PPC initiates 10-year PPA with Titan, Heron serving as supplier

Power utility PPC has reached an agreement for a 10-year power purchase agreement (PPA) with cement producer Titan, now the second industrial consumer to establish a bilateral energy supply contract with the utility, following metal processing company Viohalco.

PPC’s agreement with Titan, already activated, shares the same structure as the utility’s preceding deal with Viohalco.

As a first stage, the cement producer’s energy requirements will be covered by electricity generated at PPC power plants, both lignite-fired and and hydropower. A third-party supplier, energy firm Heron, will supply PPC’s energy output to Titan.

At a latter date, this PPA will develop into an entirely green-energy deal with all required electricity generated by PPC’s solar parks.

Heron’s involvement in the power utility’s PPA with Titan is expected to further increase the energy firm’s share of the high-voltage market.  It recently rose sharply to 11.25 percent following Heron’s involvement in PPC’s PPA with Viohalco.

PPC’s share of electricity production slides to 37%

Power utility PPC’s share of electricity production fell sharply to 37 percent in the first half of the year, a 6 percent drop compared to a year earlier.

The company’s administration, which has just presented the energy group’s first-half results, mainly attributed this contraction to reduced output at its natural gas-fueled power stations, driven lower by a slump in PPC’s high-voltage market share, down from 90.1 percent to 53.8 percent over the past year.

During this period, three major industrial consumers, Aluminium of Greece, Helleniq Energy, formerly named Hellenic Petroleum (ELPE), and metal processing company Viohalko, ended supply deals with PPC and established new agreements with rival producers.

However, Viohalko, one of Greece’s biggest electricity consumers, will reestablish an association with PPC in 2025, when a green-energy power purchase agreement (PPA) between the two is set to commence.

PPC believes it can regain, over the next few years, some of the high-voltage market share it has shed by offering industrial consumers competitively-priced green energy.

This is a key reason behind PPC’s current push towards developing a sizeable RES portfolio, whose target for 2026 has been set at 5 GW.


Energy exchange survey for PPA platform nears completion

A Hellenic Energy Exchange market survey for a prospective green-energy PPA platform, now being shaped, is set to be completed this Friday, the deadline faced by participants for sending in their responses to a questionnaire received.

The survey, whose results will shed light on the market’s PPA-related needs and, thereby, help shape the platform, has been distributed to energy sector players across the board, from suppliers to producers, major-scale consumers, developers, aggregators, traders and banks.

The questionnaire includes technical questions not previously asked as well as more specific questions. The energy exchange wants to take into consideration all factors that could impact the operations of the platform facilitating bilateral green-energy power purchase agreements.

The energy exchange intends to process the survey’s results for a comprehensive picture by September, before transforming the information obtained into an advanced market plan. It will undergo a new round of consultation, whose scheduling has yet to be determined.

The energy exchange aims to establish a green-energy PPA platform that will encourage the participation of small and medium-sized investors. Big investors, experience has already shown, are capable of acting independently to establish PPAs.


RES contract suspension right, enabling PPAs, reexamined

The details of a formula included in a recent legislative revision, permitting RES project investors to suspend, for two years, their project operating contracts with RES market operator DAPEEP in order to engage in direct market participation or establish PPAs, will be reexamined from scratch by the next government’s new energy minister. The general election’s second round of voting takes place this Sunday.

The previous government’s energy ministry had indicated the two-year suspension right would only apply to RES projects that had not been connected to the grid until the revision’s date of ratification.

Energy ministry officials and other sector authorities remain split on the legislative revision’s specifics. The decision on which approach will be adopted has, as a result, been passed on to the next energy minister.

Once a decision has been reached, a related circular will be forwarded to DAPEEP so that the new formula can be applied.

Advanced negotiations between RES producers and industrial enterprises for the establishment of two-year PPAs have stagnated as a result of the indecision over the legislative revision’s details.

Industrial players push ahead with Green Pool plan details

Industrial players are moving full steam ahead to help shape a finalized Green Pool model whose purpose will be to keep green-energy PPA prices at competitive levels for the country’s energy-intensive industries, energypress sources have informed.

The new government to emerge from the general election’s second round of voting on June 25 should be be handed a Green Pool plan ready for consultation. The plan is expected to be fine-tuned and finalized by September or October before it is forwarded to the European Commission for approval.

