The intertemporal interplay between energy supply and energy consumption by source in Greece Total primary energy supply in Greece Total final energy consumption by (ktoe), [1990-2016] source (ktoe), [1990-2016] 35000 25000 30000 20000 25000 15000 20000 15000 10000 10000 5000 5000 0 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Primary and Secondary oil Electricity Geothermal, solar, etc Geothermal, Solar, etc Oil Products Natural gas Heat Biofuels and waste Biofuels and waste Hydro Natural gas Coal Coal Source: IEA 19
Greece imports the majority of its oil and gas needs, which is translated as a huge cost and low rating in terms of security of supply Electricity key figures per capita in Greece Natural gas key figures per capita in Greece and Europe (KWh), [2017] and Europe (cubic meters), [2017] 7000 1000 Greece Europe 900 6000 800 Greece Europe 5000 700 600 4000 500 3000 400 300 2000 200 1000 100 0 0 Own Production Import Export Own consumption Production Import consumption Crude oil key figures per capita in Greece Production capacities by source per capita in and Europe (bbl.), [2017] Greece and Europe (KWh), [2017] 0.05 18000 Greece Europe 0.05 Greece Europe 16000 0.04 14000 0.04 12000 0.03 10000 0.03 8000 0.02 6000 0.02 4000 0.01 2000 0.01 0 0.00 Fossil Nuclear Hydro RES Total Production Import fuels Source: Eurostat 20
Greece has completed the national target of 20% reduction in greenhouse emissions in respect to 1990 levels, mainly because of the financial crisis Greenhouse gas emissions intensity of energy consumption (2000 = 100), [2000 – 2016] 105 100 95 90 85 EU (28 countries) Greece 80 75 70 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Carbon footprint per capita in Greece and Europe (tons), [2017] 7 6 Greece Europe 5 4 3 2 1 0 total Diesel and gasoline Natural gas Coal Other sources Source: Eurostat 21
Compared to the rest EU countries, Greece has experienced the biggest increase as far as the inability to keep homes adequately warm Inability to keep home adequately warm (%), [2010-2016] 35 Greece EU 32.9 30 29.5 29.2 29.1 25 26.1 20 18.6 15 15.4 10 10.8 10.8 10.3 9.8 9.5 9.4 8.7 5 0 2010 2011 2012 2013 2014 2015 2016 Arrears on utility bills (%), [2010-2016] 45 Greece EU 40 42.2 42.0 35 37.3 35.2 30 31.8 25 23.3 20 18.8 15 10 10.2 9.9 9.9 9.1 9 9.1 8.1 5 0 2010 2011 2012 2013 2014 2015 2016 Source: European Commission 22
3. Investments 23
Investments are crucial in order to enable the transition to a low carbon energy supply by the year 2050; A Global Overview Global new energy investments by sector (billion $), [2010-2017] 1200 1000 800 Electricity (network, fossil fuel and renewable generation) 600 Oil & Gas (Upstream & Downstream) 400 Nuclear 200 0 2010 2011 2012 2013 2014 2015 2016 2017 Global new investments in renewables by sector, (billion $), [2005-2017] 400 350 300 Other (hydro, geothermal, etc) 250 200 Biofuels 150 Wind 100 50 Solar 0 2005 2007 2009 2011 2013 2015 2017 Source: IEA & Bloomberg 24
European energy investments is on a growing pattern, mainly boosted by better debt financing terms Energy investment by fuel in Europe, (billion $), [2017] 70 Coal, gas and oil Upstream 60 Nuclear Downstream/ infrastucture Renewables 50 29.79% 40 10% 0% 30 70.21% 20 90% 47 61 36 10 0 Oil and Gas Coal Power generation Renewables transport Electricity networks and heat Total new investments in renewables EU (billion $), [2005-2017] 160 140 120 100 80 60 40 20 0 2005 2007 2009 2011 2013 2015 2017 Source: IEA & Bloomberg 25
