Recovery mechanism for supplier windfall earnings

The energy ministry is moving ahead with a windfall earnings recovery mechanism for electricity suppliers in an effort to counter retailer pricing inaccuracies resulting from fluctuating wholesale electricity prices.

Electricity retailers are required to set their prices each month, by the 20th of the preceding month.

Contrary to August, a month for which suppliers set retail electricity prices that underestimated wholesale electricity price levels, supplier prices set for September overestimated wholesale electricity price levels. As a result, suppliers earned excessive amounts last month. .

The new recovery mechanism will be designed to retrieve excess earnings resulting from such retail pricing inaccuracies. According to the plan, it will be applied once a year, every November, to calculate a net annual result for all electricity suppliers.

Energy minister Kostas Skrekas yesterday informed that the new mechanism will be come into effect next month.

Power suppliers under enormous strain because of increased liquidity needs and high costs

Power suppliers in Greece have reached a critical point considering their inability to finance their increasing liquidity needs and remain in operation.
The suppliers’ capital needs are increasing rapidly along with power prices, since these companies are obligated to pay cash for the electricy they buy daily in the energy exchange.
Given the fact that in August power prices are expected to rise significantly, since the price of gas is passed on one month later in the Greek market, the suppliers’ liquidity needs will also rise considerably.
Furthermore, suppliers are also faced with the following:
Financing for over a month consumer subsidies announced by the government.
The rise of unpaid bills and arrears on behalf of consumers.
Damages from consumers who make use of easy change of supplier.
The obligation to pay their charges to grid operators regardless of having collected it by their consumers.
Suppliers have exhausted their ability to procure new financing from banks, as well as their shareholders’ ability to support them.

Competition committee checks power pricing suspicions

RAE, the Regulatory Authority for Energy, has identified electricity pricing irregularities for all consumer categories that need to be inspected, the authority’s head official Athanasios Dagoumas has told a news conference.

The country’s vertically integrated energy groups are RAE’s main concern, while the authority has already forwarded related data to the competition committee, which has the authority to investigate whether dominant players are applying abusive pricing practices.

RAE is closely cooperating with the competition committee, while the two entities have formed a working group for the matter, according to Dagoumas.

Wholesale price clause suspension not instant relief

The suspension of a wholesale electricity price clause included in power bills will not bring about instant price relief for consumers as suppliers are continuing to take on new costs that threaten to eliminate any prospective price reductions ahead of increased state subsidy support.

New regulations will require electricity suppliers to inform households and businesses on prices they will charge two months in advance. On July 10, when this pricing rule will be activated, suppliers will need to announce their price per KWh to be charged two months later, on September 10. On August 10, suppliers will need to do the same for their price on October 10, and so on.

Power utility PPC, the retail market’s dominant player, will play an influential role in market price levels. If the utility subdues prices levels, rival players will follow suit in an effort to their maintain market shares or possibly increase them.

Electricity consumers charged fixed tariffs – they represent a small percentage of the market – will, from now on, need to pay a penalty fee should they leave their supplier prior to the expiration of agreement.

Uncertainty will remain prevalent despite the new rules. At this stage, there is no model offering electricity price forecasts two month down the road, which is a problem given the market volatility. A single announcement by Russian president Vladimir Putin, or a European Commission package of sanctions against Russia, is enough to send natural gas prices flying and, as a result, lead to sharp wholesale electricity price increases.

 

Ministry sees swift approval for wholesale market intervention

The energy ministry has forwarded a draft bill to the European Commission’s Directorate-General for Energy for wholesale electricity market intervention and believes the plan’s new mechanism will be swiftly approved for implementation as of July 1, energypress sources have informed.

The ministry’s proposed plan entails deducting windfall profits earned by electricity producers under the current conditions and compensating them based on respective caps to be set for energy production technologies.

Details of the mechanism have already been submitted to the Brussels energy authority, which has unofficially approved the plan, the sources added.

The plan’s introduction at the beginning of July would enable August electricity prices for consumers to be shaped in accordance with July’s price levels.

Once an agreement with the Directorate-General for Energy has been reached, the Greek government will need to ratify the plan and issue a related ministerial decision enabling a temporary revision of wholesale electricity market regulations.

 

Subsidies remain key tool to counter steep energy prices

Electricity bill subsidies will remain the basic tool in the government’s policy seeking to offer households and businesses protection against the energy crisis’ exorbitant electricity prices, it has been decided at a Brussels meeting.

