Suppliers unimpressed by plan ending PPC lignite monopoly

Independent electricity suppliers have remained unimpressed by measures taken to end stare-controlled power utility PPC’s exclusive access to lignite, noting resulting lignite-generated electricity amounts offered to third parties are too small to bring about changes to competition.

The country’s independent suppliers had until yesterday to respond to a 15-question questionnaire forwarded by the European Commission as part of a market test on the effectiveness of the measures, recently agreed on between Brussels and new energy minister Kostas Skrekas.

Certain respondents explained that low-priced lignite electricity purchases, even at levels well below day-ahead market price levels, would not offer benefits as they cannot offset extremely higher wholesale electricity prices, pushed up by increased balancing market costs.

Some of the vertically integrated suppliers, not facing problems by the wholesale price shifts, noted the measures would end the prospects of a futures market operating at the energy exchange any time soon.

RAE wants measure of balancing market distortion cost

RAE, the Regulatory Authority for Energy, has requested power grid operator IPTO to calculate the financial impact of balancing market distortion costs since November’s launch of new target model markets.

RAE has since decided to impose restrictions on balancing market offers. These are expected to be published in the government gazette today or tomorrow, enabling their implementation three days after the date of publication.

RAE estimates it will have implemented the balancing market restrictions by the end of this week.

It remains to be seen if RAE’s request towards IPTO for a measure of the higher balancing market costs incurred by suppliers will result in retroactive returns for affected parties dating back to the early-November launch of the target model.

Non-vertically integrated electricity suppliers, severely impacted by the increased balancing market costs that resulted in higher wholesale market prices, are demanding retroactive rebates.

PPC to hold back on CO2 cost clause until at least March 31

Power utility PPC, facing rising CO2 emission costs, will not activate a related clause included in low-voltage supply agreements for protection until at least March 31, energypress sources have informed.

Otherwise, the overwhelming majority of the country’s households would soon be subject to significant electricity cost increases as CO2 emission costs have been on the rise over the past four months or so.

State-controlled PPC’s low-voltage supply agreements have included a CO2 emission clause since November 1, 2019.

Yesterday, carbon emission futures were priced at 32.78 euros per ton, slightly below a level of 35.14 euros per ton in mid-January.

CO2 emission costs have risen consistently since first hitting levels of 29 euros per ton in November, 2020.

According to recent forecasts by ICIS, specializing in commodity pricing, the upward trajectory of carbon emission costs will continue over the next three years, averaging 39.24 euros per ton in 2021, before skyrocketing to levels of 46 euros per ton in 2022 and 50 euros per ton in 2023.

PPC’s CO2-cost clause has already been activated for its medium and high-voltage supply.

The corporation plans to reexamine its CO2 clause freeze for low-voltage consumers beyond March 31.

Contrary to PPC, independent suppliers have incorporated wholesale market price clauses, not CO2 emission cost clauses, into their supply agreements.

Independent suppliers have activated their clauses as a result of higher balancing market costs. Their low-voltage consumers have consequently faced electricity bill increases ranging from 7 to 30 percent.

Consumers paying the price for balancing market turbulence

Low and medium-voltage consumers – households, businesses, small-scale producers and industrial producers – are paying the price for the target model’s persisting market turbulence that has led to higher wholesale prices, especially in the balancing market, nearly three months after the launch of new markets.

Interventions made by authorities have yet to fully resolve issues and offer market stability.

Additional costs have been passed on to consumers despite no official price-hike announcements by electricity suppliers.

In the medium-voltage category, prices have risen to levels of between 67 and 69 euros per MWh from 59 to 61 euros per MWh prior to November’s launch of target model markets, introduced as a step towards harmonizing Greece’s market with EU markets.

The market turbulence has also overwhelmed consumers in the low-voltage category, where prices have risen consistently.

With the exception of the power utility PPC, whose prices have remained steady as the company’s supply contracts do not include wholesale market-related clauses, independent suppliers have passed on their elevated electricity purchasing costs to consumers through higher tariff rates. Most independent suppliers include wholesale market clauses in their supply agreements.

Making matters more troubling and confusing for consumers, independent suppliers each employ different wholesale market clause-activation levels and resulting pricing formulas, meaning it is difficult to tell whether their supply terms are being adhered to or not.

Price hikes by independent suppliers have ranged from 7 to 35 percent, electricity bills sent to energypress by frustrated consumers show.

