Russia

REPowerEU details unveiled, RES acceleration a key aspect

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The European Commission has unveiled details of its REPowerEU plan, a road map intended to eliminate Europe’s reliance on Russian energy sources.

Brussels’ road map will aim to eliminate Russian gas, oil and coal imports into the EU by 2027. The renewable energy sector is planned to play a key role in this effort. The European Commission has increased the RES sector’s energy-mix target to 45 percent, up from 40 percent, by 2030 and will seek to accelerate RES investments.

Solar energy utilization will be a pivotal factor of this strategy, to be promoted through the European Solar Rooftop Initiative, part of the REPowerEU plan.

The wider plan will push for an energy savings increase of 13 percent by 2030, up from the present objective aiming for a 9 percent increase in savings.

The European Commission estimates investments totaling 210 billion euros will need to be made by 2027, as an addition to the previous Fit for 55 plan, which set a target for a 55 percent reduction of carbon emissions by 2030, compared to 1990 levels.

Russian gas payments by Greek companies due next few days

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Greek companies that have imported Russian natural gas supplied by Gazprom and face installment payment deadlines expiring between May 20 and 25 are expected to accept Moscow’s ruble-currency demands as part of a wider EU approach that still remains unclear.

Even so, the European Commission, appearing set to revise EU directives concerning payment procedures by member states for Russian gas, is believed to be adjusting to Moscow’s ruble-currency demands.

Greek companies that have imported Russian gas believe the dispute will soon be resolved and are awaiting EU directives and related signals from the Greek government before proceeding with installment payments, sources informed.

The Greek government and the country’s energy players are continuing to observe emergency plans as energy supply security remains a threat as long as Russia’s war on Ukraine continues.

 

 

LNG order costs fall as much as 40% below TTF prices

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The cost of LNG orders placed in recent days has fallen 10 to 40 percent below levels at the Dutch TTF exchange, driven lower by fine weather around Europe and subdued demand in Asia as a result of lockdown restrictions imposed over the past two months by authorities in China, insisting on a zero-Covid policy.

LNG price levels are also lower at the TTF exchange, easing to levels between 93.5 and 94 euros per MWh, the lowest since February.

Market pressure has also eased as a decision by Ukraine to disrupt a pipeline supplying Russian gas to Europe has had less negative impact than initially feared.

Ukraine’s decision, believed to have been taken to pressure the West for stricter sanctions against Russia, prompted Russia’s Gazprom to find a bypass solution through alternative routes to the EU.

These developments could lead to a significant reduction in wholesale electricity prices as a result of less price pressure faced by electricity producers.

The duration of China’s lockdown will greatly shape LNG market developments. For the time being, LNG orders that had been intended for China are being redirected to Europe.

Though supply to Asia has fallen considerably from high levels recorded just months ago, LNG demand typically increases in China, Japan and South Korea during summer.

 

ELPE, Motor Oil decide to cut Russian oil imports

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Greece’s two refineries, Hellenic Petroleum (ELPE) and Motor Oil, are moving ahead with plans to replace Russian crude oil imports with orders from alternative sources.

Both energy groups have planned ahead of the EU’s proposal for a ban of all oil imports from Russia by the end of this year, company officials have informed. Reduced reliance on Russian oil imports has been a part of their strategies, whose implementation began last year, the officials added.

Neither energy group has been overexposed to Russian oil imports. Motor Oil’s Russian oil imports, over the years, have represented between 5 to 7 percent of its total oil imports, while ELPE’s Russian oil imports in 2021 reached 18 percent of the group’s total, according to its annual results.

Motor Oil’s deputy managing director Petros Tzannetakis informed a teleconference with analysts last month that the energy group had cut Russian oil imports in the fourth quarter last year.

ELPE’s leadership, which had joined a business delegation accompanying Greek Prime Minister Kyriakos Mitsotakis on a recent official visit to Saudi Arabia, reached an agreement with Aramco for bigger crude oil purchases, presumably to replace Russian oil.

Energy ministry officials in Sofia for EU’s first regional energy platform

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A first regional taskforce for cooperation between EU member states on energy matters, as part of the EU’s Energy Purchase Platform, is scheduled to meet in Sofia tomorrow, as announced earlier this week by European Commissioner for Energy Kadri Simson.

The regional taskforce will concentrate on the year ahead and provide specific regional expertise and know-how to develop and implement the REPowerEU action plan to reduce dependency on Russian fossil fuels, fill storage ahead of next winter and further accelerate the decarbonization of the energy sector.

This meeting comes following Russia’s recent decision to disrupt natural gas supply to Bulgaria as well as Poland.

