An electricity interconnector linking Greece and Italy is expected to return to full capacity in the middle of next month, according to Greek power grid operator ADMIE.
Should it go ahead the move will finally bring to an end a prolonged outage that has been closely watched by electricity market participants. “The Italian cable is a big wild card in July,” one trader said.
Most traders said the return of the cable would pressure the Greek market because of recent low prices in Italy.
Usually the cable flows cheaper Greek electricity into the Italian grid. However falls on the Italian gas market have pulled down equivalent power products, while Italian spot prices have been pressured with relatively high renewable power generation a factor.
This has lead to day-ahead outturns on the Italian power exchange in some hours cheaper than the Greek equivalents. “Most days, Greece closes above Italy in 12 hours of the day,” one source said.
Maintenance work began on the 500MW cable at the beginning of the year ( see EDEM 18 November 2013 ) after consistent limitations and outages throughout the second half of 2013.
Issues began in July of last year when a sudden failure forced the interconnector offline.
But the cable is now due to return to full capacity on 15 July, ADMIE said.
According to the transmission system operator (TSO), auctions for cross-border capacity on the link will take place on a daily basis for the remaining days of the month between 15 and 31 July, with monthly auctions for August also expected. The TSO is yet to make a final decision on the exact schedule.
Premium over Italy
According to latest data from the two power exchanges, on Monday the Greek Day-ahead premium to the Italian national spot average, or PUN price reached €4.02/MWh in hour 3, but the spread shifted in the morning hours with Italy €20.70/MWh above Greece in hour 10, the highest spread of the day.
However the flows usually run electricity from the southern part of Italy, where most of its renewable installations are located.
In that region, the Greek price was above its Italian counterpart for 14 hours of the day, with the widest spread at €11.65/MWh in hour 3.
“If [the cable] returns to operation in July and prices in Italy are the way they are now, there will be a very big flow coming from Italy to Greece,” one trader said.
The cable only adds to an already bearish situation as Greece expects high solar generation as summer settles in alongside average hydro generation.
Furthermore, following maintenance in June on the Bulgarian-Greek interconnector, the available transmission capacity allocated at the monthly cross-border auctions in July reached 400MW (see separate story). Sophie Udubasceanu