Energy ministry multi-bill at parliamentary committee

Greek Parliament’s Standing Committee on Production and Trade begins is set to begin discussions today on a multi-bill covering a wide range of energy-sector issues. The committee’s talks are expected to continue during the week, but a date has yet to be set for the multi-bill’s tabling in Parliament for ratification.

Energy-sector issues included in the multi-bill include a formula for filtering out stagnant RES projects as a means of freeing up required grid capacity.

Non-auction tariff levels in 2023 for small-scale wind and solar energy projects of up to 6 MW is another matter included in the energy ministry’s multi-bill, as are power purchase agreement (PPA) rights for RES projects, instead of fixed tariffs, which were trimmed as part of the new deal.

Also included is an article concerning a compensation amount for gas company DEPA Commercial following the cost of its recent decision to cancel LNG orders, not required as a result of lower energy demand this winter.

It also includes revisions exempting businesses and farmers from public service compensation surcharges, included in electricity bills, worth 63 million euros.

In another section, the multi-bill includes terms increasing upper capacity limits to 100 kW on solar energy panels installed for net-metering purposes by churches, charities, NGOs and schools.

Moreover, the revisions include an EU formula to be adopted for the development of offshore wind farms as a pilot project off Alexandroupoli, northeastern Greece.


Enterprises, farmers spared of public service compensation fees

An energy ministry draft bill submitted to Parliament on Wednesday for discussion expected next week includes a provision exempting energy-intensive enterprises in the low and medium-voltage categories, as well as farmers, from public service compensation (YKO) surcharges concerning  electricity bills between November, 2021 and March, 2022.

The energy-cost relief promised by this four-month exemption to consumers of the aforementioned categories is estimated to be worth approximately 63 million euros.

Public service compensation surcharge payments for these categories of consumers were initially suspended, from the end of 2021, at the height of the energy crisis, in order to ease their energy-cost burden.

At the time, government officials originally planned for these suspended public service compensation amounts to be paid at a latter date, once electricity prices had deescalated.

At the beginning of this year, the energy ministry noted these amounts ought to be abolished as a result of fiscal leeway provided by a surplus of the public service compensation’s special account.

Revisions aim to reduce energy cost for most consumers

The energy ministry is moving ahead with three revisions intended to lighten the burden of electricity bills for most consumers. Two of the changes were included in a draft bill submitted to Parliament late last Friday night, while a third revision has been attached to a RES-sector draft bill forwarded for consultation.

These measures include a new formula changing the way a special levy imposed on electricity producers is calculated. It is planned to now be calculated as 5 percent of the average TTF gas index price, an initiative that should lessen the levy’s cost for electricity companies and, by extension, the cost of electricity for consumers.

This special levy on electricity producers was introduced in November at a fixed rate of 10 euros per MWh.

Also, several low and medium-voltage consumer categories – including industrial consumers and farmers – will be exempted from a public service compensation (YKO) charge included in electricity bills.

In addition, a legislative revision is planned to pave the way for power purchase agreements (PPAs), offering industrial consumers renewable energy supply agreements over long-term periods.

IPTO announces provisional contractors for island substations

TERNA and a partnership comprising Nari and Electromec have been named provisional winners of a tender staged by power grid operator IPTO for contracts to develop substations at the Greek islands Folegandros, Milos and Serifos, all planned to be interconnected to the mainland grid by 2025.

TERNA was named provisional contractor for the development of substations on Folegandros and Milos, the first section of the tender, while Nari and Electromec were named provisional contractors for a substation on Serifos, the second section of the tender.

IPTO aims to have contracts signed for these projects by June. These two tenders are part of the fourth phase of grid interconnections linking the Cyclades with the mainland.

Interested parties faced a July, 6, 2022 deadline. A total of six companies or partners submitted bids for this tender, three for each section.

IPTO has already awarded contracts for the installation of subsea cables to link Folegandros, Milos and Serifos with the mainland grid. The winning bidders were announced by the operator last November.

Hellenic Cables was awarded a contract to install subsea cables from coastal Lavrio, southeast of Athens, to Serifos and from Serifos to Milos, two sections covering a total length of 170 kilometers and priced at 195 million euros.

