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.

Ministry working on decision facilitating PPAs for industry

The energy ministry and European Commission are nearing an agreement that would exempt electricity producers from a wholesale electricity market cap as long as they have established power purchase agreements (PPAs) with energy-intensive consumers for physical delivery of power quantities.

The ministry is moving in this direction as it is seeking a subsidy-free solution for energy-intensive industrial consumers, facing urgent energy-cost issues as a result of expired or expiring power supply agreements, in 2023, with power utility PPC. The power utility has ruled out any chance of renewing supply agreements with industrial consumers under favorable terms, as had been the case until now.

For most industries, PPC supply contracts expired at the end of 2022, while the remainder face expiring contracts in 2023.

Energy minister Kostas Skrekas is preparing a ministerial decision that will pave the way for the establishment of PPAs between electricity producers and high-voltage industries, sources informed.

Both electricity producers and consumers will need to present detailed schedules of physical power deliveries to be eligible for PPAs.

The minister pledged, last month, to deliver a related ministerial decision while participating at a meeting held by SEV, the Hellenic Association of Industrialists.

PPAs will reportedly initially be applicable between industries and lignite and gas-fired power plants, followed by industries and RES producers.

Industrial sector sources told energypress they have yet to receive news of any specific decision by the energy ministry, recalling that most industrial plants are being billed at wholesale electricity market prices as of January 1, noting PPC does not intend to renew their supply contracts under previous terms.

Preliminary PPA agreements up, 2.5-3 GW in extra grid space

An energy ministry decision offering incentives for RES projects incorporating power purchase agreement (PPAs) plans has led to a flurry of such preliminary agreements between RES producers and industrial energy consumers.

Applications representing over 6 GW in RES projects incorporating PPA agreement plans have been submitted to power grid operator IPTO. This group of projects has been offered priority status for grid connections, through a ministerial decision reached in August.

On the other hand, PPAs with RES producers are crucial for industrial enterprises, pressured by higher energy costs. Many industrial enterprises face expiring supply agreements with power utility PPC that were established at prices well below current levels.

The energy ministry aims to further establish the dissemination of bilateral contracts between renewable energy investors and large-scale consumers or electricity suppliers by easing capacity limits on RES projects incorporating PPAs. This move will offer additional grid capacity of between 2.5 and 3 GW for such projects.

It remains unclear if this higher capacity for RES projects incorporating PPAs will be made gradually or through one step. A decision on this detail is expected imminently.

 

Mytilineos highlights energy cost woes faced by industry

Leading industrialist Evangelos Mytilineos, chairman and CEO of the Mytilineos group, has pointed out the energy-cost challenges faced by group member Aluminium of Greece ahead of its expiring electricity supply agreement with power utility PPC.

The power utility has already made clear it cannot continue offering favorable electricity supply agreements to industrial consumers, especially under the current market conditions.

Aluminium of Greece’s electricity supply agreement with PPC expires in 2023. Other energy-intensive industries are also under pressure to resolve their energy-cost issues. For some, the problem is even more acute as their supply agreements with PPC end at the end of this year.

PPC, in negotiations with industrial consumers, has remained adamant on its position, insisting it cannot keep offering favorable terms, especially given the adverse market conditions and a current wholesale market model that  severely restricts profit margins of electricity producers and transfers excess revenues to the Energy Transition Fund for financing of household support measures.

In response, the government is now looking for solutions that would offer incentive for power purchase agreements (PPAs) between renewable energy producers and industrial enterprises, the objective being to ease the energy-cost burden on industries.

Energy minister Kostas Skrekas recently sat in at a meeting staged by SEV, the Hellenic Association of Industrialists, which called for urgent action that could resolve the energy cost concerns faced by industrial enterprises.

 

Incentives sought for PPAs between renewable energy producers, industry

The government is urgently looking for solutions that would offer incentive for power purchase agreements (PPAs) between renewable energy producers and industrial enterprises, the objective being to ease the energy-cost burden on industries, facing, within the first half of 2023, expiring energy supply agreements that were established with power utility PPC prior to the energy crisis at prices well below current levels.

Government officials are working on the issue with increased urgency following energy minister Kostas Skrekas’ participation at a meeting held by SEV, the Hellenic Association of Industrialists.

SEV members, at the meeting, pressed for an energy supply solution offering competitive prices as protection against the threat of industrial unit closures, already occurring in central Europe.

