target model

Industrial energy cost reduction measures planned, deputy tells

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The government is preparing to reduce a special consumption tax for energy-intensive mid-voltage companies and also push through a series of other measures aiming to reduce industrial energy costs, deputy energy minister Gerassimos Thomas has revealed in an interview with Greek daily Kathimerini.

The deputy minister said he is confident a Greek proposal seeking extensions for the country’s demand response mechanism and transitory flexibility remuneration mechanism (TFRM) will be approved by the European Commission.

The special consumption tax for energy-intensive mid-voltage companies will be reduced to the level offered to high-voltage companies, the deputy minister informed.

Also, a new public service compensation (YKO) mechanism offering benefits for high and mid-voltage industries will be introduced, he said.

Power grid operator IPTO needs to design and launch new demand response products in compliance with EU directives, the deputy minister noted while addressing the forthcoming launch of the target model in Greece.

The objective is to provide incentives to private-sector producers and industry for equal participation in the balancing and energy markets, he explained.

 

 

Brussels concerns delay flexibility remuneration mechanism

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A government proposal for a transitory flexibility remuneration mechanism (TFRM) is being delayed by European Commission concerns, holding back progress despite a legislative initiative taken by the energy ministry to hasten the approval process.

The Greek government forwarded its flexibility mechanism proposal to the European Commission in December, requesting it remains valid over a transitional period. The request has obviously prompted concerns in Brussels, as suggested by an ongoing question-and-response procedure.

Many EU member states no longer use TFRMs. Prior to the request in December, Greek officials had informed the European Commission that flexibility in the country would be remunerated through the Target Model, once it is implemented, not separately.

Approval by Brussels is needed before Greece’s energy ministry can issue a ministerial decision formalizing the transitory mechanism.

The energy ministry, in an effort to limit the overall delay, has attached a related legislative revision to a wider draft bill covering environmental matters, now headed for parliament.

Otherwise, the ministry would need to submit a separate legislative revision to parliament once Brussels has given its green light. Such a course would further delay the mechanism’s implementation.

RAE starts target model delay investigation, hearing possible

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RAE, the Regulatory Authority for Energy, has launched an investigation seeking to pinpoint the causes behind the delay of the target model’s first stage.

An April 10 deadline was missed for trial runs of all market systems in a procedure involving power grid operator IPTO, the energy exchange and EnexClear.

IPTO was unable to complete the development of a balancing market platform needed for the trial runs. The operator attributed its delay to a coronavirus-related inability by General Electric to deliver required software on time. This delay has now clocked up some 60 days.

The energy authority wants to determine whether any other factors, besides the coronavirus pandemic’s inevitable effect, have played a role in the delay of the trial run.

RAE also wants to examine the impact of the delays until now on the target model’s next stages. A full-scale launch scheduled for June 30, when day-ahead, intraday and balancing markets are expected to begin operating, now appears to be out of the question, while a delay beyond summer is feared.

The authority could summon all parties involved to a hearing to determine whether penalties need to be imposed.

Target model schedule’s first major deadline hit by coronavirus

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Trial runs of energy exchange market systems, the target model’s first major deadline, were officially scheduled to commence today but have been postponed as a result of coronavirus-related delays, power grid operator IPTO has informed.

IPTO, the energy exchange and EnexClear were scheduled to start system tests today.

General Electric, citing the period’s extraordinary conditions, has explained it is not in a position to deliver finalized version of a platform needed for the balancing market.

The company estimates a 50-day delay in the delivery of the related software, based on current data.

This delay will have a knock-on effect on the schedule mapping out an energy exchange launch on June 30.

According to law, RAE, the Regulatory Authority for Energy, will need to begin an investigation process on the matter and determine responsibilities for the delay. Presumably, IPTO and the energy exchange will need to offer explanations.

A new official date will then need to be set once the investigation has been completed. Now set to be dragged into the summer period, the energy exchange launch may be further delayed, beyond August.

 

Target model’s June 30 launch date headed for delay, extent unclear

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The target model and energy exchange launch date, scheduled for June 30, is no longer possible, unless unforeseeable changes occur, the main issue now being the extent of the expected delay, officials agreed during a virtual conference staged on Wednesday by RAE, the Regulatory Authority for Energy.

