Two Czech firms emerge as PPC unit sale’s surprise contenders

The emergence of two Czech firms, EPH (ENERGETICKÝ Α PRŮMYSLOVÝ HOLDING) and Indoverse Coal Investments Limited, for expressions of interest in the first round of the main power utility PPC’s bailout-required sale of lignite mines and power stations, is the procedure’s surprise development so far.

Expressions of interest by three major local players, GEK-Terna, Mytilineos and ElvalHalcor, a member of the Viohalko group, joined by Beijing Guohua, a wholly owned subsidiary of China’s Shenhua, had been widely anticipated.

EPH is the most recent buyer of lignite units in Europe. The Czech firm acquired facilities with a total capacity of 8,000 MW in 2016. Located in Germany’s east, these lignite units were sold by Sweden’s Vattenfall. Roughly half were built in the 1980s and the other half about two decades ago.

Vattenfall, a state-owned firm, is believed to have sold these units to EPH in order to reduce its portfolio’s exposure to CO2 polluting lignite.

The corporate size of EPH is comparable to that of PPC. Its assets are valued at 12.8 billion euros and annual total turnover reaches about 6 billion euros. However, the Czech firm’s profit figures are a lot more robust. The company’s most recent EBITDA figure was reported at 1.9 billion euros.

EPH maintains assets in central Europe – Czech Republic, Slovakia, Germany, Hungary and Poland – as well as in Italy and the UK.

The EPH group was established in 2009 with the PPF group, which has invested in Greece’s OPAP state lottery, among its founding shareholders. Through subsidiaries, EPH controls and operates lignite-fired power stations, mines, telethermal systems, natural gas networks and storage facilities. It also operates as a coal trader and supplier of electricity and natural gas and owns a number of renewable energy units.

The main shareholder at EPH, 42-year-old Daniel Kretinsky, sold 31 percent of EPH Infrastructure to Australia’s Macquarie Infrastructure and Real Assets in 2016. Kretinsky also holds stakes in Czech media and is a co-owner of the Sparta Prague soccer club.

Indoverse, the other Czech firm to emerge for the first round of PPC’s sale, is active in the Czech Republic’s coal market and operates one power station and mines. Early this year, the company’s head, energy-sector investor Pavel Tykac, who is ranked one of his country’s five wealthiest individuals, declared an intention to invest over one billion euros in European coal-fired power stations.

Tykac has been involved in a number of contentious issues and has needed to face legal charges prompted by unorthodox business practices, including aggressive takeover attempts.

He is the sole owner of Sev.en Energy Group, Indoverse’s parent company. The Sev.en energy group is far smaller than Greece’s PPC. It produces approximately 10 million tons of lignite each year and operates a 410-MW lignite-fired power station.

PPC sale draws expected local players, Shenhua, Czech firms

Three major local players, GEK-Terna, Mytilineos and ElvalHalcor, a member of the Viohalko group, as well as a fourth, the Copelouzos group, joined by Beijing Guohua, a wholly owned subsidiary of China’s Shenhua, have – as was anticipated – all submitted first-round expressions of interest for the main power utility PPC’s sale of bailout-required sale of lignite mines and power stations. Two Czech firms, EPH (ENERGETICKÝ Α PRŮMYSLOVÝ HOLDING) and Indoverse Coal Investments Limited, also emerged as surprise participants. The deadline for expressions of interest expired yesterday afternoon.

PPC needs to disinvest power stations and mines units representing 40 percent of the utility’s overall lignite capacity.

The list of first-round bidders could be revised if partnerships are established or entrants fail to meet criteria enabling qualification for binding bids in the second round. The PPC board will decide on the qualifiers.

Finalized investment schemes will need to be officially declared by the end of July. A September deadline is expected to be set for binding bids.

It is not yet known if any of the sale’s early participants intend to submit binding second-round bids. They are expected to decide after examining PPC’s financial, technical and legal information to be made available to first-round participants through a data room. Investors are not expected to decide any sooner than next month.

The sale price to be demanded by PPC will be a crucial factor for investors. Though definitely interested in acquiring lignite-fired power stations and mines as a means of  controlling their cost of electricity sold, participating suppliers are troubled by the rising production cost of solid fuel-based power generation, a development prompted by EU climate change policies.

PPC advisers upbeat on wider turnout for lignite units sale

The main power utility PPC’s advisers steering the utility’s bailout-required sale of lignite mines and power stations representing 40 percent of the utility’s overall lignite capacity, are confident that, besides local players, a considerable number of foreign investors will also emerge to submit first-round expressions of interest. The deadline for participants expires today.

Over the past few days, it has been rumored that the sale could attract investors from India. This remains to be seen, later today. For the time being, a number of local players, namely GEK-Terna, Mytilineos and Viohalco, as well as the Copelouzos group, expected to join forces with China’s Shenhua for this sale, are believed to be the only certainties.

It is not yet known if any of these probable participants will submit binding second-round bids. They are expected to decide after examining PPC’s financial, technical and legal information to be made available to first-round participants through a data room. These details will help participants determine whether the purchase of lignite units represents a sustainable investment or not. Investors are not expected to decide any sooner than next month.

The sale price to be demanded by PPC will be a crucial factor for investors. Though definitely interested in acquiring lignite-fired power stations and mines as a means of  controlling their cost of electricity sold, participating independent suppliers are troubled by the rising production cost of solid fuel-based power generation, a development prompted by EU climate change policies.

According to European Commission studies and forecasts, emission right costs in the EU, already elevated, are expected to climb further, from 14.43 euros per ton, yesterday’s price, to over 30 euros per ton in 2030.

Given these conditions, investor interest in PPC’s disinvestment of lignite units is expected to be limited to industrial enterprises eligible for offsetting mechanisms compensating such expenses.

 

 

PPC lignite unit bidders to move alone for sale’s initial stage

Most of the local corporate groups planning to submit first-round expressions of interest for the main power utility PPC’s bailout-required sale of lignite mines and power stations representing 40 percent of the utility’s overall lignite capacity are expected to move independently before forming consortiums for the second round, if the acquisition of units offered is deemed sustainable.

All investors, expect for the Copelouzos group, which has made clear it intends to join forces with China’s Shenhua from the start, are expected to bid alone in the first round.

The deadline for first-round expressions of interest expires this Thursday. At this stage, GEK-Terna, Mytilineos and Viohalco, along with the Copelouzos-Shenhua partenership, are expected to emerge as the first round’s local bidders.

No further partnerships involving Greek firms are expected at this preliminary stage of the sale process despite ongoing talks between various parties. Talks for the establishment of consortiums are seen maturing in July, once the short list of second-round qualifiers takes shape.

The sustainability prospects of units offered by the sale’s terms will be crucial in determining the bidding interest of second-round qualifiers.

According to sources, current talks between interested parties not only concern initial equity line-ups but long-term partnerships for power supply.