Industrial enterprises in Greece are currently under enormous pressure as a result of elevated energy costs. PPC has already made clear it cannot continue to offer industrial firms new supply agreements at favorable prices, as has been the case over recent decades.

PPAs with RES producers appear to be the only solution for industrial enterprises as such agreements would secure competitively priced energy over extended periods.

 

PPA contract prices driven lower by market imbalance

Power purchase agreements (PPAs) have fallen to levels of between 40 and 50 euros per MWh because of two key factors, firstly, the need of many RES project investors to establish bilateral contracts in order to upgrade their projects and meet priority-status standards set by power grid operator IPTO, and secondly, as a result of low absorption rates of production as large-scale consumers who could absorb big RES quantities have already made intra-group arrangements, a leading official at Aurora Energy Research has told energypress.

In addition, potential off-takers are limited and have low creditworthiness, the official noted.

“The supply and demand imbalance is putting downward pressure on PPA prices, resulting in PPAs trading at levels significantly below their value,” the official pointed out.

PPA contracts running from 2025 and 2035 in the Greek market should actually be worth between 60 and 90 euros per MWh for solar energy and between 70 and 100 euros per MWh for wind energy, the official noted.

 

Banks scrutinizing PPAs ahead of RES project financing

Banks are scrutinizing power purchase agreements (PPAs) on a case-by-case basis, applying their own assessment criteria rather than general formulas that could underestimate the risk level of transactions, before moving ahead with financing applications for renewable energy units.

A main concern for bank executives contacted by energypress is whether the risk assessment process for PPAs should also take into account risks arising from other activities pursued by applicants.

Banking sector officials added that the competent market regulator, following related discussion, is expected to intervene by issuing a decision that will not impose specific assessment rules, but, instead, describe associated risks and provide banks with flexibility to analyze corporate PPAs on a case-by-case basis ahead of their respective project financing decisions.

“Right now, off-taker assessment is the key issue for banks. It’s all about the scenarios of how we assess off-takers credit-wise, overall, not just in extreme market scenarios or special circumstances,” Argyro Banila, Head of Structured Financing Corporate & Investment Banking at the National Bank of Greece, told the recent Renewable & Storage Forum, an event organized by energypress.

PPAs seen reaching 2.4 GW by ’27, big green energy interest

Bilateral energy agreements to be established by RES producers with energy buyers in the Greek market are expected to represent a total capacity of 2.4 GW by 2027, highlighting the significant investment interest in the country’s green energy market, a study conducted by Grant Thornton on behalf of the Greek energy exchange has shown.

This projection was included in a Grant Thornton feasibility study concerning the establishment of a platform for PPAs (power purchase agreements) at the Greek energy exchange.

The Grant Thorton study, along with a supplementary study conducted by Afry, were presented at a plenary session held yesterday by RAE, the Regulatory Authority for Energy, ahead of consultation, enabling comments and observations, to be launched today.

Manolis Kalaitzakis, Director of Strategy and Development at the Greek energy exchange, plans to hold a series of meetings with interested parties, including producers, off-takers, traders, banks, and energy ministry officials, to determine how the market views a potential energy exchange platform for PPAs.

DEPA Commercial finalizing terms for 840-MW in RES units

State-controlled gas company DEPA Commercial plans to finalize connection terms for over 850 MW in RES projects by the end of this month as part of its plan to vertically integrate through entry into the domain of electricity production, energypress sources have informed.

DEPA Commercial intends to utilize its RES projects to establish power purchase agreements (PPAs) with major-scale consumers, as well as with the group’s retail gas subsidiary Fysiko Aerio, the sources added.

DEPA Commercial’s RES projects whose licensing procedures have reached an advanced stage represent a capacity of over 600 MW.

The gas company had established a business plan to enter electricity production prior to the outbreak of the energy crisis.

DEPA Commercial holds a 49 percent stake in renewable energy company North Solar, with an option to acquire the other 51 percent stake. North Solar’s RES portfolio totals 500 MW. Last summer, North Solar took over New Spes Concept, holding a 232-MW RES portfolio.

In addition, DEPA Commercial plans to finalize, within the next few days, its participation in an 840-MW gas-fueled power station in Alexandroupoli, northeastern Greece, along with power utility PPC and Damco Energy.

