Reuters: Greece to begin electricity auctions this month

Greece will begin electricity auctions this month to meet a condition of its international bailout that says Athens must end the dominance of its Public Power Corp (PPC) utility and open up its power market.

PPC, which is 51 percent owned by the state, controls about 60 percent of Greece’s wholesale electricity market and about 90 percent of the retail market.

Under last year’s economic aid deal, Greece’s third since 2010, Athens committed to introduce electricity auctions to lower PPC’s share of the retail and wholesale market to less than 50 percent by 2020.

This would involve the sale of electricity capacity to retailers that would then sell it to their own clients.

Electricity market operator (LAGIE) is organising the auctions, starting on Oct. 25 with an opening bidding price of 37.37 euros per megawatt-hour (MWh), according to a document on its website.

PPC has warned that the auctions should not be priced much lower than the average wholesale price to avoid “excessive production losses” for the former monopoly, which is facing increasing competition from power producers such as GEK TERNA , Hellenic Petroleum and Mytilineos . The average wholesale power price currently stands at about 40 euros/MWh.

LAGIE’s latest report for September said that PPC’s market share in the retail market dropped to 88 percent from about 90 percent in August.

Source: Reuters