Greek enterprises face April 27 date for hydrogen project proposals

Leading Greek energy players are gearing up to participate in a European Commission effort concerning the development of the continent’s first major investments in eco-friendly hydrogen production, a key aspect in Brussels’ decarbonization drive.

Interested parties face an April 27 deadline to submit proposals concerning a number of categories, including PCI-supported sustainable low-emission hydrogen production, the emphasis placed on RES-generated hydrogen.

The White Dragon project, as it has been dubbed, has brought Greece’s biggest industrial corporations closer, as they prepare to jointly bid for project categories Brussels will subsidize in the context of the Hydrogen Europe program.

The White Dragon project provides for investments of 2.5 billion euros in electrolytic hydrogen production by means of solar energy from photovoltaic parks with a capacity of 1.5 GW. They are planned for northern Greece’s west Macedonia region, a lignite-dependent economy.

Gas utility DEPA, gas grid operator DESFA, petroleum group Motor Oil, the Mytilineos group, Terna, Hellenic Petroleum ELPE, Polish company Solaris, as well as the Demokritos National Center for Scientific Research and the Center for Research and Technology Hellas (CERTH) are taking part.

The hydrogen to be produced will be used for district heating, fuel to be exported via the Trans Adriatic Pipeline, and as fuel for large vehicles such as lorries and buses.

 

IPTO seeking active role in Cyprus, Israel, Egypt grid interconnections

Power grid operator IPTO is seeking an active role in the grid interconnections to link Greece with Cyprus and Israel, as well as Egypt, the company’s chief executive Manos Manousakis told yesterday’s Power and Gas Supply Forum, an online event staged by energypress.

Responding to questions as to whether IPTO is considering to acquire an equity stake in these projects, Manousakis noted that the operator’s role is to ensure the interoperability of the Athens-Crete and Crete-Cyprus power grid interconnections, a commitment made by the Greek government back in October, 2019.

The European Commission, engaged in ongoing exchange with IPTO in an effort to understand the level of maturity of these grid interconnection projects and, primarily, the interoperability of its systems, has mentioned that Brussels would be interested in the equity involvement of a European TSO, Manousakis informed.

Other priorities at IPTO include upgrading and expanding Greece’s grid interconnections with neighboring countries, which would boost cash flow in the domestic energy market through electricity exports, the chief executive noted.

A tender for the development of the local segment of a second transboundary grid interconnection linking Greece and Bulgaria, from Nea Santa, northeastern Greece, to Bulgaria’s Maritsa area in the south, will be completed this year, Manousakis informed.

New interconnections with Albania and North Macedonia are also being examined at present, he noted.

In addition, IPTO is close to signing a cooperation agreement with Italian operator TERNA for the development of a second Greek-Italian grid interconnection.

Furthermore, plans for an upgrade of the Greek-Turkish interconnection, a project linking the European and Turkish transmission systems, are also maturing, the IPTO chief informed.

 

 

PPC granted license for 665 MW gas-fueled power station

A power utility PPC investment plan entailing the development of a 665-MW gas-fueled power station in the industrial zone of Komotini, northeastern Greece has been granted a license by RAE, the Regulatory Authority for Energy, adding to the list of licensed projects to serve as a bridge in the country’s energy transition until the renewable energy sector fully prevails.

The project linked to this latest license, given a 35-year duration, is scheduled to be launched in December, 2024.

RAE has now granted five licenses to an assortment of companies for such investment plans, though not all will necessarily be developed.

An 826-MW gas-fueled power station being developed by Mytilineos in Viotia, slightly northwest of Athens, set to be launched at the end of this year, is the most advanced of these investment plans.

The maturity levels vary for other projects in terms of environmental licensing and other procedural matters. These include a 665-MW unit planned by Terna, also in Komotini; an 826-MW project planned by Elpedison in Thessaloniki; and an 830-MW facility planned by the Copelouzos Group’s Damco in Alexandroupoli, northeastern Greece.

Also, the power utility is expected to reach a decision on converting its prospective Ptolemaida V lignite-fired power station into a gas-fueled facility.

Man Energy Solutions to support Terna for LNG truck-loading station

German company Man Energy Solutions has signed an agreement with construction company Terna to help with the development of a truck-loading station at gas grid operator DESFA’s LNG terminal on the islet Revythoussa, just off Athens.

Man Energy Solutions will take on the task of fully constructing infrastructure needed for the management of LNG supply, through trucks, to customers.

Commenting on the agreement, Thanassis Papaioannou, head of Man Energy Solutions’ Department of Machines and Electricity Units in Greece, noted: “We are very pleased to bring our knowhow in the LNG domain to [the] DESFA [terminal], joining forces with TERNA, one of the leading construction companies in the country. The actualization of this project will create new growth opportunities in areas where natural gas networks do not exist – that is, access to gas.”

Just days ago, it was also announced that DESFA has reached a finalized investment decision on the development of a small-scale LNG jetty at the Revythoussa terminal, as an addition to the facility’s LNG truck-loading station, contributing, amongst other things, to the emergence of LNG bunkering at the nearby Piraeus port.

PPC seeks IPTO support for EC lignite compensation request

Power utility PPC wants power grid operator IPTO to provide a statement declaring whether the power utility’s lignite-fired power stations, nowadays loss-incurring units as a result of elevated carbon emission right costs, are still necessary for the achievement of grid sufficiency, the utility’s objective being to gain support for a lignite compensation request submitted to the European Commission, not to immediately shut down its lignite units, sources have informed.

Brussels has been examining the PPC compensation request for months, initially as part of a package incorporating the European Commission’s lignite antitrust case against Greece, and more recently, following settlement of the latter, as a separate issue that has dragged on.