The Bulgarian government has also organized a coinciding meeting of regional ministers. Greece’s energy minister Kostas Skrekas (photo) and the ministry’s secretary-general Alexandra Sdoukou will participate.

The two Greek government officials will be visiting Sofia on the heels of yesterday’s official launch of work on the Alexandroupoli FSRU, an LNG terminal project intended to diversify the energy sources of Greece and the wider region. Yesterday’s official ceremony was attended by heads of state representing Greece, Bulgaria, North Macedonia and Serbia.

During their visit to Sofia, the Greek energy ministry’s two officials are also expected to take part in a bilateral meeting with Bulgarian energy minister Alexander Nikolov.

This session’s agenda will examine the progress of the IGB gas pipeline, set to be completed and launched in July, and an electricity grid interconnection upgrade between the two countries, whose completion is expected by the end of this year.

The IGB gas pipeline, promising to contribute to the EU’s effort for drastically reduced dependency on Russian energy sources, will offer a second interconnection between Greece and Bulgaria, in addition to the nearby Sidirokastro link.

 

 

Unclear EU stance on Moscow’s ruble payment demand for gas

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The European Commission appears to be deliberately maintaining an unclear stance on Moscow’s demand for natural gas supply payments in the ruble currency, an in-between position that presently enables European companies to abide by Russian President Vladimir Putin’s related decree without breaching EU sanctions imposed on Russia.

Yesterday’s EU council meeting of energy ministers for a common European stance on Russia’s ruble-currency payment demand for Gazprom natural gas failed to produce an agreement, instead maintaining the ambiguity that has hovered in recent weeks.

European Commissioner for Energy Kadri Simson reiterated that payments for Russian natural gas in the ruble currency would represent a violation of European sanctions on Russia, and, as a result would not be accepted. However, she did not offer specific advice on how European companies should make their payments for Russian natural gas when the next round of payments are due. Simson ascertained that clearer directions would soon be issued, without specifying when.

Italian minister for Ecological Transition Roberto Cingolani has allegedly supported that European companies must be given the ability, at least temporarily, to conform to Russia’s payment demands, according to a Politico report.

However, the Italian government has denied that Rome is preparing to make ruble-currency gas payments to Russia, describing the Politico reports as misleading.

 

 

 

REPower EU plan overambitious, ‘an objective, not a specific strategy’

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The European Commission’s REPower EU transition plan, aiming to greatly reduce Europe’s reliance on Russian gas, is overambitious and should be regarded as an objective rather than a set of specific measures, officials taking part in the recent annual Gas Infrastructure Europe conference, an authoritative sector event, have concluded.

The calculations offered by the REPower EU plan are incorrect, Torben Brabo, GIE’s president, has told the Euractive agency, adding that a closer look at the figures concerning Russian natural gas supply, LNG supply, as well as biomethane projections, renders the European plan as overambitious.

LNG availability and purchase projections in the REPower EU plan are possibly too high, the GIE president stressed.

Officials linked with LNG infrastructure told the GIE conference that the LNG market’s actual conditions will prevent the EU plan’s lofty targets from being achieved. Anything beyond 50 percent of the target set will be difficult to attain, these officials contended.

American current gas liquefaction capacity does not suffice for supply of an additional 15 bcm of LNG to Europe, as specified in the EU plan, officials taking part in the GIE conference contended.

Qatar and other LNG exporters in the Middle East have already committed amounts to non-EU buyers, while the REPower EU plan’s 35-bcm biomethane objective appears to be too optimistic, they added.

 

 

 

 

Athens awaiting EU outcome for Gazprom payment stance

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The Greek government’s stance regarding Moscow’s demands for ruble-currency payments to Gazprom for natural gas supply will depend on decisions to be taken by fellow EU members, government officials have told energypress.

Athens is expected to push for greater clarity on the matter and a common European stance on the issue at an emergency meeting of EU energy ministers called by the French EU presidency for next Monday.

An imminent payment expected to be made by German company Uniper will be pivotal in decisions to be made by EU member states on Moscow’s ruble-currency payment demand for Russian gas supply.

According to German media, Uniper intends to make a euro-currency payment to Gazprom, but, rather than make the payment to a European bank, as the company has done until now, it will instead transfer the related amount to Russia’s Gazprombank, not on the sanctions list.

As has been widely reported, Russian president Vladimir Putin has ordered countries deemed as adversaries to make gas payments through a specific procedure involving two Gazprombank accounts, a foreign-currency account and a ruble-currency account. Gazprombank will convert foreign-currency sums to rubles before transferring the resulting amounts to parent company Gazprom.

Alexandroupoli FSRU project development launch on May 3

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Development of the Alexandroupoli FSRU, in Greece’s northeast, a project promising to boost energy security and widen energy source diversification in Greece and the wider Balkan region, is scheduled to officially commence on May 3.