At present, there is no sign of any price de-escalation. The cost of wholesale electricity in the balancing market has remained on an upward trajectory. Last week (January 18-24), price levels averaged 10.82 euros per MWh, up from 7.77 euros per MWh in the previous week.

The wholesale market clauses of independent suppliers are expected to keep producing price hikes for some time even if possible additional measures by RAE, the Regulatory Authority for Energy, lead to an overall price de-escalation. This is due to a latency between the wholesale clearing procedure and clause activation.

 

Wholesale prices in Greece well over European average in 3Q

Wholesale electricity prices in Greece during the third quarter of 2020 were three times over the €16/MWh European average, based on the Nord Pool power exchange, a European Commission report covering European electricity markets for this period has shown.

The report also traces the market’s 3Q rebound following a heavy slump in the preceding quarter.

Average prices rebounded at a slower pace in southeast Europe, compared to other regions, before reaching pre-pandemic levels in September as a result of weak demand and high production of wind energy and hydropower facilities, according to the Brussels report.

The average price in the third quarter rose by 43 percent, against 2Q, to €43/MWh, and was 30 percent lower, annually.

European price shifts in August moved in coordination, while the price gap between Greece and the European average narrowed significantly in 3Q as a result of the use of lignite-fired units and weak demand.

This gap vanished in September as a result of stronger wind energy output, which exceeded one TWh for the first time. As a result, prices in the region were between €46 and €47/MWh in September.

As for energy-mix developments, lignite-based production in Greece experienced a decreased share, captured by natural gas-fueled output.

In southeast Europe, the lignite-based output share contracted to 29 percent in 3Q from 35 percent in the equivalent period a year earlier; the gas-fueled sector’s production share rose to 20 percent from 18 percent; and the RES sector’s share of the energy mix increased to 34 percent from 30 percent.

Household electricity tariffs in Greece averaged €16.54/MWh (not including taxes and surcharges), while the country’s average for industrial tariffs was €10.62/MWh, the report showed.

Balancing market prices down for third successive week

Balancing market price levels have fallen considerably for a third consecutive week, between December 21 and 27, latest figures published by power grid operator IPTO have shown.

According to this data, the balancing market price averaged 7.18 euros per MWh for the seven-day period, considerably lower than levels of about 10.5 euros per MWh registered a week earlier.

RAE, the Regulatory Authority for Energy, is making an effort to normalize the target model’s new markets, launched two months ago.

Balancing market prices rose sharply during the first few weeks of the launch, especially troubling non-vertically integrated suppliers and forcing the authority to prepare a price ceiling for producer offers.

The recent downward trajectory in balancing market prices has been interpreted as an effort for price restraint by producers.

RAE now considers that it should wait before imposing tough restrictions on producer offers.

 

 

Wholesale electricity soared to over €83/MWh in November

The average cost of wholesale electricity in November was 50.1 percent higher than the average for the year, official market data just released by power grid operator IPTO has shown.

Wholesale electricity prices averaged 83.095 euros per MWh in November, well over the current year’s average of 55.332 euros per MWh, the data showed.

Of November’s 83.095-euro average, 57.284 euros concerns the day-ahead and intraday markets.

Surcharge costs in November were also well over the average level for 2021, reaching 16.456 euros per MWh last month compared to this year’s average of 5.665 euros per MWh.

The year’s lowest average wholesale electricity cost, over a month, was recorded in June, at 38.677 euros per MWh. The second-highest monthly average, below November’s peak, was recorded in January, at 67.326 euros per MWh.

Electricity consumption fell to levels below 4 million MWh for five months this year, in April, May, June, October and November, according to the IPTO data.

 

Suppliers want lower price limits for producers, retroactive returns

Electricity suppliers are demanding a further reduction to a price ceiling proposed by RAE, the Regulatory Authority for Energy, for balancing market offers by gas-fueled producers, and, in addition, also want an upper limit of 3.5 euros per MWh imposed on compensation for this service.

This 3.5-euro compensation rate per MWh, which reaches approximately 5 euros per MWh when system-loss charges are added, is one of the highest in Europe, suppliers contend.

Suppliers also want electricity and balancing market cost limits to apply retroactively as of November 1, 2020 with returns of resulting amounts owed by the end of this accounting year.

Non-vertically integrated electricity suppliers have reacted strongly against sharply increased balancing market costs and far higher wholesale electricity prices since the launch of the target model’s new markets several weeks ago.

