Public Power Corporation (PPC) and the development ministry seem determined to sign a major energy deal with Germany's RWE. This comes despite objections from other players about the lack of transparency in the process, as well as continued union opposition. GENOP is planning a strike on January 29, opposing PPC's cooperation with RWE.
In an effort to force PPC to entertain other pairings, Endesa Hellas, the joint venture of Spain's Endesa with Mytilineos, last week submitted a counter-bid along the lines of RWE's. However, the latest intelligence is that this overture has been rejected.
Evangelos Mytilineos, CEO of energy and mining group Mytilineos, reportedly met with PPC's management and development minister Christos Folias. Mytilineos is understood to have expressed displeasure at receiving a PPC rejection letter.
"We are willing to do business with PPC and were expecting a tender to open up so that we could participate," a source close to Endesa Hellas told the Athens News but was not willing to confirm the rejection letter.
Everybody wants to participate in the liberalisation of the market in Greece and wants a relationship with PPC, the provider of 90 percent of energy in Greece, he said.
"Endesa Hellas has submitted to PPC a proposal for a broad cooperation in electricity and natural gas," a local analyst noted. "Following the already known proposal from RWE, which is scheduled to be discussed by the BoD on January 29, Endesa Hellas has submitted a competitive proposal to PPC that includes: a) the acquisition from Endesa Hellas of old lignite-fired plants and their replacement with new power plants; b) the common development of a coal-fired power plant; c) and the cooperation in the natural gas field, including the construction of an LNG terminal," he added.
A spokesperson at Mytilineos also confirmed the bid but refused to disclose other information. The bid would have 50 percent funding from Spain's Endesa and 50 percent from Mytilineos in line with the 50-50 joint venture of Endesa Hellas, while 49 percent of the control of the venture would be held by PPC and the rest by Endesa Hellas, it is understood.
Greek energy player Copelouzos Group, along with Italy's Enel, has gone on record saying they would have liked an open tender for the initiative that RWE is organising with PPC.
RWE and PPC have reached the stage of discussions for the signing of a memorandum of understanding (MoU). RWE stresses that the bid is a "cooperation" rather than a strategic stake deal with PPC.
Meanwhile, PPC announced on January 9 a deal with Halyvourgiki.
"The management of Halyvourgiki SA and PPC have decided to propose to their BoDs the approval of a draft MoU for the construction and operation of an 880MW natural gas-fired electricity generation unit. The unit is planned to be installed on a site owned by Halyvourgiki, which holds the generation licence from 2001. The draft MoU envisages the creation of a separate legal entity in the form of a societe anonyme, which will manage the project. Halyvourgiki will own 51 percent of the new entity and PPC 49 percent."
The local authorities of Elefsina are objecting to the creation of a new, potentially environment polluting plant on the site of the old one. PPC argues that such deals will bring in new streams of revenue.
Meanwhile European Union regulators have proposed tighter measures on Co2 emissions, including the obligatory purchase by electricity producers of all their Co2 emission permits as of 2013. PPC is one of Europe's biggest polluters given its dependence on lignite mining. "This will clearly be an issue when the utility discusses with the government new pricing structure in July. If the EU proposal is passed PPC's lignite-fired plants would become less competitive as the generation cost could rise by more than E20/MWh, resulting in onlooker profitability from the generation segment," a local analyst told us.