DG Energy and DG Comp authorities, in talks with Greek government officials, did not permit wholesale market measures for electricity purchases by suppliers at levels below the System Marginal Price, a lower cost that would then have been passed on to consumers.

Brussels officials had expressed hesitation from earlier on for a two-pronged solution entailing wholesale and retail market intervention as the European Commission wanted to avoid, at all costs, any impact on the target model, Europe’s unified electricity market.

As a result, energy minister Kostas Skrekas and the ministry’s secretary-general Alexandra Sdoukou arrived in Brussels yesterday with a simpler alternative plan that was shaped to be more compatible with the European Commission’s sensitivities.

 

RAE proposes €67m return from power producers to suppliers

RAE, the Regulatory Authority for Energy, has proposed a legislative revision that would facilitate a return of 67 million euros, by electricity producers – expect RES producers – to suppliers, an amount representing unpaid balancing-market earnings between November, 2020 and February, 2021, during the launch of the target model.

The amounts that would be returned to suppliers concern two categories, companies that had passed on excessive costs to customers, as well as companies that had not passed on excessive costs to their customers.

According to information obtained by energypress, two retailers, power utility PPC and Volterra, had not passed on excessive costs to their customers. In this case, money to be returned will go straight into the company coffers of these two firms.

Returns for companies that had passed on excessive costs to customers will be injected into the Energy Transition Fund as support for subsidies offered to consumers.

 

 

Swift Brussels approval sought for energy market measures

The energy ministry’s leadership will seek swift approval of a national plan for two-pronged intervention in the wholesale and retail electricity markets, intended to subdue energy prices, at a meeting with European Commission officials in Brussels today.

Energy minister Kostas Skrekas and the ministry’s secretary-general Alexandra Sdoukou will discuss the country’s plan with DG Energy technocrats. The government has announced the measures will be implemented July 1.

The measures include a suspension of wholesale electricity price adjustment clauses included in retail electricity bills as well as a wholesale price-cap mechanism.

These measures, however, will not necessarily keep tariffs steady. On the contrary, suppliers will, after informing customers, be able to adjust kilowatt hour prices based on their wholesale electricity purchase costs.

According to sources, Greece’s plan stands a strong chance of being approved by the European Commission as it essentially does not affect the target model and also includes a taxation measure for windfall profits earned by electricity producers, a measure repeatedly proposed by the European Commission.

Gov’t confident Brussels will approve wholesale market plan

Government officials are confident the administration’s two-pronged intervention plan for the wholesale and retail electricity markets will soon be approved by the European Commission, enabling implementation as of July 1, despite some reservations expressed over the past few days, government sources involved in the process have told energypress.

Athens’ plan was forwarded to the European Commission’s Directorate-General for Energy and Directorate-General for Competition last Friday, following consultation on technical details between Greek government officials and Brussels.

Details of the Greek proposal are expected to be discussed over the next few days through a teleconference meeting involving technocrats , sourced noted.

Energy minister Kostas Skrekas could also hold talks this week with the head officials of the Directorate-General for Energy and Directorate-General for Competition, to elevate the effort to a political level. A written response to the Greek plan from these Brussels bodies is believed to be imminent.

The Greek government is confident its energy-crisis plan will be approved by Brussels for two reasons. Firstly, Athens’ decision to eliminate, through a related tax, windfall profits earned by electricity producers during the energy crisis is one of the tools proposed by Brussels. Secondly, the Greek plan is not expected to affect transboundary trade as import-export prices will continue to be shaped by wholesale market forces.

 

Ministry to suspend wholesale adjustment clauses in bills

The government appears determined to push through with an energy ministry decision suspending wholesale electricity price adjustment clauses included in retail electricity bills as of July 1 and for as long as measures – in both markets – are deemed necessary.

Even so, details of the plan remain unclear. The government aims to implement a new electricity price-adjusting mechanism on July 1. Its fundamentals involve setting a remuneration cap for electricity producers and reducing wholesale electricity price levels for suppliers.

There has been confusion as to whether the government will suspend or cancel existing wholesale electricity price adjustment clauses.

In comments to energypress, leading energy ministry officials supported that energy minister Kostas Skrekas plans to deliver a draft bill suspending wholesale electricity price adjustment clauses, while also introducing a wholesale price-cap mechanism.

