REG - Public Power Corp - Annual Financial Report <Origin Href="QuoteRef">DEHr.AT</Origin> - Part 6
07/04/2017 18:40
- Part 6: For the preceding part double click ID:nRSG9898Be
amounts in thousands of Euro)
Share Capital Share Premium Legal Reserve Revaluation Surplus Fixed Assets Statutory Revaluation Surplus Foreign Exchange Differences, Tax-free and Other Reserve Retained Earnings Total Non Controlling Interest Total Equity
Balance, January 1, 2015 1,067,200 106,679 109,203 4,833,594 (947,342) (83,272) 1,048,597 6,134,659 90 6,134,749
- Net loss for the year - - - - - - (102,518) (102,518) 2 (102,516)
- Other comprehensive income/(loss) for the year after tax - - - (71,550) - (36,446) - (107,996) - (107,996)
Total Comprehensive income/(loss) for the year after tax - - - (71,550) - (36,446) (102,518) (210,514) 2 (210,512)
- Transfers from retirements of fixed assets - - - (8,721) - - 8,721 - - -
- Dividends - - - - - - (11,600) (11,600) - (11,600)
- Other movements - - - (1,046) - - (35) (1,081) - (1,081)
Balance, December 31, 2015 1,067,200 106,679 109,203 4,752,277 (947,342) (119,718) 943,165 5,911,464 92 5,911,556
Balance, January 1, 2016 1,067,200 106,679 109,203 4,752,277 (947,342) (119,718) 943,165 5,911,464 92 5,911,556
- Net profit for the year - - - - - - 67,520 67,520 3 67,523
- Other comprehensive income/(loss) for the year after tax - - - - (33,653) - (33,653) - (33,653)
Total Comprehensive income/(loss) for the year after tax - - - - (33,653) 67,520 33,867 3 33,870
- Transfers from retirements of fixed assets - - - (4,085) - - 4,085 - - -
- Legal Reserve formation - - 8,321 - - - (8,321) - -
- Other movements - - - - (1) (31) (32) - (32)
Balance, December 31, 2016 1,067,200 106,679 117,524 4,748,192 (947,342) (153,372) 1,006,418 5,945,299 95 5,945,394
The accompanying notes are an integral part of these financial statements.
PUBLIC POWER CORPORATION S.A
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 2016
(All amounts in thousands of Euro)
Share Capital Share Premium Legal Reserve Revaluation Surplus Fixed Assets Statutory Revaluation Surplus Tax-free and Other Reserve Retained Earnings Total Equity
Balance, January 1, 2015 1,067,200 106,679 109,203 4,082,686 (947,342) 8,965 1,541,057 5,968,448
- Net loss for the year - - - - - - (152,511) (152,511)
- Other comprehensive income/(loss) for the year after tax - - - (56,132) - (25,008) - (81,140)
Total Comprehensive income/(loss) for the year after tax - - - (56,132) - (25,008) (152,511) (233,651)
- Transfers from retirements of fixed assets - - - (6,538) - - 6,538 -
- Dividends - - - - - - (11,600) (11,600)
- Other movements - - - - - - (2) (2)
Balance, December 31, 2015 1,067,200 106,679 109,203 4,020,016 (947,342) (16,043) 1,383,482 5,723,195
Balance, January 1, 2016 1,067,200 106,679 109,203 4,020,016 (947,342) (16,043) 1,383,482 5,723,195
- Net profit for the year - - - - - - 166,414 166,414
- Other comprehensive income/(loss) for the year after tax - - - - (18,053) - (18,053)
Total Comprehensive income/(loss) for the year after tax - - - - (18,053) 166,414 148,361
- Transfers from retirements of fixed assets - - - (3,403) - - (3,403) -
- Legal Reserve formation - - 8,321 - - - (8,321)
- Other movements - - - - - -
Balance, December 31, 2016 1,067,200 106,679 117,524 4,016,613 (947,342) (34,096) 1,544,987 5,871,565
The accompanying notes are an integral part of these financial statements.
PUBLIC POWER CORPORATION S.A.
