Serious obstacles to green PPAs that will ensure cheap power to industry

By Haris Fludopoulos

At the moment, in the Greek electricity market, there is no possibility to conclude green bilateral PPAs between industry and RES producers, due to the special conditions that prevail. This fact, which is due to market pathologies, does not allow the industry to start signing such contracts that will provide a solution to the energy problem of energy-intensive manufacturing companies.

The matter was mentioned by the Union of Industrial Energy Consumers EBIKEN in a recent letter sent to the Minister of Energy K. Skrekas and the president of RAE Th. Dagoumas.

“Until today, it is not possible to conclude bilateral contracts with physical delivery between a buyer (industry or supplier) and a producer of a contract unit or RES unit, without the energy necessarily passing through the stock exchange and without the transactions being made at the marginal price (OTS), while it is obvious that the price agreed in the context of the contract is not related to the OTS” states EBIKEN in the letter.

“For these reasons the producer and the buyer at the end of the month should settle between themselves, based on their hourly agreement, the transactions made through the stock exchange, i.e. the producer should return to the buyer the amount corresponding to the difference between of the OTS price and the agreed price in the event that the OTS is higher than the agreed price and the buyer to return a corresponding amount when the agreed price is higher than the OTS”, underlines EBIKEN.

“Unfortunately, there is a characteristic delay by the energy exchange to proceed with this regulation, that is to say that there is the possibility that bilateral contracts with physical delivery do not necessarily pass through the exchange, a regulation, which is applied to all favored European markets and is a request of industry in our country since the opening of the futures market” industrial energy consumers point out.

EBIKEN states in the letter that the imposition of a ceiling also creates difficulties in concluding bilateral contracts even if the contracts concern new RES units under construction, which will be put into operation after 1.1.2023 and obviously not existing units.

Solutions

In order to end the impasse, EVIKEN has submitted three proposals for its part:

1. To compel the stock exchange to proceed immediately with the regulation, which will allow the conclusion of bilateral contracts with physical delivery without it being mandatory for the transaction or the settlement to take place through the stock exchange.

2. In the opposite case, to exempt from the imposition of the ceiling those RES, which will sign long-term bilateral contracts with mandatory physical delivery with industries for RES that are put into operation after 1.1.2023.

3. To exempt from the imposition of the ceiling the RES units that enter into long-term contracts within the framework of the Green Pool and will be registered in the corresponding register.