The Greek banking system prefers to provide loans on the robust Greek energy sector , since its NPE percentage is considerably low Non performing exposure by sector in Greece Non performing exposure of the (%), [H1.2018] energy sector (%), [2015-2018] 5.0% Public administration 6.20% 4.0% 4.0% Catering industry 3.6% 71.40% Health 39.60% Rural Activities 49.20% Transport and Storage 33.70% Telecommunications, IT and Media 61.10% 2015 2016 2017 Η1 2018 Real Estate Management 48.80% Energy 3.60% Accomodation 40.00% Shipping 37.70% Financial Firms 18.50% Outstanding loans in the energy Other Industries 42.20% sector (mil. €), [2014-2018] Construction 47.10% Textile Industry 67.50% 5,200 5,012 Electronic Products and Machines 42.30% 4,914 Paper, Wood and Furniture industry 66.10% 5,000 Οther Μanufacturing Αctivities 56.70% 4,800 Chemical and Pharmaceutical Industry 37.10% Petroleum Products 1.60% 4,600 Metallurgy 47.20% Food, Beverage and Tobaco Industry 39.50% 4,400 Processing 42.40% 2014 2015 2016 2017 2018 Commerical 52.90% Source: Bank of Greece 26
The next day for Greek banking system is to provide a set of new investment opportunities that could assist win-win potentials in the market The new energy framework in line with the challenges of the banking sector New Opportunities New Privatizations Fin Tech – New Banking National Transformation Energy New Plan Energy Projects Low Risk New RES Bad Debts Market Decrease Model 27
Greece is expected to create energy investment opportunities due to the availability of RES potential and the ongoing sizeable infrastructure projects RES share in final electricity consumption %, [2010-2030] 60% 56.0% % share in final energy consumption % share in final electricity consumption 50% 43.0% 40% 31.0% 32.1% 30% 23.8% 25.0% 19.0% 20% 10% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Source: Draft National and Climate Plan 2030, Ministry of Environment and Energy (2018) 28
According to a realistic revision by HAEE, the projected investments regarding the period 2020-2030 will reach 20.1 billion euros HAEE’s projected figures (billion €), [2020-2030] Total Network and Storage 20.1 4.9% Natural Gas Pipelines 5.9% 1 Energy Efficiency 5.3 26.3% 1.2 4.8 RES Electricity Generation Research and 23.8% 0.2 Development 1% 1.2 4.3 New conventional power 2.1 plants and upgrading Infrastructure in existing Electricity 5.9% 21.3% Electricity Distribution Network - Digitalization 10.4% Source: HAEE 29
Total investments related to RES stand at 46.2% out of the total amount projected to be invested in the Greek energy market by 2030, based on HAEE’s realistic revision Fragmentation of projected figures (billion €), [2020-2030] Remaining RES Electricity Total related budget: 19. Generation to RES: 10.8 Network & 5 Natural Gas Storage 9.3 Pipelines 4.8 1 1.2 3 New conventional power Energy 1.2 plants & upgrading Efficiency 70% of 4.3 1.5 5.3 existing bill. euros Infrastructure 70% of 2.1 in Electricity bill. euros 0,6 0,2 Electricity Distribution 1.3 Network - Digitalization Electricity Distribution R&D Network - Digitalization Infrastructure in Electricity Source: HAEE 30
Coffee Break Duration (11:30 – 11:45) 31
Part 2 4. Natural Gas & LNG Markets Duration (11:45 – 13:30) 32
4. Natural Gas 33
Natural Gas reserves are abundant worldwide and can support the energy transition to a low carbon economy Global natural gas production [2018] Global natural gas consumption [2018] Monthly average regional gas prices European import price formation (% of price ($/mmBtu), [2010–2018] formation mechanism) [2005-2017] US (Henry Hub) NE Asia Spot Price German Border Price Japan (based on LNG) UK (NBP) 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: IEA, IGU 34
Greek natural gas market is rising again after a steep drop during the economic crisis, being transformed to a fully liberalized market Natural gas consumption in Greece (mil. Nm3), [2007-2017] 5000 4643 4502 4500 3831 4000 3500 2769 3000 2500 2000 1500 1000 500 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Power Production: Big Industrials: Distribution Grids: Total: Natural gas Prices in Greece (€/MWh), [2015-2018] 35 34.23 30 25 19.62 20 15 10 5 0 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Weighted Average Import Price Balancing Gas Daily Price Source: DESFA & RAE 35