Brussels has offered its tentative approval of the plan but details that emerged following negotiations still need to be shaped and incorporated into the Green Pool’s finalized version.

Though developments have remained stagnant at political and institutional levels as a result of the general election procedure’s two rounds of voting, industrial consumers, who will represent the bulk of the Green Pool, have tasked the Grant Thornton consultancy group with studying plan details, including the share of cost for participants.

The state, according to the plan’s current shape, would cover 85 percent of the Green Pool’s cost, while market participants would cover the other 15 percent. If cost-related changes are eventually made, they will not be dramatic and could be revised for an 80-20 division.

Next mixed RES auction offering Europe’s lowest starting prices

RES auction starting prices in Greece have, contrary to other European markets, remained unchanged at levels set earlier this year ahead of a  session in September and, as a result, are currently the continent’s lowest.

Several months ago, local authorities set RES auction starting prices of 54 euros per MWh for solar energy and 63 euros per MWh for wind energy.

The energy crisis and its escalated wholesale electricity prices prompted – in more recent times – countries such as Germany to offer investors generous increases in RES auction starting prices.

These rises were offered in parts of the continent after European RES auctions held in 2022 failed to attract the anticipated level of interest from investors, leaving significant amounts of unwanted capacities, including in Greece.

Berlin raised its RES auction starting price for solar energy to 73 euros per MWh from 60 euros per MWh for a session in March. The initiative drew a satisfactory number of participants.

Serbia, preparing for its inaugural RES auction, is offering a starting price of 105 euros per MWh for wind energy and 90 euros per MWh for solar energy to attract investors.

Italy, for its most recent RES auction, in May, set a starting price of 65 euros per MWh for solar energy, the same level set by Spain for its most recent RES auction.

The UK recently offered a starting price of 54.8 euros per MWh for solar energy and 61.9 euros per MWh for wind energy.

Returning to Greece, it remains to be seen if the de-escalation in electricity prices of late will prompt investors to choose RES auctions for their project tariffs or instead opt for other solutions such as PPAs.


PPAs no longer unfamiliar ground for banks, offering corporate financing

Banks no longer view green-energy PPAs with hesitation and have opened up to providing significant corporate financing to investors involved in such agreements, a major turnaround observed over the past few months, market officials have observed.

Banks are focusing on corporate PPAs as interest by investors in such arrangements has grown considerably, market officials told energypress.

Unlike the recent past, banking institutions are now well versed on PPAs as they have acquired the necessary know-how and appropriate tools to assess credit profiles of parties involved, as well as risks entailed.

This shift in attitude by banks, underlined by participants at a recent Energyyear conference, is helping nurture a growing number of PPAs in the Greek market.

However, banks remain reserved on providing financing solutions for merchant PVs, still a developing sub-sector, market officials noted, but are closely tracking the sector’s development for prospective financing.

Italy’s Sofidel, RWE-PPC Renewables sign 10-year PPA for Greek paper mill

Sofidel, the Italian multinational producer of tissue paper for sanitary and domestic use, has signed a ten-year power purchase agreement (PPA) with Meton Energy S.A., a joint venture of RWE Renewables and PPC Renewables, for annual electricity supply of 21 GWh at the producer’s paper mill in Katerini, northern Greece.

The renewable energy to be supplied to Sofidel’s production facility in Katerini will be produced by one of five solar energy farms being developed by RWE and PPC Renewables at Amyntaio, also in the north.

RWE and PPC Renewables’ five solar farms in Amyntaio, scheduled to be fully operational by the end of the first quarter in 2024, will offer a combined capacity of 210 MW.

Sofidel, one of the world’s leaders in the tissue paper market, estimates its PPA with the Meton Energy S.A. joint venture will cut its CO2 emissions by 12,500 tons per year.

“The signing of the PPA is another important step in our journey towards our goal of increasing the use of energy derived from renewable sources,” noted Riccardo Balducci, Sofidel Group’s Sustainability Director. “The agreement represents part of our policy for multiple energy supply options to promote a low-carbon economy and contribute to bringing additional renewable energy capacity to the market,” he added.