Energy exchange and power grid operator IPTO officials took part in the session, held to evaluate preparations of the launch.

Officials admitted the target model’s delay could be over one month long. Given the August summer break, its launch may need to be made even later, they noted.

Similar thoughts were expressed during a preceding European Commission conference, on Monday, to check the target model’s progress.

Despite the extraordinary period’s accumulation of difficulties, the energy ministry still considers the existing target model launch date as official and contends it will make all efforts to achieve it.

General Electric, citing the unforeseeable coronavirus circumstances, has stated it cannot deliver a finalized platform for IPTO’s balancing market over the next few days, as had been planned.

Consequently, a trial run of market systems officially scheduled for April 10 is no longer possible, according to the energy exchange.

On the contrary, IPTO believes trial runs can still be performed without the balancing market’s finalized platform.

Target model schedule checked at virtual meeting today

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Leading energy sector authorities and European Commission officials will stage a virtual conference today, instead of a face-to-face meeting in Athens, to examine whether Greece’s commitment to a June 30 launch of the target model and energy exchange markets – next-day, intra-day and balancing markets – can be strictly adhered to amid the extraordinary conditions prompted by the coronavirus epidemic.

Representatives of Greece’s energy ministry, the energy exchange, power grid operator IPTO and RAE, the Regulatory Authority for Energy, will take part in today’s teleconference with European Commission officials.

All market terms have already been approved by Brussels.

Finalized decisions on various formulas to be applied, such as the proportion of production each producer will be permitted to offer through contracts, are expected by the end of April.

A May 15 deadline for a full-scale trial run of all the market’s systems has been set.

Brussels ‘attaching unresolved market issues to target model’

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Greece’s unresolved energy market issues, including demand response and flexibility mechanism requests, appear to have been bundled up into one package by the European Commission as it waits to see if the country will honor its commitment to launch the target model this summer, sources believe.

Brussels has held back on approving a demand response mechanism extension request and CATs rewarding flexibility. Sources believe the European Commission will maintain delay tactics, through ongoing correspondence, until the summer.

The Greek government forwarded a request for a demand response mechanism extension of two years in late December before presenting the plan in Brussels the following month.

The presentation prompted an extended period of correspondence between the two sides that ended up requiring Greece’s energy ministry to respond to a lengthy list of questions. The ministry’s responses to these questions were forwarded two weeks ago. Athens is now awaiting news from the European Commission.

PPC Renewables set for second of three Ptolemaida PV unit tenders

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PPC Renewables plans to announce a tender next week for the development of a 15-MW solar energy project, the second of three sections making up a bigger 230-MW photovoltaic project planned for Ptolemaida, northern Greece.

The renewable energy firm, a wholly owned subsidiary of power utility PPC, has already forwarded all relevant information concerning this tender to the European Commission for publication on its official website.

A tender has already been staged for an initial 15-MW package. As for the project’s third and final package, by far the biggest, 200 MW, PPC Renewables intends to stage a tender for its development by summer.

During its construction stages, the project is expected to create at least 300 jobs, while, when completed, the facility should generate 390,000 MWh, enough to cover the needs of 290,000 persons.

PPC Renewables is expected to be among the first companies to induct projects into the Target Model, in other words, two-sided contracts with consumers whose prices will no longer be determined at auctions staged by RAE, the Regulatory Authority for Energy.

PPC Renewables’ portfolio currently totals 150 MW of completed energy projects, while RES projects representing a further 100 MW are now under construction. In addition, tenders for 280 MW have either been announced or will be announced. This additional 280-MW capacity includes the Ptolemaida project, expected to require between 24 and 36 months for completion.

Independent players want clauses for cost factors other than the SMP

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Supplier cost clauses should not be limited to the System Marginal Price (SMP) as various other wholesale market factors influencing the overall cost should also be taken into account, independent electricity suppliers have agreed in a related public consultation procedure completed yesterday.

Previously, RAE, the Regulatory Authority for Energy, proposed the implementation of a standardized SMP as the only permissible clause, the objective being to simplify consumer price comparisons of supplier offers.

Though independent suppliers do not want their supply term clauses limited to the SMP, they acknowledge this factor remains relevant under the current system, ending mid-way through 2020 with the arrival of the target model.

