Changes appear Imminent in Greek Power Deregulation (18/03/2005)

Παρ, 18 Μαρτίου 2005 - 14:43
By Chryssa Liaggou
The Public Power Corporation (PPC) is preparing to enter into joint ventures with private investors with a view to securing its market share in the planned deregulated market, sources said yesterday. The move is seen as spurred by increasing foreign investment interest in the Greek power production market, but also as related to the government’s resolve to push forward with power deregulation — where “PPC will form a strong competitive pole,” according to a recent statement by Development Minister Dimitris Sioufas. The sources said PPC is already in advanced talks with Electricite de France (EDF) with a view to joint investments in Greece and abroad. The proposed scheme would give EDF a 50 percent share in PPC’s new power plants, up to 1,600 megawatts, which will replace old ones, while PPC would participate in EDF investments elsewhere. The scheme is said to have secured the consent of PPC’s labor union. Separately, the president of the Regulatory Authority for Energy (RAE), Michalis Karamanis, told a press conference that competition in the deregulated power market will be spurred by the large foreign companies that possess advanced know-how, as domestic investors cannot go it alone and will have to collaborate with them. Such an interest, he said, has already been expressed by Italy’s Edisson and Spain’s Iberdola, which acquired a 49.9 percent stake in Greece’s largest wind power generator, Rokas, in December. Karamanis also presented the new code of transactions in the deregulated power market. A process of dialogue among interested parties will now be launched, to be followed by the issuing of tenders for the construction of privately operated power stations. The latest developments are seen as the first serious boost for the power sector since it was formally deregulated in 2001. “The objective is to bolster productivity and an economic basis for the system, not to create subsidized investments,” said Karamanis. He said he supports the idea of incentives for attracting investment but said caution must be exercised so that they do not effectively amount to subsidies. Karamanis added that the tenders to be issued will be open to all and not just those that have already been licensed. PPC’s first competitor will be Hellenic Petroleum’s power plant in Thessaloniki, which will be connected to the grid at the end of 2006, he said. EU warning The announcement of the RAE’s plans coincided with a warning by the European Commission to Greece and nine other member states (Belgium, Estonia, Ireland, Germany, Latvia, Lithuania, Luxembourg, Spain and Sweden) to speed up deregulating their electric power markets or face referral to the European Court. The Commission calls for the immediate incorporation into national legislations of Directive 54/2003/EC, which gives the right to industrial power consumers since July 1, 2004 and to private consumers as of July 1, 2007 to freely choose their suppliers. After receiving reasoned opinions, countries are generally given two months to comply. Most of the 10 countries are also called upon to comply with the provisions for deregulating the natural gas market. Greece is still in a transitional adaptation period as an “emerging market.” Karamanis said the RAE will propose the legal separation of PPC’s power transmission sector at an initial phase, and later of distribution, in the framework of harmonization with EU legislation. The legal separation will be subsequently followed by the actual separation of ownership when the competitive market matures. (Kathimerini)