supplier surcharge

Gas market, NOME, supplier surcharge bailout’s remaining energy issues

Posted on by admin

The country’s NOME auctions will not be changed so as to adjust to the main power utility PPC’s hydropower output, energy mnister Giorgos Stathakis has made clear ahead of next week’s arrival to Athens by the troika for another round of bailout negotiations.

Though the issue has already been tabled at a technical level, the Greek side has rejected throughts by Brussels technocrats to increase the role of hydropower output at the NOME auctions. They are held with the aim of opening up the retail electricity market and offering third parties access to PPC’s lower-cost lignite and hydropower sources.

On the contrary, talks between the government and lenders concerning RES sector funding, the opening up of the natural gas market and privatization of DEPA, the public gas corporation, remain unsettled.

The government will enter next week’s talks with the aim of replacing the RES-supporting supplier surcharge no sooner than 2019. No further supplier surcharge changes are planned for this year following a recent decision reducing this charge by 35 percent, according to the ministry.

The introduction of so-called green certificates in 2019, through the energy exchange, is currently being examined. Suppliers will purchase green certificates, which will constitute competitive forms of compensation for RES producers.

According to the energy minister, the RES sector is driving down wholesale electricity prices and, therefore, this effort needs to be paid for by suppliers.

The energy ministry has ruled out any chance of a RES-supporting ETMEAR surcharge increase on consumer bills.

As for the natural gas market, DEPA and Shell have reached an agreement on the former’s acquisition of a 49 percent stake held by Shell in their EPA Attiki supply venture covering the wider Athens market. DEPA already holds a 51 percent stake.

Also, Italy’s Eni, currently holding a 49 percent stake in EPA Thessaloniki-Thessaly, will gain full control of this supply venture following a deal with DEPA, until now the majority partner with a 51 percent stake.

An agreement between the government and lenders on DEPA’s privatization is pending but may now proceed following the aforementioned developments. The energy ministry has prepared a proposal entailing the formation of a holding company, part of which will be eligible for a bourse listing.

According to the plan, the holding company will include three subsidiaries, one responsible for the DEPA networks, a second for commercial affairs, and a third for international natural gas projects. A strategic investor will be able to enter the subsidiaries, especially the one controlling commercial matters.

It is unclear what amount this model could inject into the country’s privatization coffer. The higher-than-expected sale price achieved just weeks ago for a 66 percent stake of DESFA, the natural gas grid operator, which fetched 535 million euros, well over a budgeted amount of 400 million euros, has provided the energy ministry with more negotiating space concerning its DEPA sale plan. TAIPED, the state privatization fund, expects 250 million euros from this sale.

 

SEV energy top officials call for fairer industry conditions

Posted on by admin

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.

 

Supplier surcharge to be reduced by 35% for rest of year

Posted on by admin

The energy ministry has reached a decision to reduce the RES-supporting supplier surcharge by 35 percent for the rest of 2018, energypress sources have informed.

This reduction is greater than a drop of between 20 to 25 percent that had been anticipated, primarily as a result of the steady RES special account surplus and the reduced number of months the revision will concern as a result of the delay in implementing the measure.

A legislative revision to bring the reduction into effect may coincide with Greek parliament’s ratification, expected soon, of a draft bill for the main power utility PPC’s bailout-required sale of lignite units.

The extent of the supplier surcharge reduction is based on a number of factors, including the RES special account’s surplus for 2018, as projected by LAGIE, the Electricity Market Operator; the amount of the RES-supporting ETMEAR surcharge that needs to be recovered for previous years; an ETMEAR reduction decided on by RAE, the Regulatory Authority for Energy, at the end of 2017; as well as the need for a RES-sector safety cushion of around 50 to 60 million euros.

The government had committed to a supplier surcharge reduction as part of the bailout’s third-review agreement with the lenders. According to this  agreement, the reduction should have been implemented by the end of March.

The country’s lenders made clear that the ETMEAR reduction decided by RAE represents a breach of bailout terms and needs to be corrected by the authority when it makes its next revision for the second half of 2018.