Given the increased CO2 emission right costs, investor interest in PPC’s disinvestment of lignite units is expected to be limited to industrial enterprises eligible for offsetting mechanisms compensating these expenses.

Two major Greek industrial groups, Viohalko and Mytilineos, are eligible for offsetting mechanisms.

 

DEPA strikes takeover deal with Shell, guarantees included

DEPA, the public gas corporation, and Shell concluded long-running negotiations over the weekend for the former’s acquisition of the Dutch firm’s 49 percent share of the EPA Attiki gas supply and EDA Attiki gas distribution ventures covering the wider Athens area.

The two sides needed to stretch a June 6 deadline agreed to by the government and country’s lenders before striking a deal. It is expected to be approved by the DEPA board tomorrow while an extraordinary shareholders’ meeting is expected to immediately follow for final approval. TAIPED, the state privatization fund, now control’s DEPA’s 65 percent and ELPE (Hellenic Petroleum) holds the other 35 percent.

The agreement between DEPA and Shell was reached for 150 million euros, as had become widely known long before the weekend’s deal.

Following much resistance, the Dutch firm ended up providing long-term guarantees covering any pending tax issues that may arise in the future, including tax matters or accidents resulting from faulty infrastructure development. Also, Shell has committed to terms that would block any future market reentry attempt by the Dutch firm, including indirectly, as a member of an investment scheme, or via any special purpose vehicle (SPV).

Shell was represented in its EPA Attiki joint venture with DEPA, the majority partner with a 51 percent stake, through a special purpose vehicle (SPV).

Once finalized, the DEPA-Shell deal will need to be endorsed by the European Commission’s Directorate General for Competition. The same goes for DEPA’s agreement already reached with Italy’s ENI for the latter’s acquisition of the Greek gas utility’s 51 percent in the EPA Thessaloniki-Thessaly gas supply company. ENI initially went into this joint venture holding a 49 percent stake and now stands to gain full control of the gas supply firm for 57 million euros. However, DEPA will maintain its 51 percent stake in the EDA distribution company covering the Thessaloniki-Thessaly area.

The completion of all these matters will enable the DEPA privatization plan, to offer investors two separate subsidiraries representing the utility’s trading and infrastructure divisions, to go ahead. According to energy ministry sources, DEPA’s considerable cash deposits for 2017, totaling 250 million euros, will be divided between the two prospective subsidiaries.

The Greek State intends to sell a 50.1 percent stake of DEPA’s trading subsidiary, which is expected to draw major investor interest, and retain a 14.9 percent for veto rights concerning matters of strategic importance, especially international gas supply agreements. Two major Greek players, Mytilineos and ELPE, as well as European firms have already expressed interest.

As for DEPA’s infrastructure subsidiary, the Greek State will initially maintain its current stake of 65 percent and, depending on decisions to be taken at ELPE for its 35 percent stake in the gas utility, could sell a 14 percent stake to keep 51 percent.

Recent competition committee action taken by Motor Oil to protested  DEPA’s EPA Attiki takeover plan, promising to give the gas utility control of the wholesale and supply markets in the wider Athens area, could prove to be an obstacle.

Speaking on the sidelines of an Economist conference in Athens last week, energy ministry officials appeared unperturbed. They pointed out that DEPA’s presence is being reduced to one supply firm from two, while adding this development will be followed by the sale of a majority stake in DEPA’s prospective subsidiary representing the trading division.

 

 

 

 

PPC set to appoint boards of two firms selling lignite units

The main power utility PPC intends to appoint, within the next few days, the boards of two new companies to carry the utility’s lignite mines and power stations included in a bailout-required sale representing 40 percent of the corporation’s overall lignite capacity, CEO Manolis Panagiotakis has announced.

Procedures for the disinvestment are believed to be progressing on schedule. Investors have until June 21 to express first-round, non-binding interest for the units included in the sale.

A broad turnout is expected in the first round, but many local investors insist they will emerge for the sale’s preliminary stage on an exploratory basis.

The two new PPC firms will operate concurrently with the sale procedure, according to the power utility’s boss.

The increased cost of CO2 emission rights, consistently over 15 euros per MWh in recent times, is a concern for the sale as it adds to the risk faced by prospective investors.

“We could make a bid if we see that the units can operate even with a marginal profit margin,” the representative of one potential investor, still reserved about the prospects of the units up for sale, told energypress.

The Mytilineos group and GEK-Terna have both declared they will submit non-binding offers on June 21, but it remains unknown whether they will be willing to make follow-up offers. Elpedison has insisted it will not turn up for the first round. The Stasinopoulos group is expected to participate, either independently or as part of a consortium. The first-round participation of a consortium comprised of the Copelouzos group and China’s Shenhua is also seen as a certainty.

According to the sale plan, binding offers will be submitted in September following the provision of data-room access to participants, offering details on the units to be sold.

 

 

 

 

 

Edison considering DEPA distribution network subsidiary

The participation of Edison’s executive vice president Pierre Vergerio at an Economist conference in Athens this Friday has added further credibility to recent rumors of the French-owned Italian company’s interest in a DEPA subsidiary representing the Greek gas utility’s distribution network to be offered as part of its privatization.

It is believed the DEPA privatization model, still not official, will offer investors a majority stake in a subsidiary representing the gas utility’s commercial interests and a minority stake in another subsidiary covering the distribution network.

Edison is rumored to be particularly interested in DEPA’s distribution network subsidiary, which is expected to be established for the upcoming privatization.

Vergerio, in charge of Edison’s midstream gas, energy management and optimization, is also the managing director of IGI Poseidon, a DEPA-Edison joint venture developing the ITGI project.

A number of major Greek players, including ELPE (Hellenic Petroleum), Mytilineos and Motor Oil, have already expressed interest in DEPA’s prospective subsidiary for commercial matters.

Prior to Edison’s emergence as a possible candidate for DEPA’s distribution network subsidiary, pundits had forecast this part of the privatization would only attract special funds that invest in infrastructure projects offering consistent long-term yields.

Announcements offered to date by Edison officials have gone no further than to inform that the corporation is keeping a close watch on the DEPA privatization developments. A finalized and detailed DEPA privatization model has yet to be delivered, Edison officials have pointed out, adding that decisions on the matter have yet to be reached at the company.

 

 

Country’s big energy players gearing up for DEPA sale

The past couple of days could be regarded as an unofficial launch of DEPA’s (public gas corporation) privatization, given the strong interest expressed by major players for the gas utility’s commercial division.

Two of the country’s biggest energy market players, the Mytilineos corporate group and ELPE (Hellenic Petroleum), which holds a 35 percent stake of DEPA, made clear their interest in the gas utility’s commercial section yesterday, just hours after energy minister Giorgos Stathakis updated energypress on the DEPA privatization model to be adopted.

The government and country’s lenders have agreed on a DEPA sale model entailing a split of the gas utility into two subsidiaries representing its commercial and distribution network divisions. This split is expected in September.