Throughout the entire period, officials in Greece have needed to respond to extensive Brussels questioning over PPC’s compensation request. Most recently, the European Commission is reported to have informed PPC, by email, that it would deliver a decision as soon as possible, once all information has been processed.

PPC, in its letter to IPTO, informs that it would be prepared to shut down the lignite units now if the operator considers them unnecessary for grid sufficiency as they are the cause of losses on a daily basis.

The power utility has planned a phaseout of its lignite facilities over the next three years, as part of the country’s decarbonization effort.

IPTO, in a grid-sufficiency study covering 2020 to 2030, conducted within the framework of the National Energy and Climate Plan, has stressed the period between 2021 and 2024 will be crucial as a result of PPC’s planned phaseout of lignite-fired power stations.

Subsequently, the grid’s sufficiency will depend on how soon three new gas-fueled power stations with a capacity totaling 2,150 MW – PPC’s Ptolemaida V, and units being developed by Mytilineos and TERNA – will be ready for launch, IPTO’s NECP-linked study noted.

Weather effects lend credibility to PPC lignite compensation bid

The impact of last week’s heavy snowfall around Greece, prompting power outages in various areas, northern parts of Athens being hardest hit, has added credibility to state-controlled power utility PPC’s compensation bid to the European Commission for its need to keep using lignite-fired power stations.

Had IPTO, the power grid operator, not ordered the grid entry of PPC’s lignite-fired power stations, nowadays a high-cost option, widespread blackouts amid the adverse weather conditions would have been inevitable, making matters far worse, including at economic and political levels.

IPTO officials have stressed the country continues to need PPC’s lignite-fired power stations until their production capacity is gradually replaced by cleaner gas-fueled power stations. These are: PPC’s Ptolemaida V; a unit being developed by the Mytilineos Group in Viotia, northwest of Athens; and Terna’s prospective unit in Komotini, northeastern Greece, still at the planning stage.

The period between 2021 and 2024 will be crucial for the country’s power generating sufficiency as a result of the planned withdrawal of existing lignite-fired power stations, a related IPTO study has shown. The system’s sufficiency will depend on how swiftly the aforementioned gas-fueled power stations, totaling 2,150 MW, can be up and running.

If the planned completion dates for these three projects are maintained then there will be no reason to delay the withdrawal schedule of lignite-fired power stations, sources pointed out. The grid entry of PPC’s Ptolemaida V and Mytilineos’ Viotia unit, without the Terna unit, would suffice to cover the capacity gap to be left by the withdrawn lignite units, these sources added.

However, any delays in the completion of the new power stations could prompt Greek officials to request more time from the European Commission for the withdrawal of lignite-fired units, the sources said.

RAE awaits Brussels response to Ariadne minority sale plan

RAE, the Regulatory Authority of Energy, is awaiting a response from the European Commission before approving a plan by power grid operator IPTO to sell up to a 40 percent stake in its subsidiary Ariadne Interconnection, established specifically for the development of the Crete-Athens interconnection.

RAE has consulted Brussels as the authority wants clarification on what the corporate structure of parent company IPTO and its subsidiary permits, based on EU law.

The Crete-Athens grid link was originally planned as a segment of EuroAsia, a wider interconnection plan of PCI status to link the Greek, Cypriot and Israeli electricity grids, with EuroAsia, a consortium of Cypriot interests, at the helm. Eventually, IPTO withdrew the Crete-Athens section for its development as a national project.

Ariadne Interconnection’s role will be strictly limited to the construction of the Crete-Athens interconnection, a concession agreement between IPTO and its subsidiary Ariadne Interconnection has specified. Once completed, IPTO will assume the project’s management.

Last October, IPTO forwarded a detailed plan to RAE concerning the sale of a minority stake in Ariadne Interconnection.

China’s SGCC, a strategic partner of IPTO holding a 24 percent stake, informed, some time ago, that it would be interested in acquiring a 20 percent stake of Ariadne Interconnection. European operators such as Italy’s Terna and Belgium’s Elia, as well as major investment groups, have also expressed interest.

The acquisition by investors of a minority stake in Ariadne Interconnection is linked to the development of major-scale RES projects on Crete.

IPTO, Terna plan Greek-Italian link boost of up to 1,000 MW

Power grid operator IPTO is taking initiatives to upgrade Greece’s interconnections with neighboring countries, acknowledging transboundary grid link insufficiencies are having a negative impact whose consequences include market functional disorders and higher electricity prices.

The operator has formed working groups with all of Greece’s neighboring countries to examine the prospect of constructing or reinforcing existing interconnections.

These associations include cooperation with Italian operator Terna. The two sides, prepared to consider both an upgrade of the existing system or the development of a new one, estimate that the Greek-Italian grid interconnection requires a capacity increase of between 500 and 1,000 MW.

According to sources, IPTO and Terna have agreed to proceed with related studies for an optimal solution as soon as possible. The operators intend to reach a decision within the next few months. Any selection will need to be approved by the Greek and Italian regulatory authorities of energy.

IPTO intends to include this project in its ten-year development plan covering 2022 to 2031, expected to be presented at the end of the year.

The existing Greek-Italian electricity grid interconnection, a 163km subsea cable with a 500-MW capacity in operation since 2002, will be used to facilitate the target model’s next stage, market coupling, beginning on December 15 with the aim of harmonizing the energy markets of the two countries.

ENTSO-E, the European Network of Transmission System Operators for Electricity, has pointed out that a Greek-Italian grid interconnection boost will be needed for an effective bridging of prices between the two countries.