Suppliers believe some time will be needed for observations concerning the SMP’s replacement, including day-ahead market prices.

Also, the target model’s new markets will bring about significant supply cost changes that cannot be calculated at present, suppliers noted in the public consultation procedure.

Though PPC has asked that its contribution to the public consultation procedure not be published, the utility’s opposition to the cancellation of a CO2-related clause it applies is already widely known.

Limit on target model electricity contracts, consultation soon

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An upper limit is expected to be imposed on the amount of electricity production companies will be entitled to negotiate for target model contracts, according to a decision by authorities to be forwarded for public consultation within the next few days.

The implementation of an upper limit restricting the amount of electricity a company is permitted to negotiate in the futures market is foreseen in the target model plan. The remainder of electricity will need to be channeled into the day-ahead market to ensure that necessary amounts are available.

For months now, officials have speculated about the level of the upper limit. A clearer picture is expected within the next few days, when terms are forwarded for consultation.

Power utility PPC and independent companies have offered differing views. PPC has insisted on an elevated maximum level, an opinion shared by industrial figures, including EVIKEN, the Association of Industrial Energy Consumers, who believe low-level limits would not enable them to establish contracts with PPC for electricity amounts fully covering their needs.

Work needed for Athens-EC convergence on energy reforms

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Greek and European Commission positions on energy reforms for further market liberalization remain at opposite ends, despite January being previously billed as a key month, and will require great effort if agreements are to be reached, government sources have informed ahead of a series of meetings in Athens. Both Athens and Brussels want further market liberalization but their approaches differ.

A first round of meetings is scheduled to begin next week with the arrival of Brussels technocrats for preliminary talks with government and market officials. Top-level lender representatives will then follow up a week later.

The Greek government’s basic position is centered around a swift decarbonization process at state-controlled power utility PPC, which would eliminate the need for third-party access to PPC’s monopolized lignite sources, offering lower-cost electricity.

A government proposal for the establishment of SPV partnerships with private-sector companies that would facilitate purchases of high-voltage lignite-generated PPC electricity by industrial enterprises has only been entertained by the power utility, limiting the measure’s prospects for a market share reduction at PPC, still dominant.

In preceding negotiations, the country’s lenders have indicated that decarbonization alone does not suffice. The views of the lenders on the government’s SPV proposal also differ.

The European Commission’s Directorate-General for Competition has called for wider participation in the SPV that would effectively also take on board independent electricity suppliers, not just energy-intensive industrial enterprises, for purchases of lower-cost lignite-generated electricity produced by PPC.

Opposing views are seen requiring more work for convergence, which could be achieved by the end of the first half. The implementation of the target model promises to serve as a catalyst.

Two more rounds of talks in Athens are scheduled for March and May.

Ministerial decision on target model schedule set for delivery

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The energy ministry is close to issuing a ministerial decision that will offer a specific and binding schedule concerning the implementation of the target model, including the launch of energy exchange markets, ministry sources have informed.

Deputy energy minister Gerassimos Thomas, who attended yesterday’s opening energy exchange session for 2020, stressed the target model will be fully functional by the second half of 2020 following a series of delays. This development will offer greater market transparency and eliminate many distortions, he added.

Any violation of the target model schedule will require RAE, the Regulatory Authority for Energy, to impose penalties within 20 days, according to new regulations.

The ministerial decision setting the target model schedule is required by recent energy-sector legislation.

This legislation sets a road map of commitments for power grid operator IPTO and the Greek energy exchange leading to the launch of energy markets.

 

 

ELPE, well placed with marine fuels, also eyeing gas, renewable energy

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Strategic decisions made by Hellenic Petroleum (ELPE) back in 2006 for an upgrade of the enterprise’s refinery in Elefsina, west of Athens, enabling production of the entire range of fuels, including new-era marine fuel, has provided flexibility for robust financial results.

Most refineries in the wider Mediterranean region are currently pressured by significantly narrowed profit margins. ELPE is an exception. Its ability to produce new low-suphur marine fuels has secured a strategic advantage over competitors.

Further investments currently being made in the company’s refinery division are expected to boost profit figures from levels of 700 to 800 million euros to one billion euros.