The energy ministry opposed RAE’s move to reduce the ETMEAR surcharge as it knew the lenders would not embrace the initiave.

Greek officials need to decide on the supplier surcharge for 2019 by the end of this year. The government has promised it will abolish the surcharge and replace it with an alternative mechanism.

Supplier surcharge a regulated charge, EVIKEN reminds

Posted on by admin

Any decision to consolidate the current RES-supporting supplier surcharge paid by electricity suppliers and force them to incorporate it into their competitive pricing policies, even though this surcharge clearly represents a regulated charge that was introduced to support the RES sector, would amount to a stab in the back for the competitiveness of Greek industry at a time when efforts are being made to revitalize Greek industry, EVIKEN, the Association of Industrial Energy Consumers, has underlined in a letter forwarded to energy ministry Giorgos Stathakis and highly-ranked associates.

Consumers are already paying a high-leveled ETMEAR RES-supporting surcharge and, therefore, are entitled to lower wholesale electricity prices, currently the most expensive in Europe by far, the association noted in its letter.

Also, if the supplier surcharge is consolidated and, as a result, passed on to consumer electricity bills rather than being absorbed by suppliers, as is the case at present, then this would eliminate the benefits of relief measures offered to energy-intensive industrial enterprises, EVIKEN supported.

Thirdly, Greece’s revised bailout demands a full replacement of the supplier surcharge, EVIKEN reminded in its letter to the government officials.

Recent media reports have suggested the supplier surcharge could be extended.

 

 

 

Any supplier surcharge extension ‘would affect competition’

Posted on by admin

Any decision to prolong the current RES-supporting supplier surcharge covered by electricity suppliers, as suggested in various media reports, would hurt electricity market competition and represent a step back in the effort to truly liberalize this market, industrial-sector officials have warned.

Industrialists plan to officially present their concerns to the government within the next few days.

In comments to energypress, industrial sector officials noted that an extension of the supplier surcharge would affect competition as no independent supplier can continue absorbing this additional cost indefinitely, meaning that it will eventually need to passed on to consumers.

RAE, the Regulatory Authority for Energy, is working on an alternative plan to replace the existing RES-supporting supplier surcharge at the beginning of 2019. LAGIE, the Electricity Market Operator, is concurrently working on another plan.

The supplier surcharge was imposed a year and a half ago. The main power utility PPC, still dominating the retail electricity market, has chosen to absorb this cost, forcing its rival independent suppliers to act likewise.

The supplier surcharge, which increases the cost of electricity by 7 euros per MWh for suppliers, is negatively impacting the effectiveness NOME auctions, industrial sector sources also noted. NOME auctions were introduced late in 2016 to offer independent suppliers access to PPC’s low-cost lignite and hydropower sources.

RES-supporting supplier surcharge ‘compatible with target model’

Posted on by admin

The existing RES-supporting supplier surcharge can stand as a compatible part of the target model envisioning market coupling, or harmonization of EU wholesale markets, SPEF, the Hellenic Association of Photovoltaic Energy Producers, supports in a technical analysis.

The association has forwarded this analysis to energy minister Giorgos Stathakis, his secretary general Mihalis Veriopoulos, and RAE (Regulatory Authority for Energy) president Nikos Boulaxis.

SPEF, in the analysis, proposes a series of steps that may enable the continued implementation of the supplier surcharge amid the prospective market coupling environment.

The supplier surcharge is a necessary and fair measure in view of national RES penetration targets, along with the need for improved RES sector investment conditions, a prerequisite for the national economy as a whole, according to the SPEF study.

“Objectively speaking, we see no need for the abolishment of the supplier surcharge as a result of the target model’s market coupling plan, nor do we see any need for the implementation of an alternative measure as a replacement,” the study notes.

The RES-supporting supplier surcharge’s removal would take the country back to an era of catastrophic market distortions at the cost of the RES sector and the RES special account, the study warns, adding that suppliers would benefit and consumers would be burdened as they would subsequently face heavier RES-supporting ETMEAR surcharges.