Olaf Lubenow, Head of Trading Solutions at RWE Supply & Trading for the UK, Northern and Southern Europe, commented: “This agreement is the result of the full commitment of all parties. It builds on a first bilateral power purchase agreement RWE signed with Sofidel last year for one of our onshore wind farms in Italy. We are pleased to establish long-term partnerships with pioneers like Sofidel, demonstrating how climate protection is possible under market conditions.”


‘PPAs must be registered to secure guarantees of origin’

Green-energy power purchase agreements (PPAs) will need to be registered with DAPEEP, the RES market operator, in order to secure renewable energy Guarantees of Origin, the operator’s president and CEO Giannis Giarentis has stressed in comments to energypress.

This essentially means that, otherwise, the green origin of electricity quantities supplied by producers to off-takers through bilateral contracts will remain uncertified.

PPAs not entered into the DAPEEP registry and, subsequently, not covered by Guarantees of Origin, will practically result in non-certification of energy derived from renewable energy sources. This would deprive such PPAs of cost-related advantages as they would be no different to bilateral contracts signed between off-takers and thermal plant owners.

The DAPEEP head official’s remarks come at a pivotal time for Greece’s nascent green PPAs market, taking its first steps with a first round of contracts capitalizing on a recently introduced exemption from a wholesale market cap for physical delivery contracts.


Green aggregators playing an increasingly crucial role

Green aggregators, representing RES producers in the market, are offering power purchase agreements (PPAs) for durations now reaching up to ten years, as is customary in more mature markets abroad, and, as a result, are developing into a key part of the sector offering bilateral green-energy contracts.

Until recently – during a transition period that has enabled RES projects to directly participate in the market – nominal durations of PPAs, reaching up to 20 years, were rarely honored, their average duration lasting just two to three months, and, in certain cases, about a year.

Upfront determination of PPA cost is vital information for banks assessing projects, subsequently increasing their chances of securing financial support. Otherwise, if RES producers with PPAs turn to banks for project support but do not incorporate PPA costs into their loan applications, banks will attach PPA price levels based on figures provided by consultants, which tend to be overestimated.

Green aggregators are specialized and innovative companies applying sophisticated market tools for optimal commercial management of green-energy plants, achieved by minimizing balancing costs and making accurate production forecasts.

Given the deepening energy-mix penetration of renewables, as well as the complexity of their market participation, an extremely difficult task for RES producers to handle alone, green aggregators are playing an increasingly crucial role.

Up until December, 2022, a total of 33 green aggregation licenses were granted for a total capacity of 16.1 GW, according to data provided by RAE, the Regulatory Authority for Energy.

PPC, industrial players close to establishing 10-year PPAs

Power utility PPC and energy-intensive industries, most notably metal manufacturer Viohalco and building materials producer TITAN, the country’s biggest energy users, appear to have hit the final stretch in negotiations for PPAs promising lower-cost green-energy supply over ten-year periods.

PPC and industrial customers have agreed on most details concerning prospective PPAs but still need to converge on certain legal issues and terms, sources have informed.

Energy-intensive industries are looking to establish PPAs as soon as possible as they remain exposed to the volatility of the wholesale electricity market, which has often increased their energy costs to loss-incurring levels.

As has already been disclosed, PPC, for the first two years of these ten-year agreements, will price its PPA supply deals based on its existing lignite and natural gas-sourced energy basket, while, beyond this period, the company will price its PPAs based on the generation costs of solar and wind energy farms it plans to have developed, by then, in order to supply industrial energy users.

Additional lower-cost energy alternatives appear to be on the horizon for energy-intensive industries, especially since a recent legislative revision enabling RES producers who have already secured tariffs to put aside these agreements for two years and seek better terms and prices in the market, presumably through PPAs.

According to sources, industrial players and RES project investors have already entered negotiations for such deals, which could benefit both sides by offering lower-cost energy for industry and higher tariffs for RES producers.

PPA market could achieve supply-demand balance by 2030, study notes

The country’s PPA market is greatly imbalanced as numerous investors behind a large number of RES projects are keen to establish power purchase agreements, promising priority status for their licenses as well as favorable borrowing terms, but, on the other hand, the number of interested customers, major industrial consumers, willing to purchase power through PPAs is limited, a study by Aurora Energy Research has shown.