Natural gas entry points are expected to increase and get upgraded facilitating bi-directional flow of natural gas with neighboring countries Entry points and quantities (mil. Nm3), [2007-2017] 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Sidirokastro Kipoi LNG Total: Source: DESFA 36
Existing LNG terminal and future infrastructure will transform Greece to a natural gas hub, increasing the importance of the country in terms of security of supply Route of Trans Adriatic Pipeline (TAP) LNG market in Greece (mil. Nm3), [2007-2018] 1600 1400 1200 1000 800 600 400 200 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: TAP & DESFA 37
The current projection for LNG growth in the Greek market is significant greater compared to the previous decade No of Cargos Quantity (cubic meters of LNG) 140 18000000 16000000 120 14000000 100 12000000 80 10000000 8000000 60 6000000 40 4000000 20 2000000 0 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 38
Retail market exists mainly in the regions of Thessaloniki, Thessaly and Attiki, yet there is an ambitious plan for expansion of the market through new grid construction and use of CNG/LNG technologies for remote areas Active customers in the three regions of EDAs, [2018] Thessaloniki: 220k customers Thessally: Region Attiki Thess Total 90k customers Active Customer 120k 310k 430k Non-users with access 585k 232k 817k Attiki: 120k customers Penetration 36% 54% 43% Source: EDA Attiki, EDA Thessaly & EDA Thessaloniki 39
The area of Thessaloniki and Thessaly are under “EDA THESS” DSO, being the first areas to have been provided with natural gas EDA Thess - Total distributed quantity EDA Thess – Number of customers 450 (mcm) [2013-2017] [2013-2017] 400 310 350 300 250 200 150 100 50 0 2013 2014 2015 2016 2017 EPA Thessalonikis EPA Thessalias EDA Thess 2018 EDA Thess - 4 Bar grid construction (km), Active customers. [2018-2022] [2013-2017] 400 336.5 350 291.8 300 250 200 150 100 50 18.2 14.1 6.7 10.3 3.2 0 2018 2019 2020 2021 2022 Existing Regions New Regions EDA Thess Total: Source: EDA Thess 40
The area of Attiki is under “EDA Attiki” DSO, being the area with the lowest penetration rate and therefore with the greatest dynamic for market expansion EDA Attikis 5-years plan: New EDA Attikis 5-years plan: Grid connections, [2018-2022] construction (km), [2018-2022] 450 140 EDA Attikis: Active customers and distributed quantities (mcm), [2018-2022] 400 135 354.3 348.3 343.0 338.3 350 130 325.8 300 125 250 120 200 115 150 110 2018 2019 2020 2021 2022 Distributed Quantities (mcm) [Left axis] Active Customers [Right axis] Source: EDA Attikis 41
CNG & LNG technologies can offer reliable solutions to remote areas in which pipeline construction is costly, and at the same time are considered as ideal technologies for the expansion of the market to the islands CNG/LNG potential market Industry Agriculture Remote cities & Power Transport Chemical single Client Distribution Co Generation CNG supply chain Compression Industries Station Decompression Trailers LNG supply chain Remote Cities Truck Small Loading LNG Terminal Terminal Power LNG Ship Generation Source: HAEE 42
The retail market consists of more than 8 active suppliers some of which have started selling quantities in the B2B market before 2018 Pricing formulas used by Greek natural gas suppliers 1 st Formula: Fixed Amount per DEPA Auctions Premium Professional month 2 nd Formula: Fixed Amount per Residential Supply Price Premium month Central Heating 3 rd Formula: Fixed Amount per Fixed Amount per Residential month on month Autonomous quantity Double Single Services OR Offer Product (Power) Source: HAEE 43
