Electricity supplier switching by consumers up 89% in 2019

Consumers switching electricity suppliers increased sharply by 89 percent in 2019, a report by RAE, the Regulatory Authority for Energy, has shown.

A total of 576,436 consumers, 8.5 percent of the 6,783,075 consumers in total, switched suppliers in 2019, up from 4.51 percent in 2018, the report showed.

This sharp rise in consumer switches was attributed to growing consumer confidence in independent electricity suppliers as well as the effectiveness of discounts and various other offers made available by these suppliers to attract customers. Put simply, competition in the Greek electricity market appears to be intensifying.

Household electricity consumers showed the greatest degree of mobility, followed by mid and high-voltage consumers, or businesses and industrial consumers, the RAE report observed.

In the mid-voltage category, 834 business and industrial consumers of 9,071 in total, or 9.19 percent, switched electricity suppliers in 2019, according to the report.

Despite the increased customer mobility, power utility PPC remained dominant in 2019, supplying electricity to 5,694,627 consumers, or 83.95 percent of the 6,783,075 in total, the report showed. In terms of consumption, PPC held a 71.13 percent share, supplying 27.7 million MWh last year.

Independent supplier Protergia, a member of the Mytilineos group, was ranked second in terms of total number of customers in 2019, supplying to 181,232 customers, the report noted.

Elpedison was ranked third with 171,143 customers, followed by Heron (140,812), Watt & Volt (127,364), Zenith (73,968), Volton (69,688), NRG (52,961), Fysiko Aerio (39,881), Volterra (35,748) and KEN (33,997).

A total of 24 independent suppliers are active in Greece’s electricity market.

Natural gas bill payments down 30% in last two months

Natural gas bill payments have plunged by 30 percent over the past two-month period following a milder single-digit decline a month earlier, latest market data has shown.

Consumers have resorted to installment-based payback plans in far greater numbers during this two-month period of deterioration.

Suppliers, fearing a rise in unpaid receivables, are not hesitating to cut gas supply to customers who were already battling against energy debt prior to the pandemic and are now in deeper trouble. However, this supply-cut threat concerns a small percentage of customers.

Gas suppliers have yet to turn to the government for support measures, as was the case in the electricity sector. However, they may end up needing help in the form of low-interest loans, support mechanisms and other financial tools if the country’s tourism industry suffers a major setback this coming summer, as is feared.

Zenith and EPA Attiki (Fysiko Aerio) hold an 85.39 percent overall share of the country’s retail gas markets equipped with distribution networks – wider Athens area, Thessaloniki and Thessaly – data processed by energypress showed. Zenith leads with 46.14 percent and EPA Attiki follows with 39.25 percent.

EPA Thess, a former monopoly covering Thessaloniki and Thessaly, has lost approximately 15 percent of its market share to newly emerged rivals, the data showed. KEN, the biggest gainer, has captured 5.25 percent and is followed by Protergia (3.1%), Elpedison (1.91%), NRG (1.35%), Heron (1.05%), Watt+Volt (0.75%) and EFA (0.76%).

Suppliers face tougher times, NOME benefits ending

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

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

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

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

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

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

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

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

 

 

 

Elpedison enters race for new gas-fueled power station

Elpedison has submitted an application to RAE, the Regulatory Authority for Energy, for an electricity production license concerning an 826-MW combined cycle gas-fueled unit in the Thessaloniki area, next to an existing company unit.

The investment plan, estimated to be worth 400 million euros and requiring about two years to complete, is the fifth application submitted by as many companies for a gas-fueled power station.

The companies still need to make final business decisions to proceed with these investment plans. The country’s grid capacity is believed to have space for one or two new gas-fueled power stations over the next few years.

Production licenses have already been granted by RAE for some of the other four applications while the processing of the others is believed to have reached an advanced stage.

The Mytilineos group has applied for a 650-MW unit at the corporation’s energy hub at the Viotia (Boeotia) area’s Agios Nikolaos location, slightly northwest of Athens. The Copelouzos group submitted an application for a 660-MW unit Alexandroupoli, northeastern Greece; Gek-Terna is looking to develop a 660-MW gas-fueled power station in Komotini, in the north; and the Karatzis group, owner of the KEN electricity company, aims to develop a 665-MW in the country’s mid-north, in Larissa.

Copelouzos, Karatzis groups also planning gas-fueled units

The Copelouzos and Karatzis corporate groups are the latest energy-sector players planning to develop new natural-gas fueled power stations, following Mytilineos, already granted a production license, and Gek Terna, whose project plan had become known but was not officially announced until yesterday.

