Splitting day-ahead market flawed move, expert warns

An energy ministry proposal for a split of the day-ahead market into two entities is short-sighted, flawed, counter-productive and does not make economic sense, Dr. Alex Papalexopoulos, the architect behind Greece’s target model, has noted in an article for energypress.

As a result of a rush to eliminate CO2 emissions, investment in coal and gas-fired power plants in most regions has plummeted but investments in renewable energy sources have not been enough to fill the gap, Dr. Papalexopoulos noted, adding that strong demand and weak supply fueled the global energy crisis, which began unfolding last autumn.

Gas, coal and oil prices skyrocketed and, in addition to the climate challenge and emerging energy crisis, the war in Ukraine and its impact on natural gas supply has further exacerbated the chaotic situation in global energy markets, Dr. Papalexopoulos pointed out.

Decarbonization policies should be pursued without delay and at a faster pace, but the West needs to adopt an inclusive “all in” technology policy through which concurrent development of all technologies should be pursued, he stressed.

Amid this chaotic energy landscape, the role of wholesale energy markets is now even more crucial, while the temptation to rush big government interventions into the wholesale trade picture without the input of experts is a recipe for disaster, Dr. Papalexopoulos warned.

Splitting wholesale markets makes absolutely no economic sense as this would destroy price signals for demand-side resources and energy efficiency needed to provide system flexibility, Dr. Papalexopoulos explained, adding that such a move would reduce the liquidity of the day-ahead market.

Distorted day-ahead market prices will also create serious inconsistencies in futures markets, Dr. Papalexopoulos noted.

 

Wholesale power price reaches new record level, €466/MWh today

The wholesale electricity market’s day-ahead market price has reached a new record level of 466 euros per MWh for Monday, up from 426 euros per MWh on Friday.

The maximum price has soared to 686 euros, while the minimum price is at 261 euros, demand close to 202 GWh.

Natural gas represents 43.1 percent of the energy mix, followed by renewables (23%), lignite (13%), hydropower (9.5%) and imports (8%).

As for the country’s neighbors, the wholesale electricity price is at 460 euros in Bulgaria and 527 euros in Italy.

 

New electricity market model launched, PPC role pivotal

A new model for the country’s electricity market, intended to contain soaring prices brought about by the energy crisis, comes into effect today with the introduction, as a first step, of price caps in the wholesale market, setting remuneration upper limits for electricity producers of all categories.

A ministerial decision expected imminently, possibly today, will set upper limits of 112 euros per MWh for hydropower facilities, 85 euros per MWh for renewables, 253.98 euros per MWh for natural gas-fueled power stations and 206.71 euros per MWh for lignite-fired power stations. These limits will remain valid for the first one-month period, starting today.

Any discrepancy between these upper limits and the average price of the day-ahead market will be transferred to the Energy Transition Fund for subsidy support.

The government hopes its plan will subdue electricity prices to levels of between 20 and 30 percent higher than last summer.

Calculations for a finalized electricity price per KWh, following the deduction of subsidies, will be based on state-controlled power utility PPC’s new price list. The government, guided by the utility’s new price list, will set a single price for all suppliers. The level at which PPC will set the bar remains to be seen. The company’s market dominance will set a standard for the entire market.

Though not yet confirmed, it is believed PPC will announce, by July 10, a nominal price of between 460 and 490 euros per MWh, meaning 46-49 cents per KWh.

PPC and all other players are abandoning a 30 percent discount offered to customers. PPC’s subsidies for hydropower and lignite units will now end up with the State, which is assuming the discount-policy role.

Wholesale price clause suspension not instant relief

The suspension of a wholesale electricity price clause included in power bills will not bring about instant price relief for consumers as suppliers are continuing to take on new costs that threaten to eliminate any prospective price reductions ahead of increased state subsidy support.

New regulations will require electricity suppliers to inform households and businesses on prices they will charge two months in advance. On July 10, when this pricing rule will be activated, suppliers will need to announce their price per KWh to be charged two months later, on September 10. On August 10, suppliers will need to do the same for their price on October 10, and so on.

Power utility PPC, the retail market’s dominant player, will play an influential role in market price levels. If the utility subdues prices levels, rival players will follow suit in an effort to their maintain market shares or possibly increase them.

Electricity consumers charged fixed tariffs – they represent a small percentage of the market – will, from now on, need to pay a penalty fee should they leave their supplier prior to the expiration of agreement.

Uncertainty will remain prevalent despite the new rules. At this stage, there is no model offering electricity price forecasts two month down the road, which is a problem given the market volatility. A single announcement by Russian president Vladimir Putin, or a European Commission package of sanctions against Russia, is enough to send natural gas prices flying and, as a result, lead to sharp wholesale electricity price increases.

 

RAE report step towards wholesale clause suspension

RAE, the Regulatory Authority for Energy, has delivered a report on details concerning the planned suspension, for a year, of a wholesale price-related adjustment clause included in electricity bills by suppliers. The RAE report is the first step towards the suspension of the clause, planned as of July 1.

The energy ministry, the recipient of the report, will, as the sector authority, need to make a series of revisions to current electricity supply rules and, by extension, electricity bills, for the period during which wholesale electricity market measures will remain valid.

In practice, the RAE proposal means that the wholesale price-related adjustment clause will be removed from all existing tariffs that are currently not fixed.

Instead, a single charge for household and business category electricity will be introduced as part of the government’s wholesale market measures.

As of July 1, when the wholesale price-related adjustment clause is planned to be suspended, electricity suppliers will be able to offer three different types of tariffs – fixed, flexible with upper and lower limits, as well as flexible without upper and lower limits.

Existing electricity-bill customer agreements with wholesale price adjustment clauses will be converted to offer flexible price agreements, with our without limits, depending on the choice made by customers.

Subsidies will remain a key tool in the government’s effort to subdue energy costs for consumers.

Tool sought to stop producer electricity market manipulation

RAE, the Regulatory Authority for Energy, is looking to introduce a mechanism designed to detect and stop, preventively, actions by electricity producers intended to manipulate the market.

This prospective mechanism is expected to identify the actions of players big enough to influence the market and will also be used for any future energy crises with the aim of swiftly returning any windfall profits earned by electricity producers to the market.

RAE has commissioned ECCO International, a global energy consulting and software company headed by Dr. Alex Papalexopoulos, for a related study examining possible ways in which such a safety tool could be implemented in wholesale electricity markets.

Such preventive tools already exist in the US, Canada and Australia, countries with developed energy markets.

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.