These measures, however, will not necessarily keep tariffs steady. On the contrary, suppliers will, after informing customers, be able to adjust kilowatt hour prices based on their wholesale electricity purchase costs, it is understood.

 

Electricity market emergency plan presented to Brussels

Energy ministry officials will today present, for the first time, the government’s package of energy-crisis measures to the European Commission’s Directorate-General for Energy.

Brussels’ approval of the package is needed despite the Greek government’s claims that the measures, intended to subdue energy market prices, are within the framework of the European Commission’s RePowerEU plan, also aiming to combat the crisis.

Although details of the Greek package are still in progress, its basics appear to have been finalized.

The day-ahead market, according to the plan, will continue to operate normally, and, as a result, electricity import and export prices will not be impacted. However, the clearing price formula will be revised so that each electricity production technology (lignite, natural gas, hydropower, renewables) is paid for output based on its respective variable cost plus a fair profit, rather than the system marginal price.

According to the plan, electricity suppliers will purchase energy from the domestic market at the lowest prices resulting from the new clearing price formula.

In addition, a wholesale price adjustment clause included in electricity bills will be suspended for the entire duration of emergency measures.

The government wants to avoid characterizing as a tax a plan intended to retroactively collect 90 percent of excess profits earned by electricity producers in recent months. If classified as a retroactive tax, the measure could end up being challenged in court if deemed to be unlawful.

With this danger in mind, the government is presenting its tax plan as a universal fee for solidarity contributions or solidarity dividends.

The government aims to implement its energy-crisis emergency plan by July 1. Swift progress in Athens’ negotiations with Brussels will be needed if this target date is to be achieved.

 

Retail, wholesale measures for crisis’ new support package

The government’s latest energy-crisis support measures, whose fundamentals were announced yesterday by Prime Minister Kyriakos Mitsotakis, will take immediate effect, beginning with subsidies for consumption in May and June. Details are expected to be announced by government officials early today.

These subsidies, according to sources, will be combined with a price cap in the wholesale electricity market as of July, as negotiations with the European Commission are ongoing and Brussels approval is needed, as was the case with Spain and Portugal.

The new subsidies are expected to absorb approximately 50 percent of electricity cost increases for households, while, combined with July’s anticipated price cap in the wholesale market, the support package will absorb between 70 and 80 percent of energy cost increases for households, businesses and farmers, according to government calculations.

The support package for households will, as has been the case over the past few months, continue subsidizing up to 300 kilowatt hours per month, but subsidy levels will fall from 72 euros a month in April to a monthly level of between 55 and 60 euros, which, in terms of energy-cost increase absorption, works out to the same percentage as the average electricity price ended lower in April compared to the previous month.

Based on this reasoning, May and June subsidies for businesses will also be slightly lower than the level of 130 euros per MWh offered in April.

The new support package will also subsidize monthly consumption exceeding 300 KWh at a rate of 10 cents per KWh for all households, not just principle residencies, as was the case with previous packages.

The wholesale electricity market price cap to be implemented is expected to keep the average price at a level of approximately 100 euros per MWh.

 

Customers shifting suppliers at higher rate, PPC share steady

The number of consumers and small businesses switching electricity suppliers in search of more affordable energy deals reached 3.1 percent in March, nearly double the 1.62 percent who did so during the equivalent month a year earlier.

Power utility PPC captured 30.6 percent of these shifting consumers, a record figure for the company.

Consumers are returning to PPC at a growing rate, an influx offsetting the number of the company’s exiting customers. PPC’s net loss of customers was virtually wiped out in March, limited to 1,400 low-voltage connections from approximately five million in total represented by the company.

PPC lost between 20,000 and 25,000 customers per month from September to December last year, while, earlier in 2021, the company was losing between 40,000 and 45,000 low-voltage customers each month.

Customer shifts during the first quarter of 2022 have not altered the rankings of independent suppliers, based on market share.

The top five remained unchanged with the country’s three vertically integrated suppliers, Protergia, Elpedison and Heron, occupying the first three places, respectively, followed by Zenith and Watt+Volt.

Among the independent players, Zenith registered the biggest number of new customer additions, closely followed by NRG.

PPC’s pricing policy during the energy crisis has created a sense of greater safety, attracting customers. The impact of the company’s new charges on fixed tariffs remains to be seen.

Sector officials believe the retail electricity market is essentially no longer open to  competition, warning of a return to a market lacking competition.