Three of the country’s non-vertically integrated electricity suppliers took part in public consultation staged by RAE, the Regulatory Authority for Energy, to present their objections and proposals, energypress sources informed. The procedure ended yesterday.

 

EVIKEN requests balancing market restrictions for at least 6 months

EVIKEN, the Association of Industrial Energy Consumers, wants a price ceiling imposed for at least six months in the balancing market, warning producers are seeking to elevate industrial electricity tariffs despite the absence of any corresponding production cost increases.

Restrictive measures for a three-month duration, as proposed by RAE, the Regulatory Authority for Energy, in its related public consultation procedure would not suffice, EVIKEN warned.

The association, in a letter submitted to the public consultation procedure, also requested retroactive implementation of a price ceiling in the balancing market, beginning November 1, 2020.

Balancing market costs have risen sharply since the launch of new target model markets six weeks ago, pushing up wholesale and retail electricity prices.

The electricity market’s current structure enables oligopolistic practices that are not subject to monitoring, EVIKEN noted in its letter.

RAE consultation on balancing market restrictions ends today

RAE, the Regulatory Authority for Energy, will need to make decisions following today’s conclusion of its public consultation on a price ceiling proposed by the authority for electricity producer offers in the balancing market.

The authority held a series of meetings yesterday with all producers operating gas-fueled power stations and will now need to decide on whether to incorporate observations made by producers into its plan as part of the effort to resolve issues that have become apparent during the first six weeks of the target model’s new markets, including the balancing market. Wholesale electricity prices have risen sharply.

Producers have tabled a number of varying, even conflicting, proposals. Some producers insist that the imposition of any restrictive measure runs contrary to the free-market principles promised by the target model. Others believe any restrictions should be set at low levels, but not as low as levels proposed by RAE.

Producers believe the balancing market’s problem is linked to energy quantities not price restrictions, warning that supply sufficiency problems could result during periods of high demand if levels as low as those proposed by RAE are eventually set.

Balancing market restrictions have applied until recently in more mature markets such as those of Belgium and the Netherlands. Balancing market conditions differ from country to country as respective levels of flexibility vary.

 

 

RAE discusses balancing market ceiling with producers

RAE, the Regulatory Authority for Energy, is staging a series of meetings today with major-scale electricity producers to discuss its proposal, forwarded for public consultation last Thursday, for the imposition of a price ceiling on offers made by producers in the balancing market. Its price levels have risen sharply since a launch several weeks ago as part of the target model’s new markets.

Representatives of three electricity producers, power utility PPC, Protergia and Elpedison, all vertically integrated, have been invited by the authority to separately present their views on its price-ceiling proposal before they submit their official views to the matter’s public consultation procedure by tomorrow morning’s 11am deadline.

Producers operating gas-fueled power stations are generally believed to oppose the prospect of a price ceiling on their offers, as they consider the balancing market to be a useful tool measuring supply and demand in the electricity market, as is the case around Europe.

RAE has attached a three-month limit on the duration of its price-ceiling proposal. Restrictive measures such as the authority’s proposal are generally not embraced by the European Commission, as RAE chief executive Thanassis Dagoumas has admitted.

Non vertically integrated electricity suppliers, hit hard by price rises in the wholesale electricity market, of which the balancing market is a component, have called for the restrictive measure to take retroactive effect. This is considered an unlikely prospect by market officials.

Many critics of the target model preparation procedure had warned that its new markets should not begin operating unless a RAE monitoring mechanism is in full working order.

Latest market data published by power grid operator IPTO showed a mild de-escalation of balancing market price levels to between 12 and 13 euros per MWh for December 7 to 13, the new target model’s sixth week, but these levels are still regarded as being excessive.

CO2 right prices up 39% in 45 days, adding to wholesale market price ascent

CO2 emission right prices have hit new records, trading at levels of over 30 euros per ton in recent days for a rise of 39 percent over the past month and a half that has contributed to the wholesale market price ascent.

These elevated CO2 right levels peaked on Tuesday, at 32.02 euros per ton, well over a price of 23.05 euros per ton recorded just weeks ago, at the end of October.

The upward trajectory of CO2 emission right costs is also contributing to even higher prices in Greece’s wholesale electricity market.

Last Wednesday, the day-ahead market’s average price exceeded 80 euros per MWh, rising further to 93 euros per MWh hour yesterday.

