SEV

Ministry, SEV join forces to reduce industrial energy cost

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A working group formed by the energy ministry and the energy committee of SEV, the Hellenic Association of Industrialists, has begun work on measures intended to reduce energy costs for Greek industry.

At its first meeting, held yesterday, the working group took preliminary steps seeking measures that would ensure foreseeable and competitive energy costs for Greek energy-intensive businesses, industrial sector sources informed.

A decision to form this working group comprising energy ministry and SEV officials was reached at a meeting in October between SEV’s energy committee with the ministry’s leadership.

Implementing a compensation mechanism to cover CO2 emission costs between 2021 and 2030 for eligible industries was set at the top of the agenda, SEV officials who took part in the meeting informed.

Besides working on bringing this mechanism into play as soon as possible, the SEV and ministry officials will also seek to determine how much additional revenue will need to be injected into the mechanism so that it may cover relevant compensation amounts.

An increased 11 percent share of CO2 emission right revenues raised at auction is currently planned to be used to compensate industry for CO2 emission costs in 2023.

However, Greek industrial players argue this percentage is insufficient. The energy ministry has pledged to increase the share of CO2 right auction revenues for industrial emission cost coverage.

Greek pavilion for first time at upcoming COP28 conference

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Greece will have its own national pavilion at a UN climate change conference for the very first time when officials meet for a 28th edition, COP28, in Dubai November 30 to December 12, sources have informed.

Over 25 events are planned by the energy ministry to promote Greek energy projects contributing to the energy transition, the sources noted.

The country’s presence at the conference with an independent pavilion comes following intensive efforts since last year. The Greek pavilion will provide a platform for crucial Greek energy projects.

At the preceding event, COP27, the then-Secretary General of Energy and Mineral Resources, Alexandra Sdoukou, now the deputy energy minister, had presented a GR-Eco Islands initiative, involving small islands that can serve as examples, models and case studies for green sustainability as a whole.

At COP28, the energy ministry will be organizing – with Sdoukou at the helm – a series of events showcasing, internationally, the country’s initiatives on sustainable development, green energy and energy transition. DESFA, the gas grid operator, IPTO, the power grid operator, and SEV, the Hellenic Association of Industrialists, will be involved, as will Enterprise Greece, the official investment and trade promotion agency of the Greek State.

Industry partially satisfied with gov’t energy-cost strategy

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SEV, the Hellenic Association of Industrialists, has expressed partial satisfaction over government action aiming to reduce energy costs for energy-intensive industries.

Energy minister Thodoris Skylakakis has reportedly pledged to meet as many industrial-sector requests as possible, even within the remainder of 2023.

These requests include a CO2 cost-offsetting mechanism between 2021 and 2030; a two-year extension, covering 2024 and 2025, of a Temporary Crisis and Transition Framework adopted by the EU as economic support for member states following Russia’s invasion of Ukraine; as well as a demand response mechanism rewarding flexibility.

However, the ministry does not appear keen to act on requests made by Greek industry for a reduction of grid and distribution network usage surcharges imposed by power grid operator IPTO and distribution network operator DEDDIE/HEDNO, respectively.

Further industrial-sector requests for connection-term priority concerning green-energy PPAs and an end to a transit fee on gas from Bulgaria also seem unlikely to be accepted by the ministry.

 

Significant emission cuts from domestic industry, SEV notes

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Greece’s industrial sector is now responsible for 47.5 percent of the country’s total carbon emissions, down from 59 percent in 2010, with plans for more reductions further ahead, SEV, the Hellenic Association of Industrialists, has noted in a special report.

Greek industry has reduced greenhouse gas emissions by 43 percent over the last 10 years, the sixth largest reduction in the EU, SEV highlighted in its report.

Furthermore, the sector’s share of energy consumption is lower than in most European countries, accounting for only 17 percent of consumption, the SEV report noted.

Renewable energy facilities installed by domestic industrial and energy groups are playing a key role in Greece’s transition to cleaner forms of energy, according to the association.

Greek industry is supporting European goals for climate neutrality by 2050 by investing in renewable energy sources and reducing carbon emissions, while also improving efficiency of resource utilization, SEV noted.

However, high energy costs, environmental-impact limitations and a lack of investment incentives in the EU, putting European firms at a disadvantage compared to US competitors, are tempting many European enterprises, including Greek, especially energy-intensive companies, to consider moving out of the continent, a development that threatens to bring about a new wave of deindustrialization, SEV warned in its report.

Investments in green or digital technologies, as well as in production of crucial raw materials, to end a reliance on non-EU countries, are needed, the report noted.

Though energy costs have fallen considerably since the summer of 2022, they remain high and stand as one of the biggest challenges faced by the industrial sector, SEV pointed out.