PPC low-voltage customer loss continues slowdown in 4Q ’21

Power utility PPC’s number of departing household and business consumers slowed down in the fourth quarter of 2021 to a total of 37,000, from 47,000 in the previous quarter, market data released by DEDDIE/HEDNO, the distribution network operator, has shown.

PPC’s decreased number of departing customers in the low-voltage category, a trend that was sustained throughout 2021, especially since the beginning of the energy crisis, highlights the power utility’s pricing policy, which includes discounts.

During the second quarter of 2021, PPC lost 70,000 low-voltage customers, while the company’s customer loss in the first quarter of last year was approximately 100,000.

As a result, independent electricity suppliers attracted a diminishing number of new customers from quarter to quarter last year.

The country’s independent electricity suppliers attracted a total of 67,500 low-voltage customers in the third quarter of 2021, down from 85,000 in the second quarter and 103,000 in the first quarter.

PPC’s low-voltage customers totaled 5.02 million at the end of 2021, down from 5.06 million at the end of the third quarter. Independent suppliers represented 1.66 million suppliers at the end of 2021, up from 1.61 million at the end of the third quarter.

Gov’t plan aims for electricity prices at first-half ’21 average

The government will pursue a strategic target aiming to reduce retail electricity prices to the average level recorded in the first half of 2021, through the implementation of a price ceiling in the wholesale electricity market and state compensation packages for electricity producers covering the price difference.

However, it remains unclear how this ambitious measure, worth at least 4 billion euros amid the current conditions, will be financed.

The government’s plan will be carried out in coordination with any proposals that may be announced by the European Commission.

Announcements, by the Greek government, are not expected before May 18, when Brussels could deliver energy-crisis proposals for member states.

The price of natural gas in coming weeks, an unknown factor, adds risk to the government’s support plan. Gas prices could further escalate if Russian president Vladimir Putin decides to disrupt supply; if Russia’s war in Ukraine intensifies; or if any other unfavorable factor comes into play.

At present, a best-case scenario would result in a price tag of at least 4 billion euros for the Greek government’s strategic plan to reduce electricity prices.

Three different financing sources could be considered: the Energy Transition Fund, currently financing monthly energy subsidies; a 900 million-euro surplus from a supplementary budget submitted to parliament a fortnight ago; and Recovery and Resilience Facility (RRF) money.

 

 

Retail electricity market pressured, regulatory decisions crucial

The retail electricity market’s future shape very much depends on regulatory decisions and energy market policies that could be implemented, which, if unfavorable, could result in a greatly reduced number of suppliers, authorities have warned.

Suppliers are currently struggling as a result of cash flow issues prompted by delayed consumer payments and the pressure of meeting regulatory fee payments to operators.

Suppliers typically require capital amounts of between 60 and 70 million euros to purchase wholesale energy quantities and cover regulatory costs before receiving payments from consumers.

In comments offered at the recent Power and Gas Forum organized by energypress, Pantelis Biskas, professor at the Aristotle University of Thessaloniki, underlined the electricity market’s adverse conditions, brought about by the energy crisis and exacerbated by Russia’s war on Ukraine.

These adverse conditions are seriously affecting supplier cash flows and could lead to a major contraction of retail electricity suppliers, depending on upcoming policies, the professor noted.

RAE seeks to limit or abolish bilateral electricity contract restrictions

RAE, the Regulatory Authority for Energy, is moving to limit, or even abolish, restrictions imposed on bilateral physical delivery contracts in Greece’s electricity market as a step towards further liberating the market for price de-escalation.

RAE, in a letter forwarded to the country’s energy exchange, has requested a study examining all scenarios that would further facilitate bilateral physical delivery contracts.

The energy exchange intends to have completed its study in three months so that RAE can proceed with related legislative initiatives.

The issue of whether bilateral contracts in Greece’s wholesale electricity market could contribute to a de-escalation of electricity prices in the retail market has preoccupied local authorities for quite some time.

In recent months, wholesale electricity market price increases in Greece have been almost fully passed on to the retail market, contravening the pattern of more mature European markets.

Government considering price ceiling on retail electricity

The government is considering to impose a price ceiling on retail electricity, but decisions may depend on the outcome of the next EU summit, scheduled for May 30 and 31.

Even so, the Greek government will be prepared to act alone if EU leaders fail to reach decisions concerning the energy market at the next summit, Prime Minister Kyriakos Mitsotakis pointed at last week’s Delphi Economic Forum.

