Barriers, restrictions affecting power, gas market liberalization

Greece’s retail electricity and gas markets are moving towards full liberalization, but, in the course, needing to overcome major barriers and restrictions, a European Commission report for 2020 has highlighted.

Despite the progress made, obstacles in four key areas continue to obstruct the entry of new players in the country’s electricity and gas markets, the report noted.

Disincentives of regulatory nature, market inequalities, entrepreneurial and procedural barriers, as well as customer inaction were identified as the four key areas that need to be dealt with if full liberalization of the electricity and gas markets is to be achieved, the report found.

On the regulatory front, proposals offered by the European Commission focus on the need for a consistent framework offering long-term stability and security for market players.

Market surveillance and monitoring by authorities needs to be effective and accurate to prevent unfair competition behavior by market players, it added.

On market entry, the report recommends actions that would enhance the procedure’s reliability and uniformity.

As for customer immobility, signifying a market still not fully mature, the European Commission report proposes the provision of improved information to customers before supply agreements are signed, greater transparency, better price-comparing ability, as well as mechanisms protecting consumers against unprincipled actions by suppliers.

RAE set to permit gas link fee discounts after initial hesitation

Following initial hesitation, RAE, the Regulatory Authority for Energy, appears set to permit distribution network connection fee discounts offered by natural gas distributors to attract new customer. But this approval will only apply to areas where gas market penetration levels remain low.

RAE has hesitated to approve such discounts offered by gas utility DEPA’s subsidiaries EDA Attiki, EDA Thess and DEDA – the three gas distributors covering the wider Athens area, Thessaloniki-Thessaly and rest of Greece, respectively – fearing the special offers could be regarded as a form of state aid by the European Commission’s competition officials.

However, DEPA Infrastructure, a new DEPA entity now controlling these three gas distribution subsidiaries, recently warned that RAE’s delays are undermining its privatization procedure. This warning was highlighted in a letter to the authority that was also shared with privatization fund TAIPED and the energy ministry.

RAE’s delay in endorsing EDA tariffs for 2019 to 2022 has consequently also placed the gas company’s development plan in turmoil, DEPA Infrastructure pointed out in the letter.

RAE has overcome its concerns and is now preparing to endorse the tariffs. The authority will also permit connection fee discounts in areas where natural gas market penetration levels do not exceed 25 percent.

In areas where natural gas market penetration levels are exceeded but not greater than 75 percent, RAE will permit connection fee discounts of up to 90 percent in 2022, 80 percent in 2023, 70 percent in 2024 and 60 percent in 2025.

The authority will not endorse any connection fee discounts for municipalities where natural gas market penetration levels exceed 75 percent.

 

Gas supplier switching up 164% in newly liberalized gas market

A total of 20,134 gas company customers, 4.18 percent of 481,838 in total, switched suppliers in 2019, data provided by RAE, the Regulatory Authority for Energy, has shown.

This mobility highlights the Greek retail gas market’s heightened level of competition less than three years since its liberalization and the determination of customers to secure the best possible deals.

In 2018, when the country’s retail gas market was liberalized, 7,611 customers of 441,330 in total, a far lower 1.72 percent, switched gas suppliers.

These figures represent a 164 percent rise, between 2018 and 2019, of customers switching gas suppliers.

Businesses registered the greatest level of mobility, followed by household customers and industrial customers, in that order, both in terms of gas amounts used and number of supply connections.

The supplier switching rate in the household category was 4.12 percent in 2019, up from 1.69 percent in 2018. In the business category, 5.72 percent of consumers switched suppliers in 2019, up from 2.41 percent in 2018.

On the contrary, supplier switching in the industrial customer category fell sharply to 3.17 percent in 2019 from 8.78 percent in 2018.

In numbers, 19,180 household consumers of 465,018 in total changed gas suppliers in 2019. In the business category, 944 of 16,505 made switches to new suppliers last year. As for the industrial category, 10 of 315 customers moved to new gas suppliers in 2019.

Despite the increased level of customer mobility, two suppliers, Zenith and Fysiko Aerio, remained dominant, capturing market shares of 65.51 and 25.76 percent, respectively, in terms of number of connections, according to the RAE data. The two frontrunners were followed by Mytilineos (2.85%), Elpedison (2.05%) and NRG (1.16%).

These market shares and rankings differ when based on gas volume. Under these terms, Zenith’s share was 35.95 percent in 2019, while Fysiko Aerio captured a 31.13 percent share. They were followed by PPC (5.96%), Mytilineos (5.44%), Heron (5.25%), Elpedison (5.21%) and DEPA (3.51%), among a field of smaller players.

 

 

Copelouzos, DEPA secure PPC gas supply deals for 4.5m MWh in 2020

The Copelouzos Group and gas utility DEPA have emerged as the winning bidders of a power utility PPC tender for gas supply to the latter in 2020 totaling 4.5 million MWh. The terms include an option for supply in 2021.

Besides the Copelouzos Group and DEPA, a third participant, Mytilineos, took part in the tender.

The Copelouzos Group has successfully bid to supply 2.5 million MWh of gas to PPC, while DEPA has taken on the other 2 million MWh needed by the power utility, energypress sources informed.

PPC is one of Greece’s biggest natural gas consumers. Its needs are expected to grow further as a result of the power company’s upcoming entry into Greece’s natural gas retail market, a move carrying ambitious targets. PPC also plans to enter the wholesale gas market.

PPC failed to secure capacity slots for 2020 at the Revythoussa LNG terminal, just off Athens, through a competitive procedure from November to earlier this month.

Success here would have enabled PPC to import LNG shipments in 2020, as the power utility had done in the previous year.

PPC now intends to bid for an LNG capacity at the prospective Alexandroupoli FSRU in northeastern Greece during a binding second-round market test expected following the festive season.

PPC gearing up for gas market entry, seeking alternative supply sources

The main power utility PPC is intensifying its efforts for a natural gas market entry as an alternative business activity in the wider energy sector to compensate for anticipated losses to result from its disinvestment of lignite units and electricity market share contraction, both required by the bailout agreement.

“The natural gas market is changing rapidly. We also want to enter the retail gas market,” PPC’s chief executive Manolis Panagiotakis told a parliamentary committee yesterday.

The PPC boss made clear the power utility’s intentions to look for alternative supply sources, beyond the gas utility DEPA. An older nine-year supply agreement with DEPA expires on December 31, 2020.

“We are already preparing ourselves for the period beyond the [current] DEPA agreement,” Panagiotakis informed. “LNG has arrived and Azerbaijani gas will soon also be here. We, too, want to connect with these sources. That’s our strategy,” he added.

PPC has also made arrangements to utilize the upgraded LNG terminal on Revythoussa, an islet just off Athens.

PPC ranks as one of the country’s biggest natural gas consumers. The power utility is expected to consume 15.7 million MWh of gas in 2019 to fuel four power stations, Aliveri V, Megalopoli V, Lavrio IV and Komotini. The corporation also requires gas amounts to begin trading in the country’s retail gas market.