Motor Oil Hellas is also expected to emerge as a candidate, highlighting how coveted the DEPA privatization is for energy players.

Motor Oil Hellas recently announced a plan to enter the retail natural gas market through its Coral network of gas stations.

The petroleum firm has filed a complaint to the competition committee over DEPA’s close-to-finalized effort to acquire Shell’s 49 percent of their EPA Attiki joint venture covering supply in the wider Athens area. DEPA already holds a 51 percent stake and would fully own EPA Attiki if the deal with Shell is finalized.

The Motor Oil Hellas complaint could turn into legal action as DEPA, already controlling the country’s biggest wholesale gas agreements, would also gain major control in the capital’s retail market and affect competition.

This issue is certainly not one of minor importance and could end up delaying the overall plan for the retail gas market’s restructuring as well as DEPA’s privatization.

Greece’s wholesale gas market is also changing. Until recently, DEPA controlled this market as the dominant importer of natural gas. DEPA held a 96 percent of the wholesale gas market in 2016.

Things began to change in 2017 when Prometheus Gas, a joint venture formed by the Copelouzos group and Gazpromexport, imported a total of one billion cubic meters, capturing a 20 percent share of the market. M&M Gas, a joint venture involving Motor Oil Hellas and Mytilineos, also imported gas amounts in 2017, through the Greek-Bulgarian interconnection.

Mytilineos is already very active in the wholesale natural gas market as an LNG importer. It plans to import a first Qatar Gas shipment next month. Mytilineos has also established a direct trading partnership with Gazprom and is believed to be negotiating a deal with another major player.

 

Major battle in the making for upcoming DEPA privatization

The upcoming privatization of DEPA, the public gas corporation, is expected to develop into a fierce contest between major Greek energy market players.

Yesterday, Evangelos Mytilineos, CEO of the Mytilineos corporate group, made no secret of his interest in DEPA’s commercial division to be offered to investors. This was preceded by ELPE’s (Hellenic Petroleum) interest for a presence in the natural gas market. Motor Oil Hellas has also noted it envisions a strong future in this specific market.

The main power utility PPC yesterday declared its intention to become active in the retail natural gas market, possibly within the current year. However, as a state-run firm, PPC will not be eligible to participate in the DEPA privatization.

The government and country’s lenders have agreed on a DEPA sale model entailing a split of the gas utility into two subsidiaries representing its commercial and distribution network divisions, respectively, for the privatization.

Motor Oil Hellas has filed a complaint to the competition committee over DEPA’s close-to-finalized effort to acquire Shell’s 49 percent of their EPA Attiki joint venture covering supply in the wider Athens area. DEPA already holds a 51 percent stake. This complaint could turn into legal action. Motor Oil Hellas is troubled by this sale plan as a private-sector investor is selling its stake to a state-run firm with a dominant market share.

Motor Oil Hellas is interested in the retail gas market section of EPA Attiki. The petroleum firm is less enthusiastic about EPA Attiki’s wholesale activity, including DEPA’s supply contracts with producers and importers.

On the contrary, the Mytilineos group is interested in the full range of DEPA’s commercial activity. The enterprise is already very active in the wholesale natural gas market as an LNG importer. Mytilineos has also established a direct trading partnership with Gazprom and is believed to be negotiating a deal with another major player.

ELPE, holding a 35 percent stake of DEPA, has also declared it envisions a gas market role, either through DEPA or independently. ELPE could bid for DEPA’s commercial subsidiary, as long as it is ensured a majority stake and managerial control of this enterprise.

A foreign energy firm already active in the Greek market as a member of a consortium is believed to be interested in DEPA’s distribution networks, according to energypress sources.

Despite the early interest shown by investors in the DEPA sale, indicating conditions are now appropriate, the specifics of DEPA’s privatization model have yet to be finalized. In his comments yesterday, the Mytilineos group’s CEO forecast that the DEPA sale will go ahead and be completed this time round following a stalled attempt back in 2013.

 

 

 

 

Mytilineos wins GEF energy company of the year prize

The Mytilineos corporate group Group has been awarded the Energy/Hydrocarbons Company of the Year prize, one of seven awards offered by the Greek Energy Forum, an exchange platform for energy sector professionals, at its annual GEF Energy Awards, held for a second time, at an event just staged at London’s prestigious Cass Business School.

Energean Oil & Gas CEO Mathios Rigas picked up the Energy Influencer prize.

ELPE (Hellenic Pegtroleum) took the Social Responsibility prize.

The Smart Islands Initiative, aiming to drastically increase RES production on Greek islands, won an Energy Innovator prize; Kantor Management Consultants was awarded the Energy Consultancy/Services of the Year prize; Gaslog, an international LNG carrier, took the Maritime Services of the Year prize; and the Eunice Energy Group won the Green Energy prize.

Greek Energy Forum was founded in 2013 and its GEF Energy Awards established in 2016 as a biennial event to recognize and award organizations, enterprises and personalities inspiring others through exceptional work and valuable contributions to the energy and hydrocarbon sectors of the east Mediterranean.

The prizewinners of all categories were voted by an independent prize committee comprised of internationally renowned industry players not linked to the GEF.

The committee, in alphabetical order, was comprised of Panos Kelamis, CEO, Cyprus Hydrocarbons Company; Stavros Kokkinis, General Manager Shipping & Products Trading, Shell Trading; Yanos Michopoulos, Managing Director, Authentix, former Country Manager Greece & Cyprus; Michael Tamvakis, Professor of Commodity Economics & Finance, Cass Business School; Petros Tratskas, Senior Originator, ENI Trading & Shipping; Ioannis Tsipouridis, General Manager at R.E.D Pro Consultants and former President of Hellenic Wind Energy Association; and Rikard Skoufias, Energy Consultant, former Country Manager Greece of TAP.

 

 

Protergia decision to develop 650 MW gas-fueled power station explained

A decision by Protergia, a member of the Mytilineos corporate group, to develop a 650 MW natural gas-fueled power station is primarily based on long-term trends projected for the domestic energy market over the next 10 to 15 years, Dinos Benroubi, the energy division head at the Mytilineos group, informed participants at a conference staged by HAEE, the Hellenic Association for Energy Economics.

“We have made certain decisions and will push ahead with a new 650 MW gas-fueled power station,” Benroubi remarked.

Electricity demand is expected to significantly increase beyond 2025, while the European trend is headed towards decarbonization and a turn to renewable energy, according to projections made by IPTO, Greece’s power grid operator, the official explained.

By 2022, when the new Protergia gas-fueled power station is expected to begin operating, thermal units totaling 1,060 MW are expected to be added to the system while between 1,600 and 1,900 MW will be withdrawn by 2025, Benroubi noted.

He explained that, based on IPTO forecasts, a capacity sufficiency issue will emerge as of 2022.

“Acting together, we will all resolve this issue for the years 2020 and 2021 but, from then on, thermal output will be needed, it has become apparent,” Benroubi remarked.

