By Kakia Papadopoulou
Greece’s leading engineering group Mytilineos Holdings throws the gauge to the closed energy monopoly in Greece signalling that the real energy market deregulation will not be far away.
As for Public Power Corp, the state-owned electricity producer, should reconsider its whole strategy, as the presence of big international players within its field is not pleasant.
Mytilineos said late Tuesday that it will proceed with the construction of a merchant power plant of 412 MW in the region of Viotia, south of Greece. Additionally, the group said that withdraws its interest from the Hellenic Transmission System Operator’s tender for the first private electricity production units which expired on Feb 22.
Mytilineos is in advanced talks with energy giant Endesa and its decision is clearly related with the large capital base of the Spanish power producer.
“Endesa evaluated the situation and agreed that we should construct the unit independently,” a Mytilineos top ranking official told energia.gr.
“We expect to finalize our cooperation agreement with Endesa next month,” he added.
HTSO’ s tender involves the construction of three private power generation units of over 300 MW each in the southern part of Greece.
Under the terms of the tender, HTSO will acquire from candidate IPP’s their availability capacity certificates for a 12 year period. The price of the availability capacity certificates will be determined according to the offers of the bidders and this should be in the range of a minimum of EUR35,000 per MW per year up to EUR92,000 per MW per year. HTSO will cover up to 70% of the cost of the certificates.
Bearing in mind that currently and during the whole transition period of market liberalization all producers are reimbursed by HTSO at EUR35,000 per MW per year for their available capacity, it is clear that the investment cost won’t be easily paid off.
Maybe when the HTSO masterminded plans like the above-mentioned, Greece was isolated enough from an energy supply point of view, and could cover its needs from cheap imports from the Balkans.
Things changed to the worst with the closure of the Kozlodui nuclear plant in Bulgaria in the beginning of the year, creating a large energy deficit across the Balkans.
Bulgaria was the biggest electricity exporter in the Balkans, exporting a record 7.8 billion kilowatt hours of electricity in 2006 but plans almost no exports this year because of the shutdowns.
Greece is badly affected, if someone recalls that Athens imported some 3,500 GWH in 2005 while the imports in 2006 are seen of 4,000 GWH, of which 70% to 80% had come from Bulgaria.
“We will need to operate more units,” said Dimitris Papaconstantinou director of strategy and planning with Public Power Corp (PPC), the country’s main electricity producer. “But the cost will be considerably higher if we put in operation some expensive fuel units,” he added.
Greece bought from Bulgaria electricity for an average price of EUR40 per MWH in 2006. The respective cost for PPC is seen over EUR50 per MWH, given the current oil and natural gas prices.
The dynamic presence of Endesa is already giving a headache to the government and Public Power Corp’s officials.
Given the bad financial state of the country’s main electricity producer along with the higher cost of energy, new players should start taking the baton from PPC’s hands.
“With one of the biggest energy companies in Europe settling in Greece, PPC should not feel very comfortable from now on,” Mytilineos official said.