August 29, 2022
Electricity exports from Greece to its neighbours in the north increased in July, and the trend is expected to continue in August. In this rather unexpected situation for Greece, which has become a net exporter of electricity while traditionally being a net importer, the country is helping its Balkan neighbours deal with severe electricity shortages.
In parallel with the steep rise of natural gas and electricity prices in Europe, Western Balkan countries are further affected by production and supply problems. In much of the region like Serbia, Kosovo*, and North Macedonia, low availability of coal and technical issues in coal thermal power plants have led to reduced production and increased import need.
Greece becomes a net exporter
One place where Serbia, Kosovo* and North Macedonia have found more electricity lately is Greece. The country has become net exporter this summer since it is not facing issues with electricity production, still imports relatively cheap Russian gas and has LNG cargoes. According to the rules of the interconnected market, electricity flows from more affordable to more expensive markets. Therefore energy traders can now take advantage of a lower price in Greece and sell it wherever the price is higher.
According to the latest data from Independent Power Transmission Operator (IPTO) for July, the country drastically increased its exports and became a net exporter for only the second month this year.
In July, Greece exported over 500 GWh: 351 GWh to Italy, 253 GWh to Albania, and 184 GWh to North Macedonia. Exports natural flows increased by 976% compared to last year’s corresponding month, given that they were previously very low. It should be noted that traditionally Greece has been a net importer of electricity, but during the last few years, this has begun to change.
Furthermore, projections for August have one fundamental difference compared to July: the underwater interconnection between Greece and Italy has stopped operating since August 19 and is planned to stay offline until September 3 because of technical issues.
Greece manages to keep its wholesale power price lower than Italy
The result is that Greek exports to Italy and vice versa are reduced to zero during this time. Given that Italy is directly affected by the rise of power prices in France, Greece manages to keep its wholesale power price lower than Italy these days.
Difference in market prices leads to more exports
The situation regarding interconnections is as follows: Italy has a connection to Greece and another one to Albania. Since only the latter is online right now, Greece is partially shielded from price increases in Italy. In contrast, the Western Balkans are more exposed to high Italian prices, which makes financial sense for them to import Greek electricity.
This was especially evident on August 26 and 27, when Italy and Greece had a huge difference of EUR 300/MWh in their respective prices. On Monday, August 29, Greece was EUR 40/MWh cheaper, which may seem minor, but it still makes a lot of profit for traders and exporters.
The fact that Greece maintains a lower price than Italy means that it can export more electricity to Albania and North Macedonia, as long as their interconnections support it. This power can also make a small but measurable indirect difference to wholesale prices in other countries further north, such as Serbia, which also faces significant issues with its production.
On Friday, Greece exported 130 MWh to Albania, 129 MWh to North Macedonia and 20 MWh to Bulgaria for 279 MWh. On Monday, 159 MWh were exported to Albania and 129 MWh to North Macedonia for 288 MWh. The rising trend is expected to materialize next month when IPTO publishes its data for August.
This is a positive development for the region, ahead of a very tough winter regarding the energy situation.
* This designation is without prejudice to positions on status and is in line with UNSCR 1244/99 and the ICJ Opinion on the Kosovo declaration of independence.