This imbalance, in which supply of green-energy PPAs exceeds demand, is significantly reducing PPA prices to levels well below those reflecting the actual cost of such agreements, according to the Aurora study, whose findings were presented at the recent 4th Power & Gas Forum in Athens by Evaggelos Gazis, Aurora’s Head of South Eastern Europe.

The study found that the fundamental fair value of typical fixed-price PPA contracts in 2025 could range between 60 and 100 euros per MWh.

A fair value for a 7-year PPA starting in 2025 is over 70 euros per MWh for solar and over 80 euros per MWh for onshore wind, the Aurora study determined.

Though supply for PPA contracts is currently much higher that demand, increased demand from utilities and aggregators could balance the market by 2030, the study noted.

The fair market value of a PPA depends on the asset’s capture price, the value of risk and hedge as well balancing cost and value of Guarantees of Origin (GO) certificates, the study pointed out.

German-Spanish systems for local exchange’s PPA platform

The Greek energy exchange plans to shape its prospective PPA (power purchase agreement) trading platform based on German and Spanish systems, deemed as positive examples as they ensure greater liquidity and attract more investment interest, the Greek energy exchange’s new CEO, Alexandros Papageorgiou, told the recent Power & Gas Forum in Athens.

PPA platforms are digital markets that bring together RES producers with energy consumers interested in purchasing green energy.

These platforms highlight the most important aspects of respective green portfolios, such as power, technologies and production, providing potential buyers with information they need to choose from available options before signing bilateral contracts.

The Greek energy exchange also intends to significantly expand its gas trading platform by offering a range of new products, its CEO informed.

“It is important to know the needs of market participants,” Papageorgiou noted.

The local energy exchange is following a wider European direction taken by energy exchanges across the continent, which are increasingly relying on use of relevant tools available to reduce costs for consumers and offer smoother functioning markets.


Green Pool talks for PPA price containment enter third round

Local authorities are striving for imminent approval, by the European Commission, of the Green Pool, intended to contain price levels of prospective green-energy power purchase agreements (PPAs) established between industrial producers and energy producers, so that it may be implemented early in 2024.

Negotiations between Greece’s energy ministry and the European Commission’s Directorate-General for Competition, launched roughly a year ago, have now entered a third round of talks.

It began early this year and is now taking place as talks between local industrial players and RES producers for the country’s first ever PPAs have ripened.

The process continued this month with a Greek response to a new set of questions forwarded by Brussels.

A recent exemption of bilateral contracts from wholesale market caps has paved the way for the establishment of PPAs.

Authorities are striving for Brussels’ imminent approval of the Green Pool so that it may be implemented early in 2024, a year during which the pool is expected to be eased into the system as a pilot program before green-energy quantities supplied to industrial energy users become considerably bigger.

Energy exchange platform for PPAs standardized with some flexibility

Procedures leading to the establishment of an Energy Exchange platform hosting green-energy power purchase agreements (PPAs) have restarted following a short break of a few weeks.

Though still at a preliminary stage, the procedure has already indicated that the PPA platform being prepared by an energy exchange working group will offer largely standardized terms as a means of fostering agreements, especially during the platform’s early stage, while also offering some degree of flexibility, as too much rigidity could hamper agreements.

As a next step, the working group intends to focus on two other key aspects, one concerning aggregation details and the other whether bids submitted should be binding or not. Further ahead, tools related to risk management and clearing capability will be looked at.

The energy exchange’s leadership, newly appointed, is now examining a related recommendation delivered by Grant Thornton, serving as the exchange’s consultant on the new platform.

The energy exchange is also looking at comments and observations provided by participants of a related consultation procedure staged by RAE, the Regulatory Authority for Energy.

In addition, the energy exchange is preparing to distribute a questionnaire to prospective PPA platform participants, the aim being to cater to market needs as best as possible.

Once finalized, the PPA platform must be approved by RAE. If given the green light, the energy exchange’s administration will need to proceed with the search for an information system provider, a major stage in the process of setting up the PPA platform.

Brussels proposals include PPA priority, RES growth support

A series of European Commission proposals for the EU electricity market do not call for any major changes to its structuring but make note of the need for mild revisions to the current model through the implementation of various market tools.

A draft of the proposals, obtained by energypress ahead of their official presentation, scheduled for March 14, highlights the need for industry to be provided obstacle-free access to long-term tools, such as PPAs; consumer rights for fixed tariffs and improved market information; and long-term markets offering investment support for RES development.

