Subsidies remain key tool to counter steep energy prices

Electricity bill subsidies will remain the basic tool in the government’s policy seeking to offer households and businesses protection against the energy crisis’ exorbitant electricity prices, it has been decided at a Brussels meeting.

DG Energy and DG Comp authorities, in talks with Greek government officials, did not permit wholesale market measures for electricity purchases by suppliers at levels below the System Marginal Price, a lower cost that would then have been passed on to consumers.

Brussels officials had expressed hesitation from earlier on for a two-pronged solution entailing wholesale and retail market intervention as the European Commission wanted to avoid, at all costs, any impact on the target model, Europe’s unified electricity market.

As a result, energy minister Kostas Skrekas and the ministry’s secretary-general Alexandra Sdoukou arrived in Brussels yesterday with a simpler alternative plan that was shaped to be more compatible with the European Commission’s sensitivities.

 

Swift Brussels approval sought for energy market measures

The energy ministry’s leadership will seek swift approval of a national plan for two-pronged intervention in the wholesale and retail electricity markets, intended to subdue energy prices, at a meeting with European Commission officials in Brussels today.

Energy minister Kostas Skrekas and the ministry’s secretary-general Alexandra Sdoukou will discuss the country’s plan with DG Energy technocrats. The government has announced the measures will be implemented July 1.

The measures include a suspension of wholesale electricity price adjustment clauses included in retail electricity bills as well as a wholesale price-cap mechanism.

These measures, however, will not necessarily keep tariffs steady. On the contrary, suppliers will, after informing customers, be able to adjust kilowatt hour prices based on their wholesale electricity purchase costs.

According to sources, Greece’s plan stands a strong chance of being approved by the European Commission as it essentially does not affect the target model and also includes a taxation measure for windfall profits earned by electricity producers, a measure repeatedly proposed by the European Commission.

Ministry to suspend wholesale adjustment clauses in bills

The government appears determined to push through with an energy ministry decision suspending wholesale electricity price adjustment clauses included in retail electricity bills as of July 1 and for as long as measures – in both markets – are deemed necessary.

Even so, details of the plan remain unclear. The government aims to implement a new electricity price-adjusting mechanism on July 1. Its fundamentals involve setting a remuneration cap for electricity producers and reducing wholesale electricity price levels for suppliers.

There has been confusion as to whether the government will suspend or cancel existing wholesale electricity price adjustment clauses.

In comments to energypress, leading energy ministry officials supported that energy minister Kostas Skrekas plans to deliver a draft bill suspending wholesale electricity price adjustment clauses, while also introducing a wholesale price-cap mechanism.

These measures, however, will not necessarily keep tariffs steady. On the contrary, suppliers will, after informing customers, be able to adjust kilowatt hour prices based on their wholesale electricity purchase costs, it is understood.

 

Electricity market emergency plan presented to Brussels

Energy ministry officials will today present, for the first time, the government’s package of energy-crisis measures to the European Commission’s Directorate-General for Energy.

Brussels’ approval of the package is needed despite the Greek government’s claims that the measures, intended to subdue energy market prices, are within the framework of the European Commission’s RePowerEU plan, also aiming to combat the crisis.

Although details of the Greek package are still in progress, its basics appear to have been finalized.

The day-ahead market, according to the plan, will continue to operate normally, and, as a result, electricity import and export prices will not be impacted. However, the clearing price formula will be revised so that each electricity production technology (lignite, natural gas, hydropower, renewables) is paid for output based on its respective variable cost plus a fair profit, rather than the system marginal price.

According to the plan, electricity suppliers will purchase energy from the domestic market at the lowest prices resulting from the new clearing price formula.

In addition, a wholesale price adjustment clause included in electricity bills will be suspended for the entire duration of emergency measures.

The government wants to avoid characterizing as a tax a plan intended to retroactively collect 90 percent of excess profits earned by electricity producers in recent months. If classified as a retroactive tax, the measure could end up being challenged in court if deemed to be unlawful.