 

PPA-linked RES project interest surges, favorable conditions

Investment interest in wind and solar energy projects planned to offer their output through power purchase agreements (PPAs) has grown sharply, as indicated by a large number of preliminary PPA agreements submitted by investors to power grid operator IPTO for entry into a priority-status category established through a ministerial decision.

A 1,500-MW limit that had been set by the ministerial decision for this category has been greatly exceeded, according to energypress sources. The energy ministry has already decided to elevate this limit, but it remains unclear if the bar will be raised sufficiently to fully cover the heightened level of investment interest being declared.

RES producers are turning to PPAs in greater numbers as a result of lower fixed tariffs being offered at RES auctions staged by RAE, the Regulatory Authority for Energy, market officials have pointed out.

Another key factor behind this trend is the greater need for green power generation being expressed by suppliers, due to a wholesale cap, as well as industrial players, all of which is creating favorable PPA conditions offering RES producers higher fees.

A considerable amount of grid capacity for PPA-based RES projects is expected to be made available through the cancellation, by energy authorities, of RES projects that have held connection terms for quite some time but inexplicably remained stagnant.

Strong PPA demand prompts boost to 1,500-MW capacity

The energy ministry plans to boost a current 1,500-MW capacity made available to RES producers for Power Purchase Agreements with electricity suppliers or major-scale consumers as this capacity has been virtually exhausted due to robust demand. The extent of the capacity increase still remains unknown.

The large number of green investments being planned in Greece, along with medium-term electricity cost projections PPAs can offer electricity suppliers, are factors that have boosted demand for PPAs in recent months.

Demand would have been even higher if industrial consumers were not subject to a uniform ceiling on wholesale market compensation for green units.

Power grid operator IPTO is taking preliminary steps towards establishing a new priority list, expected in roughly one month.

Energy exchange examining Corporate PPA prospects

The Greek energy exchange has begun examining the prospect of adopting Corporate PPAs, a new market, as indicated by Wednesday’s kick-off of a pre-feasibility study for a non-mandatory auction platform.

This is purely an initiative of the Greek energy exchange, which, according to information obtained by energypress, wants, through this process, to understand the fundamentals of the market and determine how it could operate in Greece.

Speaking at this week’s Green Deal Greece 2022 conference, organized by TEE, the Technical Chamber of Greece, Manolis Kalaitzakis, the energy exchange’s Director of Strategy and Development, referred to the issue, noting that such a tool would enable smaller producers and consumers who do not possess the required experience and know-how to gain access to PPAs.

The Greek energy exchange, through its study, wants to establish an in-depth opinion, based on Greek market conditions and data, in order to decide whether a Corporate PPA market should exist and determine what it could offer to the country’s energy system.

PPAs through Green Pool, state subsidies to be set at 85%

A Green Pool model forwarded by the energy ministry for European Commission approval ahead of an envisaged launch at the beginning of 2023 will have the dual goal of setting energy costs for eligible industries at competitive price levels and bolstering green-energy generation through power purchase agreements.

The energy ministry hopes its plans will be given the green light as soon as possible so that industries can, immediately afterwards, establish PPAs for green energy, with state subsidies set at 85 percent.

This would enable industries to partially cover their energy needs as of the beginning of 2023 at competitive prices and also reduce their carbon footprints.

The Greek proposal was forwarded to the European Commission’s Directorate-General for Competition early this month, the aim being to make energy-intensive industries more environmentally friendly and facilitate the energy-mix entry of new RES facilities.

Rising PPA interest expressed by major-scale consumers

Major-scale energy consumers are expressing growing interest in power purchase agreements with RES producers, but supply currently remains subdued.

Banks are playing a key role in this development as they are encouraging customers to establish PPAs by offering low interest rates as an incentive, a new banking offer, as was noted by a sector official at the recent Athens Energy Dialogues conference.

Banks, increasingly acknowledging that PPAs are the way forward, prefer ten-year PPAs, deemed as agreements that protect from dangers and risks, while also being suitable for the Greek market, according to sector officials.

Market players are already seeking professional PPA advice from consulting firms to prepare for their entry into this new territory.

 

Platform facilitating green PPAs approaching launch

The details of a platform to enable green PPAs for company use are close to ready and should be forwarded for consultation by RAE, the Regulatory Authority for Energy, within the next few days, energypress sources have informed.