As part of its transformation for the future, ELPE is also striving for swifter growth in the renewable energy market. It aims to reach an operating RES capacity of 600 MW over the next two years. ELPE intends to participate in the next RES auction with facilities measuring 460 MW.

In the gas market, ELPE is closely following the forthcoming privatization of gas utility DEPA. The petroleum group, holding a 35 percent stake in DEPA, will either seek to acquire a full stake or sell its minority stake. The company wants a clear-cut solution.

Elsewhere, ELPE has already decided to sell its stake in distribution networks, promising a major cash influx.

In electricity, a final investment decision on the development of a new gas-fueled power station is expected by summer. This decision will greatly depend on the progress of the target model, as well as the government’s commitment to its decarbonization policy.

As for its hydrocarbon interests, ELPE plans to stage a first drilling operation at the Gulf of Patras block by the end of 2020. Seismic surveys at other blocks in its hydrocarbon porfolio are currently being conducted.

 

Target model preparations to be reviewed by Brussels tomorrow

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The country’s efforts in adhering to a target model schedule leading to the model’s implementation will be presented tomorrow by government officials to European Commission technocrats via a teleconference.

During tomorrow’s teleconference, the Greek team, led by the energy ministry’s secretary-general Alexandra Sdoukou, will need to convince Brussels officials that the country is on track for a spot-market launch in about six months, or June, 2020, as the government has pledged.

The Greek government must present a comprehensive strategy ahead of talks on electricity market competition and liberalization, essentially deferred until next month.

Brussels is applying consistent and considerable pressure on Greek officials, energypress sources have informed. Concerns include the still-unendorsed day-ahead and intra-day market clearance regulation, despite many months of processing.

Furthermore, power grid operator IPTO’s energy management director Iraklis Skotinos has promised that the balancing market will also be ready in June.

Indicative of its determination to adhere to target model schedules, the energy ministry recently had a draft bill ratified in parliament enabling RAE, the Regulatory Authority for Energy, to impose fines for delays.

Upper limit for target model agreements a contentious issue

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Imposing an upper limit on day-ahead market bilateral agreements has developed into one of the most contentious issues in the lead-up to the target model.

Opposing views were voiced, once again, last Friday at an IENE (Institute of Energy for Southeast Europe) conference.

Industrial sector officials fear the implementation of a single-digit upper limit, as requested by ESAI/HAIPP, the Hellenic Association of Independent Power Producers, would not provide industrial enterprises with enough space to reach agreements with power utility PPC as a means of covering their needs.

Imposing an upper limit on PPC’s forward contracts would cancel out the industrial sector’s accessibility to such products, EVIKEN (Association of Industrial Energy Consumers) board member Antonis Kontoleon told the IENE event.

The imposition of such a limit on PPC should be matched for all vertically integrated players, Kontoleon added.

Such a limit would prevent producers from establishing forward agreements with their own supply firms.

ESAI/HAIPP chief official Giorgos Stamtsis noted that the structure of the Greek market is characterized by the presence of one dominant company with exclusive access to lignite, major-scale hydropower facilities, as well as a very high market shares in the retail market, over 70 percent, as well as the wholesale market.

 

EVIKEN warns of new market distortions, costlier electricity

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EVIKEN, the Association of Industrial Energy Consumers, has warned of the institutionalization of new market distortions, through the adoption of the target model, that could significantly affect power utility PPC and ultimately prompt even higher costs for electricity consumers.

Greece’s industrial sector has persevered elevated electricity costs over the past decade, far higher than levels offered to European competitors, EVIKEN sources noted.

The association primarily attributed the country’s higher electricity costs to what it described as the “continual institutionalization of a series of measures that have led to the establishment of a regulated oligopoly in a market flooded by distortions and regulatory obstacles, along with the delayed launch of the new electricity market and market coupling with the neighboring markets of Italy and Bulgaria, as part of the target model’s framework.”

Revisions called for by EVIKEN include a balancing market that will operate through a unit-based central dispatching model.

Greek wholesale electricity prices Europe’s highest

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Wholesale electricity prices in Greece, averaging 65.5 euros per MWh, are Europe’s highest, well over the EU average of 43.3 eurpos per MWh, according to European Commission figures for the second quarter of 2019. This data highlights the lack of competition in Greece’s electricity market.