The Alexandroupoli FSRU, to be developed and operated by Gastrade, a project-specific consortium established by the Copelouzos group, has become particularly crucial given the energy market challenges faced by the EU following Russia’s invasion of Ukraine and the ongoing war.

The Alexandroupoli FSRU promises to initially offer a new gas transmission corridor to Greece and Bulgaria, and, at a latter stage, to Romania and North Macedonia, helping all these countries reduce their reliance on Russian natural gas.

Completion of the project’s second stage, expected in 2024, promises to double the unit’s capacity and enable natural gas transportation as far as Ukraine.

The Gastrade consortium is comprised of five partners, founding member Elmina Copelouzos of the Copelouzos group, Gaslog Cyprus Investments Ltd, DEPA Commercial, Bulgartransgaz, and DESFA, Greece’s gas grid operator, each holding 20 percent stakes.

All five partners have agreed to offer 2 percent each so that North Macedonia can enter the consortium with a 10 percent stake.

Prime Minister Kyriakos Mitsotakis and his Bulgarian counterpart Kiril Petkov will attend next week’s ceremony marking the start of work on the project.

All eyes on Germany’s ruble payment stance for Russian gas

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Greece and the entire EU are waiting to see if Germany will agree to Russia’s demand for Gazprom gas supply payments in the ruble currency.

Berlin’s next payment to Russia’s state-controlled Gazprom is due tomorrow. To date, Chancellor German chancellor Olaf Scholz has refused to bow to Moscow’s recent payment-term demands.

The decision to be reached by Germany on this dispute with Moscow is expected to serve as a guide for most EU members.

Berlin has officially noted that Russian president Vladimir Putin’s payment demand violates the terms of an agreement signed between the two sides.

Besides creating artificial demand and, subsequently, greater value for the ruble, which has been impacted by sanctions on Russia, Moscow’s demand for natural gas payments in its currency is also seen as a Russian show of strength aiming to force the EU to succumb to Russian demands.

The EU’s refusal, so far, to bow to Russia’s ruble-currency pressure for natural gas payments has contributed to keeping gas prices at high levels.

Greek officials who took part in an energy-security meeting yesterday, called by Prime Minister Kyriakos Mitsotakis, reportedly stated that the EU made a mistake to reject Russia’s ruble payment demand, made in late March.

The ongoing political tension and market turbulence, resulting in higher natural gas prices, is benefitting Russia’s gas revenues.

 

PM calls emergency meeting after Russia gas cut to Bulgaria

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Prime Minister Kyriakos Mitsotakis will hold an emergency meeting this afternoon at the government headquarters with the energy ministry leadership’s participation following Russia’s decision yesterday to disrupt gas supply to Bulgaria, following a disruption to Poland.

The Greek leader had a telephone discussion with his Bulgarian counterpart Kiril Petkov this morning, pledging Greek energy-supply support, within the framework of EU solidarity, following Russia’s decision to disrupt supply to the neighboring Balkan country.

This support will most likely stem from Greece’s LNG terminal at Revythoussa, the islet just off Athens, through a partial reservation of this facility’s capacity for Bulgaria’s needs.

Consumption in Bulgarian at this time of the year is low, meaning supply through the Revythoussa unit should help cover the neighboring country’s needs, at least temporarily.

Bulgarian-based MET Energy has already ordered a 142,500 m3 LNG shipment through the Revythoussa terminal.

Talks in progress for Italy’s East Med gas pipeline entry

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Talks are in progress for Italy’s official entry into the East Med gas pipeline project, a prospective 2,000-km pipeline planned to carry natural gas to Europe via Greece, Cyprus, Israel and Italy, energypress sources have informed.

Greece, Cyprus and Israel signed an agreement for the project’s development in 2020, without Italy’s participation, as the country’s government at the time, citing environmental issues, had reacted against the project reaching its shores.

Italy’s current Prime Minister, Mario Draghi, recently stressed that the East Med gas pipeline needs to be pursued as a result of Russia’s invasion of Ukraine.

The project has now gained political support in Italy, through a resolution issued in parliament urging the government to co-sign the transboundary agreement, energypress sources informed.

Italy has revised its stance on the East Med project as a result of a recent EU-27 decision to drastically reduce Europe’s reliance on Russian natural gas.

Italy could officially announce, in May, its intention to co-sign the East Med agreement, sources informed.

Lignite extraction boosted as part of emergency plan

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Power utility PPC has boosted its lignite mining output by an additional 5,000 to 6,000 tons a day for its Meliti and Agios Dimitrios power stations in northern Greece and by an extra 7,000 to 8,000 tons a day for its Megalopoli power station in the Peloponnese, in response to Prime Minister Kyriakos Mitsotakis’ call, early in April, for increased lignite reserves should Russia disrupt its natural gas supply to Europe.

