Corrected: Greek power market braced for ‘mother of all battles’

01 July 2014 16:03 Source:ICIS

(The seventh paragraph has been corrected to say "for Tuesday delivery" rather than "for Wednesday delivery".)

The Greek wholesale electricity market is braced for a hit on Wednesday, with unions threatening to go on strike and expectations that lignite-fired power plants will be forced offline.

Market operator LAGIE failed to calculate the price for next-day power for two consecutive days back in January after the unions representing workers of the incumbent Public Power Corporation (PPC) went on strike and the transmission system operator ADMIE did not operate for two days ( see EDEM 29 January 2014 ).

The GENOP-PPC union announced on Tuesday afternoon workers will go on a 48-hour strike on Wednesday to voice discontent at a draft bill to privatise PPC. Fears emerged first on Thursday ( see EDEM 26 June 2014 ).

“The mother of all battles is about to begin,” one trader said.

Traders reported that the PPC unions expect to shut down several lignite-fired power plants, mainly in the region of Kozani and Ptolemaida, including the 330MW Meliti power plant.

“The unions of the plants have been very vocal about not only striking but actually occupying the plants,” one source noted. The trader added that this means they will stop anyone who tried to go to work from reaching it.

Support

Market participants said that some power plants going offline had already added support to prices. For Tuesday’s delivery, the Greek day-ahead pool price, known as the system marginal price (SMP),is continuing a strong trend, settling at €67.04/MWh, up €9.53/MWh from a day earlier.

Uncertainty remains, with the government not confirming if the bill will be submitted to the parliament on Wednesday. “If indeed the law goes to parliament tomorrow I think the strike will take place,” one trader noted. If the government delays discussing the bill, the strike is likely to be postponed. Meanwhile, another trader noted that there are no changes in the data regarding unit availability.

The unions have held rallies at various energy companies, with the most recent on Monday evening, according to statements on GENOP-PPC’s website. Further plans include another rally on Thursday.

The Greek incumbent PPC holds a monopoly over the Greek electricity market with a large power plant portfolio including lignite-fired power plants with low production costs.

The unions have demanded the draft to privatise PPC is withdrawn immediately, as well as another bill that paves the way for privatising ADMIE.

The government plans to split PPC into the ‘small PPC’, due to be auctioned off and another entity in which the government will also sell a 15%-20% shares package. Sophie Udubasceanu

By Sophie Udubasceanu