Dialogues conference.

Banks, increasingly acknowledging that PPAs are the way forward, prefer ten-year PPAs, deemed as agreements that protect from dangers and risks, while also being suitable for the Greek market, according to sector officials.

Market players are already seeking professional PPA advice from consulting firms to prepare for their entry into this new territory.

 

Ministry continuing talks with Brussels for green PPAs

Energy ministry officials are intensifying talks with the European Commission for its approval of a support mechanism concerning green PPAs to be established between industrial producers and RES producers through green pools.

The energy ministry recently responded to an initial set of questions forwarded by Brussels and is expected to stage a teleconference with European Commission official within the next week or two for further clarification of issues concerning the green PPAs.

According to sources, the initiative’s main objective is not to bolster the industrial sector but to help transform industrial players into greener players and also facilitate the entry of new RES units into the country’s energy mix.

Officials are striving to announce the green pool plan this coming summer.

 

Brussels seeks clarification on green PPAs for industry

The European Commission, in ongoing exchange with the energy ministry, is seeking clarification on the functional details concerning green PPAs planned as a supportive measure for the industrial sector.

Aspects for which Brussels wants further details include how the entity to be tasked with managing the PPA mechanism will purchase additional energy required and how it will sell excess green energy.

Brussels has also asked if the regulating body will have responsibilities in the balancing market and how the mechanism’s Green Pool will interact with and influence the balancing market.

The energy ministry forwarded a group of responses to Brussels’ first set of questions at the end of last week. A teleconference in early December had preceded the European Commission’s questions.

According to insiders, clarity on the support measure’s launch schedule is expected in approximately two months. In the meantime, two or three more rounds of questions from Brussels are anticipated.

Industry back to pre-pandemic levels despite energy crisis

The country’s industrial sector is proving to be resilient amid the energy crisis, judging by its energy consumption patterns, up 3.2 percent in November, compared to the equivalent month a year earlier, according to data provided by power grid operator IPTO in its monthly report.

Overall high-voltage electricity demand in November reached 555 GWh, almost to the pre-pandemic level of 563 GWh that had been recorded in November, 2019.

Export activity by the heavy industry sector has risen, reflecting these electricity demand figures. However, industrial players have had to deal with rising energy costs over the past few months. Producers are inevitably passing on increase energy costs to consumers.

 

 

Producers expecting €8.83m surcharge return from gas distributors

RAE, the Regulatory Authority for Energy, has determined the size of network usage surcharges all large-scale consumers stand to be handed back by natural gas distributors to offset across-the-board surcharges imposed on industrial enterprises between August 14, 2015 to December 1, 2016. The amount to be returned by the gas distributors totals 8.83 million euros.

Gas distributor EDA Attiki, covering the wider Athens area, will need to return to large-scale consumers a total of 1.44 million euros, EDA Thess, covering the Thessaloniki and Thessaly areas, must return 3.26 million euros, and DEDA, covering the rest of Greece, needs to return 4.13 million euros.

The 8.83 million-euro amount that will need to be returned by the three gas distribution companies is expected to be offered in 36 monthly installments from November, 2021 to October, 2024.

Large-scale consumers were universally charged a network usage surcharge of 4 cents per MWh over a 16-month period, based on a bailout term from 2015, which prompted EVIKEN, the Association of Industrial Energy Consumers, to forward an official complaint to the European Commission.

Industry opposes RES surcharge as competitive pricing component

Energy-intensive industrial producers strongly oppose an energy ministry plan to change the status of a RES-supporting ETMEAR surcharge included in electricity bills from a  regulated to competitive fee by having it incorporated into the pricing policy of suppliers, EVIKEN (Association of Industrial Energy Consumers) sources have informed energypress.

The industrial producers have cited two key reasons for their disapproval. Firstly, changing the ETMEAR surcharge into a competitive component of supplier pricing policy would terminate the ability of industrial consumers to receive related compensation as, based on EU state aid directives, compensation is permitted for regulated charges but not competitive charges.