With this danger in mind, the government is presenting its tax plan as a universal fee for solidarity contributions or solidarity dividends.

The government aims to implement its energy-crisis emergency plan by July 1. Swift progress in Athens’ negotiations with Brussels will be needed if this target date is to be achieved.

 

Retail, wholesale measures for crisis’ new support package

The government’s latest energy-crisis support measures, whose fundamentals were announced yesterday by Prime Minister Kyriakos Mitsotakis, will take immediate effect, beginning with subsidies for consumption in May and June. Details are expected to be announced by government officials early today.

These subsidies, according to sources, will be combined with a price cap in the wholesale electricity market as of July, as negotiations with the European Commission are ongoing and Brussels approval is needed, as was the case with Spain and Portugal.

The new subsidies are expected to absorb approximately 50 percent of electricity cost increases for households, while, combined with July’s anticipated price cap in the wholesale market, the support package will absorb between 70 and 80 percent of energy cost increases for households, businesses and farmers, according to government calculations.

The support package for households will, as has been the case over the past few months, continue subsidizing up to 300 kilowatt hours per month, but subsidy levels will fall from 72 euros a month in April to a monthly level of between 55 and 60 euros, which, in terms of energy-cost increase absorption, works out to the same percentage as the average electricity price ended lower in April compared to the previous month.

Based on this reasoning, May and June subsidies for businesses will also be slightly lower than the level of 130 euros per MWh offered in April.

The new support package will also subsidize monthly consumption exceeding 300 KWh at a rate of 10 cents per KWh for all households, not just principle residencies, as was the case with previous packages.

The wholesale electricity market price cap to be implemented is expected to keep the average price at a level of approximately 100 euros per MWh.

 

Spain, Portugal price cap agreement to guide Greek plan

Spain and Portugal’s agreement with the European Commission for the implementation of a temporary cap of 50 euros per MWh on reference prices for natural gas and coal used by power plants, effectively detaching wholesale electricity market prices from the cost of these generation sources, promises to serve as a guide for Greece’s negotiations with Brussels for intervention in the country’s wholesale electricity market.

Spain and Portugal had requested a temporary cap on reference prices of 30 euros per MWh, for one year.

The price of electricity in Spain and Portugal will be the same as that applicable for transactions with the rest of the EU, via France, El Pais reported.

The limited capacity of the Iberian Peninsula’s electricity grid interconnections with France will restrict electricity exports from Spain and Portugal. Otherwise, lower electricity prices resulting from the temporary cap would have prompted a sharp rise in electricity exports from Spain and Portugal.

Though the Greek government is on standby for a European price-cap solution to the energy crisis, Athens has already begun regulatory and legislative preparations for domestic market intervention.

EVIKEN: Wholesale market price control urgently needed

Regulatory intervention is urgently needed to control prices in the wholesale electricity market, EVIKEN, the Association of Industrial Energy Consumers, has noted in a letter forwarded to RAE, the Regulatory Authority for Energy.

Price-control intervention in Greece’s electricity market is needed as, besides the extraordinary conditions, the market is also pressured by a series of pending revisions, EVIKEN noted.

Balancing market redistribution has yet to be carried out, while the RES sector must still take on full balancing responsibility and, in addition, bilateral contracts need to be established with natural gas-fueled power stations, the association noted.

EVIKEN reiterated that specific strategies being pursued in the supply market are resulting in a full transfer of wholesale market price risk to retail tariffs.

This, combined with the absence of a futures market and the reluctance of producers, including power utility PPC, to offer a minimum percentage of their production portfolio through bilateral contracts – all in the absence of basic competition – results in all energy production being traded through the energy exchange, whose prices are now being formed by producers without any risk entailed, EVIKEN noted.

 

RAE seeks to limit or abolish bilateral electricity contract restrictions

RAE, the Regulatory Authority for Energy, is moving to limit, or even abolish, restrictions imposed on bilateral physical delivery contracts in Greece’s electricity market as a step towards further liberating the market for price de-escalation.

