Power utility PPC has increased its rate of payments for debt to operators, reducing the total amount owed from 900 million euros in July, 2019 to approximately 650 million euros at the end of last July, energypress sources have informed.
This debt, owed to power grid operator IPTO, distribution network operator DEDDIE/HEDNO and RES market operator DAPEEP, has fallen at an average of between 22 to 24 million euros per month.
PPC aims to reduce its debt to these operators by a further 100 million euros by the end of the year, which would reduce the figure to 550 million euros.
If the current payment rate is maintained, PPC’s debt to operators may drop to a level of between 260 and 270 million euros by the end of 2021.
The power utility’s improved operator-related debt performance, a turnaround compared to a year earlier, when company officials had warned better days along this front were a long way off, has, by extension, helped DAPEEP improve its payment record to RES producers for their output.
PPC’s annual deficit was at a level of approximately 900 million euros last year.
Cost-reduction initiatives and a suppression of energy commodity prices during the pandemic have helped PPC stabilize its finances.
The utility’s outlays for liquid fuels, natural gas, CO2 rights and electricity purchases fell by 33.7 percent, or 561.3 million euros, in the first half this year compared to the equivalent period a year earlier.
The energy ministry intends to maximize the eligibility and coverage of an imminent plan designed to offset unsettled accounts between market operators and energy producers or suppliers.
A related ministerial decision is expected to be delivered by the energy ministry within the next fortnight.
The energy ministry’s upcoming measure, seen as crucial cash-flow support for energy-sector companies amid extraordinary times, will seek to make eligible – for offsetting – as many categories as is legally possible.
This essentially means that the offsetting plan’s terms to be included in the ministerial decision will be far more relaxed than those of a proposal delivered just days ago by RAE, the Regulatory Authority for Energy.
The energy ministry accepts a number of the observations made by RAE but is proceeding with its own appraisal and terms, sources informed.
A security fund being established by the energy ministry as financial protection for electricity market players from the pandemic’s repercussions will, for the time being, be limited to covering the needs of market operators.
A wider package also including protection for suppliers, as was initially intended, will need to be examined later on as its cost, estimated anywhere between 600 million and one billion euros, is considered too substantial by authorities.
Limiting the security fund’s coverage for market operators will require an amount of between 100 and 200 million euros, it has been estimated.
The security fund’s sum promises to compensate power grid operator IPTO, distribution network operator DEDDIE/HEDNO and RES market operator DAPEEP for regulatory surcharges not expected to be received under the current conditions.
Consumer electricity bill payments, which include regulatory surcharges, are projected to fall by approximately 30 percent over the next two to three months.
A decision offsetting unsettled accounts between electricity suppliers and operators is expected to be reached and delivered by the energy ministry following next week’s Greek Easter break.
Ministry officials will determine details based on the findings of a recently completed RAE (Regulatory Authority for Energy) study held to gather observations by various market officials. The intention is to offset as many accounts as possible. However, certain limits are expected to be set by RAE.
The ministerial decision will take into account the currently tightened cashflow conditions in the market, sources informed.
The RES special account, covering payments for green energy production, will be protected. RES market officials recently expressed concern about this account’s financial stability.
Greece’s network operators need to pursue projects concerning the development of networks designed to carry and distribute hydrogen, the new clean fuel whose rise is leading to major changes.
Companies such as Greek gas grid operator DESFA, gas utility DEPA and distributors will need to include hydrogen-related projects in their next network development programs. Hydrogen projects are expected to be eligible for favorable EU funding.
A fortnight ago, EU energy commissioner Kadri Simon informed European Parliament’s Committee on Industry, Research and Energy that a new regulation for projects of common interest (PCI) will place emphasis on hydrogen networks, carbon capture, domain bridging, storage batteries and smart networks.
In addition, a German government official recently declared that hydrogen will become the new gasoline, noting Germany will play a leading role in its overall development.
Quite clearly, national governments and major energy companies around Europe are working to establish hydrogen as a key fuel in the adjustment needed to achieve decarbonization goals.
In Greece, network operators will need to seize the opportunity and plan hydrogen projects eligible for a share of the EU’s PCI funds.
An incentive-based regulation that would gradually replace a cost-based model is being seriously considered for a formula determining earnings provided to the country’s operators.
The energy ministry and RAE, the Regulatory Authority for Energy, are examining changes to the regulatory framework concerning investments in the energy transmission and distribution networks, officials representing the two bodies have highlighted at the ongoing Thessaloniki International Fair.
Operator earnings include regulated earnings determined by WACC figures for projects.
Regulatory authorities around Europe typically permit higher and lower WACC rates that consider the time required to complete a project, or its cost. This is not so in Greece.
Incentives driven by specific targets or the achievement of specific results need to be offered by the regulatory authority, deputy energy minister Gerassimos Thomas told a forum titled “Energy Developments in the Country amid Structural Changes to the New Energy Model”, staged within the framework of the Thessaloniki International Fair.