The Copelouzos group has applied to RAE, Greece’s Regulatory Authority for Energy, for a production license concerning a 660-MW combined cycle power plant in Alexandroupoli, northeastern Greece. The Karatzis group, owner of the electricity supplier KEN, has submitted an application to the authority for the development of a 665-MW combined cycle facility in the mid-north Larissa area.

The Copelouzos group submitted its application to RAE in December while the Karatzis group forwarded its bid to the authority last month, energypress sources have informed.

As has been previously reported, the Mytilineos group plans to develop a 650-MW facility in the Viotia area, northwest of Athens, while Gek Terna is preparing to set up a 660-MW gas-fueled unit in Komotini, northeastern Greece.

The similar capacities envisioned for all four project plans are not coincidental. Technical experts consider power plant capacities of approximately 660 MW as ideal for optimal efficiency.

KEN official: ‘Let’s first utilize existing interconnections’

Electricity interconnections reduce risk and prices but the country’s existing potential and interconnections are not being fully utilized, Yiannis Psarros, the crossboundary trade manager at independent supplier KEN, noted in an interview for local business news channel SBC’s Energy Week show, hosted by energypress journalist Thodoris Panagoulis.

“Let’s utilize these [existing interconnections] first and then look at developing new ones, such as the Cretan interconnection, Eurasia and Euroafrica,” Psarros remarked. “Our country depends greatly on interconnections,” he added.

Electricity suppliers in Greece are currently absorbing elevated wholesale prices but it remains questionable as to how long they can keep doing so, the KEN official explained.

Inadequate rainfall and an increase in oil prices have driven up wholesale electricity prices, compared to recent levels in Europe and the Balkans, Psarros pointed out.

Psarros described the NOME auctions – introduced in Greece slightly over a year ago to offer independent suppliers access to the main power utility PPC’s low-cost lignite and hydropower sources – as a transitional measure that cannot be relied on for favorable market conditions in the future.

Until now, NOME auctions have helped the market remain afloat but made minimal impact in terms of independent supplier growth through a contraction of PPC’s dominant market share, the KEN official remarked.

He admitted current market shares of independent suppliers would have been lower had NOME auctions not been introduced. Also, extraordinary situations such as last winter’s energy crisis would have proved devastating without the NOME auctions, he added.

Psarros described the bailout-required contraction target set for PPC as ambitious – given the measures implemented to date. PPC’s retail electricity market share, still at about 83 percent, needs to drop to less than 50 percent by 2020.

The KEN official expressed satisfaction with the newly emerged company’s performance over the past nine months. KEN now operates 19 retail outlets and is one of the two or three fastest growing suppliers in terms of new customer arrivals, stressed Psarros, who also made note of the independent supplier’s establishment of a crossboundary trade division.

He expressed reservations over next April’s target starting date for the Greek energy exchange but admitted serious work is being carried out for its launch.

“The energy exchange promises to introduce a futures market, in other words, each player will be able to buy and sell future-term energy. It’s a usefool tool,” Psarros said, adding consumers stand to benefit from the resulting competition.

 

KEN partnership with Cyta looking at Crete market and beyond

Emerging independent electricity supplier KEN, seeking to broaden its customer base, has reached an agreement with Cypriot telecommunications firm Cyta for the provision of services through the latter’s retail network around Greece, energypress sources have informed.

KEN, which, according to retail electricity market data for March, held a 0.03 percent market share, small but triple February’s level, has already launched a nationwide promotional campaign in support of its market entry.

The KEN-Cyta collaboration is expected to be launched soon. Besides offering KEN services through Cyta outlets, the partnership will also include combined energy and telecommunication packages.

Combined packages are expected to play a key role in KEN’s growth objectives. A number of electricity suppliers have already forged such partnerships with telephony companies.

Though unanticipated, the collaboration established KEN and Cyta was not a sudden development. KEN’s managing director Yiannis Kounalakis held a post as sales manager at Cyta for the Cretan market prior to taking on the helm at KEN late in 2016. Cyta maintains a broad customer base in Crete and is one of this regional market’s key telephony players.

KEN does not intend to limit its aspirations to the Cretan market. The electricity supplier is looking to gain a respectable share of the Greek electricity market.

A member of the Karatzis corporate group, KEN plans to make significant investments in the energy sector in 2017, group officials informed during a presentation of financial results.

The group aims to further expand its Greek retail network through franchise deals, while a plan for an entry into the natural gas market is also being developed.