The Prysmian group was awarded a contract to install subsea cables from Milos to Folegandros and Folegandros to Santorini, two sections covering a total length of 127 kilometers and priced at 150 million euros.

The 4th phase of the Cyclades grid interconnection is budgeted at 524 million euros in total, of which 165 million euros is being covered by the recovery fund.

Once completed, the 4th phase of the Cyclades grid interconnection is expected to reduce annual carbon emissions by approximately 150,000 tons, create grid capacity of up to 730 MW for the development of RES facilities in the region, and also significantly reduce public service compensation (YKO) surcharges added to electricity bills for subsidizing high-cost local power generation on Greek islands.

Public service compensation system revised, October launch

Revised public service compensation (YKO) surcharges for electricity bills, recently announced by energy minister Kostas Skrekas, will come into effect as of next month, households of the previous system’s three consumption level categories facing a uniform rate of 1.7 cents per KWh.

The revised public service compensation system is expected to result in an additional 300 million euros, annually, for a risk hedging mechanism.

The revisions will result in a public service compensation increase of 1.01 cents per KWh for low-voltage consumption levels of up to 1,600 KWh during a four-month period, as this category’s existing rate is 0.69 cents per KWh.

On the contrary, the public service compensation cost for households using greater electricity amounts will be reduced as the existing surcharge for consumption levels between 1,601 and 2,000 KWh is 5 cents per KWh and 8.5 cents per KWh for consumption over 2,000 KWh.

Medium-voltage consumers will face a public service compensation increase, from 0.69 cents per KWh to 1.7 cents per KWh.

The public service compensation surcharge rate will remain unchanged at 4.14 euros per MWh for energy-intensive industrial consumers.

Under the new system, farmers using low-voltage electricity will face increased public service compensation surcharge rates, as will municipalities, for their road lights.


Hedging tool to collect up to €500m annually for crisis aid

Authorities estimate a new Permanent Hedging Mechanism will accumulate an annual sum of between 350 and 500 million euros, for consumer subsidy support, through public service compensation (YKO) surcharges included in electricity bills.

According to energy minister Kostas Skrekas, the new mechanism will operate as a prospective reserve Energy Transition Fund and will be used should energy prices rise further to help fund consumer support initiatives.

“With this risk hedging tool, we are shielding and protecting the people of Greece from any future painful energy crises,” the minister noted.

Under the plan, public service compensation surcharges for three existing household consumption categories will be set at one level. As a result, public service compensation charges for households consuming up to 1,600 KWh per four-month period will be increased by 1.01 cent, from the existing level of 0.69 cents to 1.7 cents.

This means that public service compensation charges for households consuming greater amounts will actually be reduced as current YKO rates for consumption levels of between 1,601 and 2000 KWh per four-month period are 5 cents per KWh and 8.5 cents per KWh for consumption levels of over 2,000 KWh per four-month period.

Households consuming up to 1,600 KWh per four-month period should expect to pay additional public service compensation charges of 4 euros per month.



Industry may be spared of public service compensation cost

Energy minister Kostas Skrekas has, for the first time, in public comments, left open the possibility of industrial enterprises being spared of paying public service compensation (YKO) amounts for a five-month period covering November to March, as part of an effort to reduce industrial energy costs.

“We will assess the public service compensation account’s revenues and, if deemed necessary following the five-month period, will gradually impose these charges,” the minister noted at an event focused on industrial energy cost.

Speaking at the same event, Giorgos Xirogiannis, deputy general manager of SEV, the Hellenic Association of Industrialists, underlined the problems faced by industrial producers as a result of the sharp rise in energy costs.

Greek industry is currently 20 to 30 percent less competitive than European industrial enterprises, the SEV deputy noted.

He raised a series of energy cost-related issues that need to be addressed, including the YKO surcharge added to electricity costs, distribution costs and energy taxes.

Investments in renewable energy infrastructure and networks need to be accelerated in coming years for the achievement of a favorable energy mix balance, the SEV official added.

Also, the impact on the cost of energy of the EU’s “Fit for 55” package, aiming for a 55 percent reduction of carbon emissions by 2030, compared to 1990 levels, needs to be discussed, the SEV deputy added.