According to Eurelectric, the sector association representing the common interests of the electricity industry at a European level, 1 MW of thermal capacity is needed for every 1 MW of wind energy capacity, the Mytilineos group’s energy head told.

Thermal output currently suffices to cover present RES levels, Benroubi explained, while questioning whether reduced thermal output will be enough to cover increased RES levels in 2025.

The corporation has estimated that, in 2025, a lignite-fired power station would generate electricity at a cost of 105 euros per MWh and a natural gas-fueled unit would produce at a cost of 67 euros per MWh, the official pointed out.

The development of a new natural gas-fueled unit is needed both in terms of grid needs and sustainability.

Licensing delays, bureaucracy ruining RES investment plans

Renewable energy sector players may have been able to absorb the cost of bureaucratic delays in the past, but market changes, shaped by auctions, no longer allow for such latency, meaning investments plans could well be cancelled amid the new conditions if license applications continue being delayed, sector officials have stressed at an investment conference staged by SEV, the Hellenic Association of Industrialists.

Highlighting the bureaucratic obstacles in the sector, major energy groups such as Mytilineos and Terna Energy are currently developing or completing wind energy project investments licensed about 15 years ago as a result of various delays prompted by authorities.

“Two months have gone by since we submitted an application for a production license to RAE [Regulatory Authority for Energy] and we have yet to receive a response. I would have expected a quicker reaction for a 350 million-euro investment,” remarked Dinos Benroubi, the energy division head at the Mytilineos corporate group.

Greek licensing procedures for wind energy projects appear to be even more complicated than those concerning thermal facilities, or natural gas fueled power stations, it was noted at the SEV conference.

Participants explained that, amid the current conditions, energy groups aiming to concurrently strive for multiple licenses concerning many RES projects would need to maintain oversized teams just for RES sector matters.

Employees at forestry and archaeological services are capable of severely holding up RES investment plans, despite the availability of funds, conference participants noted.

Though the Greek State assumed the responsibility of developing offshore wind energy farms nearly a decade ago, not a single such project has been developed, despite the wider investor interest, participants reminded.

All too often, renewable energy investment plans are blocked by cases filed at the Council of State, Greece’s Supreme Administrative Court, even by non residents, it was also pointed out.

 

PPC supply drop contained despite major decline in overall demand

The decline in main power utility PPC’s electricity supply level was subdued in January and February despite the market’s significant drop in demand, monthly data supplied by IPTO, the power grid operator, has shown.

Electricity demand fell by 5.6 percent during the first two months of 2018 compared to the equivalent period a year earlier. Last winter’s prolonged cold weather was a major factor. Most of the drop (4.5% of the 5.6%) occurred during the month of January.

PPC supplied 3,944 GWh in January from a total of 4,631 GWh and 3,444.2 GWh in February from a total of 4,074 GWh, according to the IPTO data.

Elpedison was ranked second, well below PPC, with 160.5 GWh in January and 143.2 GWh in February. Mytilineos closely followed in third place with 152.2 GWh in January and 136.7 GWh in February. Heron was ranked fourth, well above the rest of the pack of independent players, with 147.4 GWh in January and 135.6 GWh in February.

 

 

 

 

New Mytilineos power unit plan to widely impact market

The Mytilineos corporate group’s disclosure, over the weekend, of an investment plan concerning a new natural gas-fueled electricity production unit in Greece comes as the second of three pivotal energy-sector moves promised by the group, following a 110 million-euro offer to upgrade the main power utility PPC’s ageing Amynteo lignite-fired power plant in exchange for a favorable long-term electricity supply agreement.

The latest move promises to impact the wholesale electricity market, the main power utility PPC’s bailout-required sale of lignite units, as well as competition between independent players.

As a new electricity production unit offering the lowest variable cost, the new facility will consistently gain entry into the system ahead of PPC’s most modern facility, Meliti, thereby impacting the wholesale market.

As for the PPC sale of lignite units, this latest move clearly expresses a preference by the Mytilineos corporate group, a leading local player, to invest in a new natural gas-fired unit that will be guaranteed priority access to the system.

An investment worth 300 million euros, the new unit, whose capacity is planned to amount to 650 MW, can be directly compared to two PPC lignite-fired units included in the bailout-required disinvestment – Megalopoli (511 MW) and Meliti (289 MW) – in terms of capacity, market participation potential, emission costs, and other factors.

As for competition in the market, this new unit could serve as a catalyst for a swifter formation of two to three groups that could find a place in Greece’s electricity market, as has been pointed out in the past by Evangelos Mytilineos, CEO at Mytilineos.

Besides the electricity market, this new Mytilineos investment move will also impact the natural gas market as the total natural gas consumption level of the Mytilineos group facilities will exceed two billion cubic meters, annually, making it the country’s biggest natural gas consumer representing about 40 percent of overall demand. This should further boost the corporate group’s negotiating strength.

A third energy-sector move by the Mytilineos group, still undisclosed, should take its recent series of investment plans in the energy domain to a total of one billion euros.

The corporate group’s third move, believed to be worth between 500 and 600 million euros, is expected to be announced in early May.

Brussels rejects Amynteo time extension, upgrade now urgent

The European Commission appears to have rejected a Greek request for an operating hours extension of the main power utility PPC’s Amynteo lignite-fired power station, making the need to environmentally upgrade the facility extremely urgent.

Both the power utility and energy ministry are believed to have already accepted this position, according to energypress sources.

The Directorate-General for the Environment, in particular, has opposed a second request  made by Greek authorities, following an unsuccessful initial effort, calling for an extension of the ageing Amynteo facility’s remaining lifespan from 19,500 operating hours to 32,000.

A more positive stance on the prospect by the Directorate-General for Energy had raised the hopes of Greek officials, but it now appears the environmental authority’s position on the matter has prevailed.

This development means that PPC will need to act fast until the end of 2018 for a financing solution and assignment of the unit’s environmental upgrade so that the power plant can continue operating and, furthermore, ensure that the provincial city of Amynteo, in the country’s north, is not left without a telethermal facility as of 2019. Telethermal technology would cover the heating needs of Amynteo’s 10,000 or so inhabitants at an exceptionally low cost.

The Mytilineos group, GEK-TERNA, and the Copelouzos group, backed by China’s Shenhua, have all submitted upgrade proposals for the Amynteo facility.

As was disclosed yesterday by energypress, the energy ministry’s upgrade decision will be based on a series of critertia, key factors being the project’s assured financing as well as  assurance of low-cost electricity for major energy-intensive industries as a means of boosting their level of competitveness.

The Mytilineos corporate group’s Amynteo upgrade proposal, forwarded just days ago by chief executive Evangelos Mytilineos, entails a 110 million-euro revamp and lifespan extension to 2030 in exchange for a favorable long-term electricity supply agreement concerning the group’s Aluminium of Greece industrial enterprise. This proposal called for electricity absorption of between 300 and 400 MW per year, from the unit’s total capacity of 600 MW. Mytilineos left open the possibility of other industrial enterprises also taking part in the agreement. The Viohalco industrial group is believed to be interested in such a project, but the prospect remains unconfirmed.