CONSOLIDATED AND SEPARATE STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2016
(All amounts in thousands of Euro)
Group Company
2016 2015 2016 2015
Cash flows from operating activities
Profit / (Loss) before tax from continuing operations 226,444 (148,179) 200,042 (206,857)
Adjustments:
Depreciation and amortization 744,959 751,760 731,007 738,791
Amortisation of customers' contributions and subsidies (75,868) (75,750) (75,660) (75,580)
Impairment loss of marketable securities 9,040 1,488 5,427 1,488
Fair value (gain)/loss of derivative instruments (689) (2,876) (689) (2,876)
Share of loss (profit) of associates (1,241) (3,243) - -
Interest income and dividends (93,434) (64,387) (214,366) (107,699)
Sundry provisions 408,136 931,559 412,535 920,765
Unrealised foreign exchange (gains)/ losses on loans and borrowings (404) 1,565 (404) 1,565
Unbilled revenue (6,073) (137,139) (6,073) (137,139)
Retirements of fixed assets and software 11,192 18,482 11,075 18,482
Amortization of loan origination fees 7,181 7,143 7,181 7,143
Interest expense 191,984 213,626 191,984 213,626
Operating profit before working capital changes 1,421,227 1,494,049 1,262,059 1,371,709
(Increase)/decrease in :
Trade receivables (262,838) (771,855) (241,510) (772,672)
Other receivables (3,659) (4,900) 5,331 11,312
Materials, spare parts and supplies 47,228 (17,539) 24,829 (19,091)
Increase/(decrease) in :
Trade payables 177,920 184,565 34,717 228,437
Other non - current liabilities 27,711 11,337 28,350 (8,527)
Accrued/ other liabilities excluding interest 92,707 130,157 107,414 156,788
Income tax paid (252,014) (28,393) (223,232) (23,712)
Discontinued operations (57,607) 164,377 -
Net Cash from Operating Activities 1,190,675 1,161,798 997,958 944,244
Cash Flows from Investing Activities
Interest and dividends received 93,434 61,511 121,422 104,823
Capital expenditure for tangible and intangible assets (727,465) (623,699) (722,531) (616,565)
Proceeds from customers' contributions and subsidies 4,881 13,547 4,881 13,547
Investments in subsidiaries and associates 2,599 (1,951) - (722)
Discontinuef operations (40,592) (108,425) - -
Net Cash used in Investing Activities (667,143) (659,017) (596,228) (498,917)
Cash Flows from Financing Activities
Net change in short-term borrowings (50,000) 30,000 (50,000) 30,000
Proceeds from long-term borrowing 145,000 - 145,000 -
Principal payments of long-term borrowing (332,044) (272,004) (332,044) (272,004)
Interest paid and loans' issuance fees (207,796) (233,553) (212,778) (242,451)
Dividends paid (86) (11,598) (86) (11,598)
Discontinued operations (29,158) 1,533 - -
Net Cash used in Financing Activities (474,084) (485,622) (449,908) (496,053)
Net increase / (decrease) in cash and cash equivalents 49,448 17,159 (48,178) (50,726)
Cash and cash equivalents at beginning of the year 451,670 434,511 197,592 248,318
Cash and cash equivalents from discontinued operations (294,084) - - -
Cash and cash equivalents at the end of the year 207,034 451,670 149,414 197,592
The accompanying notes are an integral part of these financial statements.
D. NOTES ΤΟ THE FINANCIAL STATEMENTS
1. Corporate Information
Public Power Corporation S.A. ("PPC" or the "Parent Company") was established in 1950 in Greece for an unlimited duration
as a State owned and managed corporation for electricity generation, transmission and distribution throughout Greece.
In 1999, the Hellenic Republic enacted Law 2773/1999 ("the Liberalization Law"), which provided for, among other
provisions, the transformation of PPC into a société anonyme. PPC's transformation to a société anonyme was effected on
January 1, 2001, by virtue of Presidential Decree 333/2000 and its duration was set for 100 years.
Effective December 2001, PPC's shares are listed on the Athens and the London Stock Exchanges.
In 2007 the Parent Company proceeded to the spin - off of its RES activity and its contribution to its wholly owned
subsidiary PPC Renewables S.A.
On December 1st 2011 the Parent Company proceeded to the spin - off of its General Division of Transmission and the
contribution to its wholly owned subsidiary "Independent Power Transmission Operator" (IPTO S.A.).
On May 1st 2012 the spin - off of the General Division of Distribution was completed by its contribution to PPC's wholly
owned subsidiary "Hellenic Electricity Distribution Network Operator" (HEDNO S.A.).