IPTO awaiting approval of 20% Ariadne sale for €40m minimum

Power grid operator IPTO’s needed approval from RAE, the Regulatory Authority for Energy, of its sale plan offering a 20 percent stake in subsidiary firm Ariadne Interconnection, tasked with the development of the Crete-Athens grid interconnection, is now in the hands of the authority, sources informed.

A condition setting a minimum sale price of 40 million euros, or 20 percent of the nominal value of Ariadne’s equity capital, totaling 200 million euros, has been included in the plan, the sources added.

It also includes criteria that will need to be met by prospective bidders, as well as the tender’s steps all the way to the final round, when qualifiers will be given access to the sale’s video data room.

The VDR will offer candidates financial, technical and legal details concerning the Crete-Athens grid interconnection, a project budgeted at one billion euros and slated for completion within 2023.

IPTO has already secured a 400 million-euro loan from Eurobank, an additional 200 million euros will stem from own capital, while the other 40 percent is expected to be provided in the form of EU subsidies, now close to approval.

China’s SGCC, IPTO’s strategic partner with a 24 percent stake, as well as European operators, among them Italy’s Terna and Belgium’s Elia, have all expressed interest ahead of the Ariadne Interconnection tender.

Importantly, IPTO is still awaiting RAE’s approval of WACC levels for the Cretan interconnection project – permitted revenue (2018-2021) and required revenue (2019-2021).

Projects categorized as projects of major significance are legally entitled to additional returns beyond the asset-based yield.

DEPA Comm VDR open; 5-year stay for Infrastructure buyer

The video data room for the privatization procedure of DEPA Commercial, one of two new gas utility DEPA entities placed for sale, is now open to prospective bidders, but initial information made available is limited to non-financial details.

Financial details on DEPA Commercial will be made available as a second step to all consultants representing the potential buyers, while a third and final stage will follow to conditionally offer bidders confidential information in person at the DEPA headquarters.

As previously reported, the second-round, binding-bids deadline for the DEPA Commercial sale, offering investors a 65 percent stake, has been extended to March, 2021.

The field of second-round qualifiers is comprised of two partnerships, Hellenic Petroleum (ELPE) with Edison and power utility PPC with Motor Oil Hellas, plus Mytilineos, TERNA, the Copelouzos group, Shell, and the Swiss-based MET Group.

As for DEPA Infrastructure, the other new DEPA entity up for sale, energy minister Costis Hatzidakis is preparing a legislative revision that will require the winning bidder to retain its company shares for a period of at least five years.

This condition will also apply for the DEPA Infrastructure subsidiaries EDA Attiki, EDA Thess and DEDA, the gas distributors covering the wider Athens area, Thessaloniki-Thessaly and rest of Greece, respectively. DEPA fully owns DEDA and EDA Attiki and holds a 51 percent stake in EDA Thess.

The DEPA Infrastructure binding-bids deadline has also been extended to the end of February, 2021. Italgas, EPH, First State Investments, KKR, Macquarie and Sino-CEEF have qualified for the final round.

 

Business plan, better results, new activities in DEPA Commercial VDR

The virtual data room for a forthcoming privatization to offer a 65 percent stake in DEPA Commercial, an offshoot of gas utility DEPA, expected to be opened for potential buyers to assess by the end of this week, will present a business plan, improved financial figures at DEPA, new company activities envisaged, as well as DEPA’s outlook on the course of the country’s natural gas market and the company’s position within it.

According to privatization fund TAIPED’s revised Asset Development Plan, participants will submit binding bids in December.

The field of first-round entries, comprising two consortiums and five companies, will have roughly three months to prepare binding bids, according to the schedule.

Hellenic Petroleum ELPE and Italy’s Edison are one of the privatization’s two participating consortiums, the other formed by power utility PPC and Motor Oil Hellas. The five individual participants are: Mytilineos, TERNA, Copelouzos group, Shell and the Swiss-based MET group.

New partnerships could be established by the field of participants as long as they do not affect the sale’s competition standards and have been approved by TAIPED.

The sale of DEPA Commercial is a major attraction for potential buyers as it offers a big slice of the wholesale and retail markets, including gas supplier Fysiko Aerio Attikis, a subsidiary covering the wider Athens area. Fysiko Aerio Attikis already serves close to 400,000 households and 10,000 businesses.

Metka, Terna winning bidders for PPC Renewables 15-MW Kozani units

PPC Renewables has reached decisions to award two development contracts for respective 15-MW solar parks in the Kozani area, northern Greece, to Metka, a member of the Mytilineos group, and Terna, following two tenders, nearing finalization within the next few days, energypress sources have informed.

The imminent signing of these development contracts will signal the first steps in the development, by PPC Renewables, of a wider 230-MW solar energy complex, Greece’s biggest to date and one of Europe’s largest.

Construction work for the two 15-MW solar parks is expected to commence this coming summer, PPC Renewables anticipates.

The Kozani project will be spread across lignite mine locations operated by PPC Renewables’ parent company PPC, the power utility.

The 15-MW solar park to be developed by Metka will be equipped with its own sub-station and stationary mounts holding solar panels in a fixed position. This project’s total cost is estimated at just under 10 million euros.

The other 15-MW solar park project, to be constructed by Terna, will also be equipped with its own sub-station but, instead of fixed-position panels, will feature solar trackers, orienting panels toward the sun. This project will cost a total of approximately 11.5 million euros.

A tender for the Kozani project’s biggest segment, a 200-MW solar park, is still in progress. The deadline for bids has been slightly extended to June 11. Some 30 companies, Greek and foreign, have expressed major interest. Most are expected to submit bids.

PPC Renewables expects to have doubled its current installed RES capacity by the second half of 2021, up to 300 MW, according to the company’s chief executive Konstantinos Mavros.