GEK-TERNA had forwarded its environmental upgrade proposal to the energy ministry in October in exchange for favorable electricity tariffs.

The Copelouzos group and China’s Shenhua have proposed upgrading the lignite-fired facility in exchange for a stake of the facility.

 

 

 

Lower-cost industrial electricity a ‘key factor’ in Amynteo plan

Officials at the energy ministry see an environmental upgrade of the main power utility PPC’s ageing Amyneo lignite-fired power plant as an opportunity that would offer energy-intensive industry lower-cost electricity in the long run.

The Mytilineos group and GEK-TERNA have both proposed to upgrade the Amynteo facility in exchange for favorable electricity tariffs over an extended period, while the Copelouzos group and China’s Shenhua have joined forces to propose upgrading the lignite-fired facility in exchange for a stake of the facility.

Energy ministry officials are already making clear that the main criterion to be applied in the appraisal of these proposals will be the extent to which they assure lower-cost electricity for industries as a means of boosting their level of competitveness and complying with EU and Greek competition terms. At present, industrial enterprises are offered special tariffs by PPC on an individual basis.

Similar deals entailing upgrades for lower-cost energy have been reached in France.

PPC is currently preparing to move ahead with a bailout-required sale package of lignite units. Amynteo was excluded from the sale list by European authorities but the upgrade proposals offer potential to extend the old facility’s lifespan, currently running out of time.

The future course of the Amynteo lignite-fired power plant will depend on government decisions concerning the country’s energy strategy, PPC officials told energypress earlier this week. Lignite’s share of the country’s energy mix would need to remain considerable for the Amynteo upgrade to make sense, officials explained. It is believed that a lignite presence in the energy mix of close to the 19 TWh reached last year would justify an Amynteo upgrade. Lower levels of around 16 TWh would make Amynteo redundant, the sources added.

Just days ago, the Mytilineos corporate group’s chief executive Evangelos Mytilineos made a 110 million-euro offer to upgrade PPC’s ageing Amynteo plant and extend its lifespan to 2030 in exchange for a favorable long-term electricity supply agreement concerning the group’s Aluminium of Greece industrial enterprise. The proposal called for electricity absorption of between 300 and 400 MW per year, from the unit’s total capacity of 600 MW. Mytilineos left open the possibility of other industrial enterprises also taking part in the agreement. The Viohalco industrial group is believed to be interested in such a project, but the prospect remains unconfirmed.

GEK-TERNA had forwarded its environmental upgrade proposal to the energy ministry in October in exchange for favorable electricity tariffs.

 

PPC waiting for gov’t decision on Amynteo unit for direction

 

The future course of the main power utility PPC’s Amynteo lignite-fired power plant will depend on government decisions concerning the country’s energy strategy, utility officials told energypress when questioned about the utility’s intentions following three upgrade investment proposals made for Amynteo by GEK-TERNA, Mytilineos and Copelouzos-Shenhua.

PPC’s chief executive Manolis Panagiotakis is definitely interested in attracting an investor to take on the environmental upgrade of the ageing Amynteo facility, which would spare the utility of needing to provide capital of its own for the project, as long as lignite’s share of the country’s energy mix remains considerable, the sources noted. It is believed that a lignite presence close to the 19 TWh reached last year would justify an Amynteo upgrade.

If the annual share of lignite in the energy mix is limited to no more than 16 TWh then certain lignite-fired power stations will be redundant. Amynteo would certainly be sidelined in such a case. Newer plants and units included in a bailout required sale package of PPC lignite units, from which the Amynteo facility was dropped, would carry on operating.

PPC is waiting for energy ministry decisions on Amynteo around March, when they are expected to be revealed and forwarded to the European Commission, before deciding, the officials noted.

 

PPC retail market share dip in January ends utility’s fourth quarter rise

The main power utility PPC’s retail electricity market share dipped in January, ending an upward trajectory experienced in the previous year’s final quarter, energypress sources have informed.

PPC’s retail electricity market share at the end of January slipped to 85 percent from 85.4 percent in December, according to the sources. The utility captured an 84.21 percent share in November, up from 83.21 percent in October.

The power utility’s slight market share drop, combined with the moderately promising price level reached at the year’s first of four NOME auctions two days ago, provides some hope for increased electricity market competition in 2018 and consumer shifts to independent suppliers.

Official end-of-December data showed that Elpedison headed the pack of independent suppliers with a retail electricity market share of 3.4 percent, down from 3.72 percent in November. Mytilineos followed with 3.36 percent, from November’s 3.57 percent. Heron was ranked third with 3.19 percent, from 3.79 percent in November.

Mytilineos makes Amynteo upgrade offer for power deal

The Mytilineos corporate group’s chief executive Evangelos Mytilineos has made a 110 million-euro offer to upgrade the main power utility PPC’s ageing Amynteo lignite-fired power plant in exchange for a favorable long-term electricity supply agreement. This initiative comes as one of three key moves promised but not disclosed by the CEO earlier this week.

The offer, a written statement, was forwarded to state-controlled PPC’s head official Manolis Panagiotakis, energy minister Giorgos Stathakis and the country’s new privatizations superfund director Ourania Ekaterinari.

The Amynteo facility has been excluded from a bailout-required sale package of PPC lignite units.

In the offer, Mytilineos highlights the key role played by PPC over the years in supporting the industrial sector, adding that the time has now come for industry to support PPC.

The industrialist’s offer requests the establishment of an electricity supply agreement with PPC, offering between 300 and 400 MW per year, until 2030, as well as the right to use 90 percent of this supply. Mytilineos left open the possibility of other industrial enterprises also taking part in the agreement.

Such an agreement would secure competitively priced electricity for energy-intensive Greek industries.

Mytilineos noted that such an agreement could be utilized to help the utility reach bailout-term objectives by factoring in the mid-voltage share (up to 20 percent) into PPC’s retail electricity market share contraction requirement.

As part of the agreement, METKA, a Mytilineos group subsidiary providing a complete range of Engineering-Procurement-Construction (EPC) services for energy and infrastructure projects, could take on the Amynteo upgrade project without delay, the group’s CEO noted in the offer.

Such a development would enable PPC to continue operating its ageing Amynteo plant, whose lifespan is currently limited, and save PPC capital for other needed investments. Also, an upgraded Amynteo facility would be eligible for CATs and offer job security for staff working at the facility.

Mytilineos has asked PPC to confirm whether the utility is interested or not in the proposal by February 28, so negotiations may begin.

 

METKA to revise strategy and focus on RES sector, group chief informs

METKA, a Mytilineos group subsidiary providing a complete range of Engineering-Procurement-Construction (EPC) services for energy and infrastructure projects, will implement a new development model for the group’s construction division, to focus on the RES sector, Evangelos Mytilineos, the group’s chief executive, told analysts during an annual briefing held this week.