The accompanying financial statements include the separate financial statements of PPC and the consolidated financial
statements of PPC and its subsidiaries ("the Group").
PPC headquarters are located at 30, Chalkokondili Street, Athens, 104 32 Greece.
At December 31, 2016, the number of staff employed by the Group was 18,902 (2015: 18,356).
At December 31, 2016, employees of the Group 97 (2015: 98), have been transferred to several State agencies out of which,
were on PPC's payroll 92 (2015: 94). The total payroll cost of these employees, for the twelve-month period ended December
31, 2016 amounted to Euro 3,460 (2015: Euro 3,221) .
Additionally, PPC's transferred employees in TAYTEKO-KAP/DEI and IKA - ETAM-TAP/DEI amounted to 280 in 2016, for whom
payroll for the twelve-month period ended December 31, 2016, amounted to Euro 12,425.
PPC Group generates electricity from the 62 main power generating stations of the Parent Company as well as from additional
stations (Wind Parks, Small Hydro stations and Photovoltaic plants) that belong to its wholly owned subsidiary PPC
Renewables, transmits electricity through its 12,457 kilometres long High voltage System, out of which 11,507 kilometres
are owned by its wholly owned subsidiary Independent Power Transmission Operator (IPTO S.A.) and distributes electricity to
consumers through its 237,360 kilometres long Distribution Network of Medium and Low voltage which are managed by its
wholly owned subsidiary "Hellenic Distribution Network Operator (HEDNO S.A.)". Lignite consumed by the Parent Company's
lignite-fired power stations is extracted, mainly, from its own lignite mines. PPC Group has also installed a fibre optics
network of approximately 2,189 kilometres along its transmission lines and approximately 164 kilometres of urban fibre
optics network.
2. Legal Framework
CHANGES IN THE LEGAL FRAMEWORK OF THE ELECTRICITY MARKET 2016
GENERAL PROVISIONS FOR THE DOMESTIC ELECTRICITY MARKET
· Following Law 4320/2015 (OG A'29/19.03.2015) regarding the provisions for immediate actions to address the
humanitarian crisis, Law 4381/2016 was enacted, by which the provisions concerning the provision of electricity free of
charge are amended as follows:
«The provision of electricity, free of charge for up to 1200kWh per four month period, for a total period of 12 months,
which corresponds to three settlement four month bills for the year 2015, is provided for the electricity needs of the
households' main residence which resided under extreme poverty conditions. In case of beneficiaries whose supply had been
disconnected till January 31st 2015, it will be connected free of charge, whilst overdue debts will be settled. The
provision of free electricity could be extended in the consumption of the following year to complement the 12 month period
grant." The terms and the conditions for the settlement of overdue debts are agreed by contract between the Ministry for
Labour and Social Solidarity and electricity Suppliers.
· In the context of the institutionalized Intermittent Load Service (ΥΔΦ), auctions have started for the provision of
ΥΔΦ1 and ΥΔΦ2 type of Intermittent Load while the revised Auction's Regulation for the abovementioned provision has also
been posted on the web by IPTO.
· The electricity used for chemical reduction, electrolytic and metallurgical process is exempted from the imposition
of the Consumption Special Tax, as stated in the Decision of the Secretariat General of government
· revenues (OG B' 743/21.03.2016). The Decision contains information regarding the Beneficiaries, the required
documents, the exempted quantities of electricity, the obligations of the beneficiaries and the obligations of the
Distributors/Self-generators.
· According to the Decision 33 of the Government's Council Economic Policy (OG B' 1472/25.05.2016) the HRADF's Asset
Development Plan (ADP) was approved. Specifically, for PPC, the potential sale of 17% of its shares is included in the
Asset Development Plan (ADP).
According to Law 4425/2016, the transfer of 34% of PPC's shares which the Greek State owns, to the Public Holding Company
under establishment. Among the companies which are transferred to the Public Holding Company, IPTO is not included.