If CO2 emission right trading prices persist at levels of more than 30 euros per ton, power utility PPC will activate a related wholesale price clause incorporated into its supply agreements.

Besides the increase in CO2 emission right costs, the Greek day-ahead market has followed the upward trajectory of other European markets, where the combination of higher demand and deteriorating weather conditions is pushing price levels higher.

According to Greek energy exchange data for today’s day-ahead market, the price will average 82.31 euros per MWh, peaking at 114.1 euros per MWh and dropping as low as 44.38 euros per MWh.

 

Market restrictions on the way for electricity cost reduction

Energy minister Costis Hatzidakis’ recommendations to gas-fueled electricity producers for price restraint in the market have proven to be just partially effective, prompting RAE, the Regulatory Authority for Energy, to forward for public consultation restrictive measures, which, when legislated, will limit the levels of offers by producers in the balancing market.

Balancing market costs have risen sharply over the past six weeks, since the launch of target model markets, leading to elevated wholesale electricity prices that are now being passed on to the retail market, affecting consumers in the mid and low-voltage categories – households and businesses.

Sixth week target model market data made briefly available yesterday by power grid operator IPTO before being swiftly removed from the company website admittedly showed a de-escalation of price levels compared to unrealistically high levels reached in recent weeks, but, on average, these latest levels remained considerably high.

Taking this latest data into consideration, along with sharp price hikes recorded in the day-ahead market, the energy ministry is fully aware of the fact that electricity market prices could spin out of control if action is not taken.

The package of measures forwarded by RAE for public consultation is intended to restore market rationalization. It remains to be seen if these measures will prove effective.

Non vertically integrated electricity suppliers, hit hard by the increase in wholesale prices, are pushing for retroactive implementation of these upcoming restrictions.

 

Consumers hit with tariff hikes of over 20% in low, mid-voltage

Sharply higher wholesale electricity prices registered over the past five weeks or so in the energy exchange’s new target model markets have, to a great extent, been quietly passed on by suppliers to consumer tariffs in the household, business and industrial categories, without any related announcements  from suppliers.

Price hikes by electricity suppliers have applied to approximately 35 percent of total electricity consumption, during this period, while tariff hikes have exceeded 20 percent in the low and mid-voltage categories.

In the low-voltage category, suppliers have activated clauses enabling tariff increases when wholesale price levels exceed certain levels.

Very few independent electricity suppliers, both vertically integrated and not, carry fixed-tariff agreements in their portfolios, exposing most consumers to wholesale electricity price fluctuations.

On the contrary, power utility PPC, representing roughly 65 percent of overall consumption, does not include wholesale price-related clauses in its supply agreements, meaning its tariffs have remained unchanged over the past few weeks.

Instead, PPC includes clauses linked to emission right prices in international markets. These have remained relatively steady in recent times.

Even if wholesale electricity prices happen to deescalate in the next few weeks, a likely prospect, some latency should be expected in any downward tariff adjustments by suppliers.

Numerous consumers have lodged complaints with RAE, the Regulatory Authority for Energy, over the tariff hikes by suppliers. Complaints by suppliers against energy producers setting excessively high prices in target model markets have also been made.

EVIKEN chief warns of wholesale market crisis impact on industrial sector

The head official of EVIKEN, Greece’s Association of Industrial Energy Consumers, has warned of dangers faced by the industrial sector as a result of higher wholesale electricity prices and serious balancing market issues.

Balancing market costs have spun out of control amid the pandemic, whilst the market, as currently structured, enables players to achieve windfall profits by differentiating their offers in the day-ahead and balancing markets, Antonis Kontoleon, the EVIKEN chief, pointed out in comments to energypress.

Players are overstating grid needs or understating RES output projections, or doing both, a tactic that further increases the need for far greater energy quantities and leads to higher energy prices, Kontoleon warned.

 

Target model balancing cost skyrockets, suppliers on edge

Balancing costs in the electricity market have exceeded rational limits, skyrocketing to 57 million euros in the fifth week of the target model after totaling 71 million euros during the model’s first four weeks of operation.

Stubbornly high price levels in the wholesale electricity market have created perilous conditions that could lead non-vertically integrated suppliers to bankruptcy, while consumers, beginning with the mid-voltage category, now face tariff hikes as a consequence.

Balancing market costs between November 30 and December 6 doubled compared to a week earlier.

