PPC tariff hike over 15%, to be partially offset by surcharge cut

Electricity tariffs at power utility PPC, financially pressured and in need of a cash inflow boost, will be increased by over 15 percent and partially offset by a reduction of a RES-supporting ETMEAR surcharge included on electricity bills, the state-controlled corporation’s administration and the energy ministry have decided, reliable sources have informed.

Still a tightly kept secret, the details of PPC’s tricky equation, aiming for a significant increase in revenues while limiting the burden on consumers and also protecting RES production payments, will be presented tomorrow at Greek Parliament’s Committee on Production and Trade.

Besides sizable tariff hikes, PPC’s revised pricing policy is expected to include a clause triggering further tariff increases should CO2 emission right costs escalate in international markets – and vice versa.

In addition, a punctuality discount offered by PPC to customers paying electricity bills on time is expected to be roughly halved from its current level of 10 percent as part of the effort to boost revenues.

Meanwhile, as a means of softening the overall impact on consumers, the RES-supporting ETMEAR surcharge included in electricity bills is expected to be reduced to roughly 17 euros per MWh from the current level of 22.67 euros per MWh, a 25 percent reduction.

Decisions will be made official at a PPC board meeting this Friday and implemented September 1.

July payments for 300 MW of RES production in jeopardy

Renewable energy producers representing a total capacity of 300 MW with feed-in-premium contracts are in danger of missing out on payments for output.

A procedure for an extension of their current support system, until October 1 – as cover amid sector revisions still in progress – has been initiated but, besides not being thorough, remains unfinished. It is feared that payments for output in July could be lost.

RAE, the Regulatory Authority for Energy, has alerted the energy ministry on the issue.

RES producers seen carrying weight of electricity tariff hike

Renewable energy producers appear the likeliest market group to be affected by a government plan for electricity tariff hikes at the state-controlled power utility PPC, needed to boost revenues at the struggling utility, as, to protect consumers, these hikes will need to be offset by a reduction of a RES-supporting ETMEAR surcharge included on electricity bills.

All calculations strongly suggest that no other combination than a reduction of the ETMEAR surcharge is possible to avoid higher electricity prices for consumers.

Officials are scrambling for a finalized formula ahead of a September 24 report by Ernst & Young, PPC’s certified auditor, to avoid further bad news on the power utility’s condition.

Officials at the energy ministry, working on the plan daily, see a negative outcome for RES producers as the least detrimental alternative because they constitute a minority group of far less political cost compared to the country’s millions of electricity consumers.

RES output payments troubled by new system delay

Major delays in the implementation of a new renewable energy support system, requiring full coordination between various industry agencies, threaten to leave producers unpaid for their output.

The power grid operator IPTO and the energy exchange are among the bodies that need to introduce new systems and tools, but technical issues confronted along the way have severely delayed the process, whose launch has been scheduled for July 1, now seen as an impossible target.

The energy ministry has been fully informed on the matter and prepared a legislative amendment to offer a three-month extension. However, the execution of this act is now in doubt as a result of the government’s call, last weekend, for snap elections on July 7. Legislative activity is highly unlikely, if not impossible, in the lead up.

RES producers will not be able to be paid for their output as of July 1 if the new support system has not been implemented because of a resulting legal void.

Sensing the danger of this problem in the making, energy ministry officials are now seeking solutions, energypress sources informed.

RES producers excluded from Cretan major-scale link’s SPV

Certified network operators, primarily, and possibly financial institutions, will be entitled to take on minority roles in a special purpose vehicle (SPV) to soon be established by Greece’s power grid operator IPTO for the development of Crete’s urgently needed major-scale electricity grid interconnection with Athens.

Companies with existing electricity production roles will not be able to participate in the SPV, whose 10 percent will be offered through a tender. This essentially means holders of licenses of major wind energy projects on Crete will not be able to join the SPV.

The Euroasia Interconnector consortium, responsible for the wider Euroasia Interconnector, a PCI-status project planned to link the Greek, Cypriot and Israeli power grids via Crete, will be offered priority rights for a 39 percent minority stake. If this consortium does not exercise this priority right for all or any of the 39 percent it is entitled to, then any leftover portion will be added to the 10 percent stake to be offered to certified network operators and, perhaps, financial institutions.

IPTO is rushing to form the SPV in an effort to counter to Crete’s looming energy sufficiency threat as of 2020 because an exemption to EU law concerning power station emission limits for local high-polluting units, such as those operating on Crete, ends in December, 2019. A number of power stations on the island will need to be withdrawn.

IPTO and Euroasia Interconnector, a consortium of Cypriot interests, have been involved in an extended dispute for control of the wider project’s Cretan segment.