· Law 4389/2016 "Urgent Provisions for the implementation of the Financial Targets and Structural Reforms Agreement and
other provisions" provides, among others, the following:
· The procedures and details of the full ownership unbundling of IPTO from PPC S.A. are set (articles 142-149 and
152). According to the specific articles, PPC must:
(a) Sell, through an international tender (Invitation to Submit an Expression of Interest), at least 20% of IPTO's
shares in a strategic investor who will be either (a) a Transmission system operator, member of the ENTSO-E, or a
transmission system operator participating in a transmission system operator being a member of ENTSO-E or (b) a consortium
in which a transmission system operator of case (a) will be participating
(b) Establish a holding company, to which it will transfer in kind 51% of IPTO's Shares. PPC will be initially the sole
shareholder of that company and later on PPC will transfer all shares of the company to its shareholders, through a share
capital decrease and a distribution in kind.
(c) Sell at least 25% of IPTO's shares in a Greek public company (named Public Holding Company of IPTO). The price per
share for that sale will be equal to the price to be paid by the strategic investor as above.
The Share Purchase Agreement («SPA») must be concluded by 28 February 2017, following the earlier transfer of PPC's shares
held in the Holding Company to its shareholders, while according to Law 4393/2016 the deadline for selecting the Preferred
Strategic Investor was shortened by one month and must be concluded until 31 October 2016.
In compliance with Law 4389/2016, the Invitation to Submit an Expression of Interest was issued and published following the
July 11th 2016 decision of the General Meeting of PPC S.A. Shareholders, which set and the percentage of sale of IPTO's
shares in a strategic investor to 24%.
Four companies submitted an Expression of Interest, as follows :
• China Southern Power Grid.
• China State Grid International Development Limited, Hong Kong,
• RTE International on behalf of RTE Reseau de Transport d'Electricite S.A., and
• TERNA - Rete Elettrica Nazionale S.p.A. in partnership with F2i SGR S.p.A,
China State Grid International Development Ltd was selected as the Preferred Strategic Investor offering a bid of Euro 320
mil. The sale of 24% of IPTO's shares to the preferred investor was approved by PPC's Shareholders General Meeting on
November 24th 2016, while the SPA was signed on December 16th 2016.
Moreover, in accordance with Law 4423/2016, the time sequence of actions required to complete the full ownership unbundling
of IPTO was clarified and now is established that for PPC to sign the Share Purchase Agreement with the Preferred Strategic
Investor, the earlier transfer of the shares held in the Holding Company to PPC's shareholders is not required.
On January 17th 2017, the PPC's Shareholders General Meeting approved (a) the establishment of a 100% subsidiary company
under the name "Energy Holding Company Limited (EN.SYM)", b) the contribution in kind of the 51% of IPTO's shares held by
PPC to EN.SYM as the initial share capital plus Euro 70 in cash and c) the reduction of PPC's share capital by an amount
equivalent to the initial share capital of EN.SYM and the distribution in kind of the shares of EN.SYM to existing
shareholders of PPC at their proportionate interest in the share capital of PPC.
These actions are already underway and will take place after the fulfillment of Law 2190 / 1920 prerequisites.
In addition, within the implementation framework of IPTO's ownership unbundling, upon the completion of the transfer by PPC
to its shareholders of the shares held in the EN. SYM., the company in accordance with Article 146 of Law 4389/2016,
"requests without undue delay its listing in the Athens Stock Exchange, having taken all necessary steps to this end,
including in particular the drawing up of an Offering Circular". These actions are in progress with the cooperation and
supervision of the competent Authorities (Capital Market Commission and ATHEX).