Island grid links result in initial public service savings for 2022

The public service compensation (YKO) special account, subsidizing higher-cost electricity generation on non-interconnected islands as well electricity costs for low-income households, is expected to end the year with a modest surplus, July’s launch of the Crete-Peloponnese grid interconnection being a key factor, paving the way, in 2022, for reductions of YKO surcharges included in electricity bills, energypress sources have informed.

A precise figure on the extent of the YKO special account surplus for 2021 is expected in October, when the distribution network operator, DEDDIE/HEDNO, managing this account, submits a related report to RAE, the Regulatory Authority for Energy.

As is the case each year, the report will include financial details on the YKO special account for the current year’s first ten-month period as well as the operator’s projections for the final two months.

YKO savings resulting from the Crete-Peloponnese grid interconnection are worth approximately one million euros per day, the overall benefit in 2022 estimated at 380 million euros, power grid operator IPTO informed.

The end of the energy isolation of the Cyclades islands Syros, Paros, Tinos, Mykonos and Naxos has led to YKO savings of approximately 70 million euros per day, IPTO officials added.

Public service compensation account savings are expected to nearly double by 2024, when the fourth phase of the Cyclades grid interconnection is expected to be completed and the Crete-Athens interconnection is scheduled to be launched.

Further ahead, towards the end of the decade, this account’s outlay will be subdued even more when interconnections in the Dodecanese and North Aegean are scheduled to be completed.


Public service compensation account deficit of €36m in 2020

The public service compensation account ended 2020 with a deficit of 35.96 million euros, according to latest data provided by distribution network operator DEDDIE/HEDNO.

The account’s deficit was greatly restricted by the settlement of transactions concerning 2017, which led to an additional influx of 72 million euros.

At the other end, a settlement of payments concerning 2012-2016, plus an additional settlement for 2014-2016, led to respective account outflow of 21.9 and 21.7 million euros.

The public service compensation account received a 116.7 million-euro injection from the state budget in 2020.

An extensive investment plan being carried out by power grid operator IPTO will greatly reduce the public service compensation account’s financial needs over the next few years, according to Thanassis Dagoumas, chief executive of RAE, the Regulatory Authority for Energy.

Public service compensation account (YKO) surcharges included on electricity bills are used to primarily subsidize high-cost electricity generation on Greece’s non-interconnected islands.

RAE is expected to soon reach a decision on YKO surcharges concerning 2019.

Pending issues crucial for industrial energy cost savings

A series of issues concerning prospective industrial energy cost savings that have surfaced either as industrial-sector requests or government announcements remain unresolved, creating insecurity within industrial circles.

New industrial electricity tariffs, currently being negotiated but with much ground still to cover for convergence, are at the very top of this list for industrialists.

One energy-intensive industrial producer has already abandoned power utility PPC after rejecting the industrial electricity tariff prices the utility had to offer.

Industrialists also want a public service compensation (YKO) surcharge reduction.

On another front, the sector expects a special consumption tax rate for mid-voltage industrial consumers with annual consumption levels of more than 13 GWh to be equated with the special consumption tax rate offered to high-voltage industrial enterprises. This revision, concerning approximately 170 factories, has been announced by Prime Minister Kyriakos Mitsotakis.

Another matter for the industrial sector concerns exempting major-scale industrial units from a series of additional electricity supply surcharges, in accordance with European Commission directives.

Industrialists also want a special consumption tax exemption on electricity used for mineral processing in cement and glass production, which would align Greek law with an EU directive from 2003.

The industrial sector is also anticipating a new mechanism to offset CO2 emission right costs.

Crete-Peloponnese subsea cable installation to start soon

Power grid operator IPTO plans to begin installing a 135-km subsea cable for the Peloponnese-Crete grid interconnection, part of a larger project to ultimately extend this line to Athens, within the next few weeks. The installation’s exact starting date will depend on the weather conditions.

Also, a subsea cable interconnecting the islands Naxos and Syros, the final step in the third phase of the Cyclades grid interconnection, is expected to be electrified next month, according to the operator.