Future technologies around natural gas are coming to bridge the gap to a zero-carbon transition Penetration of biogas and sync gas into the natural gas grid Biogas Sync Gas & Hydrogen Technology Technology H 2 H 2 0 Nat. Gas Grid Syn Gas Source: HAEE 44
South East Gas Market and Prices: A Country-level Analysis 45
Greece Imported Volumes of Gas by Pipeline in Greece, [2008-2018] 4500 Russia Azerbaijan 4000 3500 Gas Volume (mcm) 3000 2500 2000 1500 1000 500 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Percentage of Total Imported Natural Gas in Regasification capacity utilization rate of the the form of LNG in Greece, [2008-2018] LNG import facility in Revithousa, [2012-2019] 35.0% 35.0% 30.0% 30.0% 25.0% 25.0% 20.0% 20.0% 15.0% 15.0% 10.0% 10.0% 5.0% 5.0% 0.0% 0.0% 2012 2013 2014 2015 2016 2017 2018 2019 Source: : Eurostat & ALSI 46
Greece Imported Volume of Gas in LNG form in Greece 1600 1400 1200 Gas Volumes in mcm 1000 800 600 400 200 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Algeria Egypt Norway Qatar Unted States Equatorial Guinea Nigeria Trinidad and Tobago Others Source: : Eurostat 47
Greece Natural Gas Quantities used in Greece by sectorial end-use, [2008-2017] 4,500 Final consumption - other sectors - energy use 4,000 Final consumption - transport sector - energy use 3,500 Final consumption - industry sector - energy use Natiral Gas Quantities in ktoe 3,000 Final consumption - non-energy use 2,500 Exports 2,000 Distribution losses 1,500 Energy sector - energy use 1,000 Transformation input - heat only - energy use 500 Transformation input - electricity 0 only/combined heat and power - energy use 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: : Eurostat 48
Greece Evolution of Gas Prices in EU-Greece for non-household consumers, [2012-2018] 0.0700 Euro per kWh 0.0600 0.0500 0.0400 0.0300 0.0200 0.0100 0.0000 2012.S2 2013.S1 2013.S2 2014.S1 2014.S2 2015.S1 2015.S2 2016.S1 2016.S2 2017.S1 2017.S2 2018.S1 2018.S2 European Union (Excluding taxes and levies) Greece (Excluding taxes and levies) European Union (All taxes and levies included) Greece (All taxes and levies included) Evolution of Gas Prices in EU-Greece for household consumers, [2012-2018] 0.12 0.10 Euro per kWh 0.08 0.06 0.04 0.02 0.00 European Union (Excluding taxes and levies) European Union (All taxes and levies included) Greece (Excluding taxes and levies) Greece (All taxes and levies included) Source: : Eurostat 49
Bulgaria Evolution of Gas Prices in EU-Bulgaria for non-household consumers, [2011-2018] 0.06 0.05 Euro per kWh 0.04 0.03 0.02 0.01 0.00 2011S1 2011S2 2012S1 2012S2 2013S1 2013S2 2014S1 2014S2 2015S1 2015S2 2016S1 2016S2 2017S1 2017S2 2018S1 2018S2 EU (All taxes and levies included) EU (All taxes and levies included) Bulgaria (Excluding taxes and levies) Bulgaria (All taxes and levies included) Evolution of Gas Prices in EU-Bulgaria for household consumers, [2007-2018] 0.08 0.07 0.06 Euro per kWh 0.05 0.04 0.03 0.02 0.01 0.00 European Union (Excluding taxes and levies) European Union (All taxes and levies included) Bulgaria (Excluding taxes and levies) Bulgaria (All taxes and levies included) Source: : Eurostat 50
Romania Evolution of Gas Prices in EU-Romania for non-household consumer , [2011-2018] 0.05 0.05 0.04 Euro per kWh 0.04 0.03 0.03 0.02 0.02 0.01 0.01 0.00 2011.S1 2011.S2 2012.S1 2012.S2 2013.S1 2013.S2 2014.S1 2014.S2 2015.S1 2015.S2 2016.S1 2016.S2 2017.S1 2017.S2 2018.S1 2018.S2 European Union (Excluding taxes and levies) European Union (All taxes and levies included) Romania (Excluding taxes and levies) Romania (All taxes and levies included) Evolution of Gas Prices in EU-Romania for household consumers, [2007-2018] 0.08 0.07 Euro per kWh 0.06 0.05 0.04 0.03 0.02 0.01 0.00 2007.S2 2008.S1 2008.S2 2009.S1 2009.S2 2010.S1 2010.S2 2011.S1 2011.S2 2012.S1 2012.S2 2013.S1 2013.S2 2014.S1 2014.S2 2015.S1 2015.S2 2016.S1 2016.S2 2017.S1 2017.S2 2018.S1 2018.S2 European Union (Excluding taxes and levies) European Union (All taxes and levies included) Romania (Excluding taxes and levies) Romania (All taxes and levies included) Source: : Eurostat 51
