Further strike fears hang over Greek electricity market

26 June 2014 16:56 Source:ICIS
ICIS_00092438.jpg

The Greek electricity market is again threatened by a 48-hour strike by the Public Power Corporation (PPC), according to a statement issued on Thursday by the GENOP union.

The last time the PPC unions went on strike, transmission system operator (TSO) ADMIE did not operate for two consecutive days and failed to submit vital information to market operator LAGIE. As a result, LAGIE was unable to calculate the Day-ahead price for the two days ( see EDEM 29 January 2014 ). And the outturn remains unknown to this day.

Market sources say the ongoing situation is causing participants to be on edge, with fears the TSO could again “shut down” temporarily.

“The PPC and ADMIE are different corporate entities, but nothing stops PPC unions from shutting down ADMIE like they did in January,” one source said.

Concerns over the strike added support to the electricity contract for delivery in July ‘14, which was assessed €1.50/MWh higher day-on-day on Thursday.

A second trader said fairly strong outturns on the Greek pool price were partly caused by lower coal-fired power plant availability.

“They are reducing generation so that it’s easier to shut down units,” he said, adding: “The most modern [330MW] lignite-fired unit, Meliti, is out of operation without any real reason.”

One source said: “The unions that reacted first are those of the generation units. If all PPC employees strike, or are prohibited from working, it is possible that the mess from January will occur again.”

However some point out that uncertainty regarding the outcome remains. “The strike could be postponed or not turn out as successful,” one trader cautioned.

Monopoly

Greek incumbent PPC holds a monopoly on the Greek wholesale energy market. A major privatisation plan is underway, as the government plans to split PPC into the ‘small PPC’, due to be auctioned off, and another entity, in which the state will sell a 10-20% share.

Also owned by PPC, ADMIE is in an unbundling process because a bill to sell a 66% stake in the company has already been approved.

The GENOP-PPC union has adamantly protested against the privatisation plans with threats of 48-hour strikes starting from when the bill is submitted to parliament.

The union demands that both bills regarding the privatisation of PPC and sale of ADMIE are withdrawn immediately.

According to the GENOP statement, the union will hold rallies in front of energy companies on Friday 26 June, and the following Monday and Tuesday. The rallies are separate from the proposed strikes.

According to Greek traders, the bill regarding PPC’s division is expected to come up on Wednesday’s parliamentary agenda. However the Greek parliament had not confirmed this by Thursday evening.

The deputy energy ministry previously said in an interview with ICIS that the sale of the TSO is expected to be finalised by the end of this year ( see EDEM 30 April 2014 ).

PPC said on Wednesday that after a series of checks, four out of five candidates for the sale have been approved and are now entering phase two, which will see binding offers submitted for the acquisition of the majority stake in ADMIE. Sophie Udubasceanu

By Sophie Udubasceanu