Greece’s PPC unveils plan to boost share of renewables, expand to other markets

Greece’s majority state-owned power utility, Public Power Corporation (PPC), has developed its 2018-2022 strategic and business plan with the support of its advisor, envisaging the company’s expansion to foreign markets and boosting the share of renewables in its overall energy generation mix, among other matters, according to an announcement from PPC. The advisor is consulting firm McKinsey & Company, according to reports.

The document, designed to safeguard PPC’s resilience and transform it into “a modern and cutting edge utility,” calls for increasing the participation of renewable energy sources, mostly wind and solar, in the company’s generation mix by around 600 MW by 2022. It sets the target of a 20%-25% share of renewable energy sources in PPC’s total capacity by 2030-2035.

The strategic and business plan calls for divesting 930 MW of lignite-fired capacity and associated mines and decommissioning 1,212 MW by 2021, while it also envisages prudent management of conventional generation units in the non-interconnected islands and the exploration of possible opportunities to convert existing diesel plans to small-scale LNG.

Under the strategic and business plan, PPC is to reposition the go-to-market strategy by focusing on retaining high priority customer segments, revising its branding and pricing, and expanding its core activities to offer a wider range of energy services and products, such as electricity-gas double play and energy efficiency services, according to the company’s announcement.

PPC is also to intensify collections and settlements in order to address stock and flow of unpaid bills, following both a long-term strategy as well as “quick wins,” and assess other growth opportunities such as energy services.

The plan calls for addressing certain regulatory issues, including claim capacity payments for generation units in order to sustain the economically challenging thermal units required for the security of supply, given their attractiveness as bridge fuel versus new builds, the announcement reads. At the same time, the document calls for a reduction of electricity suppliers’ charge for renewable energy sources (ELAPE) and eventually full abolition, as well as the abolition of NOME type auctions once lignite divestment is concluded, by the end of 2019 at the latest.

For the time horizon 2018-2022, the strategic priorities are supported by a capex plan in the area of EUR 3.9 billion, with over 50% being allocated in networks and renewable energy sources (31% in networks and 22% in RES), 23% to the contracted project for the completion of the construction of the new lignite-fired unit Ptolemais V and 9% for maintenance and environmental capex in conventional generation, according to the announcement.

By pursuing these priorities and implementing specific actions on an operational and regulatory front, PPC targets an EBITDA level in the range of EUR 1 billion-EUR 1.1 billion and a Net Debt/EBITDA ratio in the order of 3x by 2022. This would mean increasing EBITDA by about EUR 500 million, energypress wrote.