Ministry, responding to Syriza MPs, lists reasons for further sale of IPTO

A government decision to further privatize power grid operator IPTO is linked to the EU’s objective for carbon neutrality by 2050 as well as a national decarbonization target by 2028, efforts requiring big investments for greater emphasis on new and innovative technologies and systems; an upgrade of existing networks as smart networks; as well as the development of new business models, the energy ministry has noted in response to recent questioning, in Greek Parliament, by MPs of the main opposition leftist Syriza party.

Also, swift development of electricity transmission networks promises to significantly contribute to a speedy recovery of the pandemic-hit national economy, the ministry noted.

In addition, the sale of an additional stake in IPTO is a pre-election pledge made by the New Democracy party, the ministry response reminded. ND was elected into power one year ago.

IPTO’s initial privatization, shaped and carried out by the previous Syriza government, is unusual as the Greek State may have maintained a majority 51 percent stake but its powers for strategic decision-making are limited and require the approval of the minority partner, China’s SGCC, holding a 24 percent stake, the energy ministry pointed out.

SGCC has been given the right to block strategic decisions at IPTO and priority rights in any further privatization of the power grid operator.

ICSID support for Spanish RES investors may impact Greece

Setting a clear precedent in Spain and beyond, including Greece, where predetermined feed-in tariffs for renewable energy producers have been retroactively reduced, the International Center for the Settlement of Investment Disputes (ICSID) has delivered a decision against Spain, ordering the country to make a 128 million-euro compensation payment, plus interest, to Eiser Infrastructure Limited and its subsidiary Energia Solar Luxemburg.

The retroactive reductions of predetermined tariffs offered to investors in Spain for RES output are an infringement of Article 10 of the Energy Charter Treaty and its fair and equitable treatment regulation, according to the ICSID decision.

A large number of Spanish RES producers have filed cases claiming substantial compensation amounts for retroactive tariff reductions concerning existing RES units.

This ICSID development could impact measures included in Greece’s new deal, aiming to solve LAGIE’s (Electricity Market Operator) deficit problem. It includes feed-in tariff cuts for producers in exchange for bank loan extensions and interest rate reductions.

Spain’s energy ministry has announced that the government is considering appealing the ICSID decision, fearing it could prompt more affected RES investors to take related legal action and seek damages.

Eiser Infrastructure Limited had joined forces with Spanish energy investment company Elecnor and construction company Aries to develop solar energy production stations in the cities Ciuadad Real and Badajoj in 2007. These investments were worth a total of 935 million euros.

Favorable RES sector conditions, legislated in Spanish parliament before being overturned by the tariff cuts, served as an incentive for this investment decision.

Contrary to the ICSID, the Supreme Court in Spain, citing various reasons, has rejected claims made by RES producers. The court has noted that the unpredictability of actual RES market conditions justifies the tariff revisions.