By Kakia Papadopoulou
Greeks should be prepared for difficult summers ahead. The risk of blackouts, especially if there are prolonged heatwaves-a common phenomenon for a southeastern country- is more than a vague likelihood.
Greece like most Balkan countries experiences a power deficit after the closure of the Kozloduy nuclear plants in Bulgaria this year. Adding the unprecedented drought which pushed the water reserve levels deep into red this winter in Greece, there is no wonder that government officials are alert, mulling contingency plans in their offices. However, this emergency situation brings about the old root of the problem- the lack of any serious investments in the Greek power sector the past years.
“We have to deal with a difficult situation this summer,” said Hellenic Transmission System Operator chairman Evangelos Lekatsas.
“At present, we have stored water which correspond to 1460 GWh while we need at least 2,000 GWh in the summer,” he added.
But even if the Olympian Gods help Greece to cope with the increased power demand this year, the risk is still there for the years to come.
“Given the prolonged draught, the water levels have fallen dramatically, meaning that the 2008’s starting point will be disadvantageous,” Lekatsas said.
Greece imported some 3,500 GWh in 2005 while imports for 2006 are estimated at 4,000 GWh, of which 70% to 80% came from Bulgaria, at an average cost of EUR40 per MWh. The respective cost for Public Power Corp- the country’s main electricity producer- is seen between EUR50 and EUR60 per MWh, given the current oil and natural gas prices.
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 shutdown.
The problem for Greece is that there has been no serious electricity investment the past years and the reason for this is the low cost of electricity. PPC has plunged in bad economics because of the low tariff regimes imposed by the state.
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 increase 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.
Press reports said that there will be a new round of tariff increases in August, if there will not be early national elections. The government would not like to displease voters before.
“Currently, PPC does not want to get more involved, operating more units which will drag it more deeply into the red,” said Lekatsas.
But the problem is there and has to be faced.
“We will call a tender for at least three peak-hour units of 150 MW each,” said Lekatsas.
But industry observers see all these steps as half measures.
“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.