Also, revisions must ensure that the benefits of renewables reach consumers, the draft notes, placing emphasis on the functioning of the intraday market and its improved liquidity.

It also calls for transmission operators to develop a market tool limiting consumption peaks during the most challenging times of the day as a means of better managing demand and limiting prices.

The European Commission, according to the draft, continues to support the existing market model, stressing “it has provided a well-integrated market, allowing Europe to reap the economic benefits of the single energy market under normal conditions, assuring adequacy of supply and decarbonization”.

However, it admits that “in the midst of the crisis the current model has shown certain major weaknesses related to elevated and volatile fuel prices and short-term electricity markets that have exposed consumers to significant price increases”.


PPC close to signing first PPAs with industrial consumers

Power utility PPC and a number of industrial players are examining a series of details, including legal matters, before signing the country’s first round of power purchase agreements (PPAs) for supply of lower-cost green energy.

PPC and industrial consumers are aiming to sign PPAs by Monday, though it remains uncertain if this target will be achieved, energypress sources have informed.

Procedures leading towards the country’s first PPAs between PPC and industrial groups have moved rapidly since a recent announcement by RAE, the Regulatory Authority for Energy, exempting PPAs from a wholesale electricity market price cap. This measure comes into effect as of tomorrow.

The PPAs involving PPC and industrial consumers are planned to have ten-year durations. Industrial consumers will need to be supplied electricity through thermal power stations for the first two years of these ten-year periods, providing energy supply coverage until new and required RES facilities being developed by the power utility are up and running.

PPC’s launch date of new solar farms, which will ensure green energy supply to industrial consumers, is a key matter in the final-stage talks before PPAs are signed. According to sector officials, these RES projects are expected to be launched in 2025.

Some of these RES facilities have already obtained connection terms from power grid operator IPTO, but most have not, preventing absolute certainty of their launches in 2025, as projected.

Energy ministry multi-bill at parliamentary committee

Greek Parliament’s Standing Committee on Production and Trade begins is set to begin discussions today on a multi-bill covering a wide range of energy-sector issues. The committee’s talks are expected to continue during the week, but a date has yet to be set for the multi-bill’s tabling in Parliament for ratification.

Energy-sector issues included in the multi-bill include a formula for filtering out stagnant RES projects as a means of freeing up required grid capacity.

Non-auction tariff levels in 2023 for small-scale wind and solar energy projects of up to 6 MW is another matter included in the energy ministry’s multi-bill, as are power purchase agreement (PPA) rights for RES projects, instead of fixed tariffs, which were trimmed as part of the new deal.

Also included is an article concerning a compensation amount for gas company DEPA Commercial following the cost of its recent decision to cancel LNG orders, not required as a result of lower energy demand this winter.

It also includes revisions exempting businesses and farmers from public service compensation surcharges, included in electricity bills, worth 63 million euros.

In another section, the multi-bill includes terms increasing upper capacity limits to 100 kW on solar energy panels installed for net-metering purposes by churches, charities, NGOs and schools.

Moreover, the revisions include an EU formula to be adopted for the development of offshore wind farms as a pilot project off Alexandroupoli, northeastern Greece.


Revisions aim to reduce energy cost for most consumers

The energy ministry is moving ahead with three revisions intended to lighten the burden of electricity bills for most consumers. Two of the changes were included in a draft bill submitted to Parliament late last Friday night, while a third revision has been attached to a RES-sector draft bill forwarded for consultation.

These measures include a new formula changing the way a special levy imposed on electricity producers is calculated. It is planned to now be calculated as 5 percent of the average TTF gas index price, an initiative that should lessen the levy’s cost for electricity companies and, by extension, the cost of electricity for consumers.

This special levy on electricity producers was introduced in November at a fixed rate of 10 euros per MWh.

Also, several low and medium-voltage consumer categories – including industrial consumers and farmers – will be exempted from a public service compensation (YKO) charge included in electricity bills.

In addition, a legislative revision is planned to pave the way for power purchase agreements (PPAs), offering industrial consumers renewable energy supply agreements over long-term periods.

