Greek power grid: PPC and three industries in negotiations for “green” PPAs

According to information available to OT, PPC‘s negotiations with three large energy-intensive industries for the conclusion of a new type of electricity supply contracts are in progress.

These are large consumers of electricity, who do not have the ability to cover their electricity needs with their own units, and are hankering for stable prices in order to continue their production activity with the aim of continuing and expanding their exports. The electricity contracts they had with PPC expired at the end of 2022 and now a way is being sought to renew the multi-year relationship that the public company had with the industries.

The PPAs

The same sources report to OT that PPC is in discussions with two to three industries for the conclusion of bilateral electricity supply contracts (PPAs). These are forms of contracts that are commonly used abroad and their characteristics are the guarantee of the supply of electricity at fixed prices for a long period of time. This period can be as long as 10 years.

The energy crisis has made it clear, even to the most skeptical, that Renewable Energy Sources are the cheapest form of energy. Combined with the goals set to limit the climate crisis, the supply of electricity from RES is the most ideal solution for large consumers. The latter, in fact, achieve their own goals for reducing their environmental footprint with green energy

Terms

According to information, PPC and industries are currently discussing the terms of the bilateral contracts.

OT sources want the public company for the first year and a half of the total duration of the PPAs to provide prices based on the existing “basket” of energy it has: Lignite and natural gas.

And this is taking place as PPC will only be able to offer green electricity after a year and a half, when it will have built a sufficient number of photovoltaic and wind farms.

Sources state that the industries on the one hand seek to conclude PPAs on the other hand are concerned about the level of the price that will be agreed. The intense volatility that is expected to remain in the energy market for years to come is causing industry skepticism as to whether they will be able to compete with foreign majors.

To this concern, analysts respond through the OT, that it is important for an industry to know in advance the cost of electricity and from then on, in the context of a correct management, it is possible to identify those operating cost margins that can limit for to maintain its competitiveness.

Obstacles

As OT has revealed, the agreement on green PPAs presupposes in Greece the removal of administrative obstacles.

Top of all is the exemption from the ceiling on the electricity producers’ revenues of the fixed bilateral contracts. The Minister of Environment and Energy, Kostas Skrekas, is said, according to what OT has written, to be determined to proceed with such an arrangement, expecting of course the formal “OK” from the European Commission.