Lenders pushing for ETMEAR surcharge hike, Athens objects

Posted on by admin

Pressure applied by the country’s lenders for a supplier surcharge reduction for the remainder of the year and subsequent abolishment of this RES-supporting tool in 2019, a demand tabled expressed during a recent visit to Athens for fourth-review bailout negotiations, has not waned. Such a development would prompt a RES-supporting ETMEAR surcharge increase for electricity consumers. Government officials have stressed they are not willing to consider such a prospect.

The lenders have made clear that an ETMEAR reduction decided by RAE, the Regulatory Authority for Energy, late in 2017 represents a breach of bailout terms and must be corrected by the authority for the second half of 2018 so as to enable a supplier surcharge reduction.

Greece’s energy ministry opposed a RAE decision last December to reduce the country’s ETMEAR surcharge as it anticipated the move would not be endorsed by the lenders.

According to energypress sources, the lenders are expecting a Greek proposal for a supplier surcharge reduction concerning the remainder of 2018, a bailout third-review term.

Government officials and the country’s lenders agreed, as part of the third review’s conclusion, that the RES special account surplus, from March onwards, would be utilized to enable a supplier surcharge reduction.

Also, the lenders are applying heavy pressure for the abolishment of the supplier surcharge as of 2019, to be replaced by a new mechanism. A proposal presented by LAGIE, the Electricity Market Operator, for “green certificates” to replace the supplier surcharge as a new type of contribution by electricity suppliers to the RES special account, was strongly rejected by the lenders during their recent visit to Greece.

Reliable sources informed that the lenders initially tabled a proposal entailing coverage of the needed RES special account amount – following the supplier surcharge’s abolishment – through an ETMEAR surcharge increase, estimated at between 170 and 200 million euros for 2018, before reconsidering and suggesting the introduction of a new surcharge of equivalent value to be paid directly by consumers, not suppliers.

Greece’s energy minister Giorgos Stathakis has made clear he is not willing to discuss any additional charges for consumers, whether this is an ETMEAR increase or any new surcharge.

Sources noted that the eventual solution will depend on the overall course of fourth-review bailout negotiations, especially matters concerning the energy sector.

PPC boss backs 15% discount, supplier surcharge decisions

Posted on by admin

The main power utility PPC’s chief executive Manolis Panagiotakis  yesterday condemned critics of his decisions to offer punctual customers a 15 percent discount on electricity bills and not relay a supplier surcharge to authorities.

The utility head, speaking at a company event for staff members to usher in the new year, noted that the wider criticism of PPC’s discount offer, a move that has offered relief to thousands of households, was ludicrous, while adding that PPC’s refusal to pass on a supplier surcharge has helped the utility avoid electricity tariff increases.

Panagiotakis also noted that PPC should be given more time for its bailout-required market share contraction targets.

The chief official promised staff members that pay cuts would be avoided, adding that the utility needs to acquire operational independence regarding hirings and remuneration packages offered.

Commenting on the bailout-required sale of lignite units representing 40 percent of PPC’s lignite capacity, Panagiotakis said the company must work at transforming this demand from a disadvantage to an opportunity. He stressed the need for the achievement of solid sale prices of lignite units as relief for the power utility’s coffers.

Panagiotakis also admitted that not all was being done to help resolve PPC’s unpaid receivables problem, suggesting the collection effort would soon intensify to limit debt owed to the company.

 

 

 

 

Supplier surcharge reduction of 20% expected for 2018

Posted on by admin

Local energy sector authorities and energy ministry officials will begin processing data over the next few days in order to decide on the extent of a reduction to apply for the supplier surcharge in 2018.

Greek officials will take into account the leeway created for this supplier surcharge reduction by a RAE (Regulatory Authority for Energy) decision to reduce the RES-supporting ETMEAR surcharge, endorsed by Brussels. Both surcharges are used to feed the RES special account.

The Greek government recently made a commitment to reduce the supplier surcharge when agreeing to terms with the country’s lenders to conclude the bailout’s third review. The terms state that a reduction must be made by the end of March.

The energy ministry intends to submit a legislative revision to Greek parliament in March specifying the supplier surcharge percentage reduction to apply for collections over the remaining nine months of 2018.