RAE, in a letter forwarded to the country’s energy exchange, has requested a study examining all scenarios that would further facilitate bilateral physical delivery contracts.

The energy exchange intends to have completed its study in three months so that RAE can proceed with related legislative initiatives.

The issue of whether bilateral contracts in Greece’s wholesale electricity market could contribute to a de-escalation of electricity prices in the retail market has preoccupied local authorities for quite some time.

In recent months, wholesale electricity market price increases in Greece have been almost fully passed on to the retail market, contravening the pattern of more mature European markets.

Major RES input lowers electricity price to near zero Sunday afternoon

Greatly increased renewable energy contributions – covering over 80 percent of demand – during yesterday’s weekend siesta hours of 2pm to 5pm pushed down the wholesale electricity price to virtually zero, or 0.09 euros per MWh.

RES input reached approximately 5 GW (wind and solar energy units), while demand was limited to just over 6 GW, enabling authorities to withdraw from the market lignite and gas-fired power stations.

On the same day, when RES input eventually fell and gas-fired power station contributions were brought back into the grid, the electricity price level rebounded to 283 euros per MWh by the evening.

The wholesale electricity price averaged 168.22 euros per MWh on Sunday, a 27 percent reduction compared to Saturday.

Similar price fluctuations were also recorded in other parts of Europe over the weekend. Negative prices were recorded in Germany and the Netherlands, at -2.49 euros per MWh, and they were even lower in Belgium, at -17.97 euros per MWh. These negative prices essentially mean that consumers are paid to use electricity.

Today, electricity market conditions are back to the ongoing energy crisis’ normal levels. The average wholesale electricity price is at 243.08 euros per MWh, up 44.5 percent compared to yesterday, despite RES input representing 51.1 percent of the energy mix.

Authority working on retail electricity market monitoring tool, expected April

RAE, the Regulatory Authority for Energy, is developing a market monitoring tool for the retail electricity market, to enable more effective monitoring of actions by suppliers.

According to sources, this mechanism, to monitor the pricing policies of electricity suppliers, including their discount policies, as well as clause activation, should be ready by April.

RAE officials informed energy minister Kostas Skrekas, at a recent meeting, on the details and progress of the retail market monitoring tool currently being developed.

During the session, the RAE officials also updated the energy minister on the wholesale electricity market’s course, basing their findings on a monitoring tool designed for the wholesale market.

According to sources, no attempts, by producers, at market manipulation or other distortions have been identified to date. The reports presented to the minister covered the month of January.

French price containment proposal at EU council meeting

A French proposal to be tabled at a council meeting of European energy ministers this Thursday is expected to call for RES and nuclear energy windfall profits to be directly returned to the market, without passing through any operator, as is the case in Greece with RES market operator DAPEEP, to help subdue elevated wholesale electricity prices.

Energy authorities of Europe’s south, including Greek energy minister Kostas Skrekas, will be up against the firm belief of ACER, Europe’s Agency for the Cooperation of Energy Regulators, and Europe’s north that the single electricity market is functioning properly and does not require reforms, despite the exorbitant wholesale market price levels.

The prolonged crisis and, until now, apparent ineffectiveness of EU tools to remedy the situation do not appear to have convinced Europe’s north and the European Commission of the need for any revisions.

Europe’s north sees no need for change as it is backed by the security of multiple grid interconnections, a rich energy mix, storage facilities, and better functioning energy exchange markets, and, as a result, has aligned with the views of ACER.

A latest report by this agency on wholesale electricity prices, to be discussed at Thursday’s meeting, sees no abuse of dominant positions or room for improved market functioning.

Bulgaria power imports lower wholesale price, down 12.28%

Wholesale electricity prices in the Greek energy exchange’s day-ahead market have plunged by 12.28 percent, driven down by electricity imports from Bulgaria, following a continual price surge over five consecutive days.