Croatia Evolution of Gas Prices in EU-Croatia for non-household consumers, [2011-2018] 0.0700 0.0600 0.0500 Euro per kWh 0.0400 0.0300 0.0200 0.0100 0.0000 2011.S1 2011.S2 2012.S1 2012.S2 2013.S1 2013.S2 2014.S1 2014.S2 2015.S1 2015.S2 2016.S1 2016.S2 2017.S1 2017.S2 2018.S1 2018.S2 European Union (Excluding taxes and levies) European Union (All taxes and levies included) Croatia (Excluding taxes and levies) Croatia (All taxes and levies included) Evolution of Gas Prices in EU-Croatia for household consumers, [2007-2018] 0.0800 0.0700 Euro per kWh 0.0600 0.0500 0.0400 0.0300 0.0200 0.0100 0.0000 2007.S1 2007.S2 2008.S1 2008.S2 2009.S1 2009.S2 2010.S1 2010.S2 2011.S1 2011.S2 2012.S1 2012.S2 2013.S1 2013.S2 2014.S1 2014.S2 2015.S1 2015.S2 2016.S1 2016.S2 2017.S1 2017.S2 2018.S1 2018.S2 European Union (Excluding taxes and levies) European Union (All taxes and levies included) Croatia (Excluding taxes and levies) Croatia (All taxes and levies included) Source: : Eurostat 52
Hungary Evolution of Gas Prices in EU-Hungary for non-household consumers, [2011-2018] 0.07 0.06 0.05 Euro per kWh 0.04 0.03 0.02 0.01 0.00 2011.S1 2011.S2 2012.S1 2012.S2 2013.S1 2013.S2 2014.S1 2014.S2 2015.S1 2015.S2 2016.S1 2016.S2 2017.S1 2017.S2 2018.S1 2018.S2 European Union (Excluding taxes and levies) European Union (All taxes and levies included) Hungary (Excluding taxes and levies) Hungary (All taxes and levies included) Evolution of Gas Prices in EU-Hungary for household consumers, [2007-2018] 0.08 0.07 0.06 Euro per kWh 0.05 0.04 0.03 0.02 0.01 0.00 2007.S2 2008.S1 2008.S2 2009.S1 2009.S2 2010.S1 2010.S2 2011.S1 2011.S2 2012.S1 2012.S2 2013.S1 2013.S2 2014.S1 2014.S2 2015.S1 2015.S2 2016.S1 2016.S2 2017.S1 2017.S2 2018.S1 2018.S2 European Union (Excluding taxes and levies) European Union (All taxes and levies included) Hungary (Excluding taxes and levies) Hungary (All taxes and levies included) Source: : Eurostat 53
Ukraine Evolution of Gas Prices in EU-Ukraine for non-household consumers, [2016-2018] 0.0400 0.0350 0.0300 0.0250 Euro per kWh 0.0200 0.0150 0.0100 0.0050 0.0000 2016.S2 2017.S1 2017.S2 2018.S1 2018.S2 European Union (Excluding taxes and levies) European Union (All taxes and levies included) Ukraine (Excluding taxes and levies) Ukraine (All taxes and levies included) Evolution of Gas Prices in EU-Ukraine for household consumers, [2016-2018] 0.08 0.07 0.06 Euro per kWh 0.05 0.04 0.03 0.02 0.01 0.00 2016.S1 2016.S2 2017.S1 2017.S2 2018.S1 2018.S2 European Union (Excluding taxes and levies) European Union (All taxes and levies included) Ukraine (Excluding taxes and levies) Ukraine (All taxes and levies included) Source: : Eurostat 54
Serbia Evolution of Gas Prices in EU-Serbia for non-household consumers, [2013-2018] 0.06 0.05 0.04 Euro per kWh 0.03 0.02 0.01 0.00 2013.S1 2013.S2 2014.S1 2014.S2 2015.S1 2015.S2 2016.S1 2016.S2 2017.S1 2017.S2 2018.S1 2018.S2 European Union (Excluding taxes and levies) European Union (All taxes and levies included) Serbia (Excluding taxes and levies) Serbia (All taxes and levies included) Evolution of Gas Prices in EU-Serbia for household consumers, [2013-2018] 0.08 0.07 0.06 0.05 Euro per kWh 0.04 0.03 0.02 0.01 0.00 2013.S1 2013.S2 2014.S1 2014.S2 2015.S1 2015.S2 2016.S1 2016.S2 2017.S1 2017.S2 2018.S1 2018.S2 European Union (Excluding taxes and levies) European Union (All taxes and levies included) Serbia (Excluding taxes and levies) Serbia (All taxes and levies included) Source: : Eurostat 55