The platform will enable companies and electricity suppliers to partially cover their electricity needs with green-generated electricity.

The mechanism will also offer RES investors greater flexibility when offering their output to the market. It will be open to green aggregators as well as independent RES stations. A corresponding mechanism has already been launched in neighboring Italy.

RAE commissioned Afry, a Swedish-Finnish supplier of engineering, design, and advisory services, for the project.

 

 

Ministry continuing talks with Brussels for green PPAs

Energy ministry officials are intensifying talks with the European Commission for its approval of a support mechanism concerning green PPAs to be established between industrial producers and RES producers through green pools.

The energy ministry recently responded to an initial set of questions forwarded by Brussels and is expected to stage a teleconference with European Commission official within the next week or two for further clarification of issues concerning the green PPAs.

According to sources, the initiative’s main objective is not to bolster the industrial sector but to help transform industrial players into greener players and also facilitate the entry of new RES units into the country’s energy mix.

Officials are striving to announce the green pool plan this coming summer.

 

Brussels seeks clarification on green PPAs for industry

The European Commission, in ongoing exchange with the energy ministry, is seeking clarification on the functional details concerning green PPAs planned as a supportive measure for the industrial sector.

Aspects for which Brussels wants further details include how the entity to be tasked with managing the PPA mechanism will purchase additional energy required and how it will sell excess green energy.

Brussels has also asked if the regulating body will have responsibilities in the balancing market and how the mechanism’s Green Pool will interact with and influence the balancing market.

The energy ministry forwarded a group of responses to Brussels’ first set of questions at the end of last week. A teleconference in early December had preceded the European Commission’s questions.

According to insiders, clarity on the support measure’s launch schedule is expected in approximately two months. In the meantime, two or three more rounds of questions from Brussels are anticipated.

Market players fear European energy inaccuracies could lead to further woes

Major energy market players agree European energy consumers could face many more rounds of pressure over the next few years as a result of errors and inaccuracies plaguing the EU’s energy transition plan towards renewables.

Energy market players are not doubting the EU’s decarbonization goal, seeing it as irreversible, but do believe the European Commission must rectify, as soon as possible, current mechanism faults and market distortions whose resulting deficiencies are being exploited by traders and monopolies, such as Russian gas giant Gazprom, earning excessive revenues at present.

Europe appears to have trapped itself in mechanisms that do not seem to be working, fueling rising concerns among enterprises and industrial players.

Measures must be taken right now at national and European levels. For instance, windfall profits, sparked by sharp wholesale price increases, need to be stopped through the introduction of related taxes, as has been the case in Spain, market players suggest.

Also, electricity prices need to cease reflecting the spot market’s surging prices and instead be shaped by the actual cost of the energy mix, comprised of low-cost renewables (30-35%), high-cost natural gas (30%), lignite (10%), hydropower (10%), plus imports.

In addition, green PPAs reflecting actual cost need to player a bigger role. In Germany, for example, 90 percent of electricity supply is currently made available through PPAs.

Fearing this crisis could last, industrial players in Greece are moving to secure futures contracts covering supply for the next three to four years.

 

PPAs soon as measure against higher industrial energy costs

A model for green-energy power purchase agreements (PPAs) will be preannounced to the European Commission by the end of next week in an effort for a swift approval, energy minister Kostas Skrekas told a news conference yesterday, held for an update on measures being prepared to lessen the burden of increased energy costs for consumers.

The minister offered an update on the green PPA plan when asked about government measures that could protect large enterprises against increased energy costs.

The energy ministry sees the green PPAs as a cost-reduction tool for industrial energy as industrial consumers will be able to cover a significant percentage of their energy needs using RES-based electricity, a lower-cost option. The effort is expected to be based on a Green Pool model.

 

 

PPC industrial supply deals last act ahead of market share dive

Power utility PPC’s latest supply agreements with industrial consumers, finalized just days ago with steel producer Viohalco, Titan cement and building materials group, as well as all other industrial players, following a preceding deal with Aluminium of Greece, a member of the Mytilineos group, represent, barring unexpected developments, the final act ahead of major market changes that will dramatically reduce the utility’s market share beyond December 31, 2023, when these new high-voltage supply agreements expire.