Asset Management – the new market need

The photovoltaic industry and RES in general are entering a new era of maturity. Until a few years ago, investments in RES were based on government subsidies, which especially in the early days were quite generous, offering high returns to the first investors of this new, unknown sector. With the development of technology and the increase in production volume worldwide, costs have decreased dramatically and simultaneously (or at least with some time lag) the financial incentives offered by various governments have also decreased. Today, PV is the most cost competitive electricity generation technology without any government subsidy, especially in countries with abundant sunshine like Greece.

Moving up the learning curve, PV has now gained its place in the power generation mix, competing with conventional fuel technologies. Sizes have multiplied (from a few tens of kW to hundreds of MW) and investment return has decreased, as it is based on competitive participation in the energy market without subsidies. The investors of “mega projects” are mainly utilities, international funds and institutional investors, who are required to manage large investments with geographical spread, possibly with different business models and technological diversity, without necessarily having the required know-how. For many, the photovoltaic plant is now an investment product. In a regime where energy sales prices are now determined by competitive processes or by market rules through bilateral contracts (PPAs) and the duration of contracts can be very close to the payback period of the investment, the optimal performance of a PV installation matters much more than it did in the past.

This need is met by the Asset Manager, who creates added value for the investor, taking over the management on his behalf. By providing the right services, the asset manager can guarantee the maximization of financial and technical performance throughout the project’s life cycle and achieve the following objectives:

1. Increase of performance

2. Reduction of operating costs

3. Financial restructuring

4. Renegotiation of contracts in favor of the investor

5. Technological Upgrades

6. Human resource management

7. Health and safety system management

8. Environmental management

Asset Management is significantly different from the operation and maintenance (O&M) of a solar plant. Management is about the investment (the company – SPV), not just the installation, from design and development to construction, operation and end-of-life of the project, even the recycling of materials. The long life cycle of assets (30+ years) requires a comprehensive, long-term planning approach. Each asset also has unique characteristics and needs, which may require a different management approach. Best international management practices should form the basis of the asset management framework applied to each portfolio with the necessary adjustments.

An integral part of the evolution of Asset Management is the adoption of quality systems and digital tools. The ISO 55001 standard for asset management was published in 2014. However, there are very few management service providers certified to this standard. Quality systems are the backbone of any standardization and in the management field they indicate the internal transformation that service providers should follow, to optimize their own processes and offer consistent service quality.

At the same time, the adaptation of digital tools and information management systems contributes to the optimal provision of services. With the right tools, information gaps are avoided, which limit the potential for strategic, long-term planning and delivering added value to investors.

It is no coincidence that, as Europe moves towards the Paris Agreement goal of limiting global warming to 1.5°C and prepares to reach TW of installed capacity this decade, the Solar Quality Summit Europe was organized in January 2023 in Barcelona. The conference has allowed the exchange of views between managers, investors, manufacturers and service providers regarding the best practices in construction, operation, maintenance and asset management, identifying the challenges as well as new technologies and trends to achieve their goals .

Dr. Alexandros Zachariou, PV Consultant, Greensolver Business Development, Greece

February 2023

Legislative revision for PPAs submitted to Parliament tomorrow

A legislative revision exempting energy bilateral agreements from a wholesale market cap, which will pave the way for PPAs promising industrial players fixed energy costs over long-term periods, is scheduled to be submitted to Parliament tomorrow ahead of a vote on Tuesday.

Once ratified, the new law, to either be introduced the very next day, on March 1, or by March 10 at the very latest, will enable the establishment of the country’s first PPAs.

Metal manufacturer Viohalco and building materials producer TITAN, the country’s two most energy-intensive industries, are expected to be the two first corporations to sign PPAs with power utility PPC.

Ministry draft bill for pending energy-sector issues this week

The energy ministry intends to address a series of pending energy-sector issues this week by submitting to Parliament a draft bill carrying related legislative revisions.

Pending issues which the ministry is pushing to have resolved before the country’s next national election, to take place in spring, some time between April and May, include exempting power purchase agreements (PPAs) from a mechanism recovering windfall earnings of electricity producers. This would enable power utility PPC and energy-intensive industries to establish PPAs for lower-cost renewable energy supply to industry.

The details of this exemption were agreed to last week at a meeting involving officials representing the energy ministry, RAE, the Regulatory Authority for Energy, the industrial sector and PPC.