This would entail further support packages to help consumers meet sharply higher energy costs in the ongoing energy crisis, showing no signs of ending.

It is believed that a sum of between 2 and 4 billion euros will be needed to cover energy subsidies in Greece over the next 12 months. Government sources have yet to specify, but have already described the amount to be required as “considerable”.

Some of the funds could be provided through the Recovery and Resilience Facility.

 

Gas-fired generation up 72.3% in February, PPC holds ground

Natural gas-fueled electricity generation rose sharply, by 72.3 percent, or 622 GWh, in February compared to the equivalent month a year earlier, according to power grid operator IPTO’s monthly report.

This increased generation essentially filled a gap created by lower hydropower production, which dropped by 76.3 percent, or 659 GWh, during the aforementioned period.

Lignite-fired electricity generation fell by 20.3 percent, or 105 GWh, in February compared to the same month in 2021, the IPTO report showed.

These changes highlight the importance of natural gas-fueled power stations for the country’s energy mix, supply security, and grid flexibility, market authorities told energypress.

Overall electricity generation in February reached 3,506 GWh, down 2.61 percent compared to the equivalent month a year earlier.

Natural gas-fueled generation represented a 54.13 percent share of this total production, renewable energy sources generated 40.02 percent, while hydropower units contributed 5.85 percent of the month’s total.

Market shares in the country’s retail electricity market remained virtually unchanged in February, the IPTO report showed.

Power utility PPC did not give away any ground, capturing a 64.23 percent share of the retail electricity market in February, marginally up from January’s 64.1 percent.

Mytilineos was ranked second with a 6.92 percent share, followed by Heron (6.48%), Elpedison (5.78%), NRG (4.19%), Watt & Volt (2.35%), Fysiko Aerio (2.04%), Volterra (2.01%), Zenith (1.89%) and Volton (1.49%).

 

Electricity market pushed to its limits by widespread debt woes

The country’s electricity market is under severe pressure, being pushed to its financial limits by a chain effect of unfavorable events, namely serious cash-flow issues faced by suppliers, increasing overdue amounts owed by thousands of consumers to suppliers, as well as greater surcharge debt owed by the latter to electricity network operators and municipalities.

This concerning picture was presented in detail yesterday by two market operators, distribution network operator DEDDIE/HEDNO and RES market operator DAPEEP, to the board at RAE, the Regulatory Authority for Energy, with energy minister Kostas Skrekas also participating.

Teleconferences were also staged with a number of electricity suppliers for discussions on their delays in relaying surcharges collected through electricity bills to network operators and municipal administrations.

Older surcharge amounts owed by suppliers, up until October, 2020, have led to payback arrangements equally dividing these amounts to letters of guarantees and monthly installments. Most of these commitments are being honored by the suppliers.

However, newer debt issues have emerged through the current energy crisis, beginning last autumn.

According to energypress sources, suppliers owe a total amount of 50 million euros to DAPEEP, a little under 10 million euros to power grid operator IPTO, and over 200 million euros to DEDDIE/HEDNO.

Much of the sum owed to DEDDIE/HEDNO has been covered by letters of guarantee issued by suppliers, following a related revision made by the energy ministry last August.

 

Authority working on retail electricity market monitoring tool, expected April

RAE, the Regulatory Authority for Energy, is developing a market monitoring tool for the retail electricity market, to enable more effective monitoring of actions by suppliers.

According to sources, this mechanism, to monitor the pricing policies of electricity suppliers, including their discount policies, as well as clause activation, should be ready by April.

RAE officials informed energy minister Kostas Skrekas, at a recent meeting, on the details and progress of the retail market monitoring tool currently being developed.

During the session, the RAE officials also updated the energy minister on the wholesale electricity market’s course, basing their findings on a monitoring tool designed for the wholesale market.

According to sources, no attempts, by producers, at market manipulation or other distortions have been identified to date. The reports presented to the minister covered the month of January.

Electricity market pressured, new unpaid receivable fears

Electricity suppliers fear the emergence of a new wave of unpaid receivables over the next couple of months as an increasing number of consumers, pressured by sharply higher energy prices, are applying for installment-based payback arrangements and delaying payments.

A clearer picture on the energy crisis’ impact on the unpaid receivables figures of suppliers will emerge by the end of February, when payment records for consumption over the four-month period covering October to January will have been established.

