ECONOMY

PPC to hold key role in power

Public Power Corporation (PPC) President Yiannis Palaiokrassas says the country’s main electricity utility is happy to maintain its tariffs – the lowest in the European Union – at present levels and see them rise only by the amount of inflation, but is skeptical about whether such a pricing policy can survive in a unified and competitive European market. «Our pricing policy is characterized by extreme conservatism, the aim being to protect the consumer. We agree with this, provided the rates approved give us some leeway as regards (profit) margins. However, in a unified market, I do not know how long this can last,» he said during a presentation of the corporation to Greek and foreign investors at the Athens Business Club 2004. «As far as we are concerned, we have no problem in maintaining our rates below or near the inflation level,» he added. For the first time, Palaiokrassas referred to the possibility of PPC replacing some of its old lignite-burning plants with new ones, either using natural gas as a substitute, or introducing upgraded lignite plants that will use environmentally friendlier technology. For the time being, however, the Regulatory Authority for Energy (RAE) has vetoed the construction of new lignite units, aiming, on the one hand, at promoting the use of natural gas in power production, and on the other, at bolstering the interest of private investors in the sector. Palaiokrassas said PPC’s long-term strategy includes its expansion into the neighboring Balkan market and new activities, and invited investors to join in its existing diversification into telecommunications, and real estate in the future, where the corporation intends to tap its large property assets. Speaking at the same event, Development Minister Dimitris Sioufas noted that Greece has considerably delayed the opening-up of its markets, but it is now in a transitional phase, leading with certainty to new prospects, especially in the energy sector, which is affected both by the wider economic and political environment and European Union policies. «We have a long way to go in the near future. Our policy ambitions and commitments within the framework of the EU dictate a faster pace,» he said. Sioufas said the government’s policies aim at ensuring the country’s energy sufficiency, promoting the competitiveness of the economy, making Greece a strong energy hub in southeastern Europe and bolstering its geopolitical position. He said the effective deregulation of the energy markets will create new jobs, benefit industrial and domestic consumers and strengthen the country’s industrial base. Priorities in this direction include large investment programs by the Public Gas Corporation and connecting the Greek gas transmission network to Turkey’s and Italy’s, the promotion of competition in the fuels market and the creation of a new legal framework for the development of renewable energy sources. Furthermore, he said, the government backs PPC in its drive to meet the new challenges. «In the deregulated power market, PPC will hold the position of a strong central axis. It nevertheless has to continuously respond to modernization requirements and the application of new technologies in the production and prevention of pollution.» Support for PPC includes its plans for investing outside Greece, he added. He said the country is energy self-sufficient for the rest of 2004 but will need new investment to cover steadily rising demand after 2005. The government is keen to promote a strong institutional framework to prevent distortions of competition, a stable economic climate and protection of the environment to ensure sustainable development. «We want strong growth for the country, cheap energy for citizens and firms, and a clean environment for all of us today and future generations.»