In addition, industrial consumers oppose an ETMEAR status change as a new energy exchange platform promises to offer strong incentive for new RES units to participate in competitive procedures to secure agreements with energy suppliers. This essentially means that fewer, if any, RES units will remain available for bilateral agreements with industrial producers, who are counting on such arrangements for an urgently needed reduction of energy costs in the medium term.

The resilience of manufacturers is already being seriously tested by recent energy price increases brought about by the energy crisis.

Balancing cost leap the latest concern for suppliers, industry

A sharp rise in balancing market costs, which have reached 20 euros per MWh, comes as an additional headache for suppliers and the industrial sector, already facing exorbitant wholesale electricity costs amid the energy crisis.

Balancing costs have risen since the end of September, from 12.25 euros per MWh to 20.04 euros per MWh for the week covering October 11 to 17.

This upward trajectory further increases the cost of electricity for industrial consumers and non-vertically integrated suppliers at a time when market clearing prices have skyrocketed.

On Monday, when renewable energy dominated grid input with a 48 percent share of the country’s energy mix, the market clearing price eased to 189.30 euros per MWh before bouncing back up to 218.06 euros per MWh yesterday and 205.6 euros per MWh today. The average wholesale price for October is currently at 200.3 euros per MWh.

Should the balancing cost settle at the currently heightened level of approximately 20 euros per MWh, domestic industrial players will face even greater sustainability challenges, while retail electricity prices will rise further.

Suppliers and industrial enterprises are troubled as, under the current energy market conditions, there is no leeway for an increase in the balancing cost, which, even at previous lower levels of around 10 euros per MWh, was one of Europe’s highest.

 

 

Medium-voltage sector affected by wholesale price clause

Medium-voltage consumers face further power cost increases following the introduction of a wholesale price-related clause by power utility PPC, the main supplier to this category, which includes super markets and retail chains.

PPC was also forced to introduce a wholesale price-related clause for the low-voltage category in August, as a result of skyrocketing wholesale electricity prices.

Unlike rival power suppliers, who have adopted wholesale price-related clauses, the power utility had previously only included a CO2 emission rights clause in its supply agreements.

This latest energy cost increase could end up overwhelming some of the medium-voltage category’s energy-intensive consumers, defined as enterprises with energy costs representing at least 30 percent of their total business costs.

Costs for producers in Greece have risen by levels ranging between 20 and 40 percent, according to industry association Hellenic Production. The energy crisis is making stronger impact on producers in Greece as wholesale market negotiations for electricity are conducted through the intraday market, whereas most energy deals in other European markets are based on bilateral agreements at fixed prices, the association noted.

Even so, the energy crisis is being felt by industrial players throughout the continent. A group of eleven major producers representing various sectors, including steel and cement production, have urged EU leaders to take emergency action to counter the extreme energy cost increases, a major threat to post-pandemic economic recovery.

 

EU energy ministers to discuss consumer protection measures

EU energy ministers plan to discuss the alarming increase in energy prices on October 6 at a session expected to take into consideration a proposal made by Greek energy minister Kostas Skrekas for a temporary hedging mechanism that would be linked to the EU’s Emissions Trading System (ETS) as a means of protecting consumers against the overall energy cost ascent, caused by a combination of unfavorable factors, internationally.

Higher energy costs, which have energy consumers, including industrial, bracing for a challenging winter, will also be a key issue at a EU Summit meeting on October 21 and 22.

Natural gas prices yesterday climbed to 85 euros per MWh, several times over levels registered earlier in the year, oil prices exceeded 80 dollars per barrel, and CO2 emission rights, on a record-breaking streak, reached 62 euros per ton.

Besides these price rises, energy sufficiency issues are also beginning to emerge around Europe, as well as in China, for a variety of reasons.

In Greece, the combination of higher prices for primary and secondary materials, greater transportation costs, given the country’s location on the edge of Europe, plus the increase in energy prices, threatens to paralyze the industrial sector.

The country’s energy-intensive consumers are calling for a revision to supply rules. In the domestic retail electricity market, suppliers are being forces to revise prices. Some have so far resisted but are battling against narrowing profit margins. Customer shifts by disgruntled customers are already being observed.