Government compensation payments to suppliers for electricity subsidies offered to consumers, in an effort to ease the cost burden, have been slow, which, combined with delayed payments of electricity bills by consumers, has led to a cash-flow squeeze for suppliers.

Many consumers in both the household and business categories, whose energy costs this January roughly doubled compared to a year ago, are only partially covering electricity bill amounts. Energy costs for bakeries, specifically, have increased more than fivefold compared to a year earlier.

PPC holding on to market share regained during crisis, at 64.5%

Power utility PPC is holding on strong to its market share recaptured over the past five months, during the energy crisis, ending January with a retail electricity market share of 64.5 percent, the other 35.5 percent shared by independent rivals, latest monthly data released by the Greek energy exchange has shown.

PPC’s 64.5 percent market share in January is marginally higher than its December market share and nearly half a percentage point above November’s level of 64.19 percent.

The power utility’s market share had shrunk by nearly five percentage points between January and September last year, falling as low as 62.62 percent, but has steadily regained ground over the past five months.

PPC’s pricing policy appears to have been a key factor in luring customers away from independent suppliers. The power utility has continued offering discounts, which, combined with state subsidies offered during the ongoing energy crisis, have cut electricity costs further.

Among the independent suppliers, Protergia continued to lead the pack in January with a market share of 7.07 percent. Heron was next with 6.42 percent and was followed by Elpedison with 6.06 percent, NRG with 4.36 percent, Watt & Volt with 2.66 percent, Fysiko Aerio Ellados with 2.11 percent, Zenith with 1.99 percent, Volterra with 1.79 percent and Volton with 1.61 percent.

Understaffed authority unable to address consumer complaints

A platform established five months ago by RAE, the Regulatory Authority for Energy, to support and protect consumers by accepting their complaints and forwarding them to respective enterprises being criticized, has largely remained futile, restricted by the authority’s acute understaffing problem, despite a considerable inflow of complaints, some 1,400 in total so far.

The platform, myrae, launched last September, has been a letdown for consumers, facing difficulties amid the energy crisis.

Complaints submitted by troubled and frustrated consumers have raised a number of issues, including overcharging claims, lack of electricity-bill transparency by suppliers, as well as calls for intervention by the authority.

RAE’s workforce numbers about 100 persons, of which just 18 are specialized. A further 30 staff members are employed at the authority’s administrative department, while 50 have been hired on temporary contracts expiring at the end of 2022.

The shortage of staff at RAE is highlighted by a comparison to the workforce at Hellenic Telecommunications & Post Commission (EETT), which employs 226 persons, 110 of these specialized, despite overseeing a mature market.

 

Competition committee staging retail electricity market inquiry

The country’s competition committee is conducting a market inquiry that requires all electricity retailers, 18 in total, to respond to an extensive series of questions concerning their low-voltage supply activities by the beginning of the new year.

The committee questions include questions on company revenues generated by low-voltage sales during 2020 and 2021, for all consumer categories, namely households and small businesses.

The companies have also been requested to provide details on low-voltage products offered, fixed-tariff offers, frequency of tariff revisions, as well as the average life of new products offered.

A number of questions also concern details on tariff adjustment clauses applied by suppliers to electricity bills.

The inquiry does not presume suppliers have been engaged in non-competitive practices, the competition committee has pointed out.

 

PPC’s returning customers still rising, up 44% in November

The number of customers returning to power utility PPC continued to grow in November,  7,500 customers leaving independent suppliers for the switch, a 44 percent increase compared to a month earlier, when 5,200 customers returned to the power utility.

Despite the rising number of customers returning to PPC, the outflow to independent suppliers still remains greater, meaning the power utility’s customer base is shrinking, but at a slower rate.

According to data covering the market from January through November, approximately 29,800 customers left independent suppliers to return to PPC, nearly fivefold the figure registered for the equivalent period last year, or 490 percent higher.

It remains unclear if December will produce a similar pattern. PPC, since the beginning of the month, has introduced a fixed-tariff offer of 18 cents per KWh (17 cents per KWh for online applications).

PPC chief executive Giorgos Stassis recently denied that competition in Greece’s electricity market is eroding. He stressed the market has been fully liberalized, noting the power utility’s retail market share will gradually fall to nearly 50 percent over the next few years.

 

PPC cuts operator, contractor debt by €800m in 2 years

Power utility PPC has settled most of its outstanding debt owed to operators and contractors, reducing the amount from 900 million euros in 2019 to 70 million euros at present, the figure with which the corporation expects to end the year, energypress sources have informed.