They are PPC’s last industrial supply agreements offering fixed tariffs. As of 2024, PPC will offer indexed tariff prices that will be pegged to the wholesale electricity market’s monthly clearing price in the day-ahead market.

This change will most likely prompt industrial consumers to seek alternative electricity supply solutions.

Aluminium of Greece has already done so, as it plans to receive electricity from the Mytilineos group’s new natural gas-fired power plant being developed in the Agios Nikolaos industrial zone in Viotia’s Agios Nikolaos area, northwest of Athens, to be direct cable-linked to the Aluminium of Greece facility, as well as through RES production, ending a 60-year association with PPC.

At present, PPC sells an annual electricity amount of between 63 to 64 TWh, of which approximately 5 TWh concern high-voltage electricity. If energy-intensive consumers leave PPC from 2024 onwards, to avoid indexed tariffs, the utility’s electricity sales will drop to between 58 and 59 TWh, and, by extension, its retail market share will contract to about 50 percent from 64 percent at present.

This is the state-controlled utility’s aim as an evenly divided electricity market in which PPC will hold a market share of about 50 percent and the independent suppliers the other 50 percent will end the DG Comp’s frequent interventions over the utility’s excessive retail market share.

The energy ministry is aiming for green-energy power purchase agreements (PPAs) to cover 20 percent of industrial electricity demand by next year.

 

‘DAPEEP should manage PPAs platform, not energy exchange’

Preparations for the country’s Market Reform Plan, expected to soon be submitted to the European Commission for approval, have prompted a reaction from RES market operator DAPEEP, asserting it should be appointed operator of green-energy power purchase agreements (PPAs) instead of the energy exchange, as has been stipulated in the plan, now undergoing public consultation.

DAPEEP’s objection to the PPA plan, included in the Market Reform Plan, emerged at a meeting staged by RAE, the Regulatory Authority for Energy, uring discussion on the road map for domestic wholesale electricity market revisions.

DAPEEP’s operator’s chief official Yiannis Giarentis protested that the operator has supported the RES sector’s development for years, being at the helm of this market for 20 years, but has now been sidelined as green-energy PPAs, to facilitate bilateral agreements between RES producers and industrial consumers, are about to come into the picture.

RAE will now examine various proposals and views before taking a stance on the matter.

Target model revisions to enable new player entries, market coupling

The country’s Market Reform Plan, forwarded by RAE, the Regulatory Authority for Energy, for publication consultation, includes a road map for target model interventions, designed, amongst other things, to facilitate the target model market entry of new players as well as ensuing market coupling steps with neighboring countries.

This road map also includes a plan to lift existing target model restrictions, including a 20 percent upper limit for PPAs that is currently valid without any expiry date.

Another revision included in the Market Reform Plan is intended to separate energy used for balancing purposes and energy used for unit loading revisions during re-dispatching procedures for grid security or sufficiency reasons.

This separation process is planned to be implemented as of December 1, beginning with flagging of quantities activated as a result of loading revisions.

A second stage is planned to be introduced March 31, 2022, when clearing procedures for these quantities will be launched.

Power grid operator IPTO is expected to submit, today, its proposal concerning the first stage.

As for the revisions to facilitate the target model entry of new players, a demand response mechanism concerning all markets, not just the balancing market, is planned to be implemented February 1, 2022.

Just over a month later, on March 8, RES market balancing services will also be introduced, according to the road map.

Intraday market coupling of the Greek, Italian and Slovenia intraday markets is planned for September 21, through complementary regional intraday auctions (CRIDAs), a further step towards full unification of the European electricity market.

 

Green PPAs exchange platform, industrial subsidies in making

A Market Reform Plan being prepared by the government, to be submitted to the European Commission, includes provisions for the establishment of an energy exchange transaction platform concerning power purchase agreements (PPAs) between RES producers, as well as green aggregators, with suppliers and major-scale consumers.

The green PPAs, when concerning energy-intensive industrial enterprises, will receive state support, while a subsidy package for this category of agreements is also in the making, according to the plan.

Funds stemming from the recovery fund, the green fund as well as the RES special account will be used to fund the subsidy package, according to the government plan.

The aim of the effort is to ensure, in advance, the sale of prospective energy to be produced by new RES units, the intention being to  facilitate bank financing for their development given the fact that they will no longer be entitled to fixed tariffs, through auctions, over 20-year periods, as has been the case until now.

