Crucial month for energy

Crucial developments are expected this month in the country’s energy sector, whose liberalization is still suffering teething problems. Next week the board of the Public Power Corporation (PPC) is set to meet, with the controversial issue of cooperation with German energy giant Rheinisch-Westfälisches Elektrizitatswerk (RWE) on the agenda. The utility’s management has announced it will re-submit for approval the RWE cooperation memorandum which it was forced to withdraw at its last meeting at the demand of PPC’s union of employees, GENOP. The open letter recently sent by PPC to GENOP clearly shows that management is determined to advance the memorandum, even if this means a clash with the union. For its part, GENOP has warned of a strong reaction if cooperation with RWE goes ahead, saying it would be «catastrophic» for PPC. The PPC-RWE cooperation agreement provides for the construction of a coal plant for electricity production with two units totaling 1,600 megawatts (MW). PPC will own 49 percent of those units, while RWE will have 51 percent and the management. Decisions pending The private sector is also bracing for developments regarding the share of the electricity market to which it wants to lay claim. The sector is awaiting a decision by Development Minister Christos Folias concerning the tenders for mining rights in the area of Vevi in northwestern Greece, as well as decisions regarding electric power transmission operator DESMHE and the mode of operation of the electricity production unit of Aluminium of Greece. All three issues, which involve major groups (Copelouzos, TERNA, Mytilineos), have been pending for over a year, to the detriment of the country’s power network and electricity consumers. According to his close associates, the minister intends to provide definitive solutions, one way or another. The DESMHE tender concerns the construction of the first private unit with a guaranteed revenue on an annual basis. The procedure began in 2006 but was subsequently blocked by the European Union. According to the provisions of the tender, the contract should be awarded to Enelco (Enel and Copelouzos). But the EU intervened after TERNA raised objections and referred the matter to the Commission, which is one step before referral to the European Court. As for the Vevi tender, TERNA has submitted the best bid but the procedure has unjustifiably been delayed. What concerned the previous leadership of the ministry was the huge difference between the guaranteed revenue percentage offered by TERNA and that offered by the other bidders. TERNA offered 82.5 percent, followed by the Mytilineos and Hellenic Technodomiki consortium (14.5 percent) and PPC (5 percent). Regarding the Aluminium of Greece plant, its construction is complete but it has not yet begun operating. The Mytilineos group, which owns Aluminium, has asked the Regulatory Authority for Energy (RAE) to incorporate the plant in the country’s grid. RAE issued an opinion last February, on which the minister will base his final decision.