The objective is to increase lignite extraction by 45 to 50 percent over a two-year period for reserves amounting to more than 15 million tons, up from the present quantity of 10.5 million tons, which would enable lignite-fired production to reach 6.5 TWh annually, up from 4.5 TWh projected in the current energy plan.

The majority of PPC’s seven lignite-fired power stations will need to be temporarily withdrawn if increased lignite quantities are to be accumulated at the yards of these power stations.

Of the country’s seven lignite-fired power stations, just one, Agios Dimitrios IV, is scheduled to operate today.

The additional 2 TWh of electricity generation that could be produced annually as a result of this initiative would still not suffice if Russia were to stop supplying natural gas to Europe.

Greece’s annual electricity consumption is estimated at 55 TWh. Last year, natural gas-fueled electricity generation covered 20 TWh of the country’s overall electricity demand, with 40 percent of the natural gas used supplied by Russia.

This means Russia’s natural gas was responsible for 8 TWh of Greece’s electricity generation last year. The Greek plan for an additional 2 TWh in generation through greater lignite production would only cover 25 percent of electricity currently produced using Russian natural gas.

Additional LNG shipments, accelerated development of RES projects, and an energy-saving policy for households, businesses and industry will also be needed to cover the gap.

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

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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.

 

 

ExxonMobil, like Total, seems disinterested in Cretan blocks

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American multinational oil and gas corporation ExxonMobil appears likely to follow the way of France’s TotalEnergies towards a possible withdrawal from two offshore blocks, west and southwest of Crete. The two companies each hold 40 percent stakes in these offshore licenses, Greece’s ELPE maintaining the other 20 percent.

Indications of a reduction in interest by the two corporations run contrary to  growing interest expressed by Greek officials for domestic exploration as a result of the EU’s decision to drastically reduce Europe’s reliance on Russian natural gas.

EDEY, the Greek Hydrocarbon Management Company, recently forwarded letters to these upstream companies, informing them of the Greek government’s intentions for a renewed, more ambitious hydrocarbon strategy.

EDEY officials declined to comment on the retreats by ExxonMobil and TotalEnergies but noted that a new round of talks for upstream investments is beginning. Other corporations are interested in Greece’s upstream sector, EDEY officials informed.

EDEY is determined to keep a tight schedule and secure seismic surveys at the two Cretan offshore areas this coming autumn and in spring, 2023.

Government in frantic search of €3-4bn for crisis measures

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The government is frantically searching for solutions that would secure between 3 to 4 billion euros to compensate energy companies for planned price ceilings on wholesale energy prices.

Energy market conditions are adverse across the board. Consumers are struggling to meet costlier energy-bill payments, energy market companies and authorities fear an increase in unpaid receivables and its wider effects, while the government, seeing its approval rating fall by between half and one percentage point a month, is hoping for a European solution to the energy crisis, now exacerbated by Russia’s war on Ukraine.

A European solution to the energy crisis does not seem anywhere near. French president Emmanuel Macron is currently stranded by the French elections, while German chancellor Olaf Scholz appears undecided. For the time being, at least, the Greek government will need to seek a solution through the national budget.

Russian president Vladimir Putin is under no pressure to end his war on Ukraine and stop his energy-sector blackmailing of the EU as long as European energy payments for Russian gas, oil and coal, totaling 600 million dollars a day, keep flowing into Russia.

At this stage, Greek Prime Minister Kyriakos Mitsotakis’ proposal for a price ceiling at the TTF gas exchange appears to be the only promising solution, as this would strike at the root of the problem prompting exorbitant electricity prices around Europe.

Sanctions on Russia boost Greece’s upstream prospects

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The EU’s revised natural gas strategy, seeking alternative solutions as a result of sanctions imposed on Russia, has created favorable conditions for Greece’s upstream sector as the Greek market could become a destination for upstream companies operating in Russia and now needing to shift.

EDEY, the Greek Hydrocarbon Management Company, has forwarded letters to upstream companies already maintaining interests in Greece, informing them of the government’s intentions for a renewed, more ambitious hydrocarbon strategy.

EDEY also intends to hold meetings with these upstream companies to determine their levels of interest in the Greek market and shape its actions accordingly.

Total and ExxonMobil maintain hydrocarbon interests in Greece as co-members of a consortium holding two offshore licenses, west and southwest Crete. The two companies each have 40 percent stakes in this consortium, Greece’s ELPE holding the other 20 percent.

The consortium, it is believed, aims to conduct seismic surveys next winter at the offshore Crete licenses, still at early exploratory stages.

