GEK TERNA, Elpedison close to decisions on gas-fueled units

GEK TERNA and Elpedison are expected to announce finalized investment decisions for new gas-fueled power stations with total capacity over 1,400 MW within the next two months, energypress sources informed.

GEK TERNA plans to develop a 660-MW power station at the industrial zone of Komotini, northeastern Greece, while Elpedison, a joint venture involving Hellenic Petroleum ELPE and Italy’s Edison, intends to construct units with a total capacity of 826 MW at the ELPE facilities in Thessaloniki.

These project plans are estimated to be worth a total of at least 600 million euros.

The energy companies have already received energy production licenses as well as other licensing requirements, including environmental permits, for these prospective units, regarded as mature investment plans.

Both companies are awaiting new CAT mechanism details for gas-fueled power stations before finalizing their investment plans. The economic uncertainty caused by the pandemic, plus the anticipation of a second wave, are also crucial factors influencing the thinking behind these investment decisions.

Market capacity exists for new combined-cycle gas-fueled power stations during the energy transition over the next ten to 15 years, electricity market officials insist.

The planned withdrawal of power utility PPC’s lignite-fired power stations over the next three or so years combined with a lack of development in RES energy storage systems offers gas-fueled power generation an opportunity to cover capacity to be lost by lignite-fired power station closures.

A recent BloombergNEF report noted big natural gas-fueled power stations are not necessary. However, market officials point to the National Energy and Climate Plan as proof of the need for such units.

The Mytilineos group is developing an 826-MW CCGT in the Agios Nikolaos area of Boetia, northwest of Athens, with the aim of a launch in late-2021.

DESFA considering west Macedonia pipeline expansion

Gas grid operator DESFA’s next ten-year development plan, for 2021 to 2030, may include gas network extension projects in areas that have not featured in previous plans, including northern Greece’s west Macedonia region.

The shape and extent of the pipeline network expansion plan will depend on the development, or not, of regional natural gas-fired power stations by electricity producers.

Preliminary considerations for DESFA’s new ten-year development plan come just weeks after a delayed approval by authorities of the operator’s ten-year plan covering 2020 to 2029.

A prospective decision by power grid operator PPC on whether its Ptolemaida V power station will operate as a natural gas-fired unit will be instrumental in shaping DESFA’s investment decisions for pipeline network expansions in the west Macedonia area.

DESFA also intends to develop metering stations at TAP project corridor points as the capacity to be offered by the TAP project will not suffice to cover regional needs if natural gas-fired power stations are developed in the west Macedonia region.

DESFA plans to construct three new metering and regulating stations in the Eordea, Kastoria and Aspros (Edessa, Naoussa, Giannitsa) areas, their budget totaling 8 million euros. These stations, whose completion is expected by the end of 2022, will enable the development of a mid and low-voltage network for natural gas transmission to these areas.

 

PPC ups Megalopoli V output to full capacity of 811 MW

Power utility PPC’s Megalopoli V power station in the Peloponnese has, for the first time,  begun operating at a full-capacity level of 811 MW following five years of production well below full potential, a restriction whose cost the utility has estimated at 200 million euros.

Power grid operator IPTO yesterday gave PPC the green light for full-scale production at Megalopoli V after an extended period of pressure applied by the power utility.

In the lead-up, PPC was forced to operate its Megalopoli V facility at 60 percent of its full capacity, 500 MW, following instructions from IPTO, noting the Peloponnese region’s existing network could not carry a greater amount.

Trial runs at Megalopoli V, a natural gas-fired combined-cycle unit, began in April, 2015 but PPC had never been given permission to boost generation at this power plant by 311 MW to reach full capacity.

Meanwhile, PPC’s Megalopoli III and IV units, both lignite-fired, were either shut or operated well below full capacity as a result of hefty CO2 emission right costs.

A swifter full-scale launch of Megalopoli V would have enabled the power utility to completely switch off the engines at loss-incurring Megalopoli III, a 250-MW unit, PPC has noted.

Energy groups pressing ahead with natural gas-fired unit plans

The country’s major energy groups are pushing ahead with investment plans for new gas-fired power stations despite the pandemic’s unprecedented impact on the economy and electricity market.

Mytilineos, a vertically integrated group at the forefront of electricity production and supply, began constructing an 826-MW energy center at Agios Nikolaos in the Viotia area, slightly northwest of Athens, last October and is continuing to press ahead with this project.

Investment plans by other players are also maturing. GEK-TERNA is moving ahead with licensing procedures for a 660-MW unit in Komotini, northeastern Greece. The Copelouzos group is paving the way for a 660-MW facility in Alexandroupoli, also in the northeast, while Elpedison is carrying on with procedures for an 826-MW power station in Thessaloniki.

Copelouzos could partner with an investor for the group’s Alexandroupoli project, sources informed.

All the aforementioned corporate groups are positioning themselves in a new energy landscape being shaped by the dominant role of natural gas in the transition towards renewable energy and cleaner energy sources.

This trend became very apparent during the lockdown in Greece. Natural gas and the RES sector covered 60 percent of domestic electricity demand in March.

Power utility PPC is pushing ahead with its decarbonization program without any backtracking, despite the crisis. This is creating a need for new and modern gas-fired power stations.

Furthermore, Greek energy groups are continuing to eye Balkan markets for prospective electricity exports. Electricity generation in the neighboring region has not been satisfactorily upgraded in recent decades, market officials pointed out.

Vertically integrated groups are also eagerly anticipating a new permanent CAT mechanism.

Gas-fueled power stations still not fully recovering costs

The country’s independent gas-fueled power stations failed to fully recover their operating costs in 2019 despite increased operating hours, ongoing market distortions being a key factor, sources at ESAI/HAIPP, the Hellenic Association of Independent Power Producers, have stressed.

Though gas-fueled electricity production captured a 32 percent market share in 2019, far bigger than the lignite-fired share, gas-run units were unable to full cover costs as a result of persisting wholesale market restrictions.

For years, ESAI/HAIPP has contended that hydropower unit operations in Greece lead to a de facto price cap in the market. Price levels could theoretically be set at around 300 euros per MWh but the operating method of hydropower plants considerably lowers these levels.

This situation is preventing gas-fueled power stations from fully recovering costs. Their cost recovery is limited to variable costs. Revenues generated by these facilities do not suffice to cover capital investments and maintenance costs.

For some years now, ESAI/HAIPP, has pressured power grid operator IPTO for a new formula calculating available water reserves. RAE, the Regulatory Authority for Energy, launched an initial public consultation procedure on the matter in 2008 that failed to deliver any corrective action.

In the most recent public consultation procedure, staged in 2018, ESAI/HAIPP pointed out a series of factors requiring attention, including a need for greater transparency and publication of all relevant data.

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

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

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

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

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

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

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

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

 

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.