Another top-priority matter on the energy ministry’s agenda is a plan to extend, beyond 2022, the ability of small-scale RES facilities to secure tariffs through administrative procedures instead of competitive procedures.

This revision is expected to enable solar energy facilities possessing capacities of up to 500 KW – and which have submitted connection term applications to distribution network operator DEDDIE/HEDNO prior to the beginning of 2023 – to continue securing tariffs through administrative procedures.

The upcoming revisions could also include new terms permitting solar and wind energy units that have already secured fixed tariffs to participate in wholesale electricity markets on a temporary basis. This revision is imminent, the energy ministry’s secretary-general, Alexandra Sdoukou, told a recent event staged by SPEF, the Hellenic Association of Photovoltaic Energy Producers.


Revision lifting PPA barriers for industry headed to Parliament

The energy ministry is seeking a bill already in Parliament to table  an amendment designed to lift barriers currently preventing the establishment of bilateral power purchase agreements (PPAs) between power producers and large-scale consumers.

The amendment’s details were finalized at a meeting earlier this involving the participation of officials representing the energy ministry, RAE, the Regulatory Authority for Energy, the industrial sector and power utility PPC, sources informed.

Once the bill has been ratified, negotiations between PPC and energy-intensive industries for PPAs will be able to recommence after stalling as a result of the existing legal barriers.

“This intervention will ensure supply of competitively priced electricity [for energy-intensive industries]. Quantities will concern physical deliveries, while industries will be able to seek agreements with power producers for RES-generated electricity supply,” energy minister Kostas Skrekas was quoted as telling local business news publication Ikonomikos Tahidromos (OT) yesterday.

The amendment will primarily pave the way for PPC, the Greek electricity market’s dominant player, to sign PPAs with energy-intensive industries over long-term periods of between eight and ten years.

As has been previously reported, PPC is currently engaged in talks with the country’s two most energy-intensive industries, building materials producer TITAN and metal manufacturer Viohalco.

Revision exempting PPAs from wholesale market cap nearing

February has so far been a good month for the industrial sector as, following Brussels’ approval of a remuneration mechanism worth 1.36 billion euros as compensation for a carbon tax, the first wave of green-energy power purchase agreements (PPAs), which promise to reduce energy costs for industrial producers, are not far away.

A legislative revision exempting green-energy bilateral agreements from a wholesale market cap is now on the final stretch. This exemption will pave the way for PPAs promising industrial players fixed energy costs over long-term periods.

The legislative revision’s final shape is just about ready, while its ratification in parliament is expected within the next few weeks, energypress sources have informed.

For quite some time now, power utility PPC has been involved in PPA talks with metal manufacturer Viohalco and building materials producer TITAN, the country’s two most energy-intensive industries.

However, these negotiations have been held back by the need for the legislative revision exempting energy producers from the wholesale market price cap for supply of PPA-related electricity quantities to energy-intensive customers.

Industrial energy cost support activity heightened

Power utility PPC appears to have reached an advanced stage in talks with metal processing company Viohalco, one of Greece’s biggest electricity consumers, for a green-based power purchase agreement (PPA), which, if sealed, would be the power company’s first, sources have informed.

Also, on a wider scale, the Greek government, in response to considerable pressure from industrial associations, is believed to be preparing an energy-cost support package for industrial firms.

This support is expected to be offered in the form of subsidized electricity over a one-year period. A related legislative revision is being prepared. Budget money will be needed to fund this support.

Returning to PPC and Viohalco, the two sides are discussing a long-term supply agreement at a fixed price and have agreed on exclusive electricity supply from specific solar farms for the industrial player, the sources added.

Such an agreement promises to cover the industrial player’s energy needs at a subdued cost.

Manufacturers have been unsettled by expiring and expired electricity supply agreements with PPC, which, for decades, up until the energy crisis, had been able to offer low-cost energy supply deals.

PPC, like all energy suppliers, has been forced to abandon such deals, now unprofitable, and instead turn to PPAs.

Green bilateral deals platform combined with industry PPAs

An energy exchange platform for green energy bilateral agreements is planned to operate in tandem with power purchase agreements (PPAs) for industry. RAE, the Regulatory Authority for Energy, will, as a next step leading to this prospect, forward to the Energy Exchange comments accumulated through a related consultation procedure.