A 600-MW installed capacity target has been set for the end of 2022. Looking further ahead, PPC Renewables is striving for a 1.5-GW total five years from now.

Work on Crete-Athens grid link nears launch after approvals

The Court of Auditors has approved contracts offered to winning bidders for installation of the Crete-Athens grid interconnection’s four cable segments, enabling the signing of contracts for the one billion-euro project’s biggest stage, budgeted at 615 million euros, probably within the month, energypress sources have informed. Work will then be able to commence.

Prysmian, Nexans and Hellenic Cables-NKT were awarded contracts for the project’s four cable segments. Prysmian secured two of these four contracts.

On another front, the Court of Auditors is expected to approve a contract for the project’s other key stage, the design, supply and installation of two converters and a substation, in June, according to sources.

Siemens – Terna, a member of the GEK TERNA group, submitted an improved bid of 370 million euros late last month to be awarded this contract by power grid operator IPTO’s fully-owned subsidiary Ariadne Interconnection, the project promoter.

The Court of Auditors’ approval of contracts for the project’s four cable segments follows a recent decision by the environment and energy ministry endorsing the 1,000-MW project’s environmental terms.

EU funding for the project through the NSRF (2014 – 2020) is expected to be approved within the next week to ten days, according to reliable sources. This would subsequently also offer IPTO access to bank financing.

Siemens-Terna awarded converter stations contract for Crete-Athens link

Power grid operator IPTO’s fully-owned subsidiary Ariadne
Interconnection has successfully completed a tender process for the Converter Stations of the Crete-Athens Interconnection, awarding the contract to Siemens – Terna, a member of the GEK TERNA group, ADMIE (IPTO) Holding has announced. 

After the submission of an improved bid on March 26, the contract price was set at 370 million euros, of which 358.6 million euros concern the construction of the converter stations. The remaining 11.4 million euros concern maintenance of these stations.

The contract calls for a 36-month implementation period and will be signed after approval by the Court of Auditors.

The project will be included in the list of the Operational Program “Competitiveness, Entrepreneurship and Innovation” of the NSRF 2014 – 2020.

Τhe tendering procedure for the design, supply and installation of two Converters and a Substation for the DC Electrical Interconnection between Crete and Athens was launched on May 24, 2019.

The tender attracted the interest of world leaders in the industry and on November 1, 2019 the GE-Nari-Mytilineos and Siemens-Terna consortiums submitted binding offers.

The evaluation of the offers submitted by the consortiums, both of which possess strong technical backgrounds and specialized experience in similar projects abroad, required more than four months due to the project’s elevated technical demands. 

The technical evaluation was completed on March 13 and the Siemens-Terna consortium’s offer qualified, taking into account all relevant issues related to the interconnection.

Commenting on the tender, the IPTO group’s CEO Manos Manousakis noted: “During these challenging times, the tender process for our
flagship project, amounting to 1 billion euros, was successfully completed without problems.
IPTO will continue to focus all its efforts in order to protect the timely implementation of the project and ensure the safe and reliable power supply of Crete through the mainland system by 2023. Apart from the economic benefits of the interconnection of Crete for all Greek consumers, through the decline of Public Service Obligations (PSO), the implementation of this
project paves the way for accelerated RES integration on the island based on the principles of sustainable development.”

Big RES projects on islands to be given IPTO cable access

Investors behind major-scale RES project plans for non-interconnected islands and island complexes, previously granted licenses incorporating the installation of cable interconnections, will now be able to develop their renewable energy facilities and reserve capacities through interconnection infrastructure developed by power grid operator IPTO.

The energy ministry intends to attach a related amendment to a draft bill concerning environmental permits.

Licenses granted to investors in the past for major-scale wind energy farms on non-interconnected islands and island complexes expected investors to install related cable infrastructure for energy distribution.

Such licenses have been granted to the Copelouzos group and Terna for projects on Crete and Iberdrola Rokas for investment plans in the North Aegean.

The new legal framework being prepared by the ministry promises to offer investors greater flexibility as development of interconnection infrastructure will no longer be set as a condition for related RES project licenses.

Instead, investors will be able to reserve capacities through cable interconnections being developed by IPTO. However, investors will need to contribute to the cost of this infrastructure in accordance with their reserved share of the overall capacity.

Alexandroupoli FSRU tender draws 3 bids, all by key players

A tender staged by Gastrade for the construction of a pipeline and related projects needed to link the prospective Alexandroupoli FSRU, in Greece’s northeast, with the national gas grid, attracted bids from three companies, all major players at an international level, on the deadline day last Friday.

Experienced Italian firm Saipem teamed up with Greece’s Terna for one of the three bids, while two Dutch bidders, Boskalis and Van Oord, submitted the other two offers.

Gastrade officials will appraise the technical aspects of the offers before moving on to the financial side.

Meanwhile, the second round of a tender for the project’s FSRU is expected to be announced within the next few days, inviting first-round participants to submit binding offers. Over ten bidders, experienced players from Greece and abroad, submitted first-round bids for the FSRU.

The deadline of an ongoing market test for binding offers concerning the FSRU’s capacity reservations, crucial for the project’s final investment decision, expires in a few days’ time.

Besides the LNG quantities involved, the duration of capacity reservation requests will also be a pivotal factor for the project’s sustainability.

Gastrade officials, basing their judgement on the procedure’s developments until now, are confident of a favorable market test outcome that will lead to the project’s actualization.

Crete link environmental terms, needed for contracts, soon

The energy ministry will publish the environmental terms for Crete’s major-scale grid interconnection with Athens, needed for project contracts, within the first ten days or March, power grid operator IPTO, the project’s promoter, anticipates.