Despite energy minister Costis Hatzidakis’ warning of intervention to producers, whose overinflated offers have prompted this ascent, balancing market costs on December 5 and 6 exceeded 20 euros per MWh, well over levels of between 3 and 4 euros per MWh prior to the target model.

The target model, designed to ultimately homogenize EU energy markets into a single unified market, has been pitched by the Greek government as a price-reducing tool.

Though authorities have played down the price ascent of recent weeks, describing it as a nascent target model abnormality that will settle into place and not prompt consumer tariff hikes, suppliers, under severe pressure as a result of sharp cost increases, have called for immediate measures.

Suppliers have warned they will take legal action against all responsible parties in letters forwarded to the RAE, the Regulatory Authority for Energy, the energy ministry and power grid operator IPTO.

RAE held a meeting yesterday with major-scale producers, who defended their actions, according to sources. The authority limited its reaction to proposals, the sources added.

Ministry set to intervene if wholesale prices do not fall

The energy ministry is seriously examining the prospect of imposing a price ceiling, next week, on wholesale electricity prices if they do not deescalate over the next three days.

Wholesale electricity prices have risen sharply since last month’s  launch of the target model, pitched by the government as a price-reducing tool.

Day-ahead market prices for today – based on offers made prior to on online meeting between energy minister Costis Hatzidakis and electricity producers – fell mildly to 77 euros per MWh from 90 euros per MWh on Thursday.

If current prices do not fall further, it is a matter of time before suppliers pass them on to the retail market. Prior to the target model, wholesale electricity price levels ranged between 55 and 60 euros per MWh.

Some suppliers are considering to activate cost-related clauses for their tariff prices, while others have done so already, sources informed.

Producers contend the ascent in wholesale electricity prices reflects actual market conditions, adding that their power stations were previously incurring operational losses under the preceding pricing system.

However, energy ministry officials believe producers are exploiting certain rules to artificially raise prices. Hatzidakis, the energy minister, has urged producers to heed the government’s call or face intervention as of Monday.

Wholesale prices surging with target model, ceiling considered

The target model, pitched by the government as a price-reducing tool ahead of its recent launch one month ago, is developing into a major problem for the energy market as it has sparked a continual rise in wholesale electricity prices, which, if not brought under control, will eventually be rolled over to households and the industrial sector.

Mid-voltage tariffs are on an upward trajectory, while in the low-voltage category, many electricity suppliers are now reshaping clauses to incorporate increased costs.

The day-ahead market price for today reached 90 euros per MWh, up from 74 euros per MWh yesterday, and, prior to the target model, levels ranging between 55 and 60 euros per MWh.

This upward price surge has prompted strong concerns, even bankruptcy fears, among electricity suppliers who are not vertically integrated. Meanwhile, this worrying development has coincided with diminishing water levels at hydropower plant reservoirs.

The energy ministry has called for restraint from producers, warning it may need to intervene. The ministry’s secretary-general Alexcandra Sdoukou, in initial talks with producers yesterday, requested an end to overinflated prices, warning that a price ceiling may need to be imposed if the results are not satisfactory.

Whether such intervention could be implemented for an extended period remains unclear as measures of this nature are forbidden by the European Commission.

Producers content with target model markets, suppliers edgy

Any nervousness felt by producers over the target model’s new markets ahead of their November 1 launch are swiftly being quelled by rational trading results. On the contrary, non-vertically integrated suppliers have experienced cost increases and, as a result, are concerned about their company prospects.

Although it still too early to tell, electricity producers believe day-ahead market prices are reflecting actual conditions, rising with shortages and falling with any oversupply.

Day-ahead market prices began at 60.44 euros per MWh on November 11, fell as low as 41.11 euros per MWh on Saturday and rose to 68.36 euros per MWh for today.

These price levels for the day-ahead market, known as the System Marginal Price under the previous system, are regarded as being at rational levels.

Producers have also expressed satisfaction over the balancing market, a largely unknown entity prior to the target model’s launch. Prices have been high, enabling units with flexibility to ensure solid earnings.

Day-ahead market prices are projected to fall, which would subsequently limit electricity imports and require domestic power stations to operate for longer hours.

Higher earnings for producers mean greater costs for suppliers. Non-integrated suppliers are concerned about their prospects under such conditions.