The Peloponnese-Crete project, in particular, is pivotal in the effort to reduce public service compensation (YKO) surcharges for consumers. The interconnections will also help utilize the renewable energy potential of islands.

The Peloponnese-Crete subsea cable installation, made challenging by deep waters reaching 1,000 meters, will require about two months to complete, IPTO sources noted. It will be the world’s longest subsea cable grid interconnection.

Installation work for a second subsea cable (107 km, 150 kV) between Syros and seaside Lavrio, on the southeastern tip of the wider Athens area, was completed last month in preparation for the electrification of the Naxos-Syros line, expected early October. High-voltage testing, over a 24-hour period, will precede the line’s electrification.

Athens-Crete interconnection work commences at both ends

Work at both ends of the Athens-Crete grid interconnection, Greece’s biggest infrastructure project at present, has begun in earnest, power grid operator IPTO sources have informed.

In the lead-up, IPTO subsidiary Ariadne Interconnection, developing the project, and contractors signed contracts totaling approximately one billion euros last month.

Various preliminary studies and construction work are now underway. A high-voltage subsea cable is planned to run from Heraklion, Crete to Megara, slightly west of Athens.

Also, a converter station will be built close to the Cretan village Damasta.

A converter station will not be needed at Megara, on the Athenian side of the project. Instead, the interconnection’s line will run through an underground passage to reach a central unit, where the converter station will be installed.

IPTO has discussed the project with local communities to minimize any inconveniences. Requests made by locals, determined to conceal any visual impact, were taken into consideration by authorities when planning the project’s route.

Revisions were made to an environmental impact study approved by the energy ministry last April.

IPTO made significant changes for the Megara end of the interconnection, significantly increasing the operator’s budget for the project. Changes included the adoption of subterranean line passages. Similar-minded revisions have also been agreed to for the Cretan end’s Korakia area.

Once launched, the Athens-Crete grid interconnection promises to offer electricity consumers overall annual savings of 400 million euros in Public Service Compensation (YKO) surcharges, included in electricity bills.

The project will also offer major environmental benefits as CO2 emissions resulting from the overall electricity supply effort for Crete will be reduced by 60 percent once the Athens-Crete interconnection is fully launched.

This project represents Crete’s major-scale link. A preceding smaller-scale link from Crete to the Peloponnese has also been incorporated into the effort.

Industrial energy cost reduction measures planned, deputy tells

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

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

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

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

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

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



Tough recovery path for PPC, public service sum slight relief

An announcement in parliament yesterday by finance minister Hristos Staikouras for an upcoming payment to power utility PPC of 200 million euros in public service compensation (YKO), being covered by the state budget and concerning services prior to 2011, signals the beginning of a marathon recovery effort by the utility, needing to cover a 900 million-euro cash deficit.

The size of the company’s cash deficit figure, disclosed last summer by energy minister Costis Hatzidakis and PPC chief executive Giorgos Stassis, promises some financial improvement but the power utility still has plenty of ground to cover to eliminate all fears of collapse.

The imminent 200 million-euro payment to PPC, expected to be received the by the end of January, must, according to latest law, be preceded by action from RAE, the Regulatory Authority for Energy, specifying amounts owed to the corporation. The finance ministry will then give the green light for the payment’s execution.

PPC is believed to be racing against time to obtain documents ensuring the 200 million-euro payment so that this figure can be included in its balance sheet for 2019. Even if it fails to obtain these guarantees on time, PPC will financially benefit from the cash injection in its 2020 figures.

The utility must wait until next September before tariff revisions implemented four months ago make full impact for a vastly improved financial picture. These revisions are estimated to offer an additional 500 million euros.

PPC will also seek additional liquidity through a bond issue planned for the first quarter in 2020. According to a plan prepared by PPC’s previous administration, a loan amount of between 300 and 350 million euros is needed.

In addition, PPC expects to collect at least 300 million euros through the securitization of 1.5 billion euros of unpaid receivables, planned for the first quarter in 2020.