The formula used to determine supplier surcharge amounts will not be changed but, instead, the percentage paid by suppliers of total amounts resulting from the formula will be revised.

Suppliers ended up having to contribute half the supplier surcharge amounts they were originally expected to pay during the relatively recent measure’s first year.

According to energypress sources, initial calculations indicate suppliers will be exempted from 20 percent of total amounts under the new terms.

The matter will need to be reexamined at the end of the year to shape the terms for 2019.

 

 

Various fundamentals factored into RAE’s ETMEAR reduction

Posted on by admin

A decision by RAE, the Regulatory Authority for Energy, to reduce the the RES-supporting ETMEAR surcharge imposed on electricity bills by approximately 50 million euros in 2018 takes into account a number of key factors, including a 32.36 million-euro RES special account surplus forecast for 2017 by LAGIE, the Electricity Market Operator, a 278.3 million-euro surplus for 2018 anticipated by the operator in 2018, as well as supplier surcharge revenues, which the authority expects to amount to 374.93 million euros this year.

In its decision, RAE also sees a further 169.53 million euros being injected into the RES special account in 2018 from the sale of CO2 emission rights, up from 151.85 million euros in 2017. This forecast presumes an average emission rights cost of 7 euros per ton.

On the contrary, revenues stemming from a special lignite surcharge are expected to drop to 31.9 million euros in 2018 from 33.54 million euros in 2017.

Another key factor taken into account by RAE for its ETMEAR reduction is the wholesale electricity price. The authority sees the System Marginal Price (SMP) averaging 52 euros per MWh in 2018.

LAGIE wants green certificates to replace supplier surcharge

Posted on by admin

LAGIE, the Electricity Market Operator, is preparing to present a proposal to the energy ministry that would replace the existing supplier surcharge with a new type of contribution by electricity suppliers to the RES special account, “green certificate” purchases whose cost would reflect respective retail market shares.

The operator’s head official, Mihalis Filippou, informed of the intention at an IENE (Institute of Energy for Southeast Europe) conference yesterday.

According to the LAGIE head, the supplier surcharge is not compatible with market rules and, despite being adopted to counter market distortions, has led to other distortions.

The solution to be proposed will require electricity suppliers to purchase “green certificates” as gurantees of RES origin. These certificates will be issued by LAGIE and auctioned at the prospective energy exchange as one of three types of commodities to be traded at the exchange, while the resulting revenues would be used to financial support the RES special account, according to the proposal.

Regardless of whether this proposal is introduced or not, suppliers will be expected to make financial contributions to the RES special account, which raises the obvious question as to why bother changing the current system in the first place.

According to LAGIE, the new system would be compatible with international market rules, unlike the current supply surcharge, a local initiative. Also, the new system would reflect the RES special account’s real needs, the operator believes. Thirdly, and most importantly, the new system’s “green certificate”costs will be rolled over to consumption prices by all suppliers. This is not the case with the supplier surcharge as PPC, the main power utlility, has refused to pay.

The energy ministry has declared it will use the RES special account’s surplus to reduce the RES-supporting ETMEAR surcharge. The ministry has also described the supplier surcharge as an effective measure, noting it intends to keep it virtually unchanged, except for slight revisions related to the target model, a process entailing the electricity wholesale market’s harmonisation with EU law.

 

 

Supplier surcharge vanishing profit margin, Pöyry study finds

Posted on by admin

A recently imposed electricity supplier surcharge has left suppliers with the narrowest of net profit margins and weakened competition, the preliminary findings of an ongoing study being conducted by international consulting firm Pöyry have determined, energypress has been informed.

RAE, the Regulatory Authority for Energy, has commissioned Pöyry to conduct an impact assessment on Greece’s NOME auctions, which, according to the bailout agreement, needs to be finalized by the end of this year.

The assessment is crucial as it could serve as a base guiding the country’s creditors towards further measures needed to further liberalize Greece’s electricity market and intensify competition.

Coinciding with other initiatives now in progress, such as an upcoming market test for the main power utility PPC’s bailout-required sale list to be comprised of lignite-fired power stations, the NOME impact assessment could greatly shape the overall developments.