Target model wholesale prices up as uplift charges at €8.55/MWh

Uplift charges rose to reach a total of 8.55 euros per MWh during the first week of the model, significantly pushing up wholesale electricity price levels.

One of three uplift charges, applied to share costs of national grid losses, reached 1.39 euros per MWh in the first week of the target model, the Greek electricity market’s most significant reform, enabling market coupling with equivalent European markets.

The second uplift charge, applied to share capacity balancing costs, reached 2.02 euros per MWh.

A third uplift charge, for additional balancing costs, reached 5.14 euros per MWh.

IPTO, handling target model’s balancing market, set for launch

Power grid operator IPTO has declared being fully prepared for its imminent target model role of managing the balancing market, one of the new market systems to come into effect this coming Monday, when the target model is set to be launched.

Besides being tasked with managing the target model’s balancing market, IPTO, in a widely unknown role, will also be responsible for measuring overall operations of the target model.

The balancing market, an extremely complex market system requiring fundamental changes compared to current practices, will perform real-time balancing of demand against available offers.

The energy exchange will be responsible for the target model’s day-ahead and intraday markets.

In the lead-up to the forthcoming launch, IPTO, challenged by pandemic-related obstacles such as travel and staff restrictions, needed to make a series of coordinated efforts. These have included development of information systems and corresponding interface systems with the energy exchange (BMMS, MSS, XBMS and MODESTO), plus staff training.

The target model, representing the Greek electricity market’s most significant reform, is essential for market coupling with equivalent European markets.

The target model promises to reinforce the country’s energy security, offer consumers greater financial benefits through transboundary competition, lead to fair and competitive pricing in the wholesale market, while also facilitating further RES penetration, and, by extension, hastening greenhouse gas emission reductions and the decarbonization effort.

New market dry-run testing to end this week, target model launch on Nov. 1

The dry-run testing procedure for market systems ahead of the forthcoming target model launch, scheduled for November 1, will be finalized at the end of this week, RAE, the Regulatory Authority for Energy, the energy exchange and power grid operator IPTO have jointly decided.

Dry-run testing of the day-ahead, intraday and balancing markets began on August 3 to test their limits and operating ability ahead of the target model’s launch, aiming for market coupling, or harmonization of EU wholesale markets.

Market coupling, to increase competition and lower wholesale energy prices, will ultimately lead to energy union, the EU strategy seeking to offer consumers secure, sustainable, competitive and lower-cost energy.

All domestic parties involved, as well as the energy ministry, have ascertained the Greek launch will take place on November 1 following previous delays.

Even during these final days of simulated testing, day-ahead market prices have, at times, continued to display discrepancies with Day-Ahead Schedule price levels.

This has been attributed to the absence, from dry-run testing, of many traders who participate in the Day-Ahead Schedule, meaning the price levels of the two situations are based on different data.

Though balancing market prices have improved considerably as the simulated testing has progressed, following discrepancies, conclusions cannot be made until actual market conditions come into effect.

Meanwhile, public consultation by RAE on a market monitoring mechanism and a market surveillance mechanism for the new markets is due to be completed next Monday.

The market monitoring mechanism will seek, through structural and performance indicators, to evaluate levels of concentration and the market power of each participant, while the market surveillance mechanism will focus on identifying and combating strategies detrimental to competition.

The next step, once the new markets are launched, will be to market couple, initially with the Italian market, by the end of the year, followed by the Bulgarian market, in the first quarter of 2021, Greek energy minister Costis Hatzidakis recently informed.

 

 

Extraordinary conditions push SMP as high as €105 per MWh

Extraordinary conditions resulting from coinciding temporary closures of various power facilities, both in Greece and abroad, have pushed up the System Marginal Price, or wholesale electricity, to levels of as much as 105 euros per MWh, as was the case yesterday.

Four domestic gas-fired power stations – Enthes (Elpedison), Heron CC, Lavrio IV and Protergia – were out of order yesterday, for different reasons.

Problems beyond the Greek border have made matters worse. Bulgaria’s 1,000-MW Kozloduy nuclear power plant is currently out of order. The Greek-Bulgarian line serves as a transit route towards North Macedonia as a line linking Bulgaria and North Macedonia is out of order. So, too, is a line linking Greece with Italy.

Power stations that rarely operate, such as an open-cycle Heron unit, needed to be called into action as a result of the problems on these various fronts. Their necessary contributions pushed the SMP to far higher levels.