Besides these two licenses, a further four licenses have been granted in Greece. Energean maintains an onshore block in the Ioannina area, northwestern Greece. The company also holds a 75 percent stake at Block 2, northwest of Corfu, with ELPE as its partner. Also, ELPE holds two offshore licenses in the west, Block 10 and Ionio.

These six licenses could generate total turnover of 250 billion euros by 2030, assuming a 20 percent success rate during exploration, according to a conservative forecast made by EDEY.

Solar, wind energy facility installation costs up over 30%

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Solar and wind energy park installation costs have risen considerably, internationally, since early 2021, driven higher by the pandemic’s impact on the global economy, supply chain and labor,  unfavorable market developments now exacerbated by the impact of Russia’s ongoing war in Ukraine.

According to a new study conducted by LevelTen Energy, monitoring RES sector transactions worldwide, installation costs last year rose by 28.5 percent in North America and by 27.5 percent in Europe, and have continued rising this year, up 9.7 percent and 8.6 percent, respectively, taking the average RES installation cost to 57 euros per MWh.

These unfavorable developments have wiped out RES sector gains achieved over the past decade or so, during which RES installation costs have fallen.

Steel prices in Europe skyrocketed to 1,650 euros per ton in March, up from 1,100 euros per ton last October, and have since eased slightly to levels of around 1,400 euros per ton.

The increased RES costs come as a challenge to the EU’s objective for major RES growth as a means of achieving climate-change targets and drastically reducing Europe’s reliance on natural gas.

Despite these price increases, the cost of RES-based electricity generation still remains far lower than that of fossil fuel-generated electricity.

 

Egyptian grid operator team in Athens for Greek grid link talks

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A team of highly ranked officials from the Egyptian Electricity Transmission Company (EETC), headed by president and CEO Sabah Mashali, is in Athens for two days of talks, beginning today, on the development of the Greek-Egyptian grid interconnection.

The EETC officials are scheduled to meet today with a team of Greek power grid operator IPTO officials, headed by president and CEO Manos Manousakis, for a discussion on technical details concerning the grid interconnection.

Tomorrow, the EETC team is scheduled to meet with Greece’s energy minister Kostas Skrekas as well as development and investment minister Adonis Georgiadis.

A first step for the project was taken last October when the Greek and Egyptian energy ministers signed a related Memorandum of Understanding. As part of the agreement, the power grid operators of both countries have assembled a working group to conduct necessary preliminary work.

The group’s responsibilities, according to the MoU, include technical coordination to ensure the grid interconnection’s compatibility; facilitating the project’s licensing matters; as well as providing support for the project’s classification as an EU Project of Common Interest, which would ensure EU funding support.

The Greek-Egyptian grid interconnection is planned to exclusively transmit green energy from Egypt to Greece as a means of increasing the energy-mix share of renewables in Greece and the wider region and also bolstering energy security in Europe, prioritized following Russia’s invasion of Ukraine.

Prime Minister Kyriakos Mitsotakis, during a recent meeting with European Commissioner for Energy Kadri Simson, stressed the importance of the Greek-Egyptian grid link, noting it should receive European backing.

 

Revythoussa FSU purchase advantageous over rental

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The purchase of a floating storage unit (FSU) for installation at the Revythoussa islet LNG terminal just off Athens, to boost the unit’s capacity for the country’s protection against a further supply crisis, is financially advantageous compared to a one-year rental of an equivalent floating storage system, officials at gas grid operator DESFA, operating the terminal, have determined following their analysis of a related cost-benefit analysis.

The analysis, forwarded for consultation by RAE, the Regulatory Authority for Energy, last Friday, compares the costs of purchase and rent solutions over a five-year period.

Taking into account depreciation over the five-year period, the purchase of an FSU works out to be 48.4 million euros cheaper than a rental solution, DESFA officials have calculated.

An FSU rental for one year would cost a net amount of 110.6 million euros, whereas a purchase would cost 172.8 million euros, ultimately beneficial over a five-year period, according to the DESFA officials.

A capacity boost at the Revythoussa LNG terminal is seen as crucial in the effort to protect the country’s energy supply security should Russia disrupt its natural gas supply to Europe.

If Moscow does decide to cut supply to the continent, Greece, it is estimated, will need to order an additional 50 or so LNG shipments over the next 12 months.

Greece, Cyprus, Israel look to push ahead with key projects

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The prospective East Med gas pipeline and a subsea electricity grid interconnection, projects that would link Israel with Cyprus and Greece and which are being heavily promoted as a result of the EU’s new energy policy, aiming to end the continent’s reliance on Russian gas as soon as possible, are expected to dominate the agenda of today’s trilateral meeting in Jerusalem between the energy ministers of Greece, Cyprus and Israel.