The assessement’s early findings determined that net profit margins for electricity suppliers are hovering at low levels ranging between 2 and 3 euros per MWh. It has also found that all suppliers would be incurring losses at present if the NOME auctions did not exist. They were introduced last October to offer independent traders access to PPC’s low-cost lignite and hydropower sources.

These findings confirm the views of pundits and officials who insist that Greece’s electricity market conditions are not yet ripe for full competition.

 

Volterra permitted to keep paying half surcharge amount until final verdict

Posted on by admin

An Athens Court of First Instance has permitted electricity supplier Volterra to continue paying 50 pecent of an electricity supplier surcharge, based on a preceding temporary court decision, until a final verdict is delivered within the next few months.

Volterra had filed a case against LAGIE, the Electricity Market Operator, seeking protection from higher-than-expected surcharge payments, used to eliminate the RES special account.

Four other electricity suppliers, Elpedison, Protergia, Heron and Watt+Volt, had also filed separate cases against LAGIE but these were eventually withdrawn.

The issue emerged when supplier surcharge amounts, revised weekly, skyrocketed and prompted reactions from suppliers. In January, main power utility PPC, the market’s dominant supplier, decided to stop paying LAGIE its share of the surcharge, determined by market shares.

A month later, independent suppliers followed suit and, in addition, took legal action, fearing they could be removed from the electricity suppliers’ registry, as is specified by market regulations. PPC did not fear such a prospect as it controls nearly 90 percent of Greece’s retail electricity market.

Authorities needed to intervene after the supplier surcharge rose well over anticipated levels. The surcharge level has since subsided.

In the first week of May, the surcharge registered 7.1 euros per MWh, followed by 7.01 euros per MWh in the month’s second week. Such levels were anticipated in a related study conducted by the Aristotle University of Thessaloniki prior to the surcharge’s introduction last October.

 

 

PPC supplier surcharge arrears may be offset by PV outlays

Posted on by admin

An accumulating electricity supplier surcharge amount owed by main power utility PPC could be offset by amounts paid by the utility to RES producers maintaining roof-mounted PV systems. PPC is obligated to provide RES producers payments in advance before receiving delayed payments from LAGIE, the Electricity Market Operator, which cover these respective amounts, according to sources.

PPC has refused to pay its share of an electricity supplier surcharge to LAGIE since the beginning of this year, depriving, as a result, the operator’s RES special account of 75 million euros.

In response, independent electricity suppliers, whose supplier surcharge obligations are lower as a result of their smaller retail electricty market shares, are contributing 50 percent of their respective shares, based on a court ruling, until a solution to PPC’s noncompliance is found.

This 50-percent contribution by independent electricity suppliers sufficed when the supplier surcharge, which is revised weekly, had shot up to extreme levels early in the year, but is insufficient now that the surcharge level has returned to reasonable levels. RAE, the Regulatory Authority for Energy, needed to intervene and set an upper limit.

The supplier surcharge has since returned to levels averaging between 6 and 7 euros per MWh, as had been anticipated in a related study conducted by the Aristotle University of Thessaloniki.

LAGIE has maintained a tolerant stance against PPC, taking into account the utility’s serious cash flow problems, caused by an alarming level of unpaid receivables, enerypress sources have informed.

 

 

Market operator’s upcoming supplier surcharge amounts may trouble PPC

Posted on by admin

LAGIE, the Electricity Market Operator, will, at the end of this month, calculate and invoice total surcharge amounts expected from electricity suppliers for March plus any outstanding amounts since October 1, 2016, when the supplier surcharge was introduced.

These calculations, issued monthly, as required by RAE, the Regulatory Authority for Energy, factor in an upper limit of 15 euros per MWh.

Independent suppliers more or less know what to expect, given the monthly amounts already covered, but the surcharge amount could provide yet another challenge for PPC, facing cash flow issues as well as bailout-related market share contraction and production unit sale requirements.

The utility decided to stop paying the surcharge at the beginning of this year before RAE stepped in to take action. Even so, PPC appears to have been underpaying its expected surcharge amounts.