Finally, the General Meeting of PPC's Shareholders for the authorisation of the transfer of 25% of IPTO' share capital to
DES ADMIES is scheduled to take place in May 2017. It is noted that, by a subsequent amendment of Law 4389/2016, within the
Article 32 of Law. 4447/2016, OG A 241 / 23.12.2016 it is determined that, "the acquisition price per share will be
determined after carrying out a valuation of the 25% stake of IPTO's share capital as an independent stake, to be conducted
by an independent valuator, which will be appointed jointly by DES ADMIE and PPC. "
· According to the provisions of articles 135-141 of the Law, the procedures, the involved parties and all the
details concerning the implementation of the regulated forward products (NOME type auctions) are set. The quantities of
electricity to be auctioned are calculated as a percentage of PPC's share reduction in the retail market of the
interconnected system, taking as a reference point PPC's market share in August 2015, and are as follows: 8% for 2016, 12%
for 2017, 13% for 2018 and 13% for 2019. Those percentages would be possibly amended in case PPC's market share exceeds or
falls two percentage points from the reduction target set. The first auction will take place till the end of September 2016
and the physical deliveries must start during the last three months of 2016. The beneficiaries of those products will be
all the licensed Suppliers (which will be registered in the NOME registry as well) except PPC S.A. and the industrial
consumers which are not allowed to buy NOME forward products unless industrial cunsumers maintain or develop a separate
activity for electricity supply. The auctions' starting price will be determines through a Joint Ministerial Decision, by a
methodology decided by the Ministers of the Economy and Environment and Energy, after RAE's opinion. The methodology will
be based on the variable cost of PPC's lignite and hydroelectric units and will set the lignite/hydroelectric ratio in the
forward products mix. With the Joint Ministerial Decision FIN.182348 (OG B' 2848/07.09.16) the methodology for the
determination of the starting forward products auction's prices was established as well as the therefrom resulting price
for the first period of implementation of the mechanism, which was set to E37.37 / MWh. The annual quantity for the
auctioned products for 2016 was set equal to 460 MWh/h (RAE Decision 353/2016). With the same Decision, the segmentation of
the auctioned quantity to individual forward products was set, as well as the schedule of auctions. The first auction took
place on October 25th 2016, with 12 companies participating and with prices ranging between E37,37 and E37,50. Physical
deliveries should have begun within the fourth quarter of 2016.
It is noted that within November 2016, PPC filed an application to the State Council for the annulment of the
aforementioned decisions relating to the methodology of determination of the starting forward products auction prices and
the resulting price for the first period of the mechanism's implementation.
The annual quantity of electricity for the future products to be auctioned in 2017 will amount to 681MWh/h (Volume :
5,966,056 MWh) (RAE Decision 619/2016). The allocation of that annual quantity in individual future products with physical
delivery will be done through four auctions, as follows: 145 MWh/h on January 31st 2017, 145 MWh/h on April 26th 2017, 145
MWh/h on July 12th 2017 and 246 MWh/h on October 18th 2017. The first auction of 2017 was recently completed, with the
product price ranging between E41,05 and E41,14 /MWh.
Up to this date and during the mechanism's implementation, a significant variation between the total quantity of use
declarations and the load declarations, especially in low load hours was observed and therefore RAE made regulatory
interventions to ensure the proper use of those products, as base products, discouraging the submission of extremely high
declarations covering peak loads, increasing the secondary market liquidity and further strengthening the usage purpose of
the forward products (RAE Decision 184/2017).
· a "Transitional Flexibility Assurance Mechanism" will be adopted. The implementation of this transitional
mechanism, which refers to the sufficient flexibility assurance and not to the capacity one, will be enacted from May 1st
2016 and its duration will be 12 months at the most. It will compensate natural gas units (open and combined cycle and
cogeneration) and part of hydroelectric units, with the amount of Euro E45,000 /MW. The upper compensation limit per unit
is set to Euro 15 mil., while the total annual compensation amount of the mechanism has been set to Euro 225 mil. Following
the Law and in the framework of the European Commission's Decision for the approving of the above Mechanism, RAE called,
with a notice, the eligible power plants to apply for their participation in the "Transitional Flexibility Assurance
Mechanism". Following the same issue, RAE announced the list of the generation units of the interconnected system (natural
gas units and hydroelectric units) that are included in the Transitional Flexibility Assurance Mechanism, the inclusion
date, the eligible capacity and the maximum amount of compensation per unit, fuel and generator. According to the data of
the table, the mechanism integrates 1660.892 MW of PPC's natural gas units with a maximum compensation amount of Euro
54.1mil and 619.807 MW of PPC's hydroelectric units with a maximum compensation amount of Euro 27.9 mil.
· All natural gas quantities consumed for electricity generation are exempted from the Consumption Special Tax, from
June 1st 2016 and onwards (Art 61 par. 1 & 3).
· Finally, the provisions of Law 4273/2014 on the Establishment of a New Vertically Integrated Electricity Undertaking
are repealed (OG A' 146).
· According to O.G B' 1463/24.05.2016 the Electricity Supply Code is amended concerning the rights and obligations of
customers with overdue debts or under a settlement scheme for overdue debts, wishing to change their Electricity Supplier.