Energy company representatives will, for the first time, also be participating in a trilateral meeting of energy ministers involving the three countries, highlighting the determination of all three countries, and the EU, for swift progress on projects and agreements that would contribute to greater energy diversification for Europe.

Greek energy minister Kostas Skrekas will be accompanied by Kostas Xifaras, chief executive of gas company DEPA Commercial; Mathios Rigas, CEO of upstream company Energean; and Manos Manousakis, CEO of Greek power grid operator IPTO.

Representatives of corresponding Cypriot and Israeli companies will also be taking part in today’s trilateral meeting.

Prospects for the development of the EuroAsia electricity grid link promising to connect the three countries have grown considerably as Israel appears to have swept aside previous reservations. Israel has wanted the completion of the Crete-Cyprus link as a prerequisite ahead of further development.

 

 

Revythoussa FSU 12-month rental or permanent solution

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Greek authorities are making comparisons in preparation for a choice between an FSU one-year rental and a permanent floating storage unit at the Revythoussa LNG terminal as part of a plan to boost the country’s gas storage capacity ahead of next winter.

A decision for a capacity boost at the Revythoussa LNG terminal, with the addition of a fourth unit, has already been reached, highly ranked energy ministry officials have informed. A competitive procedure will be staged for the contract.

The option of renting an FSU for the Revythoussa LNG terminal, a facility operated by DESFA, the gas grid operator, would take approximately two months to complete, sources said.

This solution would make operations at the Revythoussa LNG terminal more flexible as it would enable unloading of two LNG orders simultaneously, instead of just one, as is the case at present.

A disruption of Russian gas supply to the EU would force all member states to try and secure additional LNG shipments.

The second alternative, entailing the installation of a permanent floating storage unit at the Revythoussa LNG terminal, would require more time to complete without offering any additional advantages, compared to the FSU rental, energy ministry officials noted.

Officials at RAE, the Regulatory Authority for Energy, are comparing market data such as domestic gas demand projections, and also considering Revythoussa’s prospects for a bigger role as a natural gas gateway for neighboring countries. Bulgaria and Romania are already using the Revythoussa terminal for LNG imports.

DESFA calls for doubled gas network capacity, PPPs

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The country’s changing energy policy, especially following an EU decision aiming to drastically reduce Europe’s reliance on Russian natural gas, will require far greater gas transmission capabilities, inevitably prompting the need for a major network capacity boost, double the current capacity, with project participation from private-sector investors through public-private partnerships, DESFA, the gas grid operator, has informed RAE, the Regulatory Authority for Energy.

The EU’s energy policy, steering Europe towards energy-source diversification, promises to establish Greece as a southeastern transit country handling far bigger quantities than at present.

Speaking at the recent energypress Power & Gas Fourum, Michalis Thomadakis, DESFA’s Director of Strategy and Development Division, noted: “Certain projects need to be developed so that we can fully utilize the new role the Greek gas transmission system is being called upon to adopt in the wider region. This can only be done with investments. It basically means that the system’s capacity needs to be doubled.”

A disruption of Russian natural gas supply to Europe would create a need for approximately 40 bcm to the Balkan region. Much of this quantity would pass through Greek territory.

New infrastructure promising to greatly increase Greece’s LNG importing capacity is already in the making. Projects include the Alexandroupoli FSRU in the country’s northeast, the Dioryga Gas FSRU planned for the Korinthos region west of Athens, as well as an additional storage tank at Greece’s only existing LNG terminal on the islet Revythoussa, just off Athens.

Given these prospects, DESFA is currently looking to develop new pipelines and make network revisions that would facilitate greater quantities to other European markets.

 

 

Lignite re-emphasis temporary measure for security, PM says

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A government decision for an increased lignite share of the country’s energy mix is purely temporary and driven by energy security concerns, Prime Minister Kyriakos Mitsotakis clarified during a speech yesterday in Kozani, northern Greece.

The same goes for Athens’ thoughts about extending the lives of state-controlled power utility PPC’s two lignite-fired power stations, Meliti and Agios Dimitrios V. PPC plans to withdraw these units by the end of 2023, as part of the country’s decarbonization strategy, but this exit date may now be delayed.

The technical future of PPC’s Ptolemaida V, a new convertible power station, is unclear. During yesterday’s speech, the Greek prime minister informed that, if needed, this facility would operate as a lignite-fired facility until 2028, before switching to natural gas. This switch could be made at an earlier date if the war ends and natural gas prices fall significantly, seen as unlikely at present.