The delivery of these terms will enable the winning bidders for the project’s cable installations, Prysmian, Nexans and Hellenic Cables – NKT, to sign project contracts with the operator, probably two to three weeks later, somewhere between late March and early April.

Meanwhile, appraisals of offers submitted by bidders for project converter stations are believed to be nearing completion. Two consortiums, Terna-Siemens and Mytilineos-General Electric-Nari have submitted offers to the tender for converter stations.

Construction of the major-scale grid interconnection, from Crete to Athens, will be able to commence once the cable and converter station contracts have been signed.

IPTO insists the project will be fully operational in 2023.

Work on Crete’s small-scale grid interconnection with the mainland, from Crete to the southern Peloponnese, is progressing as scheduled, IPTO has informed.

The installation of this segment’s submarine cables, awarded to Prysmian and Hellenic Cables, is scheduled to be completed around November, according to IPTO’s schedule.

This segment involves deep-sea cable installation work at more than 1,000 meters below sea level, an effort said to be unprecedented anywhere in the world.

Additional IPTO stake seen offered within next three months

The government, gearing up for a series of energy sector privatizations, plans to hasten the sale of an additional yet unspecified stake in power grid operator IPTO. The procedure could now be launched within the next three months.

Investor interest in IPTO has risen as the operator’s asset value is projected to increase sharply over the next decade.

The Greek State currently controls a 51 percent share of IPTO, directly and indirectly. Late in 2019, State Grid Corp of China (SGCC), the buyer of a 24 percent stake in IPTO and holder of priority rights should any additional stake be offered, expressed an interest to boost its stake in the operator and also acquire a 20 percent stake in subsidiary firm Ariadne Interconnector, project promoter of the Crete-Athens electricity grid interconnection, a project budgeted at one billion euros.

The size of the additional IPTO stake to be placed for sale remains unclear, but, without a doubt, SGCC’s decision on whether or not to exercise its priority right will be influential.

Italy’s Terna, holding a 30 percent stake in CDP Reti, an Italian holding company, is also believed to be interested in the upcoming IPTO sale. SGCC would also be involved here as the Chinese company holds a 35 percent stake in CDP Reti. French operator RTE and a variety of funds are also considered believed to be considering the IPTO sale.

IPTO’s assets are seen rising from a present level of 1.5 billion euros to five billion euros over the next ten years as a result of the development of major grid interconnection projects to link the country’s Dodecanese and North Aegean Islands with the mainland.

Greece’s energy-sector privatizations will not be limited to gas utility DEPA’s two new entities, DEPA Infrastructure and DEPA Trade, both underway, nor will there be a gap until the next sale, distribution network operator DEDDIE/HEDNO, scheduled for September, energy ministry officials have informed. The Hellenic Petroleum ELPE sale will be deferred.

 

One of three Crete link bidding teams wants time or will exit

ABB, the world’s biggest developer of power grid interconnection projects, has requested a further deadline extension greater than the one-month periods of additional time already granted twice for a tender concerning the Crete-Athens grid interconnection project’s engineering, procurement and construction of two converter stations and a GIS substation, energypress sources have informed. The tender’s current deadline is set to expire on October 31.

Both the Greek government and power grid operator IPTO appear determined not to accept any further deadline extension requests as this, they believe, would increase the risk of a project delay and, consequently, energy sufficiency issues on Crete.

Outdated, high-polluting power stations still operating on Crete soon need to be withdrawn.

ABB, which has joined forces with Greek maritime infrastructure construction and maintenance group Archirodon for the Cretan project’s tender, has cited the complexity of the project for the additional time the company appears to need. If a sizable extension is not granted, then ABB and project partner Archirodon will most likely withdraw from the tender, it is believed.

On the contrary, two other partnerships established for the tender, according to reliable sources, are preparing to submit their offers. Siemens is believed to have joined forces with Greek construction company TERNA and General Electric is working with Greece’s Mytilineos, according to sources.

The grid interconnection project’s development faces a tight schedule. IPTO chief executive Manos Manousakis told a recent conference the project will be launched early 2023, not at the end of 2022, as was previously believed.

PCI hopes for underground gas storage boosted by late effort

NEWS UPDATE: 

Greek energy ministry officials have made a successful last-ditch effort ahead of this Sunday’s elections that boosts the country’s chances of keeping on the EU’s PCI list an underground gas storage facility in the offshore South Kavala region, planned through the development of a depleted natural gas field, energypress sources have informed.

An FSRU in Alexandroupoli, northeastern Greece, will also be on the PCI list, enabling favorable funding terms, the sources added.

Prior to this latest development, energy ministry officials assured that problems concerning the South Kavala project’s place on the PCI list would be overcome, while admitting the project had been negatively appraised by Brussels.

Earlier today, energypress reported: 

A project entailing the development of a depleted natural gas field in northern Greece’s offshore South Kavala region as an underground gas storage facility appears likely to be removed from the European Union’s PCI list, a status enabling favorable funding.

Delays and the country’s early elections appear to have taken their toll and are believed to be key reasons behind the project’s likely removal from the PCI list.

The underground gas storage facility has been negatively reviewed by EU authorities amid procedures leading to the determination of a new and revised PCI catalogue for 2020-2021, energypress sources have informed.

Not all hope has been lost. Final decisions by EU authorities will be reached in October, which gives Greek officials some time to present their case in favor of the project’s PCI-list inclusion.

The asset’s ownership, along with the responsibility for its utilization, have been transferred to the privatization fund TAIPED, which has significantly delayed related initiatives as it obviously does not consider the project to be a top-priority issue.