 

Industrial players paying price for energy supply agreement delays

Industrial producers who have prolonged their energy-supply negotiations and delayed signing new agreements now face drastically deteriorated conditions prompted by an alarming price surge.

Highlighting the unfavorable turn in market conditions, one small-scale industrial consumer is believed to have just signed a new high-voltage supply agreement at a price level of approximately 120 euros per MWh, about 30 percent higher than levels of just a few months ago and considerably higher than supply agreements reached early in the summer.

Power utility PPC managed to move fast enough to incorporate hedging agreements to these deals as protection against price rises, a crucial decision given the current conditions.

A number of large-scale industrial players have yet to reach electricity supply agreements, finding themselves fully exposed to the sharp price rises, caused by a combination of unfavorable factors in international markets.

Mid-voltage industrial producers find themselves in even more discomforting positions as electricity price rises for this category have been even steeper, reaching levels of 125 euros per MWh in July and 150 euros per MWh in August.

The adverse market conditions help explain Hellenic Petroleum ELPE’s recent decision to not sign a new supply agreement with PPC, turning instead to group member Elpedison for its electricity needs.

Increased electricity and natural gas costs are severely impacting the competitiveness of industrial producers, expected to pass on these increased costs to their product prices.

 

Consumption record expected, industry on switch-off standby

Electricity consumption today is expected to exceed yesterday’s level of 10,700 MWh, a ten-year high, and reach close to 11,000 MWh, which would represent an all-time high, as the prolonged heatwave peaks.

Industrial consumers are awaiting switch-off orders from power grid operator IPTO. Up until yesterday, they had yet to receive such instructions, but a number of industrial enterprises have already switched off voluntarily, while Prime Minister Kyriakos Mitsotakis has urged consumers to exercise restraint in electricity consumption.

Authorities are placing their hopes for grid sufficiency in strong summer breezes forecast for Thursday that should cool temperatures and significantly boost generation through the country’s wind energy facilities.

Though still too early to judge, the grid appears to have stood up to the heatwave’s challenge so far. Minor technical issues and brief outages in various parts of the wider Athens area, Larissa, central Greece, and Agrinio, in the northwest, have been reported.

Authorities remain on edge as the resilience of a largely outdated grid remains uncertain amid daily consumption levels of 9,000 to 10,000 MWh for days on end.

Lignite-generated input is playing a crucial role. It covered between 16 and 18 percent of consumption yesterday. Power utility PPC’s lignite-fired Megalopoli III power station, which has been sidelined for months as part of the country’s decarbonization phase-out plan, operated most of the day yesterday.

 

‘DAPEEP should manage PPAs platform, not energy exchange’

Preparations for the country’s Market Reform Plan, expected to soon be submitted to the European Commission for approval, have prompted a reaction from RES market operator DAPEEP, asserting it should be appointed operator of green-energy power purchase agreements (PPAs) instead of the energy exchange, as has been stipulated in the plan, now undergoing public consultation.

DAPEEP’s objection to the PPA plan, included in the Market Reform Plan, emerged at a meeting staged by RAE, the Regulatory Authority for Energy, uring discussion on the road map for domestic wholesale electricity market revisions.

DAPEEP’s operator’s chief official Yiannis Giarentis protested that the operator has supported the RES sector’s development for years, being at the helm of this market for 20 years, but has now been sidelined as green-energy PPAs, to facilitate bilateral agreements between RES producers and industrial consumers, are about to come into the picture.

RAE will now examine various proposals and views before taking a stance on the matter.

Green PPAs exchange platform, industrial subsidies in making

A Market Reform Plan being prepared by the government, to be submitted to the European Commission, includes provisions for the establishment of an energy exchange transaction platform concerning power purchase agreements (PPAs) between RES producers, as well as green aggregators, with suppliers and major-scale consumers.

The green PPAs, when concerning energy-intensive industrial enterprises, will receive state support, while a subsidy package for this category of agreements is also in the making, according to the plan.

Funds stemming from the recovery fund, the green fund as well as the RES special account will be used to fund the subsidy package, according to the government plan.

