4.3. Regulated Network Industries (Energy, Transport, Water)
Energy
The Greek energy markets need wide-ranging reforms to bring them in line with EU legislation and policies, make them more modern and competitive, reduce monopolistic rents and inefficiencies, promote innovation, favour a wider adoption of renewable and gas, and ensure the transfer of benefits of all these changes to consumers. In this context, the State’s participation in the energy sector will be reduced, in line with the commitments included in the assets development plan of TAIPED.
As prior actions, the authorities will:
i. [resume the privatisation process of ADMIE, announcing the date for submission of binding offers for the sale of all PPC shares in ADMIE; PPC will launch the expression of interest for selling its shares in ADMIE by June 2016 (key deliverable) with the sale to be completed by end 2016 (key deliverable)]
or
[on the basis of a report produced by independent advisors, agree with the Institutions and endorse in KYSOIP a detailed action plan, including a timeline, for implementing the full ownership unbundling of ADMIE from PPC, to be completed by end 2016; in this context, the expression of interest for the sale of a share of at least 20 percent of ADMIE to a private investor will be launched by June 2016 (key deliverable). Should the Institutions, having consulted the Greek authorities, determine that there is lack of sufficient progress to complete this processin 2016, in particular in relation to the identification of and purchase by the strategic investor, the Hellenic Republic will announce by October 2016 the date for submission of binding offers for the sale of all its shares in ADMIE by December 2016, and will fully privatize ADMIE in 2017.]
ii. [transfer to TAIPED the remaining 34 percent of PPC owned by the State, and launch the process leading to the sale to one or more private investors of at least 40 percent {that was 30% in the last deal} of PPC’s active generation plants, including the assets identified in the existing law, announcing that the sale will be concluded by 2017; PPC will launch the process for separating the assets, appointing an advisor by June 2016 (key deliverable), with the tender process being initiated in January 2017, and binding offers submitted by June 2017] {the transfer of this percentage would mean the privatization of PPC}
or
[agree with the Institutions the design of the NOME system of auctions, with the objective of lowering by 25 percentage points the retail and wholesale market shares of PPC by 2017, and to bring them below 50 percentage points by 2020] {directly or indirectly, electricity is being privatised}
iii. adopt the temporary capacity payment scheme, as approved by the European Commission in March 2016. In addition, PPC as a prior action will conclude the discussions on HV tariffs with all its customers, and the adopted tariffs shall be cost-based and take into account consumption characteristics (profiles) of customers that affect costs.
By June 2016, the authorities will: (i) pre-notify to the European Commission the permanent scheme for capacity payments; (ii) legislate the new framework for the support of renewable energies, while preserving financial sustainability and guarantee the respect of State-aid guidelines (EEAG); (iii) the current legislation on ETMEAR adjustments will be amended as needed, to ensure that the debt in the RES account is eliminated over a 12-months forward looking horizon; (iv) regulate according to the final decision of the Council of State on the netting of the arrears between PPC and the market operator; (v) continue the implementation of the gas market reform, adopting gas distribution tariffs and doubling the quantities available under the gas release program (key deliverable); (vi) conclude the implementation of the energy taxation review, as agreed with the Institutions.
The authorities will implement the roadmap for the implementation of the EU target model for the electricity market, to be completed by December 2017; in this context, they will pass the required legislation on the transposition of the high-level market designin June 2016 (key deliverable), and the balancing market will be completed by June 2017.
The authorities will make use of technical assistance, provided by the SRSS of the European Commission, for implementing all energy market reforms.
Energy
The Greek energy markets need wide-ranging reforms to bring them in line with EU legislation and policies, make them more modern and competitive, reduce monopolistic rents and inefficiencies, promote innovation, favour a wider adoption of renewables and gas, and ensure the transfer of benefits of all these changes to consumers.
As prior actions, the authorities will adopt the reform of the gas market and its specific roadmap, leading inter alia to full eligibility to switch supplier for all customers by 2018, and notify the reformed capacity payments system (including a temporary and a permanent mechanism) and NOME products to the European Commission.
By September 2015, the authorities will implement a scheme for the temporary and permanent capacity payment system; modify electricity market rules to avoid that any plant is forced to operate below their variable cost, and to regulate according to the final decision of the Council of State on the netting of the arrears between PPC and the market operator; begin implementation of the gas market reform according to the agreed timeline, whilst prioritising distribution tariffs; implement interruptible contracts as approved by the European Commission; revise PPC tariffs based on costs, including replacement of the 20% discount for energy-intensive users with tariffs based on marginal generation costs, taking into account consumption characteristics of customers that affect costs (key deliverable).
In September 2015, the authorities will discuss with the European Commission the design of the NOME system of auctions, with the objective of lowering by 25% the retail and wholesale market shares of PPC, and to bring them below 50% by 2020, while having reserve prices that capture generation costs and being fully compliant with EU rules. In case it is not possible to reach an agreement on NOME by the end of October 2015, the authorities will agree with the institutions structural measures to be immediately adopted leading to the same results mentioned above in terms of market shares and timelines (key deliverable). In any case, by 2020 no undertaking will be able to produce or import, directly or indirectly, more than 50% of total electricity produced and imported in Greece (legislation to be adopted as prior action).
By October 2015, the authorities will: a) take irreversible steps (including announcement of date for submission of binding offers) to privatize the electricity transmission company, ADMIE, unless an alternative scheme is provided, with equivalent results in terms of competition and prospects for investment, in line with the best European practices and agreed with the institutions to provide full ownership unbundling from PPC (key deliverable). To this end, the authorities have sent the first proposal to the institutions in August 2015; b) review energy taxation; c) strengthen the electricity regulator’s financial and operational independence; d) transpose Directive 27/2012 on energy efficiency adopting the legislation already submitted to Parliament.
By December 2015, the authorities will approve a new framework for the support of renewable energies, while preserving financial sustainability, and for improving energy efficiency, making best use of EU funds, international official financing and private funding, Moreover, they will introduce a new plan for the upgrade of the electricity grids in order to improve performance, enhance interoperability and reduce costs for consumers. The authorities will start the implementation of the roadmap for the implementation of the EU target model for the electricity market, to be completed by December 2017 (key deliverable); in this context, the balancing market will be completed by June 2017 (key deliverable).
The authorities will make use of technical assistance for designing the new framework on renewable energies and energy efficiency. Other important areas where assistance will be used, both for legislation and for regulation, are the implementation of the gas market reform and the transition to the EU target model for the electricity market.