Malta’s wholesale electricity of 63.9 euros per MWh ranks the country second, while Poland is a distant third with an average price of 56.4 euros per MW/h in the second quarter, the data showed.

Price levels in Greece are well above those of neighboring Italy and Bulgaria, according to the data. In Italy, wholesale electricity averaged 51 euros per MWh while Bulgaria’s average was 41.2 euros per MWh.

Prices in central Europe were well below. Germany averaged 35.7 euros per MWh, Belgium 34.5 euros per MWh, the Netherlands 39.1 euros per MWh, France 35.3 euros per MWh, the Czech Republic 36.6 euros per MWh and Austria 36.9 euros per MWh.

Greece registered the second-biggest wholesale electricity price rise compared to a year earlier, the increase being 17 percent. Only Bulgaria surpassed this leap with a 22 percent increase. The EU average fell by one percent year-on-year.

These European Commission figures highlight the need for a swift and correct implementation of the target model in Greece in order to eliminate market distortions maintaining the country’s wholesale electricity market as Europe’s most expensive.

Swift target model action needed, impact on PPC

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The government and RAE, the Regulatory Authority for Energy, need to make swift decisions on matters concerning the energy market’s shape and functioning given a commitment, by the government, for punctual completion of all preparations leading to the commencement of the target model’s implementation within the first half of 2020.

RAE will need to soon stage public consultation procedures for matters detailing how markets will function amid the new environment.

If, for example, a day-ahead contract limit is to be imposed on power utility PPC, as has been debated recently, then this dominant market player will need to partially cover portfolio needs through the intraday market. This is seen as an indirect way of offering serious incentive for PPC’s diminished presence.

According to sources, a drastic reduction of the day-ahead contract limit is being considered. This would again raise PPC sustainability concerns as a result of market participation limits that would result for the power utility’s lignite units.

IGB agreement, target model on agenda of minister’s Sofia visit

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The signing of a Greek-Bulgarian bilateral agreement for the IGB gas grid interconnector, a project of major geopolitical significance, may be at the top of the agenda of the energy ministry leadership’s official visit to Sofia tomorrow and Thursday, but the target model, also on the agenda, is just as crucial.

The target model is vital as it entails the coupling of the Greek and Bulgarian electricity markets, needed for the establishment of regional electricity market, a key EU energy policy.

Given the Sofia trip’s demands, energy minister Costis Hatzidakis will be joined by his deputy Gerassimos Thomas.

Hatzidakis, on this trip, is expected to sign a bilateral agreement for the IGB gas pipeline’s construction and operation. A shareholders’ agreement and a European Investment Bank (EIB) loan agreement for the project are also planned to be signed.

The Greek-Bulgarian gas pipeline project, measuring 182 kilometers, will link Komotini, in Greece’s northeast, with Stara Zagora, creating a second interconnection point for the Greek and Bulgarian gas systems, in addition to an existing station in nearby Sidirokastro.

The new project, to offer an annual capacity of 5 billion cubic meters, will begin operating at a lower capacity level of 3 billion cubic meters.

The IGB pipeline is planned to be linked to the TAP project, running across northern Greece. Combined with the Bulgaria-Romania and Bulgaria-Serbia interconnections, the IGB will contribute to the establishment of a vertical corridor through the Balkans and connect central Balkan countries with Caspian gas supply.

Independent suppliers fear post-NOME auctions void

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Independent electricity supplier representatives will be going into their first meeting today with recently appointed deputy energy minister Gerassimos Thomas preoccupied by concerns over the plausibility of the deputy’s plan for an organized futures market, as an intermediate measure until the target model is implemented. They fear this plan may not be actualized.

Thomas, who requested today’s session as part of a series of meetings with energy sector players, has so far shown an eagerness to listen and seek solutions to various market issues.

The supplier representatives will be hoping the deputy minister has reassuring news on the launch of the target model and energy exchange markets in June, 2020.

They will also want firm news on a satisfactory hedging tool for competitive prices as a temporary substitute for NOME auctions – if they are abolished and the year’s final session, scheduled for October 16, is scrapped – until the target model’s implementation.