The project’s budget is estimated at between 300 and 400 million euros, while its storage capacity could end up being anywhere between 360 and 720 million cubic meters, as much as 10 percent of the country’s annual natural gas consumption.

France’s Engie, as well as Terna and Energean, have formed a consortium to bid for the project whenever a tender is staged.

Offers soon for IGB gas pipeline project tenders, nearing completion

Three tenders offering contracts for Greek-Bulgarian IGB gas grid interconnector’s project manager, pipeline procurement and construction are approaching completion.

Offers for the tender to appoint a project manager, to monitor development on behalf of shareholders, are expected this month.

Greece is well represented in the tender concerning the construction of the IGB pipeline, planned to cover a 182-km stretch and budgeted at 145 million euros. A total of five consortiums with three Greek firms on board have advanced to this tender’s second round.

Germany’s Max Streicher has teamed up with Greece’s Terna; China Petroleum Pipeline Engineering has joined forces with Aktor; and J&P Avax is the third local qualifier. Their bids are expected next week.

ICGB, the IGB project’s consortium, a joint venture involving YAFA Poseidon – a Greek gas utility DEPA half-owned subsidiary – and the state-controlled Bulgarian Energy Holding (BEH), plans to have appraised these offers within a month before announcing a preferred bidder at the end of April.

The IGB is planned to be linked with the TAP route, offering Bulgaria and the wider southeast European region access to Caspian gas as well as LNG.

 

IPTO signs Crete-Peloponnese link contracts, a major energy security step

Power grid operator IPTO has taken a major step in resolving Crete’s energy sufficiency threat feared as of 2020 by signing contracts with four companies, Fulgor, Hellenic Cables, Prysmian Powerlink and Terna, for the development of Crete’s grid interconnection with the Peloponnese.

Energy minister Giorgos Stathakis, who attended the signing ceremony in Kissamos, northwest Crete, described the island’s interconnection project as a historic step that paves the way for Crete’s transformation into a green energy island of minimal environmental impact, while also ensuring energy security and growth prospects for the island.

A European Commission extension for diesel-fired power stations operated on the island by the main power utility PPC expires at the end of 2019.

Ending Crete’s energy isolation by linking the island with the mainland’s grid has been discussed since the 80s, when the required technology and means were not yet available, Stathakis noted, adding conditions have now changed and led to an acceleration of grid interconnections.

The Crete-Peloponnese grid link, expected to be completed in 2020, represents the first step of a wider link, from Crete to Athens, planned to be completed in 2022.

Elsewhere, the first of three grid interconnection stages in the Cyclades has been completed while the other two are said to be making swift progress.

 

Crete-Athens link tender announcement seen 1Q of 2019

Power grid operator IPTO, given the green light by RAE, the Regulatory Authority for Energy, for the development of the Crete-Athens grid interconnection, despite European Commission objections, is pressing ahead and expects to receive approval of its related environmental studies in two to three months before launching a tender by March, 2019.

IPTO, currently progressing based on a schedule set by RAE, has completed various preliminary work, including deep-sea studies, and aims to complete the project by September, 2022.

Greek authorities are planning to keep the main power utility PPC’s diesel-fired power stations on Crete running beyond an end-of-2019 limit set by Brussels to avert an energy supply threat on the island, as was made known earlier this week by energy minister Giorgos Stathakis. His ministry has submitted a related application to Brussels for a deadline extension.

RAE is believed to still be considering various alternative options, including a proposal from Qatar for 200-MW capacity electricity supply to the island via an LNG tanker and generation facility. The cost of this option is believed to equal that of keeping PPC’s current stations running.

A proposal by energy firm Terna entailing the transfer of its gas-fueled Heron I unit, located on the outskirts of Thebes, to Crete is also still on the cards.

Euroasia Interconnector, a consortium of Cypriot interests heading a wider PCI-status project planned to link the Greek, Cypriot and Israeli power grids, has contested with IPTO for control of the wider project’s Crete-Athens segment.

Local investor views vary ahead of PPC unit sale market test

Though an imminent market test for Greece’s bailout-required package sale of main power utility PPC lignite units has yet to be announced, potential investors have already reacted in a variety of ways, most of them hesitantly, as a result of the lack of clarity on a number of issues.

Questions still remain on how overstaffed units and the future course of carbon emission right costs, expected to skyrocket within the next few years, will be dealt with.

In comments to energypress, certain players already ruled out their interest, one example being Elpedison. Offiicals at TERNA and Mytilineos noted they remain undecided and are awaiting further clairity. The Copelouzos group declared it will participate in the sale.

Though the majority of local energy firms have remained cautious, they face no choice but to closely monitor developments, as these could bring about major changes to Greece’s electricity market, assuming the sale effort makes progress. Investor opinion shifts along the way cannot be ruled out.

Financing could be an issue for investors contemplating this sale, to offer a package of units representing 40 percent of state-controlled PPC’s lignite capacity, probably divided up for more than just one tender. Banks, taking their cue from energy firms in Europe’s west, which have turned their backs to carbon-sector investments, seen as unfeasible in this day and age, are no longer anything carbon-related. Any investor financing needs would need to be sought at non-EU banks.

The market test is expected to influence the sale’s prospects, price levels, and shape terms once the tenders are staged next June.

Energy minister Giorgos Stathakis struck a deal with the country’s lenders just days ago on details concerning state-controlled PPC’s lignite unit sale, as part of the bailout’s third review.

As for investors beyond Greece, Chinese firms are believed to be firmly interested, while a number of east European firms, such as the Czech Republic’s CEZ, as well as Japan’s Hitachi, could also explore the sale’s prospects.