This overall change in direction is directly linked to the European Commission’s decision to significantly revise the EU’s Fit for 55 plan, originally setting a target for a 55 percent reduction of carbon emissions by 2030, compared to 1990 levels. Details of the Fit for 55 revisions, prompted by the impact on markets of Russia’s ongoing war in Ukraine and the EU’s resulting decision to drastically reduce its reliance on Russian natural gas, are expected to be announced by the European Commission in May.

The EU’s new energy strategy is expected to lead to an increase in the use of biomethane and green hydrogen, as well as reduced gas consumption, regardless of the supplier, be it Russia, the USA, Qatar or Algeria.

Authorities admit the international LNG market cannot increase production to a level that would fully replace Russian gas supply.

Updated NECP raises RES capacity target to 25 GW by 2030

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The updated National Energy and Climate Plan is expected to increase the country’s RES installation target for 2030 to 25 GW, up from the existing edition’s 18.9 GW.

The NECP’s greater ambition for increased RES installations and a bigger green-energy share of the country’s energy mix is based on the Fit for 55 agreement reached by the EU last April for a carbon emissions reduction of at least 55 percent by 2030, compared to 1990 levels, revised from the previous reduction target of 40 percent.

Given the latest developments concerning Russia’s war on Ukraine, the EU is now determined to achieve even faster RES development to greatly reduce its reliance on Russian gas imports long before 2030.

The Repower EU plan, recently designed for this purpose, is aiming for an average 20 percent increase in new green projects that would cut natural gas consumption by a further 3 bcm. The Repower EU plan has also raised green hydrogen targets.

Greece’s RES units operating in 2020 totaled 10.1 GW, a capacity that will need to be increased by a further 10 GW by 2030, if the Fit for 55 target is to be met. This ambitious target increases the urgency of the energy ministry’s plan for further RES project licensing simplification.

Network upgrades already planned more than cover the country’s ambitious green targets. Power grid operator IPTO estimates that planned transmission network upgrades will enable RES units with a total capacity of 28.5 GW to operate by 2030.

Ongoing war, new EU sanctions on Russia, spark price fears

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The ongoing war in Ukraine, as well as a fifth round of EU sanctions against invading Russia, have prompted further energy-shortage fears that could drive natural gas and electricity prices even higher.

A growing number of consumers struggling to cover energy bills are resorting to installment-based payment arrangements, up 60 to 70 percent since the beginning of the year.

One major energy supplier received some 6,000 applications for installment-based payments in March, up from 4,500 in February.

Though the EU has found consensus on imposing sanctions against Russia, it has struggled to reach agreement on support measures for consumers and enterprises. A gap between the EU’s north and south continues to exist, each member state more or less left to seek solutions alone.

None of the south’s proposals, intended to ease the effects of the energy crisis, including a price ceiling on natural gas, and a detachment of gas prices from electricity prices, have yet to be adopted. Instead, decisions have been postponed until May. Decisions could ultimately be shaped by the degree of pressure felt by the north.

The EU’s fifth round of sanctions on Russia, announced yesterday, include a ban on coal imports from Russia, worth four billion euros annually; a total ban of banking transactions with four main Russian banks; as well as export bans for products required by Russia, such as semiconductors. The USA has also increased its pressure on Russia.

Wholesale electricity prices in Greece may be 30 percent lower than a peak of 427 euros per MWh registered in early March, but levels of between 280 and 330 euros per MWh registered in recent days are equivalent to those of November and December.

Even if the war were to end now, the good scenario for energy prices would still be bad. Natural gas prices would remain at levels of between 50 and 60 euros per MWh throughout 2022, compared to yesterday’s level of 106 euros per MWh, for a wholesale electricity price of 160 euros per MWh, up 160 percent compared to last year and 130 percent over 2019 levels.

As for the worst-case scenario, maintenance of natural gas price levels at the present level of 100 euros per MWh would result in wholesale electricity prices of 255 euros per MWh, meaning between 130 and 150 euros in monthly electricity bills for average households, not including subsidies.

 

EU’s Fit for 55 revisions to include reduced gas use

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The European Commission is preparing to present, in May, details of its Repower EU program, a strategy aiming to greatly reduce Europe’s reliance on Russian energy. Until now, the plan has been limited to objectives, without specifics on how these targets could be achieved.

Further revisions of the EU’s energy and climate policy – as presented in the recent Fit for 55 package, which set a target of a 55 percent reduction of carbon emissions by 2030, compared to 1990 levels – will be needed, through legislative revisions and directives.

The revisions could include greater tolerance for lignite and gas infrastructure, until recently treated strictly, as well as measures for an acceleration of RES and energy storage development.