Even so, Greece’s wholesale electricity prices levels are the third highest in Europe. Day-ahead market transactions in today’s day-ahead market will average 250.22 euros per MWh, down from 285.24 euros per MWh a day earlier.

Significant price reductions were also registered throughout Europe, suggesting that a de-escalation process could now be underway following alarm in markets prompted by a sharp drop in temperatures in central and western Europe, as well as windless conditions that restricted wind energy production.

Winds have now lifted, offering increased wind energy contributions to the EU energy mix, which has led to big price reductions in day-ahead markets. Wholesale electricity prices in Belgium and Germany fell by 10 and 22 percent, respectively, and dropped nearly 9 percent in France and by more than 12 percent in Italy.

The plunge in Bulgaria reached 22 percent to 217.25 euros per MWh. This sharp drop in the neighboring market has helped reduce the overall cost of Greece’s energy mix as a result of lower-cost electricity imports from Bulgaria.

For today’s trading, electricity imports constitute 13.42 percent of Greece’s energy mix, renewable energy accounts for 28.31 percent, and natural gas-fueled generation represents 47.24 percent of the mix.

 

 

Balancing cost leap the latest concern for suppliers, industry

A sharp rise in balancing market costs, which have reached 20 euros per MWh, comes as an additional headache for suppliers and the industrial sector, already facing exorbitant wholesale electricity costs amid the energy crisis.

Balancing costs have risen since the end of September, from 12.25 euros per MWh to 20.04 euros per MWh for the week covering October 11 to 17.

This upward trajectory further increases the cost of electricity for industrial consumers and non-vertically integrated suppliers at a time when market clearing prices have skyrocketed.

On Monday, when renewable energy dominated grid input with a 48 percent share of the country’s energy mix, the market clearing price eased to 189.30 euros per MWh before bouncing back up to 218.06 euros per MWh yesterday and 205.6 euros per MWh today. The average wholesale price for October is currently at 200.3 euros per MWh.

Should the balancing cost settle at the currently heightened level of approximately 20 euros per MWh, domestic industrial players will face even greater sustainability challenges, while retail electricity prices will rise further.

Suppliers and industrial enterprises are troubled as, under the current energy market conditions, there is no leeway for an increase in the balancing cost, which, even at previous lower levels of around 10 euros per MWh, was one of Europe’s highest.

 

 

Electricity suppliers reshaping pricing policies, wholesale cost up to new high

The ongoing surge in wholesale electricity prices, now over 204 euros per MWh, a new record level, has astonished even the most seasoned company managers.

“The day-ahead market price surge to such levels has prompted great uncertainty as to what lies ahead,” one highly ranked official at a vertically integrated energy group told energypress

Responding to the wholesale market’s latest record-breaking level, an official at another energy group active in production and supply told energypress that suppliers are now recalculating their pricing policies from scratch.

Without a doubt, the electricity supply market has entered unchartered territory as the upward trajectory in prices, sparked by an unfavorable combination in international markets, appears to be unstoppable.

Company officials have admitted they have no choice but to pass on the majority of the price increase to their customers.

Some companies are cutting back on big discount offers extended to attract customers.

 

 

 

Wholesale electricity prices ease as RES input increases

Wholesale electricity price levels are expected to drop to an average of 130 euros per MWh in the day-ahead market today, down 20 percent compared to yesterday, a de-escalation attributed to increased RES input, the energy exchange has informed.

Stronger winds have been forecast, increasing the generation potential of wind energy units.

The maximum price in the day-ahead market today is expected to reach 186 euros per MWh and the minimum price will be 92 euros per MWh.

Natural gas-fired power stations are scheduled to contribute the lion’s share, 40 percent, of the day’s electricity needs, renewable energy sources will contribute 24 percent, electricity imports and lignite-fired power stations will each provide 15 percent, while hydropower facilities will contribute 6 percent.