Suppliers fear being exposed to elevated wholesale electricity prices and other uncertainties that would endanger their sustainability if the year’s final NOME auction is not held. Suppliers have counted on the year’s final session, planned to offer a substantial electricity amount, as a growth catalyst over the next year.

Introduced about three years ago as a tool to reduce power utility PPC’s dominant retail market share, the NOME auctions have obligated the utility to offer rivals below-cost wholesale electricity.

 

Plan to end NOME auctions raises fears among suppliers

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A government plan to prematurely end the country’s NOME auctions has unsettled some of the Greek retail electricity market’s independent suppliers, who fear the absence of an effective transitional model until the establishment of the target model would expose them to unforeseen dangers.

Energy minister Costis Hatzidakis has declared he wants to abolish NOME auctions, including the year’s final session, scheduled for October 16, noting the measure – introduced by the previous government as a tool to help end power utility PPC’s market dominance – is forcing the state-controlled utility to sell wholesale electricity at below-cost levels and consequently further aggravating the troubled firm’s financial performance.

Electricity suppliers, not including the major vertically integrated players, have expressed concerns as a further delay in the implementation of the target model and launch of energy exchange markets is considered likely.

Some suppliers have asked their legal departments to examine possible moves.

“On the NOME auctions, we would like to point out that we are confident the ministry will find the fairest solution for healthy competition,” commented Federico Regola, CEO at Zenith. “We are open to discussing our experience with authorities in order to relay our experience for utilization and the proper functioning of the market to the benefit of consumers. We are monitoring developments and awaiting related announcements while also maintaining our legal rights, like all companies, as this issue does not only concern Zenith but the entire sector,” he continued.

 

Energy exchange chief confident of full launch by next June

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The Hellenic Energy Exchange’s (HENEX) outgoing chief executive Michalis Philippou is confident a road map leading to the exchange’s full launch next June will remain on schedule.

Philippou, who delivered an opening speech yesterday at a HENEX seminar titled “Derivatives Market Introduction”, asserted all energy exchange systems will be ready for use by the end of this year ahead of the exchange’s full launch on June 1.

During the preceding six-month period, participants will have the opportunity to become acquainted with the exchange’s systems, while HENEX can make any necessary corrections ahead of the full launch, Philippou pointed out.

The official explained it is crucial for the exchange’s various markets – day-ahead, intraday, futures and balancing – to begin operating concurrently so that harmony can be generated, otherwise the effort to establish a new model would run into problems.

This essentially means the energy exchange’s full launch next June should, more or less, signal the start of the target model, envisioning the harmonization of EU wholesale markets.

RAE pressuring for target model launch before June, 2020

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RAE, the Regulatory Authority for Energy, is pressuring the Energy Exchange and power grid operator IPTO for swifter procedures leading to the establishment of a new model for the electricity market, the target model.

The authority wants the target model to be launched sooner than June, 2020. According to a recent schedule, the new model, which should have been launched in 2015, is slated for a launch in the second half of 2020.

IPTO and the Energy Exchange need to respond, by next month, to questions raised by RAE at a July hearing on the reasons for the model’s series of deferrals by next month.

RAE supports the establishment of one liquidator for four new spot markets to emerge under the target model.

The country’s lender representatives will be in Athens next month. If unfinished target model matters are not sorted out by then, Greek authorities will have serious explaining to do.

 

HENEX, IPTO face RAE hearing over target model, exchange delays

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The administrations of the Hellenic Energy Exchange (HENEX) and power grid operator IPTO have been summoned to offer explanations for significant delays holding back the launch of the target model and full operation of the energy exchange at a RAE (Regulatory Authority for Energy) hearing today.

RAE has expressed concern over a series of delays and continual schedule revisions for the new markets.

The authority has warned that these delays are detrimental for market participants, including industrial enterprises currently unable to establish bilateral agreements.

According to the most recent update, the Greek energy exchange is expected to be fully operational by June, 2020, when all its platforms should be up and running following trial runs.

This will enable Greece to proceed with an EU market coupling plan via Italy before a grid link with Bulgaria is also established.

The target model is planned to offer market coupling, or harmonization of EU wholesale markets.