More specifically, customers will not be able to terminate their contract with their initial Supplier in order to proceed
to a Supplier change, unless either having previously paid all overdue debts arising from their initial contract, or having
settled their debts to their initial Supplier under its debt settlement scheme.
· RAE, with its Decision 208/2016, redefined the Administratively Defined Energy Offer Cap to three hundred euros per
Megawatt hour (E300 /MWh) in accordance with Article 71 of the Power Exchanging Code. The Decision is effective from July
15th 2016.
HELLENIC ELECTRICITY TRANSMISSION SYSTEM (HETS)
· The new use of transmission system charges were announced by RAE for 2016 (Decision 466/2015), effective February 1st
2016, which are significantly lower in almost all the consumers categories or at least stabilized (prevention or restrain
of large changes) for the HV and MV customers with an annual consumption greater than 13 GWh, marking the smooth adjustment
of those charges to the requirements of the European law. The annual allowed revenue for the use of the transmission system
was lowered by 1.7% compared to 2015
· RAE by its Decision 453/2015 approved the required revenue for 2016 to Euro 203.4 mil. in accordance with its
previous Decision 572/2014 which had approved the Allowed Revenue for the regulated period 2015-2017 to Euro 254.7mil.,
250.2 mil. and 261 mil. per year, respectively. Based on the required revenue of 2017, the new use of transmission system
charges were defined (Rae Decision 456/2016).
Moreover, RAE by its Decision 253/2015 amended the provisions of the Grid Control Code (ΚΔΣΜΗΕ) and of the methodology for
the determination of the Required Revenue so that interconnection rights auction cost (clause Π3) are taken into account
RAE by its Decision 404/2016, approved the Required Revenue of the HETS Operator for 2017 to the amount of Euro 202.6 mil.
· With its 394/2016 decision, RAE (Use of Congestion Income, from the country's international interconnections access
rights, for the year 2017), approved the use of Euro 46 mil., from the Reserve Account (Interconnections Transfer Capacity
Allocation according to article 178 of the Greek Grid Control Code For Electricity) that IPTO keeps, for the reduction of
the Annual Cost for the use of the Transmission System, for the year 2017.
· Recently RAE published a Decision by which it requires IPTO to submit a recommendation for the necessary amendments
in the Grid Control Code so as to be determined that the System expansion projects for the distribution network connection
to be financed by IPTO, to be part of IPTO's regulated assets basis, under the terms and conditions established in
accordance with the Methodology for the Calculation of the HETS Required revenue, and their costs to be recovered through
the use of System Charges (Decision 169/2016).
HELLENIC ELECTRICITY DISTRIBUTION NETWORK (HEDN)
· The annual cost and the required revenue for the use of HEDN were announced by RAE for 2016 (Decision 455/2015)
amounting to Euro 757.8mil. and Euro 747.4 mil. respectively. Similarly, the annual cost and the required revenue for the
use of HEDN were announced by RAE for 2017 (Decision 454/2016) amounting to Euro 753.7mil. and Euro 741.8 mil.
respectively. Based on the required revenue of 2017, the new use of distribution network charges were defined (Rae Decision
455/2016).
· RAE by its Decision 434/2015 (OG B' 2772/18-12-2015), entitled "Approval of Unit Costs of Losses for the year 2016 in
the context of applying the Mechanism of Settlement between the Operators of the Transmission System", approved the basis
for calculating the cost of losses and determined the Unit Cost of Losses at E60 /MWh. Respectively for the year 2017, the
System Marginal Price was approved as the basis for calculating the cost of losses and the unit cost of losses at E48,7 /
MWh, according to IPTO's recommendation (RAE Decision 514/2016).
· HEDNO, as the NII Operator, announced that the market opening in the electrical system of Crete begun in June 21st
2016. Simultaneously, the necessary methodologies for the operation of the NII market were approved by RAE (Decisions
46/2016 and 47/2016). With a newer publication the market opening in Rhodes island was also announced on January 2nd 2017,
following the adoption of all the necessary methodologies for the market operation in the NIII (RAE Decisions 46/2016,
47/2016 and 238/2016) and pursuant to L.4414/2016, according to which Rhodes island is no more integrated in the derogation
regime for the supply of electricity from January 1st 2017. It should be noted that the derogation has been granted till
the full installation of the necessary infrastructure in the NII and, in any case, it expires on February 17th 2019.