North Macedonia Evolution of Gas Prices in EU-North Macedonia for non-household consumers, [2011-2018] 0.07 0.06 0.05 0.04 Euro per kWh 0.03 0.02 0.01 0.00 2011.S1 2011.S2 2012.S1 2012.S2 2013.S1 2013.S2 2014.S1 2014.S2 2015.S1 2015.S2 2016.S1 2016.S2 2017.S1 2017.S2 2018.S1 2018.S2 European Union (Excluding taxes and levies) European Union (All taxes and levies included) North Macedonia (Excluding taxes and levies) North Macedonia (All taxes and levies included) Evolution of Gas Prices in EU-North Macedonia for household consumers, [2017-2018] 0.08 0.07 Euro per kWh 0.06 0.05 0.04 0.03 0.02 0.01 0.00 2017.S1 2017.S2 2018.S1 2018.S2 European Union (Excluding taxes and levies) European Union (All taxes and levies included) North Macedonia (Excluding taxes and levies) North Macedonia (All taxes and levies included) Source: : Eurostat 56
Lunch Break Duration (13:30 – 14:30) 57
Part 3 5. Electricity 6. Renewable Energy Sources Duration (14:30 – 16:00) 58
5. Electricity 59
Fossil fuels are still essential for the security of supply and the containment of electricity prices for industrial and household consumers Gross electricity generation (TWh), [2005-2018] Security of supply (%) [2018] 70 63.7 Imports 60.9 11.81% 60 50.8 50 40 Domestic 30 88.19% 20 10 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Eurostat & HEnEx 60
Lignite generation is expected to decrease as lignite plants retire, with gas-fired generation and RES expected to further strengthen their position in the mix Gross electricity generation by fuel (% Gross electricity generation by fuel (%), [1990 – 2016] and MWh), [2018] 100% 100% 1,269 MWh 90% 10.60% 90% 80% 2,579 MWh 80% 70% 21.54% 60% 70% 50% 60% 4,059 MWh 40% 50% 33.90% 30% 40% 20% 10% 30% 4,066 MWh 0% 20% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 33.96% 10% 0% 2018 1 Solid Fuels Petroleum and Products Gases Renewables Natural gas Coal RES Hydro Source: Eurostat & HEnEx 61
The incumbent (PPC), still has a dominant share in electricity generation (52,51%, for 2018), while the remaining 47,49% consists of RES and alternative generators Percentage of total quarterly generation per participant and fuel type (%), [2018] 33.65% 30.50% Qtr1 Qtr2 Qtr3 Qtr4 24.88% 24.52% 24.64% 22.02% 21.77% 20.44% 17.93% 15.02% 14.00% 13.55% 13.09% 10.42% 9.57% 7.50% 6.98% 6.92% 6.65% 6.52% 6.36% 6.45% 4.91% 4.97% 4.62% 4.44% 4.33% 4.22% 4.16% 4.11% 3.87% 3.73% 3.72% 3.51% 3.35% 2.88% Elpedion Heron Korinthos Mytilineos PPC Lig _Meg Lig_Mel PPC PPC DAPPEP Power Natural Gas Coal Hyrdo RES Source: HEnEx 62
Electricity consumption is anticipated to rapidly increase over the upcoming years, in line with the projected economic recovery Total electricity consumption in Greece, EU 28 and World (TWh), [1990-2016] 3183.43 64.31 59.28 Greece 3042.98 EU 28 [1990-2016] TWh [1990-2016] TWh 2464.62 Households 23106.86 Industry & Services World 22% [1990-2016] TWh 32.85 78% 2016 10901.84 Source: IEA 63
RES and hydro stand at 49.5% of total electricity capacity for 2018, while alternative generators represent 21.5% of conventional units capacity Electricity capacity of conventional units per Total electricity capacity per fuel (MW), [2018] producer (MW), [2018] 11,975 MW 17,444 MW (68.6% of total) 5,469 147 289 100% 4,900 422 433 90% Heron 511 3,904 767 80% Lig_Melitis 810 3,171 70% Herron II Viotias 60% Korinthos Power 50% Lig_Megalopolis 40% 8,596 Mytilineos 30% 20% Elpedison RES Coal Natural gas Hydro 10% PPC 31,35 % 22,38 % 28,09 % 18,18 % 0% 2018 Source: HEnEx 64
The ability to pay the bills for electricity has developed to the greatest challenge for the Greek households System marginal price and CO2 Prices Electricity prices by type of user , (€/kWh), [2015-2018] [206-2017] 80 25 0.25 70 0.2 20 60 Medium size 0.15 industries 50 15 0.1 40 Medium size 0.05 households 10 30 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20 5 10 0 0 Electricity prices components (%), [2016] January April July October January April July October January April July October January April July October 26.43% Taxes and levies excluding VAT 2015 2016 2017 2018 21.95% Network costs Monthly Average SMP €/MWh (Left Axis) CO2 European Emission Allowances in € (Right Energy and supply 51.62% Axis) Source: Eurostat & HEnEx 65