 

HENEX, IPTO to face RAE hearing over target model, exchange delays

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The administrations of the Hellenic Energy Exchange (HENEX) and power grid operator IPTO have been summoned to a hearing later this month by RAE, the Regulatory Authority for Energy, to offer explanations for significant delays concerning the launch of the target model and full operation of the energy exchange.

The hearing is planned to take place at the end of July, energypress sources have informed.

RAE has expressed concerns over a series of launch deferrals of the target model, to offer market coupling, or harmonization of EU wholesale markets.

The authority sees these delays as being abnormal while also negatively impacting prospective market participants such as industrial enterprises, currently not able to proceed with bilateral agreements.

In its most recent update, IPTO noted that the energy exchange will be fully operational in about a years’ time, in June, 2020.

Solar parks of 400 KW and over subject to target model terms

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The EU plans to reduce a level committing solar power parks to target model terms  to 400 KW from 500 KW as of January 1, 2020, a development that promises to directly impact investor plans. Related Greek legislation will need to be ratified by the start of next year.

As a result, DAPEEP, the renewable energy market operator, will endorse operating aid contracts, reinforcing fixed prices, for new solar energy parks of up to 400 KW, while ventures with capacities over this level must hold feed-in premium contracts.

Target model obligations for holders of feed-in premium contracts require their participation in day-ahead markets – for matters concerning energy, not price – and the balancing market, which carries a discrepancy cost for investors.

According to sources, an EU decision has also been reached that will enable member states to continue offering existing and approved RES support systems for a two-year period beyond 2020, in 2021 and 2022.

Brussels tight-lipped on Greek CAT mechanism approval

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The European Commission has remained tight-lipped as to if, when and under what conditions it intends to endorse Greece’s proposal for a permanent CAT remuneration mechanism.

The plan, attached to a wider draft bill prepared by the energy ministry, was ratified in Greek Parliament last week just ahead of the house’s closure for upcoming snap elections on July 7, the intention being to secure CAT remuneration and sustainability for the power utility PPC’s prospective Ptolemaida V power station, when the facility is launched.

Brussels has maintained a rigid stance on the matter, adopting an aggressive interpretation of regulations and guidelines, sources have informed.

Greece’s implementation of the target model, aiming for market coupling, or harmonization of EU wholesale markets, is believed to be one of the conditions demanded by Brussels for the CAT mechanism’s approval. Implementation of the target model within 2019 is seen as a highly unlikely prospect.

There have been no indications as to when the European Commission may deliver a comfort letter to Greece on the CAT remuneration mechanism.

The matter may be urgent for Greece but the new European Commission being pieced together following the recent European elections means slower progress in Brussels at present.

 

Explanations sought for balancing market delays

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An extension beyond December of this year will be needed for the delivery of the balancing market due to the project’s high complexity and increased workload, power grid operator IPTO has informed RAE, the Regulatory Authority for Energy.

The authority has requested precise schedules and explanations for delays from local bodies involved in the development of the target model following EU pressure.

IPTO estimates an additional time period of at least three months will be needed as thorough inspections will be necessary, citing the balancing market’s importance to the grid’s safety and reliability. The operator does not want to commit to any specific delivery dates.

A delay in finalizing the market’s shape, decided through an approval of the balancing market as recently as December, has not helped, IPTO noted in its response to RAE.

Information system delays have also been detected. IPTO has commissioned the development of a market management system (MMS), market settlement system (MSS), and a cross-border management system (XBMS).

RAE, concerned by target model delay, requests report

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RAE, the Regulatory Authority for Energy, concerned about Greece’s delayed implementation of the target model, aiming for market coupling, or harmonization of EU wholesale markets, has requested a detailed progress report from the Energy Exchange and power grid operator IPTO.

The authority also wants the two bodies to deliver a binding finalized schedule detailing when this preparatory work will be completed for the new model to be ready to operate.A series of target model deferrals have raised concerns at RAE, now preparing to apply increased pressure, sources noted.

According to the latest schedule, the electricity market’s new model, which should have been launched in 2015, is now expected to be ready to operate in the second half of 2020.

A tender for logistics required in the market coupling procedure between the Greek and Italian markets is expected to be completed by this date.

Delays have also been identified in the establishment of three spot markets at the energy exchange – intraday, day-head and balancing markets.