During the country’s ten-year recession, prior to the pandemic, PPC’s debt owed to operators and contractors had peaked at nearly one billion euros.

The corporation now owes 50 million euros to contractors and 20 million euros to the three market operators – DAPEEP, the RES market operator; IPTO, the power grid operator; and DEDDIE/HEDNO, the distribution network operator – latest company data has shown, the sources noted.

Besides benefitting PPC, which, for years, was embroiled in a series of legal battles with operators, contractors and equipment suppliers, the debt reduction is also helping offer market stability.

Other suppliers have had difficulties keeping up with payments to operators during the energy crisis and its narrower profit margins. If PPC, the dominant supplier, was also delaying its payments to operators at present, the energy market may have been in an unstable condition.

The total amount currently owed by electricity suppliers to the market operators is estimated at 350 million euros, making PPC’s 20 million-euro owed just a fraction of the sum.

 

PPC 300% increase in returning customers, outflow still bigger

The number of customers returning to power utility PPC in October increased by more than 300 percent compared to May, but the company is still losing more customers than it is gaining, latest market data obtained by energypress has shown.

PPC gained 5,200 new customers in October, compared to 1,350 five months earlier, the data showed. If the wave of PPC’s returning customers continues to swell, the inflow of customers will eventually exceed the outflow.

Recent data made available by distribution network operator DEDDIE/HEDNO backs this trend as the operator’s figures showed that PPC lost 47,000 low-voltage connections between the second and third quarters, well below the 71,000 lost between the first and second quarters.

PPC represented 5.06 million low-voltage connections in September, a 74.2 percent market share, according to the DEDDIE/HEDNO data.

Among the independent suppliers, representing an overall 1.61 million low-voltage connections in September for a 23.6 percent share, Protergia, a member of the Mytilineos group, was at the forefront with a 4.07 percent share, or 277,000 customers, followed by Elpedison, with 3.75% and 256,000 connections, and Heron with 232,000 connections and a 3.41 percent share.

 

Electricity prices could be driven further 13% higher in December

Latest complications in the licensing procedure for the Nord Stream 2 gas pipeline running directly from Russia to Germany through the North Sea, as well as the EU’s deteriorated ties ties with Belarus, key transit territory for Russian gas entering the EU via Poland, appear set to push electricity price levels even higher in coming weeks.

Wholesale electricity in Greece averaged a price of 221 euros per MWh in the first half of November, up from 198 euros per MWh for October, overall.

If current conditions do not improve, suppliers estimate that retail electricity prices will reach nearly 300 euros per MWh in December, up 13 percent from the current November level of 265 euros per MWh.

Market players are being pushed to the edge. Some suppliers are waging survival battles, others are seeking to appease unsettled customers through campaigns offering energy-efficiency tips, while others are seeing their market strategies overrun by the continual flow of unfavorable developments.

Greek government officials are also jittery, realizing that household electricity subsidies of 39 euros per month offered for November and December for the first 300 KWh of consumption will not be enough.

 

 

EU energy ministers to discuss consumer protection measures

EU energy ministers plan to discuss the alarming increase in energy prices on October 6 at a session expected to take into consideration a proposal made by Greek energy minister Kostas Skrekas for a temporary hedging mechanism that would be linked to the EU’s Emissions Trading System (ETS) as a means of protecting consumers against the overall energy cost ascent, caused by a combination of unfavorable factors, internationally.

Higher energy costs, which have energy consumers, including industrial, bracing for a challenging winter, will also be a key issue at a EU Summit meeting on October 21 and 22.

Natural gas prices yesterday climbed to 85 euros per MWh, several times over levels registered earlier in the year, oil prices exceeded 80 dollars per barrel, and CO2 emission rights, on a record-breaking streak, reached 62 euros per ton.

Besides these price rises, energy sufficiency issues are also beginning to emerge around Europe, as well as in China, for a variety of reasons.

In Greece, the combination of higher prices for primary and secondary materials, greater transportation costs, given the country’s location on the edge of Europe, plus the increase in energy prices, threatens to paralyze the industrial sector.

The country’s energy-intensive consumers are calling for a revision to supply rules. In the domestic retail electricity market, suppliers are being forces to revise prices. Some have so far resisted but are battling against narrowing profit margins. Customer shifts by disgruntled customers are already being observed.