The aim of the effort is to ensure, in advance, the sale of prospective energy to be produced by new RES units, the intention being to  facilitate bank financing for their development given the fact that they will no longer be entitled to fixed tariffs, through auctions, over 20-year periods, as has been the case until now.

The plan is expected to result in lower-priced green energy for industrial consumers and also facilitate the development of new RES investments.

PPC-Aluminium of Greece agreement paves way for other major consumers

The forthcoming end of a long-lasting business association between Aluminium of Greece, a member of the Mytilineos group, and power utility PPC, announced at the former’s general shareholders’ meeting yesterday, marks the end of an era in the energy ties between the country’s biggest electricity consumer and the Greek market’s dominant supplier.

In 2023, Aluminium of Greece will no longer depend on PPC’s supply, a development concurrently marking the beginning of its goal to become the first eco-friendly aluminium producer.

The latest PPC-Aluminium of Greece agreement promises to pave the way for solutions in negotiations currently in progress between the power utility and other energy-intensive industrial producers.

Other than the fact that the duration of Aluminium of Greece’s new supply agreement with PPC will run until 2023, no other details have been disclosed. Its expiration in two years’ time will mark the end of a 60-year association between the two companies.

One thing already clear is that Aluminium of Greece, beyond 2023, will receive electricity from the Mytilineos group’s new natural gas-fired power plant being developed in the Agios Nikolaos industrial zone in Viotia’s Agios Nikolaos area, northwest of Athens, to be direct cable-linked to the Aluminium of Greece facility, as well as through RES production.

The combination of these two electricity sources will offer Aluminium of Greece greater energy-source flexibility, the group’s chairman and CEO Evangelos Mytilineos noted yesterday.

PPC’s administration, headed by chief executive Giorgos Stassis, displayed realism that will “help industry, as a whole, move ahead with the energy transition that is inevitably approaching,” Mytilineos acknowledged. “We can establish PPAs at good price levels, and we will play a significant role in this domain,” he added.

 

PPC hold of industry ending, energy groups entering picture

The approaching end of a 60-year business association between power utility PPC and Aluminium of Greece, a member of the Mytilineos group, announced yesterday by the group’s chairman and CEO Evangelos Mytilineos, marks the end of an era with wider implications, as all the country’s energy and industrial groups are heading in the same direction.

“In 2023, Aluminium of Greece will no longer depend on PPC. It is moving into a new era as, for the first time since its establishment, the company will be freed from PPC in terms of electricity supply,” Mytilineos announced at a general shareholders’ meeting.

The future belongs to the vertically integrated groups, smaller versions of the power utility, set to enter and cover market needs.

Some enterprises have already prepared and positioned themselves for the new era, in which major-scale electricity consumers will no longer depend on PPC, instead covering needs through PPAs.

Companies that have been slower to incorporate Greece’s energy transition into their strategies must now move fast if they want to remain on the map.

The developments offer a glimpse of the energy sector’s new era. A more efficient PPC will no longer be weighed down by dependencies and compromises, private-sector groups will be structured for greener policies, RES investors will not depend on tariffs at RES auctions, but, instead, establish PPAs with industrial consumers, and competition will intensify through the many changes coming into play, such as the target model markets and the Capacity Remuneration Mechanism (CRM).

Green-energy investments, breaking one record after another, now appear likely to achieve a 2030 objective aiming for eco-friendly energy coverage of the country’s total energy demand at a level of 63 percent.

This essentially means that RES facilities offering a total capacity of 17 GW will be operating by the end of this decade, lessening the need for natural gas-fired power stations, which will become unsustainable, in market terms, as a large proportion of energy exchange transactions will be covered by increasingly competitive RES units.

 

Brussels strategic reserve conditions discussed by RAE, IPTO, ministry

A new adequacy report and a new market reform plan, two conditions set by the European Commission for Greece’s adoption of a strategic reserve mechanism, have been discussed during an online meeting between RAE, the Regulatory Authority for Energy, power grid operator IPTO, and the energy ministry.

The European Commission’s Vice-President Margrethe Vestager, also Brussel’s Commissioner for Competition, during a preceding meeting, earlier last week, with energy minister Kostas Skrekas, called for a new adequacy report, in other words, an updated study proving the country’s need for a strategic reserve mechanism to cover actual grid needs.