As was pointed out at the recent energypress Power & Gas Forum by Pantelis Kapros, Professor of Energy Economics at the National Technical University of Athens, the EU’s energy policy, concurrently managing economic, energy security and environmental concerns, is now shifting towards greater emphasis on energy security as a result of Russia’s invasion of Ukraine and the move’s wider repercussions.

Even so, the Fit for 55 objectives for 2030 are expected to be maintained, while RES targets may be raised to more ambitious levels.

The EU will also look to reduce natural gas consumption for electricity generation and heating through the use of biomethane quantities in excess of 35 billion cubic meters by 2030, green hydrogen quantities of 20 million tons by 2030, as well as energy storage system development, noted Professor Kapros, one of the architects of the EU’s energy policy.

The EU’s Fit for 55 package had originally planned for 164 bcm of Russian gas imports in 2025 and 131 bcm for 2030, but these quantities are now expected to be greatly reduced to 74 bcm and 33 bcm, respectively.

Greece, Cyprus, Israel prepare to discuss East Med, power grid link

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The East Med gas pipeline and a subsea electricity grid interconnection to link Israel with Greece and Cyprus, projects whose prospects have grown as a result of the EU’s new energy policy, aiming to end the continent’s reliance on Russian gas as soon as possible, are expected to dominate the agenda at an upcoming trilateral meeting between the energy ministers of Greece, Cyprus and Israel.

The session is planned to take place in a fortnight’s time or immediately following the Greek Easter period, culminating on April 24.

Italian Prime Minister Mario Draghi recently stressed that development of the East Med gas pipeline, a prospective 2,000-km pipeline planned to carry natural gas to Europe via Greece, Cyprus, Israel and Italy, needs to be pursued as a result of Russia’s invasion of Ukraine.

A consortium formed by Greek gas company DEPA and Italy’s Edison is continuing its studies on the East Med project plan.

As for the subsea electricity grid interconnection, Cyprus and Israel have pushed for its development to end their energy isolation. The European Commission has already approved funding worth 657 million euros for the prospective project’s section to run from Greece to Cyprus.

Greek prime minister Kyriakos Mitsotakis and energy minister Kostas Skrekas will be involved in two key meetings in Athens today, to focus on energy matters as a result of Russia’s war on Ukraine, with Israel’s alternate prime minister and foreign affairs minister Yair Lapid, as well as US under secretary of state for political affairs Victoria Nuland.

 

PPC capable of boosting lignite extraction by 43%, utility tells

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Power utility PPC has the capacity to increase its lignite extraction to as much as 15 million tons annually, from 10.5 million tons at present, for a 43 percent increase to full-capacity lignite-fired generation, in the event of a Russian disruption of natural gas supply to Europe, according to an updated annual mining plan submitted by the utility to the energy ministry.

Even so, this increased production could still not be enough to fill the enormous gap that would be left by a Russian cut in natural gas supply.

The country’s lignite-fired electricity generation can increase to 6.5 TWh annually from the present plan of 4.5 TWh, according to the utility plan. However, PPC would need to hasten the development of a series of projects to boost productivity at its lignite mines and increase the amounts of lignite stocks at the yards of its seven lignite-fired power stations – five Agios Dimitrios units, as well as Meliti and Megalopoli.

The annual plan’s objective is to increase lignite stocks at each of the five Agios Dimitrios facilities to 1.75 million tons from 1.2 million, while also increasing the amount at Meliti to 300,000 tons from 220,000 tons this month, as well as the lignite stock at Megalopoli to 500,000 tons from 270,000 tons.

Prime Minister Kyriakos Mitsotakis is expected to comment on Greece’s lignite alternative, given the Russian threat, at the official launch, tomorrow, of a major-scale solar energy farm developed by Hellenic Petroleum ELPE at Livera, close to Kozani, northern Greece. Offering a 204-MW capacity, this facility is one of Europe’s biggest.

Emergency steps taken for FSU at Revythoussa LNG terminal

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The energy ministry appears to be pushing ahead with an emergency plan for swift installation of a floating storage unit (FSU) at the country’s only existing LNG terminal, on the islet Revythoussa, just off Athens, for increased LNG storage capacity ahead of next winter, sources have informed energypress.

Gas grid operator DESFA, the Revythoussa facility’s operator, has already researched the market for an appropriate vessel, which will need to be equipped with modern technology and recently built.

The FSU to be moored at Revythoussa will need to offer an LNG storage capacity of between 130,000 and 140,000 cubic meters to satisfy the Greek market’s needs, the sources noted.

Under normal conditions, procedures concerning this specific project would take over 12 months to complete and enable installation, but authorities are now moving fast as a result of the extreme impact Russia’s war on Ukraine has had on the energy market.

DESFA will present a cost-benefit analysis to the energy ministry by this Wednesday, according to sources.