A PPC business plan, to be announced in about ten days, will offer a clearer picture on the utility’s challenging road to recovery. Details on cost cuts and a voluntary exit plan for staff members will feature in the business plan.    elec


No surprises expected in PPC’s 9-month results, out tomorrow

Power utility PPC, announcing its nine-month financial results tomorrow, already accounted for by the market, will be relying on a profitable first half in 2020, expected to be boosted by the full impact of additional revenue from tariff increases and other interventions.

Tomorrow’s results, according to forecasts, should present losses of less than 500 million euros, just a slight improvement compared to PPC’s performance for the nine-month period last year.

PPC posted a pre-tax loss of 318.4 million euros for the first half this year, or 159 million euros per quarter. The same trend, more or less, is expected in the third quarter as the power utility’s tariff increases did not take effect until September, the quarter’s final month.

This slightly improved performance is expected to carry on through the fourth quarter. The injection of a public service compensation (YKO) amount of approximately 200 million euros for previous years would come as a bonus and offer drastically improved results.

However, this prospect entirely depends on when the government will decide to execute the public service compensation payment to PPC, from this year’s budget surplus.

The corporation’s annual cash deficit of 900 million euros, announced in August, has yet to be covered. PPC’s administration is working to resolve the matter over a three-year plan.

PPC insisting on higher public service sum, disputes RAE

Power utility PPC has not abandoned an older effort for a public service compensation (YKO) payment concerning the year 2011 that is far greater than a 195 million-euro sum determined by RAE, the Regulatory Authority for Energy, and expected to be provided via the 2020 national budget or the 2019 budget surplus.

However, the power utility is once again disputing the authority’s calculations and insists the amount should be 680 million euros, or 485 million euros greater.

Besides the amount concerning 2011, PPC is also pursuing, through high-level legal action, a further 375 million euros for public service compensation sums accumulated beyond 2011.

Overall, PPC is seeking a total of 860 million euros in public service compensation.

Second electricity bill surcharge cut in two months imminent

Electricity consumers can expect a second cost reduction in two months, a public service compensation (YKO) surcharge cut for nighttime electricity consumption, once a wide-reaching energy ministry draft bill is ratified.

The bill will cover the electricity market’s further liberalization, power utility PPC’s modernization, gas utility DEPA’s privatization and RES sector support.

This latest electricity surcharge cost reduction follows a RES-supporting ETMEAR surcharge rate cut in September.

Public service compensation surcharge rates concerning nighttime electricity usage will be reduced for consumption levels exceeding 1,600 kWh. This cut promises to ease electricity-based heating costs for households this coming winter.

The energy ministry intends to decide on the extent of the surcharge reduction once the aforementioned draft bill has been ratified.

YKO surcharge costs concerning nighttime electricity consumption increased for households at the beginning of 2018 when a low flat-rate formula was replaced by one gradually increasing the surcharge rate in accordance with usage levels, as is the case for daytime consumption.

RAE, the Regulatory Authority for Energy, has proposed an YKO surcharge rate reduction from 0.085 euro to 0.03 euro per kWh for nighttime consumption of over 2,000 kWh and a cut from 0.05 euro to 0.015 euro per kWh for consumption levels between 1,600 and 2,000 kWh.

YKO rates for nighttime electricity consumption have been equated with daytime rates since January 1, 2018. These are 0.00690 euro per kWh for electricity consumption between 0 and 1,600 kWh, 0.05 euro for consumption between 1,601 and 2,000 kWh and 0.085 euro for consumption of 2,001 KWh and over.

Costly nighttime surcharge rates a winter threat once again

Extremely high public service compensation (YKO) surcharges concerning nighttime electricity consumption, an unpleasant surprise for many consumers last winter, once again threaten to burden the budgets of households preparing to use electric heaters this coming winter.

This surcharge cost rose sharply as of the beginning of 2018, when a fixed nighttime rate was replaced by incremental rates rising with higher consumption levels.

This change prompted sharp electricity cost increases for some 30,000 households relying on lower-cost night-zone electricity tariffs.

The problem was recognized by authorities and RAE, the Regulatory Authority for Energy, proposed nighttime surcharge reductions. A legislative revision was needed but the previous government’s energy ministry did not deliver a bill to Parliament. The current government, elected in July, has yet to make a move on the matter.