The plan is expected to result in lower-priced green energy for industrial consumers and also facilitate the development of new RES investments.

Many RES plans will be shelved as competition intensifies

A sizeable number of RES plans, especially smaller-scale projects, face dead-end paths as new market conditions now being shaped undoubtedly favor the big players, domestic and foreign.

The limited RES capacity to be offered at ensuing RES auctions, lower tariff prices expected at these sessions as a result of intensified competition, also seen lowering power purchase agreement (PPA) levels for RES producers, are all contributing to this changing market scene.

Only a small fraction of the abundant RES investment plans that have emerged will end up being developed, once they have secured lower-level tariffs, offering narrower profit margins, at the next RES auctions.

RES projects representing a total capacity of approximately 3.1 GW are planned to secure tariffs, for their output, at auctions over the next three years.

Stressing the diminished prospects for most RES investment plans, over 3,000 producer-certificate applications for units representing a total capacity of 71 GW were submitted to local authorities in last December’s cycle alone.

PPC-Aluminium of Greece agreement paves way for other major consumers

The forthcoming end of a long-lasting business association between Aluminium of Greece, a member of the Mytilineos group, and power utility PPC, announced at the former’s general shareholders’ meeting yesterday, marks the end of an era in the energy ties between the country’s biggest electricity consumer and the Greek market’s dominant supplier.

In 2023, Aluminium of Greece will no longer depend on PPC’s supply, a development concurrently marking the beginning of its goal to become the first eco-friendly aluminium producer.

The latest PPC-Aluminium of Greece agreement promises to pave the way for solutions in negotiations currently in progress between the power utility and other energy-intensive industrial producers.

Other than the fact that the duration of Aluminium of Greece’s new supply agreement with PPC will run until 2023, no other details have been disclosed. Its expiration in two years’ time will mark the end of a 60-year association between the two companies.

One thing already clear is that Aluminium of Greece, beyond 2023, will receive electricity from the Mytilineos group’s new natural gas-fired power plant being developed in the Agios Nikolaos industrial zone in Viotia’s Agios Nikolaos area, northwest of Athens, to be direct cable-linked to the Aluminium of Greece facility, as well as through RES production.

The combination of these two electricity sources will offer Aluminium of Greece greater energy-source flexibility, the group’s chairman and CEO Evangelos Mytilineos noted yesterday.

PPC’s administration, headed by chief executive Giorgos Stassis, displayed realism that will “help industry, as a whole, move ahead with the energy transition that is inevitably approaching,” Mytilineos acknowledged. “We can establish PPAs at good price levels, and we will play a significant role in this domain,” he added.

 

PPC hold of industry ending, energy groups entering picture

The approaching end of a 60-year business association between power utility PPC and Aluminium of Greece, a member of the Mytilineos group, announced yesterday by the group’s chairman and CEO Evangelos Mytilineos, marks the end of an era with wider implications, as all the country’s energy and industrial groups are heading in the same direction.

“In 2023, Aluminium of Greece will no longer depend on PPC. It is moving into a new era as, for the first time since its establishment, the company will be freed from PPC in terms of electricity supply,” Mytilineos announced at a general shareholders’ meeting.

The future belongs to the vertically integrated groups, smaller versions of the power utility, set to enter and cover market needs.

Some enterprises have already prepared and positioned themselves for the new era, in which major-scale electricity consumers will no longer depend on PPC, instead covering needs through PPAs.

Companies that have been slower to incorporate Greece’s energy transition into their strategies must now move fast if they want to remain on the map.

The developments offer a glimpse of the energy sector’s new era. A more efficient PPC will no longer be weighed down by dependencies and compromises, private-sector groups will be structured for greener policies, RES investors will not depend on tariffs at RES auctions, but, instead, establish PPAs with industrial consumers, and competition will intensify through the many changes coming into play, such as the target model markets and the Capacity Remuneration Mechanism (CRM).

Green-energy investments, breaking one record after another, now appear likely to achieve a 2030 objective aiming for eco-friendly energy coverage of the country’s total energy demand at a level of 63 percent.

This essentially means that RES facilities offering a total capacity of 17 GW will be operating by the end of this decade, lessening the need for natural gas-fired power stations, which will become unsustainable, in market terms, as a large proportion of energy exchange transactions will be covered by increasingly competitive RES units.