· The new Code for the management of the HEDN was recently adopted (RAE Decision 395/2016).
ETMEAR - SPECIAL FEE FOR THE REDUCTION OF CO2 EMISSIONS (ex RES Fee) and RES Special Account
· The new 2016 charges for ETMEAR were announced. The reduction of the ETMEAR required revenue by an amount of Euro 130
mil. leads to a weighted average reduction of the charges by 8.1%, compared to the corresponding charges of 2014-2015
period (RAE Decision 465/2015). The abovementioned unit charges are also applied to the self-generators depending on the
category they belong.
The new operating aid scheme for RES was enacted (L. 4414/2016) and includes, among others, a provision for a new source of
revenues for the RES Special Account through which the production of "green energy" is compensated (Article 23). In
particular, electricity suppliers will be compeled to pay a compensation, being part of the revenues of the RES special
account, for the difference between the System Marginal Price (SMP) in the wholesale market and the SMP that would had
existed if the RES did not enter to the system (virtual SMP). Those costs will be defined in such a way that the deficit of
the Account will be reduced to zero at the end of the two year period 2016-2017, as the deficit elimination at the end of
2017 is a commitment undertaken from the Greek State's part. The EU decision 2014/536 for the application of derogation in
the Non Interconnected Islands was also incorporated in that law. Following the provisions for a charge to be applied to
Load Representatives, corresponding amendments will be made in the Power Exchange Code and in its manual, with the
amendment of article 72 and the provision of an Uplift Account for the Load Representatives and of an Uplift Charge for RES
Special Account as well as with the amendment of article 92 and of transitional provisions (RAE's Decision 334/2016).
Specifically, for this extra charge, it was decided that the amount will be charged gradually to the Load Representatives
(Load Representatives Uplift Charge for RES Special Account) for the additional value of energy from RES stations, as the
latter is determined, due to the substitution of corresponding conventional production for the year 2016, will equal fifty
percent (50%) of the charge arising from the implementation of the methodology while for the year 2017 and then after will
equal one hundred percent (100%) of the charge (L. 4427/2016).
Due to the fact that fom the implementation of this mechanism the resulting charges where very high, RAE, after the load
representatives' protests held a new consultation on redetermining the level of charges arising. Following the
consultation, RAE issued Decision 149/2017 establishing a maximum value for the hourly difference between the SMP and the
virtual SMP in order to lower the level of charges arising. RAE also established by the same Decision the retroactive
application of this threshold to all calculations from the date of the application of this mechanism. By Decision 150/2017
RAE set a ceiling for this numerical difference at 15 E / MWh. Following the adoption of these decisions the recalculation
of charges arising from the mechanism is underway. Already the new charges for the period October 1st to December 31st 2016
amount to Euro 28.4 mil. instead of Euro 59.5 mil. based on the old calculations and for the period January 1st - February
12 2017, the charges amount to Euro 65.5 million. compared to Euro 132.9 million. respectively. The new charges will be
offset by amounts already paid by the Parent Company.
· Based on its Decision 214/2016 and Law 4414/2016 for the new RES operating aid scheme, RAE announced that the ETMEAR
charges will remain unchanged until the 30th of September 2016 for all the customers' categories while then it will
reexamine ETMEAR coefficients taking into consideration the RES Special Account revenues. RAE, with its recent
announcement, considered that there is no need to readjust ETMEAR under present conditions, after having examined the
progress of the revenues and expenses of the RES Special Account (October 2016). Therefore the relevant unit charges remain
unchanged. Following the issue, RAE published the new charges for ETMEAR which will be applicable from January 1st 2017
(RAE Decision 621/2016). In specifying the allocation coefficients for the charges, the levels specified in the EU
Guidelines on State Aid for the environmental and energy sectors 2014-2020 have been taken into account.
·
· The annual allocation method of the revenues coming from the indisposed rights auctions of greenhouse gas emissions
was defined for the period 2016-2020 (Decision of the Ministry of Environment, Energy and Climate Change FIN. 47692/OG B'
3245/10-10-2016 which complements OG A' 33/27.2.2016) so that :
a) At least 72% (from the initial 60%) of the revenues to be a RES Special Account revenue.
b) 15% of the revenues will cover the needs of the companies exposed in a significant carbon leakage risk
c) 13% of the revenues will be allocated for direct support interventions for improving energy efficiency of
existing residences.
