The Greek Energy Forum, in partnership with Lightsource BP organised an event on energy transition on 2nd December 2019, taking the audience through a journey that examined the dual challenge of liberalisation of the electricity market and energy transition to zero carbon for Greece.
The keynote speakers, including Vlasios Souflis, Director of International Business Development at Lightsource BP; Harry Boyd-Carpenter, Director, Head of Energy EMEA at EBRD; Virginia Murray, Head of the Greek Projects and Structured Finance Group at Watson, Farley & Williams; Matthew Tilbrook, Director, Project Finance at METKA EGN; and Tina Mavraki, Executive Manager at Barak Fund Management / Board Director Mytilineos S.A., discussed the progress that has been made so far in both liberalisation and energy transition, the gaps that remain and the way that the two challenges interact, advance or hinder each other.
The key highlights of the evening include:
- Letting the market to liberalise is critical, as the market needs to be as efficient as possible. Once that is achieved, the second thing to look after is the bureaucracy, because it is another thing to say I have the legislation there I could do it and another to have all kinds of obstacles from the land issues to grid issues that might exist. In other markets everything is significantly streamlined. We need to create a more holistic generation mix and we need to see the system as a whole.
- The hope is that whilst the legislation is getting into place the energy prices emerging from the auctions will keep Greece attractive to investors.
- The trend will be to loosen up the legislation rather than over-legislate; to try and optimise the final design of the market. Certainly the introduction of the wholesale market, the increasing role that will need to be for the aggregators to enable renewable projects to sell power directly into the market, if they don’t have a subsidy there will be a trend towards corporate PPAs, a more active approach by major corporate consumers of power to procure directly. All of these things will occur without having to design too much, the focus should be on reducing restrictions rather than seeking to fiddle around from a regulatory perspective.
- There has also been a transfer of risk from the banks into the energy sector. Liquidity availability is manifesting itself more internationally. There is not really a shortage of capital, but there might be a shortage of good opportunities if things are not structured properly.
- The exchange has been established, but we are yet to see what that might mean for the market. The spot market launch is likely to be around June 2020.