EPC projects that have propelled METKA over the past few years are ending, which has prompted the need for the corporate group’s construction division to revise its operational strategy and redirect activities, the CEO explained.

The new METKA growth model to be applied will focus equally on contracting and development of new projects, Mytilineos noted, describing the approach as a more efficient model promising better results for the company.

The chief executine noted that METKA sees major opportunities and growth prospects in the RES sector, especially its wind and solar energy sub-sectors. METKA has already developed a formidable RES portolio in Greece and abroad through a joint venture with EGN.

METKA EGN aims to establish a large-scale solar projects portfolio through an ongoing cycle of sales and development of projects, the objective being to achieve compounding growth. This approach, applied successfully by major international firms, has the potential to double METKA’s revenues, company officials believe. METKA EGN could be brought closer to METKA as part of the effort.

Commenting on the possibility of a second production unit at group subisidiary Aluminium of Greece, an investment worth 400 million US dollars, Mytilineos told analysts that a final investment decision would depend on forecasts as well as incentives to be offered by a new investment law for industry. This investment would need to achieve an Internal Rate of Return (IRR) of 17 percent to ensure its sustainability, according to the company.

 

Mytilineos to make three major energy sector moves, CEO tells analysts

The Mytilineos group, a key player in Greece’s energy market, intends to make three major moves in the energy sector, Evangelos Mytilineos, the group’s chief executive, told analysts and banking officials, in response to questions, during an annual briefing held yesterday.

Though the CEO did not elaborate, it is widely believed that one of these moves concerns an alternative plan for the environmental upgrade of Amynteo, a lignite unit excluded from main power utility PPC’s the bailout-required sale of lignite units. Local authorities have already submitted a lifespan extension request for Amynteo, in the country’s north.

It has already been reported that Mytilineos is among a number of industrial groups examining the prospect of investing in the upgrade of an ageing lignite-fired power plant currently operated by PPC.

Given the EU’s new environmental standards, the Greek power utility’s older lignite facilities will soon need to be withdrawn if they are not upgraded.

Mytilineos took part in the recent PPC market test staged by the European Commission for investor feedback and queries concerning the power utility’s bailout-required sale of lignite units.

Besides making clear his intentions to pursue plans in the energy market, Mytilineos told participants at yesterday’s briefing that all players, not just PPC, will need to proceed with significant investments if true market competition is to prevail.

Confirming forecasts, the Mytilineos group’s performance in 2017 exceeded expectations, the group’s chief executive informed. A turnover figure in excess of 1.5 billion euros is expected to be posted, the CEO noted, without offering a precise amount.

As for group subisidiary Aluminium of Greece, Mytilineos told analysts that an investment decision on a new unit will depend on the indications offered by related investment performance indices.

Commenting on the group’s METKA subsidiary, providing a complete range of Engineering-Procurement-Construction (EPC) services for energy and infrastructure projects, the chief executive said a new model placing emphasis on RES projects, especially in the photovoltaic sub-sector, would be pursued in the immediate future.

 

Major battle seen for liberalized gas market in 2018

The natural gas retail market’s liberalization, a new reality in Greece that has arrived along with the New Year as a follow-up to the wholesale gas market’s opening, promises to lead to major changes.

Combined electricity-and-gas packages are already being offered by retailers in a local energy market whose natural gas sales have grown from 2.9 billion cubic metres in 2015 to 5 billion cubic meters in 2017.

The natural gas market is expected to gain further impetus as a result of the electricity market’s liberalization. Numerous gas market retailers, besides EPA Attiki, covering wider Athens, and Zenith, covering Thessaloniki and Thessaly, are examining the prospect of offering combined electricity-and-gas packages.

The main power utility PPC has hired a consultant to help prepare its entry into the natural gas market, while major independent electricity suppliers have already launched campaigns for gas supply. Also, DEPA, the public gas corporation, is considering entering the electricity market, either alone or along with a partner.

As of 2018, independent gas suppliers will seek to further bolster their presence in a market traditionally dominated by DEPA.

The degree of DEPA’s future retail presence in the EPA supply companies serving wider Athens, Thessaloniki and Thessaly, to be determined by ongoing negotiations between the shareholders involved in these ventures, remains to be seen.

The government appears to favor DEPA’s withdrawal from EPA Thessaly-Thessaloniki and continued presence in EPA Attiki. DEPA currently holds 51 percent stakes in these ventures. Shell holds a 49 percent stake in EPA Attiki and ENI a 49 percent stake in EPA Thessaly-Thessaloniki. Shell appears to want to withdraw.

EPA Attiki and Zenith, covering Thessaloniki and Thessaly, have both expressed an interest to broaden their geographic reach.

According to data released for 2015, the retail natural gas market in wider Athens, Thessaly and Thessaloniki exceeded 293 million euros. EPA Thessaly-Thessaloniki posted a pretax profit of 45 million euros and EPA Attiki a pretax profit of 30.1 million euros, according to this data.

As for Greece’s wholesale natural gas market, DEPA, until recently, has stood as the undisputed dominant player owing to its overwhelming control of imports. In 2016, DEPA’s natural gas imports reached 42.7 million MWh, from 44.5 million MWh in total, a 96 percent share.

However, this picture began changing in 2017, beginning with Prometheus Gas, a joint venture of the Copelouzos Group and Gazprom Export, whose imports for the year reached one billion cubic meters, or 20 percent of the 5 billion cubic meter total. These amounts were imported from the gas pipeline at Sidirokastro, via Bulgaria.

According to sources, Prometheus Gas has already signed contracts for a greater amount in 2018. Clients include PPC, which has placed orders for its natural gas-fueled power plants.

M&M, a joint venture involving Motor Oil Hellas and the Mytilineos Group, has also made imports.

In recent comments to Reuters, Evangelos Mytilineos, chief executive of the Mytilineos Group, noted that the corporate group ranks as the country’s biggest natural gas consumer with a level of 1.5 billion cubic meters, adding that M&M Gas could soon start trading annual amounts of natural gas measuring around one billion cubic meters.

Despite the emergence of new players in Greece’s wholesale gas market, DEPA managed to increase its volume-based sales increase of 9 percent for 2017’s nine-month period, while its operating profit (EBITDA) rose by 32 percent to 223 million euros.

 

PPC, expanding sources, places first Prometheus Gas order

The main power utility PPC has taken a major step towards expanding its natural gas supply sources by placing its first order with Prometheus Gas, a Gazprom-Copelouzos group joint venture, for a total amount of 839,500 MWhth in 2018. Until now, PPC has relied on DEPA, the Public Gas Corporation, for its gas needs.

PPC’s move follows a number of Prometheus Gas orders made this year by independent electricity producers and industrial enterprises.

The power utility’s order, based on a board decision made just days ago, will partially cover PPC’s gas needs in 2018 for electricity generation at its gas-fueled facilities.