The respective retail electricity market shares of suppliers are taken into account when determining surcharge levels. This means that PPC, which still maintains a dominant market share of just under 90 percent, is responsible for suppling the bulk of the surcharge.

Surcharge levels moved within normal range in March, as had been initially calculated by an Aristotle University of Thessaloniki study conducted prior to the surcharge’s introduction.

The surcharge averaged 6.59 euros per MWh between March 1 and 19 with the upper limited imposed. Without it, the average would have been just marginally higher, at 6.94 euros per MWh.

Authorities needed to impose an upper limit after the electricity supplier surcharge level greatly exceeded anticipated levels. The surcharge averaged 8.83 euros per MWh in February with the upper limit intact. Had it not been imposed, that month’s average would have reached 24.32 euros per MWh.

Supplier surcharge, back to normal levels, still unpredictable

Posted on by admin

Following sharp rises during the recent energy crisis that caused unrest among electricity suppliers, an electricity supplier surcharge appears to have returned to normal, or levels estimated by a study conducted by the Aristotle University of Thessaloniki.

RAE, the Regulatory Authority for Energy, needed to intervene and set an upper limit of 15 euros per MWh.

In February, the electricity supplier surcharge, which is revised weekly, began at 11.30 euros per MWh in the first week before gradually dropping to levels of 10.63 euros per MWh, 9.08 euros per MWh, 6.27 euros per MWh and 2.90 euros per MWh.

February ended with a supplier surcharge average of 8.83 euros per MWh. Had the upper limit not been imposed by the authority, its average would have reached 24.32 euros per MWh.

Prior to the upper limit’s implementation, the supplier surcharge reached extraordinary levels amid the winter’s energy crisis as both domestic energy supply and export needs were stretched to their limits.

Despite the overall sense of a return to normality, the ongoing fluctuation of electricity supply surcharge levels, albeit at lower levels, has kept electricity suppliers on edge. The surcharge variations are preventing independent electricity suppliers, seeking to gain ground in a market still dominated by the main power utility PPC, from pursuing pricing policies with full confidence.

 

RAE expected to revise supplier surcharge in similar vein

Posted on by admin

RAE, the Regulatory Authority for Energy, is expected to reach a decision today on a controversial RES-supporting supplier surcharge, which has developed into a troubling issue for electricity suppliers, currently subduing commerical initiatives as a result of exorbitantly high surcharge levels reached.

According to energypress sources, a lower limit for the difference between the System Marginal Price (SMP) and the virtual SMP – the price that results when removing the influence of RES output on the SMP – will probably not be adopted.

Electricity suppliers have warned that adopting a lower limit would not only lead to excessive surcharges but also transform this supplier surcharge into a standard duty, which would be unlawful.

Electricity suppliers are also troubled – for the same reason – by the possible adoption of a weekly upper limit, which LAGIE, the Electricity Market Operator, has proposed should average 8 euros per MWh. It is well over the level required for sustainable electricity supply ventures.

RAE’s revisons may entail revising downwards its recent upper limit for the difference between the SMP and virtual SMP to no more than 20 euros per MWh, from 40 euros per MWh at present.

Rattled by the recent sharp rises of the supply surcharge, independent electricity suppliers want revisions to apply retroactively, from when the surcharge was introduced in October, not as of the two-month period covering January and February, as planned by RAE.

The main power utility PPC, banking on its dominant electricity market share of nearly 90 percent, recently declared it refuses to cover the surcharge. The utility does not fear being removed from the electricity suppliers registry, as authorities have threatened to do if suppliers do not pay up, because of the overwhelming dependence of consumers on its electricity supply.

 

Market shares unchanged, PPC remains steady at around 90%

Posted on by admin

Latest retail electricity market data released for the month of January confirms a prevailing belief supporting that the market is on hold awaiting developments. The main power utility PPC’s market share remained virtually unchanged. This stagnancy threatens to incite devastating bailout-related action against the utility.

According to energypress sources, PPC, pursuing an aggressive discount-based policy since last summer despite a bailout obligation for a drastic market share contraction by 2020, is holding steady with a market share of around 90 percent.