The Brussels official also requested a new market reform plan detailing reforms designed to intensify competition in the wholesale electricity market.

Pantelis Kapros, Professor of Energy Economics at the National Technical University of Athens, has been asked to contribute to this new market reform plan, sources informed.

Besides the strategic reserve mechanism, RAE, IPTO and energy ministry officials also discussed details on prospective power purchase agreements (PPAs) between industrial enterprises and RES producers.

Vestager, at her meeting with Skrekas, the energy minister, recommended that Greece follow the examples of PPA models adopted by other EU member states, such as Spain.

PPC lignite electricity packages through futures market

State-controlled power utility PPC will soon begin offering rival suppliers lignite-generated electricity packages through the target model’s futures market, energy minister Kostas Skrekas and the European Commission’s Vice-President Margrethe Vestager, also Brussel’s Commissioner for Competition, have agreed at a meeting yesterday.

Vestager, during the session, also made clear that the balancing cost of a mechanism concerning power purchase agreements (PPAs) between industrial producers and RES producers cannot be subsidized, but, instead, will need to be aligned with terms that apply for other EU member states.

Athens expects to submit its PPA plan to Brussels in June for approval.

Also next month, the government plans to submit its support framework proposal for energy storage units.

As for the country’s Strategic Reserve Mechanism, the European Commission’s deputy requested a new proposal from Athens, in line with new EU directives.

Under the Strategic Reserve Mechanism, PPC and all other electricity producers opting to withdraw units from the market for back-up services, would be remunerated for sidelining these units for periods determined by IPTO, the power grid operator.

Vestager stressed that the country’s Strategic Reserve Mechanism cannot coincide with the wider Capacity Remuneration Mechanism (CRM).

The Brussels deputy also pointed out that a compensation request made by Greece for PPC’s redevelopment of lignite areas, part of the decarbonization effort, is legally baseless and cannot be pursued further.

Mechanisms, competition on Vestager agenda, here May 13

Energy minister Kostas Skrekas intends to present his case for the introduction of five support mechanisms encouraging energy-sector investments in Greece’s ongoing transition towards carbon neutrality to the European Commission’s Vice-President Margrethe Vestager, also Brussel’s Commissioner for Competition, on the occasion of the official’s upcoming visit to Athens, scheduled for May 13.

Vestager will be in the Greek capital with an agenda featuring two pending competition issues concerning state-controlled power utility PPC.

Greece has faced charges for PPC’s monopoly of the country’s lignite sources but an agreement was reached to end the case by introducing a mechanism offering the power utility’s rivals access to lignite-generated electricity.

A market test for this mechanism was completed some time ago but failed to attract any real interest from rival suppliers.

The percentage of lignite-based electricity made available by PPC, initially set at 50 percent of total lignite-fired output and then lowered to 40 percent, is viewed, by third parties, as too small for any real gains.

The second PPC-related matter to be discussed during Vestager’s visit concerns a recently initiated investigation by Brussels seeking to determine whether the power utility has engaged in activities impeding market competition.

Private-sector investors are pushing for a capacity remuneration mechanism (CRM) in order to go ahead with the development of natural gas-fueled power stations, needed as Greece heads towards a post-lignite era. Skrekas, the energy minister, has repeatedly said a CRM will be launched in June.

The minister also supports a strategic reserve mechanism to compensate PPC’s lignite-fired power stations, still needed for back-up services but nowadays loss-incurring as a result of higher CO2 emission right costs.

In addition, the government is seeking compensation for the premature closure of PPC’s lignite-fired power stations and related mines, being phased out until 2023.

The minister also supports a support framework for hybrid units on non-interconnected islands combining RES electricity generation and energy storage.

Skrekas is also striving to establish a mechanism that would subsidize RES producers for power purchase agreements (PPAs) with energy-intensive industrial enterprises as well as suppliers selling to major-scale consumers.