OTHER ISSUES
· In the context of the national target for energy savings, the provision of a discount on the regulated charges
(ETMEAR, PSOs, Transmission System and Distribution Network use charges) on electricity and natural gas will be granted to
Universities as a reward for attaining energy savings (L. 4386/2016). The same Law includes details on the methodology and
the way of implementing and recovering the said discount.
· The temporary methodology for the calculation of the Estimated Energy Consumption, of Energy Charged and of the Load
Representatives' representation percentage in the Non Interconnected Islands (NII) (RAE Decision 46/31.03.2016) was
approved, along with the temporary methodology of the Load Representatives in the NII Guarantees (RAE Decision
47/31.03.2016), which will be applied during the transitional implementation period of the NII Code and up to the issuance
of the Manual for the market operation in the NII.
· Following the opening of the electricity market in the NII (June 21st 2016), HEDNO has accounted for only its PSO
transactions with Alternative Suppliers operating in the NII for the period July - December 2016, since the amounts of PSO
transactions for 2016 between IPTO, PPC and HEDNO have not yet been invoiced for 2016. This is due to the non finalization
of the accounting treatment that will result from the required adjustment based on regulatory and statutory provisions.
After the finalization of PSO transaction amounts the relevant invoices will be issued.
· Following the implementation of the REMIT (Regulation on Wholesale Energy Markets Integrity and Transparency)
regulation in the Greek market, EMO announced that the participants will be required to report that the details of the
contracts concluded for the wholesale energy products for the provision of electricity or natural gas, physically delivered
in the Greek market and executed as Bilateral Contracts, will comply to Article 3.1 (a) of the Regulation.
· Τhe maximum annual charge of electricity customers for covering Public Service Obligations (PSOs) was adjusted for
2016 (RAE Decision 41/2016). This adjustment is connected to the average annual change in the consumer's price index. Due
to the decrease of that index by 1.7% in 2015 compared to 2014, the aforementioned upper limit for 2016 is set at Euro
780,000, compared to the amount of Euro 794,000 applied in 2015.
Under the same rationale, the annual contribution fees in favor of RAE, imposed on businesses operating in the energy
sector were adjusted (RAE Decision 43/2016). The amount of the annual contribution fee charged to electricity suppliers,
was set to E0.07 per absorbed MWh for 2016. The corresponding amount imposed on electricity generators is set to E8.02 per
MW of max net capacity.
· By Law 4412/2016 "Public Conventions of Projects, Procurements and Services" (adoption of Directives 2014/24/EU and
2014/25/EU), the following provisions were incorporated in the national Law :
a) Provisions of the Directive 2014/24/EU concerning the public conventions procedures
b) Provisions of the Directive 2014/25/EU concerning the procurements of the Bodies operating in the water, energy,
transport and postal services.
· The supply tariffs of PPC SA, as a Last Resort Electricity Supplier, were approved, for the fourth year of the
service (RAE Decision 223/2016) and uplift rates are as follows:
a) 5% for the HV customers on the wholesale market cost
b) 10% for MV customers on the current PPC's MV customer tariffs and
c) 10% for LV customers on the current PPC's LV customer tariffs
· The supply tariffs of PPC SA, as a Universal Service Electricity Supplier, were approved, for the fourth year of the
service (RAE Decision 224/2016) as follows:
The uplift rate amounts to 10% on the current PPC's LV customer tariffs (residential customers, as well as small businesses
with power not greater than 25kVA), compared to 12% applicable to the third year of providing this service.
· RAE, by its decision 405/2016, approved the final decommission of the Steam Electric Units 3 and 4 of Aliveri
station, Steam Electric Units Ι and ΙΙ of Lavrio-keratea station, Steam Electric Unit 8 of Agios Georgios station, Steam
Electric Units ΙΙΙ and IV of Ptolemaida station following PPC's request and the assent of IPTO. The resulting additional
decommissioned capacity (551 MW) will be matched with future PPC's electricity capacity integration, given the obligation
to match decommissioned and newly integrated capacity under the existing provisions.
· The new temporary methodology for calculating the guarantees of the Load Representatives was published by RAE's
decision 238/2016, which takes into consideration and
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