Authorities need to decide which of three platform alternatives will be adopted. One of the three options included in the consultation procedure is believed to have been rejected by all participants.

The aim is to bring together a platform for green energy bilateral agreements with another being developed by the energy ministry to facilitate PPAs for industrial consumers in place of supply agreements they held, until recently, with PPC, the power utility.

Prospective legislation to exempt bilateral contracts involving physical delivery from caps on fees for all electricity producers in wholesale electricity spot markets is central to the effort.

This exemption will enable RES producers to be remunerated at the market clearing price. Otherwise, electricity purchases and sales made through the Energy Exchange would not be able to take place at price levels agreed to between buyers and sellers.

Total capacity for PPA-intended RES projects raised to 4 GW

The energy ministry has raised a total capacity set for priority connection-status RES projects in power purchase agreements (PPAs) by 2.5 GW to 4 GW, through a ministerial decision just signed, sources have informed.

Previously, last August, the energy ministry had set a total limit of 1.5 GW for this category of RES projects, placed under a Group B category.

In another noteworthy change brought about by the new ministerial decision, examinations of standalone-battery connection applications will be prioritized for swifter processing, sources informed.

As a result, these applications will be examined along with the aforementioned Group B applications, instead of with lower-tier Group C applications, as specified by preceding terms prior to the fresh ministerial decision.

PPC talks for first PPAs with industries concern thermal-green mix

Power utility PPC’s ongoing negotiations with two energy-intensive industries for power purchase agreements (PPAs) entail ten-year electricity supply agreements at fixed prices, beginning with supply through thermal (lignite and gas) power stations for the first two or so years followed by RES-generated electricity, exclusively, for the rest of the agreement’s term, sources have informed.

According to latest information, metal manufacturer Viohalco and cement and building materials producer TITAN, the country’s two most energy-intensive industries, now without energy supply agreements as their previous deals expired at the beginning of the year, are the two industries discussing PPAs with PPC.

The power utility and the two energy-intensive industries are believed to now be discussing the fine details of prospective PPAs.

Any breakdown in these PPA talks is regarded as highly unlikely as the prospect of energy-cost stability over a ten-year period, at times of intense market volatility, is extremely appealing for the energy-intensive industries involved in the talks.

PPC negotiating long-term PPAs with 3 industrial players

Power utility PPC is holding talks with two, possibly three, industrial players for new electricity supply agreements in the form of long-term power purchase agreements (PPAs) of up to ten years following the expiry, on January 1, of high-voltage supply deals.

PPC and the industrial enterprises involved in these negotiations are currently discussing the details of terms and fixed price levels, sources informed.

The energy ministry’s intention to exempt electricity producers from a wholesale electricity market cap, as long as they have established PPAs with energy-intensive consumers for physical delivery of power quantities, has served as a catalyst for the ongoing negotiations.

Energy minister Kostas Skrekas is awaiting the European Commission’s approval for this exemption.

The industrial players discussing prospective PPAs with PPC cannot fully cover their energy needs through their own electricity production facilities, sources noted.

The current energy crisis highlights the energy-price volatility risk faced by industrial players and the importance of fixed electricity prices for stability and security to their operations, officials pointed out.

PPAs promise to offer industries energy-cost stability during times of great uncertainty, they added.


Factories closed as a result of high energy costs, PPAs urgently needed

A ministerial decision exempting power purchase agreements (PPAs) from a wholesale electricity market cap, a revision that would help resolve major energy-cost issues faced by the industrial sector, is expected to be signed by February 1, according to sources.

Industrial players, concerned about certain factors regarding this revision, have expressed uncertainty as to whether the ministerial decision, alone, will suffice for the exemption to be implemented or whether a legislative revision, needing more time, will also be needed. At present, a number of factories remain closed as a result of high energy costs.

Industrialists also want clarification on whether any intervention concerning operations at the energy exchange will be needed before PPAs can be exempted from the wholesale electricity market cap. If so, this would delay the revision’s implementation by a further four months, at least. Such a delay would prove devastating for industrial units, battling to deal with high energy costs.

Factories currently closed will remain shut until at least January 15. Their owners have yet to decide if they will reopen in the ensuing period. Industries that are still operating are being supplied electricity at regular wholesale prices, negatively impacting their production costs and competitiveness.