 

Reducing industrial energy costs a key aim of new gov’t committee

High energy costs and a discouraging, for investments, amortization status, are two main factors holding back Greek manufacturing and placing it in a disadvantageous position compared to those of rivals, Michalis Stasinopoulos, president of industrial body Hellenic Production, stressed during yesterday’s inaugural session of a new government committee for the industrial sector.

The assembly of a government committee for industrial matters has been welcomed as a  positive step by the industrial sector, hoping the committee can contribute to needed coordination between various political offices as the fragmentation of responsibilities and absence of an industry ministry has not helped counter issues faced by the manufacturing sector, Stasinopoulos pointed out.

The new government committee’s line-up includes ministers covering industrial matters, namely development and investment minister Adonis Georgiadis, finance minister Christos Staikouras, environment and energy minister Kostas Skrekas, labor and social affairs minister Kostis Hatzidakis, digital governance minister Kyriakos Pierrakakis, and education and religious affairs minister Niki Kerameus, represented at yesterday’s session by her deputy, Zetta Makri.

The industrial sector was represented by SEV, the Hellenic Association of Industrialists, SBE, the Federation of Industries of Greece, Hellenic Production, the Athens Chamber of Commerce and Industry, IOBE (Foundation for Economic and Industrial Research), and the Association of Greek Regions.

Plan for subsidized lower-cost RES power to industry explored

The energy ministry is working on a transitional state-support mechanism that would offer industrial consumers lower-cost electricity stemming from renewable energy sources.

The European Commission offers conditional approval to state aid resulting in green-energy access for energy intensive consumers.

The energy ministry’s effort to establish such a mechanism comes following the exclusion, from a government list of proposals for EU recovery fund support, of a plan envisaging power purchase agreements (PPAs) between industrial enterprises and RES producers.

The ministry’s new effort is expected to be a variation of the plan not included in the government’s list of proposals seeking support through the European Commission’s Recovery and Resilience Facility.

The ministry acknowledges that, under present conditions, direct and mutually beneficial agreements between energy-intensive industrial consumers and RES producers cannot be achieved, unless such deals concern companies belonging to vertically integrated groups.

The plan being explored would ensure RES producers remuneration for a percentage of their output absorbed,  through the state-support mechanism, at fixed tariffs and extended periods.

EU lawmakers vote in favor of carbon levy on certain imports

EU lawmakers have adopted a resolution for a carbon levy on certain imports from less climate-ambitious countries, with 444 votes in favor, 70 against and 181 abstentions.

Through the adoption of a Carbon Border Adjustment Mechanism (CBAM), to be implemented in 2023, the aim will be to create a global level playing field and prevent carbon leakage, which could create competitive disadvantages for European industrial producers.

The resolution underlines that the EU’s ambitious climate change targets should not lead to carbon leakage as global climate change efforts will not yield results if European production simply relocates to non-European countries with less ambitious emission standards, European Parliament announced in a statement.

European lawmakers, therefore, are in favor of a carbon tax on goods from non-EU countries that have not set ambitious targets for tackling climate change, as the EU has done with its ETS emissions trading system.

Besides creating a level playing field worldwide, the resolution should also serve as an incentive for both European and non-European industries to accelerate decarbonization procedures in line with the Paris Climate Agreement objectives.

 

Revisions to permit energy storage for households, industry

A special committee assembled by the energy ministry to deliver a plan, by May 15, tackling energy storage licensing and operation issues, is working on revising an existing framework to facilitate, and make financially beneficial, battery system installations at homes, businesses and industrial facilities, energypress sources have informed.

The existing framework, particularly restrictive and, as a result, subduing related investments, limits energy storage system installations to 30 KW and permits usage to roof-mounted PV panels for self-production.

The ministry’s special committee, which has been working intensively for more than two months, is striving to make revisions that would  broaden the usage of energy storage systems, the sources noted.

Energy storage system installations are expected to be permitted regardless of whether respective consumers have installed RES systems. This promises to enable battery charging through the network for utilization of stored energy at times chosen by consumers.

The use of energy storage systems is nowadays widely acknowledged as an important contributing factor for support of electricity networks and prevention of grid instability issues, especially during hours when PVs are disconnected as a result of a lack of sunlight.

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, not appeased 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 are 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.