Electricity demand for the today is forecast to drop by 2.5 percent compared to yesterday.

 

 

Heatwave pushes up wholesale prices to over €100/MWh once again

The latest rise in temperatures, prompting further heatwave conditions around Greece, is impacting the wholesale electricity market as the average clearing price in the day-ahead market has risen again to levels of over 100 euros per MWh, following days of more subdued levels, according to energy exchange data.

The average clearing price for today is up to 103.8 euros per MWh, up from yesterday’s level of 93.47 euros per MWh and Sunday’s level of 75.34 euros per MWh.

According to the day-ahead market figures, overall electricity generation today is planned to reach 167,437,017 MWh, with lignite-fired power stations covering just 11,172 MWh, natural gas-fired power stations providing 86,541,739 MWh, hydropower facilities generating 11,829 MWh and all other RES units providing 57,894,278 MWh. Electricity imports are planned to reach 16,159,231 MWh.

Today’s electricity demand is expected to peak at 12.30pm, reaching 8,580 MW, according to data provided by IPTO, the power grid operator.

Three of power utility PPC’s lignite-fired power stations, Agios Dimitrios III, Megalopoli IV and Meliti, will be brought into action today, while five of the utility’s natural gas-fired power stations, Aliveri V, Lavrio IV and V, Komotini and Megalopoli V, will also be mobilized, along with gas-fired units operated by the independent players Heron, ENTHES, Elpedison (Thisvi), Protergia and Korinthos Power.

Target model restrictions to be lifted, according to reform plan

Existing restrictions in the country’s wholesale electricity markets, or target model, will gradually be lifted over the next year or two, at the latest, according to a Market Reform Plan submitted by the Greek government to the European Commission.

The plan to is intended to determine whether the country’s natural gas-fired electricity producers can fully recover costs in a liberalized market.

Greek officials are seeking to prove that, once all wholesale market restrictions have been lifted, natural gas-fired power stations will need Brussels-approved support mechanisms in the form of a strategic reserve, until the end of 2022, and a permanent Capacity Remuneration Mechanism (CRM) from 2023 onwards.

The Greek government forwarded a draft of the country’s Market Reform Plan to the European Commission in mid-June, while Brussels has since responded with an initial set of questions seeking clarification.

The first wholesale electricity market restriction expected to be lifted, probably within the next few months, concerns a 20 percent limit on futures contracts established by suppliers with a market share exceeding 4 percent.

Following up, officials are then expected to lift upper and lower limits imposed on offers.

 

Suppliers request revisions to alleviate cash-flow pressure

Electricity suppliers, facing steep and lasting wholesale electricity cost increases, which have resulted in cash-flow issues, are seeking revisions that could alleviate the pressure, in recommendations submitted to RAE, the Regulatory Authority for Energy.

Rising wholesale electricity costs have created major cash flow problems for non-vertically integrated electricity suppliers as they are being forced to pay increasing amounts for electricity and related guarantees ahead of payments, to them, by consumers.

Consumers have also felt the pinch as suppliers, seeking protection against the rising wholesale prices, have activated wholesale cost-related clauses incorporated into their supply agreements.

Solutions for both sides seem elusive at present as market forecasts do not see any price de-escalation ahead, only further increases.

In one of the recommendations forwarded to RAE, suppliers called for their cash collateral payments made to the Hellenic Energy Exchange, as a form of guarantee, to be replaced by letters of guarantee representing equivalent amounts.

Suppliers have also requested a reexamination of the clearing price and payment formula in the day-ahead and intraday markets.

They also requested extensions for surcharge payments to power grid operator IPTO and the distribution network operator DEDDIE/HEDNO.

 

Combination of events pushing electricity costs higher

Higher-priced electricity, globally, may have arrived to stay given the combination of events such as the sudden rebound of the global economy, which is intensifying demand for fuels, metals and electricity, as well as the European Green Deal, new climate change laws and more ambitious carbon neutrality targets, pushing up CO2 emission right prices.

