By Kakia Papadopoulou
Greece has already started feeling the impact of the energy market deregulation due this summer. International energy players are taking positions, joining forces with local players, bidding for power projects or proceeding independently with the construction of power plants.
Some things are clear: there is a considerable energy deficit in the country after the closure of the Kozlodui nuclear plant in Bulgaria- the cheap electricity exporter of the region. The burden for Public Power Corp, the state-controlled electricity producer- to cover the power deficit is heavy, considering its poor financial position. Additionally, the lowest electricity tariffs which are in effect in Greece imposed by the state, worsens further its position. On the other hand, PPC or the state better, seems that it does not like the idea of handing over its monopoly status. And on top of that, energy regulatory bodies like the Hellenic Transmission System Operator or the Regulatory Energy Authority are under the government’s supervision, despite strong criticism by the European Commission.
“As long as PPC tariffs are lower than the marginal price of the pool power prices, it’s unrealistic to see any real change in the electricity market in Greece, said Yiorgos Kouvaris, development manager of Heron Thermoelectrics, an IPP.
Eurostat, the statistical body of the European Union, said in a research in January 2006,-the latest available data- that Greek consumers enjoy a 50% discount and industrial users a discount 23% in electricity tariffs, among the 25 member-states of the bloc.
A doctrine by most governments up until now, was increases in electricity tariffs not above the national cpi figures. A national plan which did not work at least for PPC, providing that inflation ran around 3%-4% in the last years while the fuel prices rises were much higher.
Even if this state-controlled electricity price regime persists until the country’s national elections scheduled for early 2008, it is almost certain that it will be some form of automated tariff adjustments medium-term or PPC will go bankrupt eventually.
Despite the rigidities of the energy market framework in Greece, some industry observers are optimistic.
“The monopoly status will be torn apart soon,” said Andreas Diamantopoulos, power sector director of Prometheus Gas, part of Copelouzos Group.
“There is an increasing energy demand which PPC cannot cover itself and the state knows that,” he added.
Copelouzos group has joined forces with Italy’s Enel and recently submitted a bid for a private electricity production unit.
Many local Independent Power Producers have cooperated recently with international energy players ahead of the market’s deregulation.
The Hellenic Transmission System Operator said late February that four consortia submitted bids for the first electricity production unit- namely Hellenic Technodomiki, with Edison and Viohalco, Enel with Prometheus Gas, Heron Thermoelectrics with GEK and Iberdrola with Motor Oil.
The other interesting aspect is that another serious energy player Mytilineos withdrew its interest from the tender on the eve of the deadline of the tender, and decided to proceed independently with the construction of a gas-fired CCP plant of 412 MW in southern Greece. Mytilineos is in advanced talks with Endesa and its decision is clearly related with the large capital base of the Spanish power producer.
It is obvious that energy players are building positions in this transitional phase of Greece’s energy landscape. The question which remains is how smoothly this transition will be with all this state involvement in the energy field.