Creditors pushing for increase in PPC power production sold via NOME auctions, sources say

A possible compromise in talks between Greece and the institutions for deregulating the country’s electricity market could involve increasing the percentage of Public Power Corporation (PPC) lignite and hydroelectric power production given to its competitors through NOME auctions, sources close to the talks told the Athens-Macedonian News Agency (ANA) on Sunday. They said this could be combined with a reduction in the starting prices for the auctions.

The creditors were also seriously considering a PPC proposal for the creation of subsidiaries to which existing customers will be transferred, which will then be sold to competitors, the sources said. They noted that the two possible solutions – NOME auctions and subsidiaries – could operate simultaneously, though the PPC’s aim in making the proposal is to obviate the need for NOME auctions.

The sources said that a market review to be published by the Regulatory Authority for Energy (RAE) in June, listing the respective market share held by PPC and alternative providers, could affect the details of the final decision.

Once the RAE report is published, the starting price for auctions (currently at 37.37 euros per MW/hour) will be revised and may be reduced by as much as five euros, the sources indicated. A total of 6.0 million MW/hours are scheduled to be auctioned in 2017 while there is strong pressure to increase this amount and outline alternative structural reforms, such as the sale of lignite-fuelled and hydroelectric PPC power plants, if the final target of reducing PPC’s market share to less than 50 pct by the end of 2019 is not achieved.

Expert sources noted that a ‘freeze’ or even decline in market share for alternative providers in recent months was mainly “technical” in nature and the result of an increase in power consumption by households during the winter. Given that the clients of the alternative providers are mainly businesses, whose consumption is less season-sensitive, their relative market share stayed flat or dropped.