Three power utility PPC lignite-fired power stations, Agios Dimitrios II and III and Melitis, along with PPC’s gas-fired power stations Aliveri V, Lavrio V, Komotini, Megalopoli V, as well as units run by the independent energy firms Heron, Thisvi and Corinth Power, all needed to be called into action to cover the grid’s needs.

The market appears to have normalized for today. SMP levels are down to relatively satisfactory levels, averaging 44.49 euros per MWh, primarily as a result of significant RES contributions, covering more than 50 percent of the overall demand, 123.993 GWh.

The lignite-fired power stations used yesterday – Agios Dimitrios II and III and Melitis – will remain closed today.

Industrial sector wants PPC’s older 10% hike scrapped, discounts kept

Industrial energy consumers, currently negotiating new tariffs with power utility PPC, want a ten-percent hike that was imposed in March, 2019 to be scrapped – also retroactively, from the beginning of 2018 – as they contend lower generation costs now enable price cuts.

The industrial sector is also demanding the maintenance of size and consumer profile-based discounts as well as a discount offered by PPC for punctual payments of electricity bills and advance payments.

In its ongoing negotiations with PPC for new tariffs, to come into effect January, 2021, the industrial sector has highlighted that wholesale electricity prices registered a record decline in the first eight-month period of 2020.

The System Marginal Price, or wholesale electricity price, fell to 42.88 euros per MWh in August this year following levels of 61.71 euros per MWh in 2018 and 64.37 euros per MWh in 2019.

CO2 emission rights, which have a neutral effect on energy-intensive industrial producers as a result of offsetting benefits, have averaged 23.83 euros per ton this year, slightly down from 24.87 euros per ton last year.

PPC has drastically reduced its high-cost use of lignite-fired power stations this year to 3,625 GWh, from 10,418 GWh last year.

The power utility appears willing to support the industrial sector by minimizing its profit margin but has made clear it will not sell below cost to any customer.

Greek wholesale electricity prices topping European levels

Greek wholesale electricity prices are currently among Europe’s highest, energy exchange data covering the past few days has shown.

On August 11, the System Marginal Price, or wholesale price, in Greece’s day-ahead market reached 52.3 euros per MWh, Europe’s second-highest level following Poland.

On the same day, Germany’s SMP was significantly lower, at 36.3 euros per MWh, the level in Italy was 41.15 euros per MWh, Bulgaria registered 41.17 euros per MWh and Romania 40.82 euros per MWh.

In yesterday’s day-ahead market, Greece’s SMP was 52.3 euros per MWh, once again virtually topping European levels, exceeded only by the Polish price. Elsewhere, Germany registered 35.86 euros per MWh, Italy’s level was 42.96 euros per MWh, Bulgaria registered 39.13 euros per MWh, Romania 38.25 euros per MWh, while Spain and Portugal both registered 39.27 euros per MWh.

Greece’s SMP was once again second-highest, behind Poland, in the day-ahead market for today, registering a level of 42.5 euros per MWh. Germany registered 38.59 euros per MWh, Italy was at 41.34 euros per MWh, the Czech Republic’s level was 39.02 euros per MWh, Bulgaria registered 39.33 euros per MWh, Romania registered 40.14 euros per MWh, while the SMP level in Spain and Portugal was 40.52 euros per MWh.

Wholesale electricity prices down considerably in first half

The System Marginal Price, or wholesale electricity price, has fallen considerably and consistently throughout the first half of the year, driven down by lower natural gas prices and a dramatic contraction of lignite-fired generation, now a costly option.

Official data released by the energy exchange shows lignite’s energy mix dominance is fading and renewable energy sources are gaining ground, while natural gas-fueled generation is consistently at the helm. 

The SMP fell throughout the first-half period, falling 22.45 percent to 59.68 euros per MWh in January, compared to the equivalent month a year earlier; 28.55 percent to 49.23 euros per MWh in February; 43.65 percent to 43.65 euros per MWh in March; 54.31 percent to 28.51 euros per MWh in April; 48 percent to 34.27 euros per MWh in May; and 50.04 percent to 34.04 euros per MWh in June.

The SMP is primarily determined by natural gas-fueled power stations, their price-setting involvement measuring 60 percent in June, the energy exchange data showed.

Also in June, natural gas was responsible for 48.06 percent of overall generation, the RES sector generated 34.74 percent of total production, hydropower contributed 9.77 percent, while lignite-fired generation was limited to 7.42 percent.