Prometheus Gas is expected to end the current year with sales of close to one billion cubic meters, an amount representing 20 percent of the Greek market’s total gas demand, based on current figures.

According to sources, Prometheus Gas has already signed deals for natural gas supply totaling over one billion cubic meters in 2018. Most of these orders have been placed by electricity producers, industrial consumers, as well as suppliers, now operating in a reformed retail gas market.

The shape of Greece’s natural gas market in the year to come has yet to be finalized. The Mytilineos Group, the country’s biggest natural gas consumer with annual needs totaling 1.5 billion cubic meters, has yet to unveil its plans.

In recent comments to Reuters, Evangelos Mytilineos, chief executive of the Mytilineos Group, suggested the corporate group could soon begin trading amounts of around one billion cubic meters a year through M&M Gas, a wholesale trading joint venture involving the Mytilineos Group and Motor Oil Hellas.

Natural gas sales in the Greek market, currently dominated by three key players, have skyrocketed in recent times. Sales are expected to total 5 billion cubic meters in 2017, nearly double the sales figure of registered 2.9 billion cubic meters in 2015. worth slightly below one billion euros.

Despite the emergence of new players, DEPA, the gas utility, has managed to increase its sales by 9 percent in terms of volume and 32 percent in terms of operating profit. The utility’s EBITDA figure is estimated at 223 million euros.

The market data clearly shows that all players, including DEPA, have benefited from the overall rise in demand for natural gas. This trend may be repeated in 2018, a year during which PPC’s Megalopoli V power plant is expected to enter the system, which will further increase local natural gas demand.

 

 

Local investor views vary ahead of PPC unit sale market test

Though an imminent market test for Greece’s bailout-required package sale of main power utility PPC lignite units has yet to be announced, potential investors have already reacted in a variety of ways, most of them hesitantly, as a result of the lack of clarity on a number of issues.

Questions still remain on how overstaffed units and the future course of carbon emission right costs, expected to skyrocket within the next few years, will be dealt with.

In comments to energypress, certain players already ruled out their interest, one example being Elpedison. Offiicals at TERNA and Mytilineos noted they remain undecided and are awaiting further clairity. The Copelouzos group declared it will participate in the sale.

Though the majority of local energy firms have remained cautious, they face no choice but to closely monitor developments, as these could bring about major changes to Greece’s electricity market, assuming the sale effort makes progress. Investor opinion shifts along the way cannot be ruled out.

Financing could be an issue for investors contemplating this sale, to offer a package of units representing 40 percent of state-controlled PPC’s lignite capacity, probably divided up for more than just one tender. Banks, taking their cue from energy firms in Europe’s west, which have turned their backs to carbon-sector investments, seen as unfeasible in this day and age, are no longer anything carbon-related. Any investor financing needs would need to be sought at non-EU banks.

The market test is expected to influence the sale’s prospects, price levels, and shape terms once the tenders are staged next June.

Energy minister Giorgos Stathakis struck a deal with the country’s lenders just days ago on details concerning state-controlled PPC’s lignite unit sale, as part of the bailout’s third review.

As for investors beyond Greece, Chinese firms are believed to be firmly interested, while a number of east European firms, such as the Czech Republic’s CEZ, as well as Japan’s Hitachi, could also explore the sale’s prospects.

 

Mytilineos pessimistic on PPC units sale, also supportive

Evangelos Mytilineos, the chief executive of the Mytilineos group, a key player in Greece’s energy market, has offered analysts a grim view on the prospects of the main power utility PPC’s upcoming bailout-required sale of production units, noting that it will be particularly difficult for the utility to sell a lignite-only package that does not include hydropower units.

However, Mytilineos also offered support to PPC, facing various issues, by stressing that the utility stands as a vital market component and is needed by all.

The Mytilineos chief’s opinion on PPC’s upcoming attempt to sell production units is crucial as the Mytilineos group is regarded as a major contender.

The group recently proceeded with a bond issue to raise capital for the prospective PPC unit sales and be ready to buy if the utility’s offer is worth investing in.

A market test determining the level of investor interest in PPC’s lignite-only production units sale package will soon be staged.

Mytilineos offered understanding and support to PPC in its quest for Public Service Compensation (YKO) retroactive returns concerning 2012 to 2014. RAE, the Regulatory Authority for Energy, recently set the amount at 360 million euros, well under the 735 million euros demanded by the utility.

“Generally, we’re with PPC and aware of the difficulties the company is facing. We know, for example, what is going on with the YKO issue,” noted Mytilineos, therefore becoming the utility’s first rival to officially back PPC.

Last December, the Mytlilineos group – one of Greece’s leading industrial groups with activities in the sectors of EPC (Engineering-Procurement-Construction), Metallurgy & Mining, and Energy – offered crucial financial support to PPC by agreeing to take up an offer and prepay a 100 million-euro amount for electricity to be consumed by the industrial group in 2017.

This cash injection offered vital relief to PPC, burdened by poor cashflow as a result of an alarming unpaid receivables problem. Many electricity consumers have struggled to meet electricity bill payments amid Greece’s ongoing recession.

RAE’s recent move to limit PPC’s retroactive YKO return to less than half the amount claimed by the utility comes as a further cashflow setback for the utility.

“The Greek market needs a strong PPC as much as it does market liberalization,” Mytilineos remarked. “If PPC falls into even bigger problems then this will be a bad development for all of us in the market,” he added.

 

 

Mytilineos prepares for bond issue to support investments

Mytilineos, one of Greece’s leading industrial groups with activities in the sectors of EPC (Engineering-Procurement-Construction), Metallurgy & Mining, and Energy, has announced the terms of a company bond issue offering 300,000 bonds worth 1,000 euros each, enabling smaller investors to also take part.

The group’s chief executive Evangelos Mytilineos had recently told a shareholders’ meeting that a bond issue allowing smaller invetsors to take part would be considered.

The bond issue will enable the corporate group to draw from a pool worth a total of 1.4 billion euros for investment needs. Its rate will be set on June 20, while the issue will be made available to investors over a three-day period, June 21 to 23. Trading of the bonds is scheduled to commence on June 28.

The Renewable energy and industrial sectors are expected to draw the bulk of the corporate group’s investment needs, Aluminium of Greece being a key recipient. The group plans to boost annual production capacity at Aluminium of Greece to 1.8 million tons from the current level of 830,000 tons. An investment of about 400 million euros will be needed for this production capacity increase.

The group is increasing its activities in the shipping sector. Dry cargo ships have been purchased at a cost of 35.8 milion euros with own capital. Further vessel purchases worth 64.7 million euros are being planned. These will also be financed with own capital. The objective is to reduce the group’s exposure to fluctuating shipping costs and also serve the transportation needs of Aluminium of Greece.

New renewable energy sector investments being planned by the Mytilineos group are worth 73.9 million euros. Own capital, grants and bank loans are expected to fininace these initiatives.

The corporate group also plans to proceed with various other aluminium and energy sector investments worth 213 million euros.