Energy costs in Greece are among the highest in the EU, SEV stressed. Last August, wholesale electricity in Greece was priced at 109.33 euros per MWh, compared to 94.41 euros per MWh in Germany, 90.96 euros per MWh in France, 96.09 euros per MWh in Spain, and 97.91 euros per MWh in Portugal.

SEV, in its report, presented four proposals aimed at protecting the competitiveness of Greek industry.

It called for the implementation of energy cost-restricting mechanisms and tools; reinforcement and expansion of electricity transmission networks, as well as development of new networks that could establish Greece as an energy hub in the wider east Mediterranean; sufficient development of energy networks to support RES facilities in their production of electricity for the industrial sector; and financial support for green-transition investments in new technologies such as CO2 capture and storage.

 

Mytilineos highlights energy cost woes faced by industry

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

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

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

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

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

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

 

Industry may be spared of public service compensation cost

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Energy minister Kostas Skrekas has, for the first time, in public comments, left open the possibility of industrial enterprises being spared of paying public service compensation (YKO) amounts for a five-month period covering November to March, as part of an effort to reduce industrial energy costs.

“We will assess the public service compensation account’s revenues and, if deemed necessary following the five-month period, will gradually impose these charges,” the minister noted at an event focused on industrial energy cost.

Speaking at the same event, Giorgos Xirogiannis, deputy general manager of SEV, the Hellenic Association of Industrialists, underlined the problems faced by industrial producers as a result of the sharp rise in energy costs.

Greek industry is currently 20 to 30 percent less competitive than European industrial enterprises, the SEV deputy noted.

He raised a series of energy cost-related issues that need to be addressed, including the YKO surcharge added to electricity costs, distribution costs and energy taxes.

Investments in renewable energy infrastructure and networks need to be accelerated in coming years for the achievement of a favorable energy mix balance, the SEV official added.

Also, the impact on the cost of energy of the EU’s “Fit for 55” package, aiming for a 55 percent reduction of carbon emissions by 2030, compared to 1990 levels, needs to be discussed, the SEV deputy added.

 

Reducing industrial energy costs a key aim of new gov’t committee

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High energy costs and a discouraging, for investments, amortization status, are two main factors holding back Greek manufacturing and placing it in a disadvantageous position compared to those of rivals, Michalis Stasinopoulos, president of industrial body Hellenic Production, stressed during yesterday’s inaugural session of a new government committee for the industrial sector.

The assembly of a government committee for industrial matters has been welcomed as a  positive step by the industrial sector, hoping the committee can contribute to needed coordination between various political offices as the fragmentation of responsibilities and absence of an industry ministry has not helped counter issues faced by the manufacturing sector, Stasinopoulos pointed out.

The new government committee’s line-up includes ministers covering industrial matters, namely development and investment minister Adonis Georgiadis, finance minister Christos Staikouras, environment and energy minister Kostas Skrekas, labor and social affairs minister Kostis Hatzidakis, digital governance minister Kyriakos Pierrakakis, and education and religious affairs minister Niki Kerameus, represented at yesterday’s session by her deputy, Zetta Makri.

The industrial sector was represented by SEV, the Hellenic Association of Industrialists, SBE, the Federation of Industries of Greece, Hellenic Production, the Athens Chamber of Commerce and Industry, IOBE (Foundation for Economic and Industrial Research), and the Association of Greek Regions.

Licensing delays, bureaucracy ruining RES investment plans

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Renewable energy sector players may have been able to absorb the cost of bureaucratic delays in the past, but market changes, shaped by auctions, no longer allow for such latency, meaning investments plans could well be cancelled amid the new conditions if license applications continue being delayed, sector officials have stressed at an investment conference staged by SEV, the Hellenic Association of Industrialists.

Highlighting the bureaucratic obstacles in the sector, major energy groups such as Mytilineos and Terna Energy are currently developing or completing wind energy project investments licensed about 15 years ago as a result of various delays prompted by authorities.

“Two months have gone by since we submitted an application for a production license to RAE [Regulatory Authority for Energy] and we have yet to receive a response. I would have expected a quicker reaction for a 350 million-euro investment,” remarked Dinos Benroubi, the energy division head at the Mytilineos corporate group.

Greek licensing procedures for wind energy projects appear to be even more complicated than those concerning thermal facilities, or natural gas fueled power stations, it was noted at the SEV conference.

Participants explained that, amid the current conditions, energy groups aiming to concurrently strive for multiple licenses concerning many RES projects would need to maintain oversized teams just for RES sector matters.

Employees at forestry and archaeological services are capable of severely holding up RES investment plans, despite the availability of funds, conference participants noted.