The SPV will initially stand as a wholly-owned IPTO subsidiary and, three months later, by the end of the year, a tender will be staged inviting investor-operators to bid for a minority stake in the venture.

Belgian network operator Elia and France’s RTE have both expressed interest in the major-scale Cretan interconnection project. It remains unclear if they will seek to join the Euroasia Interconnector consortium for part of the SPV’s 39 percent stake or focus on the 10 percent stake.

RAE, the Regulatory Authority for Energy, awarded IPTO the task of swiftly establishing a special purpose vehicle, and its majority 51 percent stake, this week in a decision that runs against a European Commission initiative that gave the Euroasia Interconnector consortium until the end of the year to resolve its dispute with IPTO. The European Commission has yet to offer an official response.

It is not yet clear if the issue will be added to the agenda for upcoming talks between the government and post-bailout inspectors.

High RES output, swifter DEPA gas order combat energy alert

The country’s energy system has been placed on Level 2 Alert, prompting a crisis management team at RAE, the Regulatory Authority for Energy, to convene yesterday for marathon talks that are expected to be followed up today with an additional session involving major-scale energy consumers.

Greece’s energy level alert already appears to be heading towards normalization as a result of two key factors.

DEPA, the Public Gas Corporation, has managed to swiften the delivery date of a major 130,000 cubic-meter LNG order. Its delivery, originally due to arrive at the country’s LNG terminal in Revythoussa, an islet just off Athens, on December 26, has been rescheduled for December 24.

The significant level of Greece’s renewable energy (RES) output has also proved crucial to avert a bigger crisis. The wind energy sector is today expected to contribute a precious 32,000 MWh electricity amount to the energy system. Market sources informed energypress that this amount is literally keeping the energy system standing.

According to the day’s grid plan, natural gas-fueled power stations are scheduled to provide significant electricity amounts, while most of PPC’s lignite-fired power stations, as well as hydropower facilities, are being called into action.

Demand for natural gas, expected to be particularly high today, is forecast to reach 227,000 MWh.

These extraordinary conditions, also expected to apply pressure on the system tomorrow, should be back to normal on Saturday when a major 130,000 cubic-meter LNG load, supplied by Algerian energy firm Sonatrach, is set to arrive.

Officials at today’s follow-up RAE meeting will further evaluate the situation and decide whether additional measures are required.

An energy-level crisis in the French market has significantly contributed to an increase of Greek exports. Local officials have requested that export limits be imposed as a result of the increased pressure being encountered by the Greek system. However, such a solution is viewed as one that contravenes EU principles.

Evia wind energy investors given two more months to cover link costs

Wind energy park investors in southern Evia, the large island located slightly northeast of wider Athens, have been given a two-month extension to start payments covering the cost of an underwater cable connection linking Polypotamos in Evia with seaside Nea Makri, on the northeastern outskirts of the capital.

This extension was made possible by an energy ministry bill amendment submitted to Greek Parliament as a result of cashflow problems being encountered in the RES sector.

Prior to the two-month extension, RES producers investing in southern Evia were expected to start paying the submarine cable connection’s cost by the end of this year.

Approximately fifteen investors holding wind facility licenses for southern Evia will need to pay IPTO, the power grid operator, for the connection project’s cost, estimated at 80 million euros. The line has a 400-MW capacity.

Most of the Greek market’s major wind energy investors are planning to develop projects in southern Evia. These include the main power utility PPC, Iberdrola-Rokas, Terna, Gamesa, Protergia and Enteka.

PPC to pay €400m to thermal, RES producers, court orders

The Council of State, Greece’s supreme administrative court, has ordered the main power utility PPC to provide 400 million euros to LAGIE, the Electricity Market Operator, covering an amount owed to thermal electricity and renewable energy producers as a result of offsetting practices pursued by the utility.

The verdict comes as a major financial setback for PPC, which has struggled to combat poor cashflow in recent years.

The Council of State rejected a PPC request made in 2013 that sought to nullify a decision reached by RAE, the Regulatory Authority for Energy, that prohibited PPC from practicing offsetting solutions for amounts owed to LAGIE and, by extension, thermal electricity and RES producers.

RAE had reached that decision following an initiative taken by independent electricity supplier Elpedison in 2013. An examination of the case found that PPC was resorting to offsetting measures, despite not being entitled to do so.

The 400 million-euro sum which PPC must pay LAGIE will then be relayed to thermal electricity and RES producers. These two sub-sectors are more or less entitled to an equal division of the amount.

According to sources, talks have already begun between PPC and LAGIE for payment of the amount through installments and not as a lump sum, which would be virtually impossible considering the power utility’s current finances.