 

Commercial interest suspicions raised over Italy power link problem

Frequent problems disenabling the Greek-Italian grid interconnection to function for extended periods have raised suspicions that commercial interests, besides technical issues, may also be at play.

The interconnection’s latest breakdown, occurring at a time when crossboundary electricity trade is set to rise, has once again brought the issue to the fore. In response, RAE, Greece’s Regulatory Authority for Energy, and its Italian counterpart, have begun investigating the matter in an attempt to identify the causes behind the regular breakdowns.

The interconnection stopped operating in early October and is not expected to become available again until at least the end of the year.

RAE and Italy’s Terna informed of a technical issue at the Greek-Italian grid interconnection on October 9.

Inspections of the interconnection’s overhead segment in Greece did not reveal any issues, prompting Terna to focus its check on the submarine section, where a technical problem was reportedly identified. A specialized vessel was then recruited for the repair effort. According to initial estimates, work is expected to be completed by mid-December while the interconnection is seen working again within the last yen days of the year.

As a result of the disruption, a mechanism was activated on November 25 requiring RAE and Terna to cover Physical Transmission Rights (PTRs) until the damage is repaired.

Italy’s interconnections with France, Switzerland, Austria and Slovenia also encountered operational problems in October and November.

Grid capacities in the wider region are expected to be tested by extreme weather conditions this coming winter. All these factors combined could prompt a domino effect that may lead to electricity capacity issues in various parts of Europe and increase prices. If so, the adequacy of precautionary measures taken by RAE will be put to the test.

Four power operators express non-binding interest in IPTO

The first stage of a bailout-required international tender offering a 24 percent share of IPTO, the power grid operator, has been completed with four bidders submitting non-binding expressions of interest, PPC, Greece’s main power utility and parent company of IPTO, has announced.

PPC, controlled by the Greek State with a 51.12 stake, will now assess the technical and economic credentials of bidders to decide whether they qualify for the next stage.

Four companies submitted expressions of interest, these being Italy’s Terna, France’s RTE, an EdF subsidiary, and two Chinese companies, State Grid of China Corporation (SGCC), and China Southern Power Grid.

Second-round qualifiers will be provided IPTO’s financial details and time to conduct due diligence procedures before they submit their binding offers.

HSBC Bank, Citigroup Global Markets Ltd and NBG Securities are acting as financial advisors, while Rokas is PPC’s legal advisor for the IPTO tender.

PPC was granted permission to stage the IPTO at a general shareholders meeting on July 11. The deadline for non-binding expressions of interest expired yesterday.

A prefered bidder for the IPTO tender will need to be selected by October 31 and the procedure completed by February 28, 2017. Should Greece’s international creditors deem that the IPTO tender is not making satisfactory progress, then a process to full privatize IPTO will be triggered.

Besides the 24 percent offered to strategic investors, the current IPTO privatization plan also entails transferring 51 percent to the Greek State and offering the other 25 percent to investors through the bourse.

 

Highest bidder to secure IPTO’s 24% in fast-moving tender

The assessment of technical and economic credentials submitted by electricity operators interested in acquiring a 24 percent share of IPTO, Greece’s power grid operator, through an international tender whose deadline for first-round non-binding expressions of interest expired yesterday, is expected to be completed swiftly, by the second week of August.

Qualifiers will then be given time to conduct due diligence procedures before they submit their binding offers. The faster the first-round non-binding stage is completed, the more time qualifiers will have for due diligence.

Facing a tight schedule for the bailout-required international tender, the main power utility PPC, controlled by the Greek State with a 51.12 stake, launched the procedure for IPTO, currently a wholly owned PPC subsidiary, just over a fortnight ago.

According to energypress sources, once the strategic investors are through to the tender’s next stage the only criterion at play will be the price they are willing to offer for IPTO’s 24 percent.

All bids, whether coming from companies with EU or non-EU roots, will be treated equally during the second stage.

Four electricity network operators have expressed non-binding expressions of interest in IPTO, PPC has announced, these being Italy’s Terna, France’s RTE, an EdF subsidiary, and two Chinese companies, State Grid of China Corporation (SGCC), and China Southern Power Grid.

At this stage, it is believed that SGCC, which already holds a 25 percent stake in Portuguese energy company REN, will lead the pack of bidders if it decides to push for IPTO’s 24 percent. SGCC had also taken part in a previous attempt to sell 66 percent of IPTO, staged a couple of years ago by Greece’s preceding conservative New Democracy party-led coalition.

At the time, IPTO’s 66 percent was evaluated at just over 900 million euros, while SGCC was reportedly preparing to offer an amount of between 600 million and 800 million euros. Based on these calculations, a 24 percent stake of IPTO is worth 216 million euros. SGCC can be expected to easily make an offer of over 300 million euros, the amount Italy’s Terna had decided to offer for 66 percent of IPTO during the previous sale attempt for the operator.

Conditions have changed over the past two years. SGCC has since become indirectly linked with Terna after acquiring a stake in CDP Reti, an Italian holding company that maintains an equity share in Terna. Also, the Italian banking sector has clearly deteriorated during this period.

France’s RTE is definitely capable of submitting a competitive offer that could rival or outdo any Chinese bid.

China Southern Power Grid, the second Chinese firm to declare a non-binding interest in IPTO, will most probably not take part in the tender’s next stage as, unlike SGCC, it does not have a European presence. If this remains so, China Southern Power Grid will not meet the tender’s criteria. The IPTO tender’s terms state that bidders must be certified European operators. China Southern Power Grid could seek a European partner, but this is considered unlikely.

The two Chinese firms are also currently participating in an Australian tender offering a share of the country’s power grid.