The RAE proposal called for a nighttime public service compensation reduction from 0.085 euro per KWh to 0.03 euro for the highest consumption category of 2,001 KWh and over, as well as a drop from 0.05 euro to 0.015 euro for the mid-level consumption category of 1,600 to 2,000 KWh.

Since January 1, 2018, nighttime public service compensation charges have been the same as the daytime rates for all consumption categories.

Prior to this, a flat YKO rate of 0.00889 euro for all nighttime consumption amounts applied until December, 2017.

PPC wants cost coverage for Crete energy sufficiency moves

Power utility PPC is unwilling to move ahead with measures required to ensure energy sufficiency on Crete between 2020 and 2023 – the period during which the island’s major-scale electricity grid interconnection with Athens is planned to be developed – unless it is assured cost coverage for these actions through public service compensation (YKO) surcharges included on electricity bills.

Various measures deemed necessary by a National Technical University of Athens (NTUA) study have yet to be implemented.

On the contrary, various issues keep surfacing. Just recently, PPC informed there is not enough time to convert a diesel-fueled unit at Atherinolakkos into a gas-fueled facility by next summer. All of the island’s high-polluting diesel-run units must be withdrawn by the end of this year.

PPC wants the cost of unit conversions, natural gas orders, as well as take-or-pay clauses that may be attached to gas supply agreements covered by the public service compensation surcharge.

Besides representing part of the overall solution for Crete’s energy sufficiency between 2020 and 2023, the plan to convert old lignite units to gas-fueled facilities also promises to serve as a long-term solution.

The NTUA study for Crete also proposes the installation of a new 100-MW unit, preferably gas fueled; development of new RES facilities with a total capacity of between 100 and 150 MW; and the installation and incorporation into the grid of energy storage systems (high-tech batteries) with a capacity of 30 to 40 MW.

Time insufficient for Crete diesel units switch to gas, will cost

Power utility PPC has admitted it does not have enough time to convert old, high-polluting diesel-fueled power stations operating on Crete into natural gas-fueled units by 2020, as it had previously assured, energypress sources have informed.

Though the island does not appear likely to experience an energy sufficiency problem, the cost of preventing a shortage will be considerable and will be covered by consumers around the country through elevated public service compensation (YKO) surcharges included on electricity bills.

Crete’s ageing diesel-fueled units, offering a total capacity of 100 MW, were given lifespan extensions in June through a legislative amendment delivered by the previous energy minister Giorgos Stathakis, without EU approval. EU fines cannot be ruled out.

This additional operating time is intended to provide cover until the launch of a small-scale grid interconnection to link Crete with the Peloponnese, expected at the end of 2020. A large-scale interconnection linking Crete with Athens is expected in 2023.

The conversion of the old power stations into gas-fueled units has constituted part of an overall plan to ensure energy sufficiency on Crete between 2020 and 2023.

Besides the high cost entailed in running these old power units, energy sufficiency on Crete is made even more expensive by high-priced leasing costs of power generators deployed on the island every summer to meet higher tourism-related electricity demand.

Plans for the installation of an FSRU off Crete appear to have also run into problems. Gas grid operator DESFA has proposed a bigger and permanent onshore LNG terminal installation.


PPC public service return for 2011 from 2020 national budget

The government has decided to cover a power utility PPC a public service compensation (YKO) payment of 195 million euros, endorsed by RAE, the Regulatory Authority for Energy, through the 2020 national budget, energypress sources have informed.

Though this solution, agreed to by energy minister Costis Hatzidakis and the finance ministry, does not promise instant relief for state-controlled PPC, burdened by poor finances, it does secure a prospective cash influx that will be taken into account by Ernst & Young, the utility’s certified auditor, scheduled to deliver a report on the Greek power utility on September 24.

This amount is expected to contribute to a sum of over 800 million euros needed by PPC over the next 12 months, according to new chief executive Giorgos Stassis.

RAE’s initial calculations for PPC’s 2011 public service compensation resulted in a sum of 160 million euros before this amount was revised to 195 million euros. PPC originally sought a sum of between 650 and 700 million euros before settling for RAE’s far lower figure.