PPC’s persistence would have been less crucial had the present period not been one of intense negotiations between the Greek government and the country’s creditors to conclude the bailout’s second review.

Pressure, by the creditors, for the sale of a 17 percent share of PPC controlled by the Greek State, has become a core issue of these negotiations as it is becoming increasingly apparent that measures taken for the utility’s market share contraction are not producing results. The creditors have also begun pressuring the government to sell 40 percent of PPC’s llignite-fired and hydropower units by the summer of 2018.

PPC missed the bailout’s end-of-2016 target of a market share reduction to 87.24 percent. The utility must gradually reduce its market share to less than 50 percent by 2020. Along the way, PPC is expected to lower its market share to 75.24 percent by the end of 2017 and 62.24 percent by the end of 2018 before hitting 49.24 percent by the end of 2019.

An assessment of the progress made is due this coming June. Though the bailout’s original plan had charged RAE, the Regulatory Authority for Energy, with this task, the creditors are pressuring to assume a greater role in the assessment.

Confusion over a RES-supporting electricity supplier surcharge, which was introduced recently but has struck levels well above expectations, has kept the market activity subdued. The board at RAE will address the issue at a meeting today. Its settlement is expected to encourage independent suppliers to relaunch promotional campaigns with renewed zest in a bid to make market share gains. Independent suppliers have held back as a result of the exorbitant supplier surcharge, which has affected budget plans and finances.

At this stage, it appears unlikely that the market momentum needed for PPC’s market share contraction to 75.24 percent by the end of the year will have been gained by June’s assessment.

According to the latest market data, PPC holds a market share of 89.83% – 59.67% in the low-voltage category, 18.82% in the medium-voltage category and 11.34% in the high-voltage category – a 1.17% increase.

Protergia follows with 2.69% – 1.11% low-voltage and 1.58% medium-voltage.

Elpedison is next with 2.42% – 1.19% low-voltage, 1.07% medium-voltage and 0.16% high voltage.

Heron holds 2.35% – 0.74% low-voltage and 1.61% medium-voltage.

Watt + Volt is at 0.76 percent – 0.65% low-voltage and 0.12% medium-voltage.

NRG Trading follows with 0.66% – 0.23% low-voltage and 0.43% medium-voltage.

Volterra holds 0.52%, all in the medium-voltage category.

Green trails with 0.35 percent – 0.22% low-voltage and 0.14% medium-voltage.

 

 

 

 

Energy economy academic decries choice of supplier surcharge formula

Posted on by admin

A prominent local energy economy academic has condemned as unnecessarily complex the energy ministry’s recent choice of formula determining the levels of a RES-supporting surcharge imposed on electricity suppliers. The surcharge’s recent exorbitant levels, far higher than expected, have prompted concerns in the electricity market, especially among independent suppliers seeking to gain market-share ground.

“The choice of this complex method is offering nothing and causing problems in the market,” noted Pantelis Capros, Professor of Energy Economics at the National Technical University of Athens. “It is well known in economic theory, as well as simple logic, that the recovery of an external cost cannot be achieved through a varying marginal market cost, simply because, by definition, it is not determined by the market as it is an external cost, in other words, the result of State intervention.”

The surcharge, which is revised weekly, factors in the System Marginal Price (SMP). Introduced recently to help balance the RES special account deficit, the surcharge has skyrocketed to levels well above expected levels, prompting independent electricity suppliers, whose business prospects have been negatively impacted, to put plans on hold and proceed with legal challenges.

The main power utility PPC, which controls nearly 90 percent of the retail electricity market, has declared it refuses to pay its surcharge amounts. Its dominant electricity supply, covering most of the market, makes unimaginable the prospect of the utility being removed from the suppliers registry. Independent suppliers, fearing such a development following a warning by authorities, have kept up with their surcharge payments but filed legal cases seeking revisions and protection.

Though the professor stressed that the RES sector needs to be supported as part of the effort to combat climate change, increase energy security, and foster RES sector growth, he also noted that a more appropriate supportive measure needs to be applied.