 

Mytilineos Group gearing up for major transformation

Mytilineos, one of Greece’s leading industrial groups with activities in the sectors of EPC (Engineering-Procurement-Construction), Metallurgy & Mining, and Energy, will soon be transformed from a successful family-run enterprise into a corporation of European standards and reach, chief executive Evangelos Mytilineos noted during a conference call yesterday, staged to present the group’s 2016 financial results and future plans.

Mytilineos concluded the session by noting that he will be speaking as president and CEO of the new group by August, when the current year’s first half results are presented. Results would be rewarding for shareholders, he noted.

The corporate group’s boss highlighted that 2017 promises to be an especially significant year for the group, its administration and subsidiaries.

The transformed corporate group can be expected to produce an annual turnover figure of 1.5 billion euros, an EBITDA performance of 300 million euros, and a net profit of 200 million euros, he noted.

The group’s performance in the first quarter of 2017 confirms that figures forecast for the year last December will be attained, the corporate group’s boss noted.

The group’s Metallurgy division’s performance was mixed in 2016. It experienced a negative first half as a result of unfavorable commodity prices before rebounding for a positive second half.

An energy supply agreement was reached with main power utility PPC, the special consumption tax (EFK) imposed on natural gas was reduced, while the euro-dollar currencies exchange rate proved favorable for the division.

A new cost-cutting program, aiming to reduce costs by 100 to 150 dollars per ton, is now being implemented. This will be a challenging task as the division is already operating as an efficiently lean enterprise.

The Mytilineos boss noted that if the cost-cutting objectives are achieved then group member Aluminium of Greece will operate at a lower cost level than equivalent industries of the Middle East.

The corporate group’s energy division experienced growth and captured an increased share of the retail electricity market in 2016. An important agreement reached with mobile telephony company Cosmote, offering the Mytilineos energy supply firm Protergia major retail market presence through the former’s extensive retail network, was also stressed during the conference call.

Responding to a question on whether the Mytilineos group would consider acquiring main power utility PPC production units, expected to soon be placed for sale as a result of a bailout demand by the country’s lenders, the chief executive remained reserved, noting that the group’s position on the matter would become known if specific proposals are forwarded by the government.

The 2016 performance of METKA, the corporation’s leading international contractor and industrial manufacturing group, was affected by an unstable environment in the Middle East, the chief executive informed. The company is currently undergoing transformation and continuing to strive for diversification both in terms of projects taken on and their geographical location, the CEO informed.

 

 

Protergia leads independent firms in IPTO’s latest market share data

Latest market share data released by IPTO, Greece’s power grid operator, shows a virtual standstill for October with independent suppliers controlling an overall 11.2 percent, up slightly from September’s share of 11 percent.

IPTO’s figures, unlike those supplied by LAGIE, the Electricity Market Operator, put independent power supplier Protergia, a member of the Mytilineos corporate group, in top place among the independent players. Protergia has steadily followed Heron among the independent suppliers in the monthly LAGIE market reports.

Returning to the IPTO report, it put main power utility PPC’s retail market share in October at 88.8 percent, down from 89 percent in September.

Protergia ended October having captured a 2.99 percent share, up from 2.95 percent a month earlier.

Heron followed with 2.96 percent, up marginally from 2.94 percent. It was followed by Edison with a 2.42 percent share, up from 2.09 percent.

As for the smaller independent players, NRG was reported as capturing 0.78 percent, down from 0.80 percent in September. Volterra was next with 0.68 percent, a rise from September’s 0.57 percent. Watt + Volt followed with 0.54 percent, up from 0.51 percent. Green captured 0.37 percent, slightly less than September’s 0.41 percent.

The marginal market share discrepancies reported by IPTO and LAGIE have been attributed to slight variations in the formulas applied.

Mytilineos group reaches Aluminium deal with PPC

The Mytilineos corporate group has announced it will sign a seven-year agreement (2014-2020) with PPC, the main power utility, for electricity supply to the corporate group’s Aluminium of Greece, following a proposal’s approval by the power utility board. The agreement ends a long battle, including legal action, between the two sides over industrial tariff levels.

The agreement is the result of intensive negotiations over many months by both sides and ends, for good, a long-running confrontation between PPC and Aluminium of Greece over electricity tariff levels for the industrial enterprise, the Mytilineos group announced in a statement.

Negotiations were held amid a constructive and positive climate that sought to ensure the financial interests of both corporations, reach a consensual settlement for energy market problems, and enhance Greek industry’s level of competitiveness, the statement added

The Mytilineos corporate group, in the statement, expressed its satisfaction for the specific agreemement, noting it recognizes the unique high-level consumption patterns of Aluminium of Greece, while also bolstering PPC’s cash flow situation amid difficult times.

The corporate group has been committed to supporting PPC as an electricity market would not exist without the utility, the corporate group’s statement added.

The Mytilineos corporate group will soon provide PPC with a 100 million amount, without any interest charges, for electricity consumption, as has been repeatedly made clear by the Mytilineos group’s leadership at shareholder meetings and in public remarks.

The agreement also specifies that Aluminium of Greece will provide PPC with a 30 percent deposit of annual electricity amounts as a deposit payment at the beginning of each year.

 

Natural gas gains further ground in electricity production

Propelled by lower natural gas prices as a result of the extended slump in international oil prices, natural gas-fueled electricity production in Greece is continuously capturing an increased share of total output while electricity producers are reporting improved profit performances.

This trend is highlighted by the balance sheets and earnings figures reported by Protergia and Elpedison, two the country’s three biggest independent electricity producers, as well as data provided by LAGIE, the Electricity Market Operator. Heron, the country’s other major independent electricity producer, has yet to release its financial results.

Independent electricity producers enjoyed a considerable performance improvement in the first half of 2016, greatly increasing the utilization of their facilities, which led to impressive profit figures following a disappointing previous year. The increased electricity production levels prompted in increase in natural gas consumption.

At Elpedison, electricity production reached 1,049,000 MWh in the first half of this year, up dramatically from 253,000 MWh during the equivalent period a year earlier. Mytilineos, Protergia’s parent company, reported a 62.5 percent production increase at its power stations.

The sales figures at DEPA, the Public Gas Corporation, also reflect this trend. They rose from 1,217 million Nm3 in the first half of 2015 to 1,771 million Nm3 in the first half of 2016, a 46 percent increase. According to the DEPA figures, released by ELPE (Hellenic Petroleum), which holds a 35 percent stake in the state-controlled gas company, natural gas sales to electricity producers more than doubled in the first half compared to the equivalent period last year.

As for the financial results, Protergia posted a total turnover of 152.5 million euros in the first half of this year, up 77 percent from 86 million euros in the equivalent period last year. The company’s EBITDA rose to 27.2 million euros from 6.6 million euros.

Likewise, Elpedison posted first-half sales of 132 million euros, up from 65 million euros, and a sharp EBITDA increase to 13 million euros from losses of one million euros incurred in the first half last year.