A prefered bidder for the IPTO tender will need to be selected by October 31 and the procedure completed by February 28, 2017. If Greece’s international creditors deem that the IPTO tender is not making satisfactory progress, then a process to full privatize IPTO will be triggered.

Besides the 24 percent offered to strategic investors, the current IPTO privatization plan also entails keeping 51 percent for the Greek State and offering the other 25 percent to investors through the bourse.

 

 

Terna, RTE definite for IPTO tender’s first-stage deadline

Barring unexpected developments, two European power grid operators, Italy’s Terna and France’s RTE, an EdF subsidiary, will submit non-binding expressions of interest for an international tender launched by Greece’s power utility PPC a fortnight ago to sell a 24 percent stake of subsidiary firm IPTO, the power grid operator, to a strategic investor, in line with terms of the country’s third international bailout. Non-binding expressions of interest by are due by tomorrow.

The technical and financial credentials of interested firms will be assessed during this first stage of the tender’s procedures.

Participants who make it through will qualify for the second stage and be provided access to IPTO’s virtual data room so as to conduct their own financial, technical and legal inspections. Other details to be provided to candidate bidders include vendor due diligence reports and bank letter of guarantee guidelines.

A prefered bidder will need to be selected by October 31 and the procedure offering IPTO’s 24 percent share must be completed by February 28, 2017.

The tender’s regulations specify that participating operators must be registered with ENTSO-E, the 42-member European Network of Transmission System Operators.

HSBC Bank, Citigroup and NBG Securities will act as financial advisors.

Terna and RTE, tipped for IPTO 24%, need to resolve issues

Exploratory talks between Greek authorities and strategic investors considering a 24 percent stake in Greece’s power grid operator IPTO have taken a step further now that the sale’s international tender has been officially launched. Given the tight schedule imposed by the country’s creditors, preliminary talks with potential bidders had jumped the gun prior to the tender’s announcement, on Tuesday.

According to sources, officials of Italy’s Terna visited IPTO’s headquarters just days ago. Terna had also expressed an interest in IPTO when Greece’s preceding conservative New Democracy party-led government attempted to sell 66 percent of the operator.

Government officials are convinced Terna will submit a bid in the latest sale effort, a procedure through which IPTO is being split from its parent company PPC, the main power utility. Besides the 24 percent being offered to a strategic investor, a 25 percent share of IPTO will be sold to investors through the bourse and 51 percent will be transferred to the Greek State, which currently holds a 51 percent stake in PPC.

Certain sources contend that the 24 percent stake of IPTO being offered to strategic investors has been specifically customized to match with an older decision reached by Terna’s administration for a 400 million-euro spending limit on IPTO. The Italian company withdrew from the previous IPTO tender in February, 2015, shortly after the Syriza party had been elected to lead a coalition government.

Though Terna’s interest in the latest IPTO tender is considered certain, the company may need to overcome hurdles as a result of the Italian banking crisis, Europe’s latest threat, now surfacing. However, as Terna’s interest is based on a strategic decision to expand its presence in the Balkans, the country’s banking crisis is not expected to influence the decision. But this cannot be ruled out, especially if the Italian banking sector’s issues deepen. Italy’s Deposits and Loans Fund is Terma’s main shareholder.

France’s RTE, an EdF subsidiary, is also keeping a close watch on the IPTO developments. Though the French company is in a better financial state than Terna, European Commission competition regulations could get in its way.

Though the aforementioned Italian and French enterprises rate as the favorites for IPTO’s 24 percent stake, the State Grid of China Corporation (SGCC), which had taken part in the previous IPTO tender, could reemerge.

It has been widely misperceived that SGCC cannot take part as the corporation is a non-EU company. However, SGCC already holds a 25 percent stake in Portuguese energy company REN, acquired in 2012, meaning it can bid for IPTO. Although Chinese firms are generally looking to invest in Greece, SGCC has yet to renew its interest in IPTO.

 

 

Tight schedule for IPTO sale, Terna the likeliest candidate

Italy’s Terna appears to be the most probable candidate for the strategic investor’s role in power grid operator IPTO’s planned split from parent company PPC, the main power utility.

Last night’s ratification, in Greek Parliament, of a multibill carrying additional measures required as part of the effort to complete the first review of the country’s third bailout package, renews the effort to sell IPTO.

The schedule, based on the new law, will be tight, or may even be unrealistic, according to certain pundits. Facing intense time pressure, PPC must need to soon stage a shareholders meeting for approval of the IPTO sale plan, then, one month later, announce an international tender and have selected a prefered strategic investor within five months.

The previous IPTO sale attempt, when an effort was made to sell a 66 percent stake, had lasted nine months without producing binding offers from interested parties. The procedure was then cut short by snap elections.

As for the latest attempt, if the international creditors deem that no substantial progress has been made by October, then the threat of opting for a 100 percent sale of IPTO will reemerge.

The new plan entails selling a 51 percent stake to the Greek stake and 49 percent to private-sector investors, including a strategic investor.

In the previous effort, Italy’s Terna had decided it could offer as much as 400 million euros for IPTO. It withdrew its interest after the Syriza party was elected to power, as the coalition government’s head party, in January, 2015. Even so, Terna has continued to nurture strategic interests in the Balkan region and can be expected to express interest in the latest IPTO tender. The 400 million euro amount it had noted it could invest in IPTO would ensure the Italian operator a stake of between 20 and 24 percent of IPTO, as well as managerial control.

Chinese firm SGCC and Canadian fund PSP, two other investors who had declared an interest in IPTO during the previous effort, do not meet the sale’s prerequisites as they are not certified European operators and, therefore, cannot take part in the new tender. The stance to be adopted by Belgium’s Elia, also present in the previous attempt, remains unknown.