ECONOMY

HELPE powers ahead

Hellenic Petroleum (HELPE) plans to start operating its first electricity plant next month, making a foray into the soon-to-be liberalized power market and pitting itself against power monopoly PPC. The country’s largest refiner will launch commercial operations at its newly constructed 390 megawatt (MW) electricity plant in Thessaloniki in northern Greece by the end of the year, its chief executive said yesterday. «The plant is in the start-up and testing phase now. It is scheduled for commercial operation at the end of December,» CEO Panos Cavoulacos told Reuters in a telephone interview. The government opened up the sale of power to Greek companies several years ago. Earlier this month, the government also submitted an electricity deregulation bill to Parliament that would allow consumers to pick other suppliers than Public Power Corporation (PPC) from July 2007 and which encourages private power producers to apply for licenses to supply a total of up to 900MW of capacity. Hellenic Petroleum’s natural gas-fired plant is seen as the main competitor to PPC. Europe’s energy markets are dominated by utility giants, many of them former state-owned monopolies that were privatized in the past two decades of market deregulation. The EU is taking several members to court for liberalizing energy too slowly. Hellenic Petroleum plans to sell its electricity in the domestic market as well as abroad, with Italy one of the markets targeted for its higher wholesale electricity prices, said Cavoulacos. «It is purely an issue of higher wholesale electricity prices in Italy relative to Greece, which has been the case in the recent past,» he said. The refiner’s entry into electricity production will be the first test of how the new private producers will fare against monopoly supplier PPC in a deregulated market. «The law will make more explicit how a liberalized wholesale market will work. Our plant will be a test in the ability of private power producers to invest in Greece,» Cavoulacos said. Hellenic Petroleum may revise its core profit (earnings before interest, tax, depreciation and amortization or EBITDA) forecast for the power plant once it gets more clarity on the electricity market that will unfold. (Reuters)