In Greece, wholesale electricity prices have risen sharply in recent days, to levels above 100 euros per MWh, the heatwave conditions exacerbating the situation. CO2 emission right prices have reached 55 euros per ton, from 32 euros per ton at the beginning of the year. The market clearing price for June is estimated to be 79.33 euros per MWh from 59 euros per MWh in December.

Major electricity suppliers in the Greek market expect the wholesale price to settle at 83-84 euros per MWh in the next month before rising to 85 euros per MWh over the next few months, and reaching 92 euros per MWh towards the end of the year.

Wholesale price clauses included by suppliers in their agreements with consumers for protection against higher prices are well below the aforementioned projections, meaning consumers should soon expect considerably higher electricity costs if these forecasts prove to be accurate.

Even if eventual electricity cost hikes turn out to be milder, RAE, the Regulatory Authority for Energy, and the energy ministry will be bracing for a bigger wave of consumer complaints.

 

Clearing price hits record level, averaging €128.15/MWh

The clearing price at the energy exchange will exceed 130 euros per MWh for 15 hours today, pushing the average price to a record level of 128.15 euros per MWh.

Driven by the heatwave, electricity demand will climb to a 9,044-MW peak at 12.30pm, according to a forecast by power grid operator IPTO.

Four lignite-fired power stations, power utility PPC’s Agios Dimitrios I, II and IV and Meliti, have been recruited to support the grid’s needs today.

In addition, all of the country’s natural gas-fired power stations – PPC’s Aliveri V, Lavrio IV and V, Komotini and Megalopoli V, as well as the independent units Heron, Elpedison Thessaloniki, Elpedison Thisvi, Protergia and Korinthos Power – are expected to operate today.

Overall electricity demand is expected to reach 175,803 MWh. RES output is seen reaching 30,565 MWh, natural gas-fired power station generation should amount to 115,868 MWh, and hydropower production is expected to total 12,824 MWh.

Market Reform Plan draft at EC, strategic reserve by end of year

A draft of the country’s Market Reform Plan, whose finalized version will carry target model market revisions for Greece, has been forwarded, by the energy ministry, to the European Commission for consultation between the two sides, expected to begin without delay.

The energy ministry and Brussels have also agreed on a timeline concerning Athens’ submission and examination of a proposal for a Strategic Reserve Mechanism, needed to ensure electricity supply security through the market’s transition and reforms.

Based on this schedule, the two sides will strive to have finalized the Strategic Reserve Mechanism by the end of the year, so that it may be launched in early 2022.

Brussels’ Directorate-General for Competition plans to begin its consultation for the Market Reform Plan in July. The procedure is expected to last four months, before target model market revisions are implemented.

As part of the overall effort, Pantelis Kapros, Professor of Energy Economics at the National Technical University of Athens, conducted a study – commissioned by RAE, the Regulatory Authority for Energy – serving as a road map for the Greek wholesale electricity market’s revisions, the objective being to fine-tune the target model.

Power grid operator IPTO will concurrently conduct a new adequacy report, including reliability standards, to accompany the Greek plan.

RAE working on common clause policy for suppliers

Following up on its intervention against power utility PPC’s recent decision to trigger a CO2 emission price-related clause for medium and low-voltage consumers, RAE, the Regulatory Authority for Energy, has now begun questioning independent suppliers over their adoption of a wholesale price-related clause.

The authority, to concurrently investigate the legality of these initiatives, has asked suppliers to forward related data concerning all of 2020 and 2021, up to the present, by the beginning of next week as part of its effort to establish a common clause policy for all suppliers that can clarify the price-comparing ability of consumers.

RAE aims to announce a new set of rules on electricity bill clauses in September, following public consultation, possibly in July.

Once RAE has examined market data expected from independent suppliers, it intends to hold a series of talks with them as of June 21.