Though the Greek State assumed the responsibility of developing offshore wind energy farms nearly a decade ago, not a single such project has been developed, despite the wider investor interest, participants reminded.

All too often, renewable energy investment plans are blocked by cases filed at the Council of State, Greece’s Supreme Administrative Court, even by non residents, it was also pointed out.

 

SEV energy top officials call for fairer industry conditions

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The uneven implementation of a measure compensating carbon emission right costs, delays in adjusting to EU directives, and the weight of a supplier surcharge are seriously threatening the level of competitiveness of Greece’s energy-intensive industrial enterprises, the energy committee heads at SEV, the Hellenic Association of Industrialists, have stressed.

Distortions affecting the carbon emission right offsetting measure are burdening the industrial sector with additional energy costs of more than 50 million euros, the SEV energy committee leaders, Evangelos Mytilineos, CEO at the Mytilineous corporate group, and Titan cement’s chief Dimitris Papalexopoulos, stressed in a joint letter.

It was forwarded to energy minister Giorgos Stathakis, deputy prime minister Yiannis Dragasakis and Mihalis Filippou, the head of LAGIE, the Electricity Market Operator.

Carbon emission right compensation amounts for the industrial sector are based on average emission right price costs of the previous year, whereas the main power utility PPC is applying emission right price levels of the previous month. This has led to a huge discrepancy in compensation amounts offered as, in 2017, the average emission price cost was 5.7 euros per ton while the price level in late February ranged between 13 and 14 euros per ton.

The heads of SEV’s energy committee called for the energy ministry and LAGIE to fully resort to existing laws, at national and EU levels, to resolve the matter.

The RES-supporting supplier surcharge is causing serious problems for the industrial sector, the SEV energy committee leaders also noted in their letter. The surcharge has hindered competition in the retail electricity market and also represents another setback affecting the industrial sector’s level of competititiveness, the officials noted.

 

PPC pledges best deals possible in talks with industrial consumers

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PPC, the main power utility, has released a statement underlining current negotiations being conducted by the utiility separately with the country’s major industrial enterprises for revised tariff agreements will be pursued to the fullest for the fairest possible agreements.

The announcement also noted PPC’s main objective is to establish constructive cooperation with all its consumer categories, including industrial firms.

The utility’s administration recognizes the crucial role being played by high-voltage industrial firms in the country’s effort to overcome the deep recession, as well as their key role in providing employment, the statement noted.

PPC is scheduled to hold a shareholders meeting on Monday. Prior to today’s PPC announcement, the utility’s chief executive Manolis Panagiotakis received a letter from Theodoros Fessas, president of SEV, the Hellenic Association of Industrialists, in which PPC was strongly advised not to take unilateral action on new industrial tariffs at Monday’s meeting. Besides being prohibited by market regulations, such an initiative would undermine current negotiations between PPC and industrial consumers, the SEV chief noted.

Industry chief offers sector’s views ahead of PPC meeting

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Theodoros Fessas, president of SEV, the Hellenic Association of Industrialists, has forwarded a letter to main power utility PPC chief executive Manolis Panagiotakis outlining the industrial sector’s views on expected electricity tariff revisions for the sector as well as other requests intended to compensate for the abolishment of a 20 percent discount for industry, a bailout demand.

The SEV chief’s letter, offering a framework for the industrial sector’s ties with PPC, was forwarded ahead of this coming Monday’s shareholders meeting at the utility.

In the letter, Fessas notes unilateral actions determining industrial tariffs without prior completion of negotiations are prohibited by market regulations. Any approval of new industrial tariffs at next Monday’s PPC shareholders meeting will be regarded as a form of unilateral action and would undermine current negotiations between PPC and the country’s major-scale industries, the SEV chief stressed. These negotiations are being conducted separately based on consumer profiles. Unilateral action would also raise competition issues, considering PPC’s market dominance, Fessas noted.

The SEV chief underlined that unilateral action errors on industrial pricing policy committed at a previous PPC shareholders meeting in February, 2014 must not be repeated. Industrial authorities fear unilateral action could again prompt European Commission intervention, as was the case with the 20 percent industrial tariff discount, a PPC shareholders initiative now being abolished.

The SEV letter also notes that PPC’s reduced operational costs, resulting from lower oil and natural gas prices, down considerably compared to two years ago, as well as the abolishment of regulatory charges in 2015, provide a basis for cost-reflective tariff negotiations with industry.

Fessas also pointed out that, until now, all verdicts concerning Greek industrial tariff disputes between the sector and PPC have vindicated industrialists, both at domestic and European Commission levels. The SEV chief noted it would be constructive for PPC and the industrial sector to eventually establish cooperative relations.