Retail power prices among EU’s lowest, wholesale prices high

Retail electricity prices in Greece, during the second half of 2019, were among the lowest in the EU, while the country registered the second biggest drop in household electricity cost, down by 5.8 percent during this period, compared to the EU average of a 1.3 percent increase, according to official Eurostat data.

However, Greece’s wholesale price level, or more specifically, day-ahead market price, is one of the highest in south and southeast Europe.

The cost of electricity for households in Greece averaged 155 euros per MWh in the first half of 2019, compared to the EU average of 216 euros per MWh, the Eurostat data showed. The cost of electricity in Greece, including taxes and surcharges, was ranked 21st among the EU-27.

The cost of electricity for enterprises in Greece was below the EU average, placing Greece in 12th place with an average price of 108 euros per MWh compared to the EU’s 117 euros per MWh in the first half of 2019, the Eurostat data showed.

A recent study conducted by the European Commission’s Directorate-General for Energy showed that Greece’s day-ahead market price averaged 41 euros per MWh in the first half of 2019, well over the average of 34 euros per MWh in south and southeast Europe.

Market officials attributed this discrepancy to Greece possessing just a day-ahead market, forcing all electricity amounts to be channeled through this one market. In other parts of the EU, wholesale electricity markets also feature intra-day, forward, balancing reserve and capacity markets. As a result, electricity producers and importers operating elsewhere also retrieve costs from other markets, which is not possible in Greece.

Low-cost gas driving down wholesale electricity prices

The abundance of low-cost natural gas, enabling electricity producers operating gas-fired power stations to offer extremely competitive prices, is reshaping the wholesale electricity market.

Highlighting this development, the average level of the System Marginal Price, or wholesale electricity price, today, a day of strong demand, is expected to be contained below 40 euros per MWh, at 39.551 €/MWh.

Today’s electricity demand is expected to peak over 8.3 GW with total consumption reaching 168,674 MWh. The wholesale price during the peak hours will not exceed 38.850 €/MWh.

The market conditions for today are not an isolated incident but part of a wider trend that has developed during the week.

Yesterday’s average SMP was just 35.961 €/MWh despite a peak of 8,105 MW and total electricity consumption of 162,777 MWh.

On Wednesday, when demand peaked at 8,072 MW and overall consumption totaled 162,492 MWh, the SMP was 39.243 €/MWh.

The SMP exceeded the 40 €/MWh level just once this week, on Tuesday, reaching 40.689 €/MWh, a day whose peak was below 8000 MW.

The week started with Monday’s SMP average at 39.277 €/MWh, a lower peak of 7,649 MW, and total consumption for the day of 152,716 MWh.

SMP prices have been falling to even lower levels during weekends. Last Sunday, the average SMP was just 30.629 €/MWh with the peak down to 6,370 MW and the day’s consumption at 134,563 MWh.

The grid relied on just one lignite-fired power station, Agios Dimitris III, last Sunday. Demand was primarily covered by gas-fired generation, as well as renewable energy sources, hydropower units and electricity imports.

Grid passes summer’s first test, demand at 7,600 MW today

The country’s grid is set to face increased pressure as temperatures rise throughout the country and are forecast to reach as high as 39 degrees Celsius today. Electricity demand is expected to rise to 7,600 MW.

The country’s grid coped well during yesterday’s first major test for the summer. Electricity demand reached 7,300 MW amid temperatures marginally lower than the levels forecast for today.

The power utility PPC was forced to use its hydropower facilities. Water deposit levels have been extremely low this year. Further usage of the hydropower facilities will be needed today but PPC is expected to act cautiously as it awaits tougher days ahead.

PPC anticipates it may need to use 50 to 60 percent of its 3,171-MW total hydropower capacity in July.

The heat-related rise in electricity demand has coincided with increased wholesale electricity prices over the past week. They rose sharply from 28.62 euros per MWh on June 28 to 44.52 euros per MWh on Tuesday and 45.01 euros per MWh yesterday.

This first summer test for the grid has once again highlighted the extremely high costs entailed in operating lignite-fired power stations. Their generation costs are now between 90 and 100 euros per MWh.

During this heatwave, PPC, currently moving to withdraw most of its lignite units over the next three years, has opted to minimize its reliance on lignite, preferring instead to cover its generation needs through its natural gas units and hydropower stations.