PPC, which, just days ago, was asked by RAE to replace its CO2 price-related clause with one linked to wholesale price levels, is doing so, announcing it will also implement a 30 percent discount as of August 5 to offset, as much as possible, a price rise anticipated as a result of its adoption of the wholesale price clause.

PPC adopting wholesale market clause along with 30% discount

Power utility PPC is preparing to replace its CO2 emission right price-related clause with one linked to wholesale electricity market price levels, which, combined with a 30 percent discount, to be applied as an offsetting tool, is ultimately expected to result in a slight overall reduction in electricity bill costs for consumers.

PPC’s new pricing system, set to be implemented on August 5, was adopted following pressure from RAE, the Regulatory Authority for Energy, in its effort to enhance the price-comparing ability of consumers.

Until now, PPC has been the only supplier using a CO2-related clause in its pricing system. All other suppliers have incorporated a wholesale market-related clause into their supply agreements, as protection against increased wholesale costs.

The power utility triggered its CO2-related clause in May in response to rallying CO2 emission right prices, which resulted in electricity bill increases of between 5 and 6 percent for consumers.

This percentage increase in the cost of PPC’s electricity bills is expected to be lowered as a result of the switch to a wholesale market clause and the accompanying 30 percent discount.

RAE scrutinizing greater lignite use, IPTO may need to clarify

RAE, the Regulatory Authority for Energy, is considering to seek clarification from power grid operator IPTO on a series of electricity market issues, including differing formations adopted for the day-ahead and ISP markets.

A first presentation, last week, of the target model’s new wholesale market, energy exchange market results and the energy mix has shown an increase in the use of lignite-fired power stations, despite their higher cost.

Power utility PPC’s lignite-fired power stations are still deemed necessary for electricity supply security, even when capacity levels are sufficient, to counter instability issues at the grid’s northern section, where interconnections facilitate electricity exports.

The use of lignite-fired power stations, such as Agios Dimitrios, Megalopoli IV and Meliti, despite the higher cost of CO2 emission rights, has significantly increased energy costs for suppliers and industry.

Also, when IPTO issues grid distribution orders to lignite-fired power stations, the grid-contribution programs of other units are consequently canceled out and remunerated by the energy exchange, even for energy amounts not contributed to the grid.

Meanwhile, lignite-fired power stations are remunerated through the balancing market at price levels that usually exceed 100 euros per MWh.

RAE’s intervention is intended to ensure the electricity market’s smooth functioning and efficiency, for the benefit of participants and consumers.

Medium-voltage suppliers seek higher-priced deal revisions

A sharp rise in medium-voltage energy costs over recent times, resulting from higher wholesale prices, threatens to damage the competitiveness of Greek manufacturers, Antonis Kontoleon, president of EVIKEN, the Association of Industrial Energy Consumers, has told energypress.

Rallying CO2 emission right prices as well as persistently higher prices in the day-ahead and balancing markets have prompted electricity suppliers to seek revised medium-voltage agreements as protection against loss-incurring sales.

Electricity suppliers, maintaining business to business agreements with medium-voltage consumers have increased – by 20 percent compared to just recently – their number of requests forwarded for new supply agreements.

More crucially, suppliers are asking their customers to accept upward price revisions.

In many cases, suppliers have forwarded letters to customers informing that they will no longer be able to service existing supply agreements unless prices per KWh are raised.

Low-voltage consumers also face increased electricity bill costs following the activation, by suppliers, of cost-protection clauses.

Independent suppliers have activated wholesale price-related clauses, incorporated in their supply agreements, while power utility PPC has triggered, for the first time, a CO2 emission rights cost-related clause.

RAE, the Regulatory Authority for Energy, has summoned PPC’s administration to offer an explanation on this decision, at a meeting today. The authority is also expected to soon summon independent suppliers.

Strict schedule for Crete target model transition plan

The European Commission has offered preliminary approval, still unofficial, of a Greek proposal concerning a transitional framework for Crete’s electricity grid link with target model markets.

