On February 19, 2001, the deregulation of 34% of the Greek energy market was officially launched, with full deregulation slated to be completed by 2005. Within hours, 917 applications were submitted to the Regulatory Authority for Energy (RAE), with proposed investments totalling GDR5 trillion.
The suitors for the GDR350-billion energy market have come bearing megawatts - about 19,000 of them, or almost twice the current national output. Of these, 7,700 megawatts would be generated by conventional thermoelectric units and 10,000 by renewable energy sources, i.e. wind, hydroelectric and biomass. The largest of the proposed plants, however, are conventional (thermoelectric) ones, fuelled by natural gas.
In this first phase of deregulation, only big industrial consumers, numbering approximately 6,500, will have the option of buying energy from the licensed provider of their choice. Households will have to wait until full deregulation in 2005 to take advantage of the competitive market. The RAE estimates that the first private plants will operate by the end of 2003.
The natural gas factor
Greece is the last EU country to begin the process of deregulating its power industry. According to many local industrialists, including representatives of the Federation of Greek Industries (SEV), the success of the deregulation depends on the concurrent deregulation of the natural gas network, which would reduce industrial electricity costs.
Development Minister Nikos Christodoulakis has stated that the government intends to proceed with the freeing of the natural gas market, a move also endorsed by a new European Commission draft Directive mandating such deregulation. Currently, natural gas is provided by the state-owned Public Gas Corporation (DEPA), which imports the gas from Russia via a pipeline running through Bulgaria. The government will also grant licenses for the importation of electricity, with actual transactions expected to begin in July.
By the end of June, shares representing about 20% of the Public Power Corporation (PPC) - which until now held the monopoly on power production and will continue to own the distribution network - will be introduced to the Greek stock market and possibly to New York's and London's as well. What's more, Christodoulakis leaves open the possibility of PPC's complete privatisation.
