Regulatory Authority for Energy Prez.: There are no indications of manipulation of the electricity market

The Regulatory Authority for Energy has not found any practices of manipulating the electricity market, underlined the authority’s president Athanasios Dagoumas during his speech to the Parliamentary Institutions and Transparency Committee.

Mr. Dagoumas was invited by Members of Parliament to brief the Commission on the issues of the energy market on the occasion of the energy crisis and high prices, as well as the conclusion on the additional revenues of the electricity companies.

On the occasion of the reports on the manipulation of the electricity market, the president said: “We as an Authority control competition issues. There is a Remit framework for this purpose. We have created a market monitoring tool,” he said and continued:” The European Regulator collects all the market data, intraday and next day market but not for balancing the market. The CEO of ACER himself, when asked three times by the European Commission to respond to the issue, stated that no issues of price manipulation have arisen, and we haven’t seen such in Greece,” adding “But the operation of the market can lead to increased profits at extreme prices. The reality is that markets operate and generate increased revenue. And the state can take these,” he stressed.

The findings concerning extreme revenues

For the first time, the president of RAE spoke publicly and officially about the conclusion regarding the hyper-revenues of electricity companies, as well as about the methodology followed by the Authority for the identification of profits. The text has been in Parliament since yesterday.

He made it known that the profits were compared between the periods October 2020-March 2021 and October 2021 – March 2022. Thus, according to Mr. Dagoumas, the Authority proceeded to subtract the profits of this year in relation to the corresponding period last year in order to to extract the result.

According to the finding, among other things, it was found that the company HERON showed profits of 45 million euros. However, the HERON power plant, as market sources note, was closed for technical reasons from the summer of 2020 until March 2021… And so, they add, there is essentially no basis for comparison since last year it had no financial results.

Following this typical example, as observed by competent market participants, serious questions arise as to the methodology followed by RAE for the detection of surplus revenues.

Mr. Dagoumas, continuing his report on the issue of the findings, as he said, found that “the profitability of electricity generators was 927 million euros during the period October 2021 – March 2022. PPC provided 335 million euros discounts (fixed contracts).” The President of the Authority sought to clarify its role: “We record the results per activity. We do not deduct amounts. From the point of view of tax policy, it is reasonable to deduct some amounts. We recorded all the factors so the state can tax profits. The operation of RAE and the Competition Commission concern competition issues “.

Prices

In his presentation, the president of RAE also spoke about the prices of electricity in the wholesale and retail market compared to EU countries.

Earlier he attributed the increases to the country’s energy mix and in particular to the dominance of natural gas, which is affected by TTF prices.

“The mixture in the next day market from 2020 consists of 40 to 45% of natural gas, 30% of RES, 10% of electricity imports, 10% of lignite and hydropower ranges from 5% to 15%. The most important thing is that the System Limit Price is set by limit units that are gas and imports. So the SLP depends on natural gas. This is the reason for the existence of high prices in the wholesale markets,” Mr. Dagoumas noted and continued:” It seems that from natural gas and imports we have increased production costs. It can not be reduced as much as gas prices. All we can do is reduce profits. As long as the TTF gas prices are at 100 euros, the price will not be able to return to the levels it was at,” the president of the Authority concluded on the issue.

The adjustment clause

In his introductory statement, the president of RAE also spoke about the issue of the adjustment clause.

As he said, it has been valid since 2013, while he clarified that the clause is part of commercial practices. He noted that the intention of the state is for itto be included in the charging prices per kilowatt hour, from 1 July.