This development will now enable RAE, the Regulatory Authority for Energy, to conduct public consultation for a temporary plan concerning the island’s participation in the target model’s wholesale markets.

RAE is expected to begin the public consultation procedure this week, sources said. It will feature a strict road map for the model’s implementation, from forthcoming steps all the way to legislation.

The plan’s framework will include two alternative methods for the island’s electricity supply transactions through a small-scale interconnection, with the Peloponnese.

The solution to be selected will greatly depend on the results of the public consultation process.

As previously reported by energypress, a transitional framework is necessary as Crete’s electricity needs will only be partially covered, at a level of about 30 percent, through the small-scale interconnection.

The framework will expire once the island’s full-scale grid interconnection, all the way to Athens, begins operating in 2023.

Consumers returning to PPC, led by wholesale-linked hikes

Higher wholesale electricity prices, prompting independent suppliers to activate wholesale-cost clauses included in their supply agreements to avoid losses, are tightening up the market by leading disappointed consumers back to the power utility PPC, a clear regression in the effort to establish a broader, more competitive field of players, latest data has indicated.

Consumers opting to leave independent suppliers and return to PPC rose by 56 percent in the first quarter of 2021 compared to the equivalent period a year earlier, market data obtained by energypress has shown.

The number of consumers leaving independent suppliers for any other supplier increased by approximately 40 percent in the first quarter of 2020, the data showed.

This increase in consumer returns to PPC is expected to be reflected in forthcoming market-share data, market officials believe.

Last year, the wholesale market price, represented, at the time, as the system marginal price, ended April last year at 38.02 euros per MWh, whereas this year, in the form of the recently launched target model’s day-ahead market, the wholesale price in April has exceeded 63 euros per MWh.

Increased CO2 emission right costs and elevated TTF and Brent prices are factors that have driven wholesale electricity prices higher. So, too, are higher balancing costs, currently more than double levels of previous years.

Wholesale electricity prices for the next twelve months are seen averaging 89 euros per MWh in the low-voltage category and 79-80 euros per MWh in the medium-voltage category.

PPC, which has never achieved its commitment to lower its market share to less than 50 percent, is offering customers significant discounts at below cost, and, as a result, hampering the market liberalization process and further narrowing the profit margins of independent suppliers, a prominent market official has told energypress.

RAE, the Regulatory Authority for Energy, has the authority and responsibility to take action against suppliers selling electricity at  below cost and protect consumers against misleading offers, the official added.

Wholesale electricity cost up 8% in 1Q, surcharges double

The cost of wholesale electricity averaged 65.412 euros per MWh in the first quarter of 2021, up 8 percent compared to the equivalent period a year earlier, when the level averaged 60.67 euros per MWh, data provided by power grid operator IPTO has shown.

It should be pointed out that a direct price comparison of all components making up wholesale cost during these two quarters is not possible as, during this time, the structure of the wholesale electricity market changed from a mandatory pool system to the target model.

For example, a minimum RES-supporting surcharge burdening wholesale costs by an average of 3.4 euros per MWh during the first quarter last year has since been abolished. Also, the market-clearing price fell to 0.72 euros per MWh in the first quarter from 2.11 euros per MWh in the equivalent period a year earlier.

Even so, the reduction in these costs was outweighed by the increase in wholesale electricity prices. The total cost in the day-ahead and intraday markets averaged 55.17 euros per MWh in the first quarter this year, compared to last year’s average cost of 50.39 euros per MWh in the mandatory pool.

Surcharge costs also increased, averaging 9.53 euros per MWh in the first quarter this year, double the level of 4.78 euros per MWh a year earlier.

Particularly high prices registered late in 2020, during the early days of the target model launch, have eased so far this year. Last November and December, surcharge costs reached 17 and 16.09 euros, respectively.

Electricity consumption fell by 6 percent in the first quarter this year, compared to a year earlier, to 12.39 TWh from 13.175 TWh, as a result of lockdown measures amid the pandemic.