Considering the period 2016 - 2018, there is no apparent trend to justify seasonal volatility in electricity prices of the Greek wholesale market Seasonal daily system marginal price, (€/MWh), [2016 – 2017- 2018] 120 2016 2017 2018 100 80 60 40 20 Winter Spring Summer Autumn 0 January February March April May June July August September October November December Average SMP 2016 : 42,8 €/ΜWh Average SMP 2017: 54,6 €/ΜWh Average SMP 2018: 60,3 €/ΜWh Source: HEnEx 66
Despite the fact that NOME auctions have been withdrawn, the share of PPC is constantly being reduced Companies with market share > 2%, [2018 – Oct. 2019] Market share (%), [October 2019] 25.00% 2.17% 30.25% 2.62% 20.00% 69.75% 2.26% 15.00% 4.33% PPC Rest 25 companies PPC’s market share (%) [2016- Oct. 2019] 10.00% 5.87% 100.00% 94.39% 95.00% 90.00% 5.00% 85.00% 5.95% 80.00% 69.75% 75.00% 70.00% 0.00% January February March April May June July August September October November December January February March April May June July August September October 65.00% January March May July September November January March May July September November January March May July September November January March May July September 2018 2019 2016 2017 2018 2019 Heron Mytilineos Elpedison Watt and Volt NRG Voltera Source: HEnEx 67
The adequacy of the system is expected to depend significantly on imports, in order for the system to meet adequately the load peaks Imports and exports with neighboring countries (MWh), [2017-2018] Imports 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2017 2018 0 -100,000 -200,000 -300,000 -400,000 -500,000 -600,000 Turkey Albania North Macedonia Bulgaria Italy Exports -700,000 Source: ADMIE 68
During the period 2017 to 2018, Greece was mainly a net importer of electricity, mainly from Bulgaria and North Macedonia Balance of Power between Greece and neighboring countries (Imports – Exports) (MWh), [2017-2018, Monthly] North Turkey Albania Macedonia Bulgaria Italy 500,000 400,000 300,000 Imports 200,000 100,000 0 Exports -100,000 -200,000 -300,000 -400,000 Source: ADMIE 69
Greece’s electricity market legislative framework could be characterized as strongly governed by law and regulation Electricity market legislative framework Mandatory Pool / Day Ahead Scheduling Target Model 2019 2018 2020 2005 2011 2016 1999 NOME Auctions End with Act of Legislative Content 1/10/2019 Organization & Market liberalization (L. 2773/1999) operation of the liberalized electricity Wholesale financial electricity market market (L. 4001/2011) (L.4512/2018) Further liberalization of System & Market Code electricity market (L.3446/2005) (L. 4533/2018) RES Support mechanism (L. 4414/2016) Market Operator for wholesale market (L. 4425/2016) Source: HAEE 70
Eco-mobility is still at infant stage in Greece, however, over the next decade it is anticipated to gain growing importance Alternative fuel vehicle registrations in Battery price ($/KW), [2010-2030] Europe [2008-2018] 1000 1,000,000 800 900,000 600 BEV CNG FCEV 400 800,000 LPG PHEV 200 700,000 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 600,000 500,000 Car Sales in Greece [2017-2018] 400,000 ` 2017 2018 Growth 300,000 Electric cars (BEV) 50 87 74% Plug-in Hybrid (PHEV) 141 228 61,70% 200,000 Hybrid (HEV) 2356 3635 54,30% 100,000 Alternative fuel vehicle (NG) 359 1030 186,90% 0 Gasoline 46068 61320 33,10% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Diesel 39014 36885 -5,50% Total 87988 103185 17,30% Source: Alternative Fuel Observatory, BNEF 71
The promotion of both fiscal and non-fiscal incentives in Greece will lead to a sharp increase in the share of electrical vehicles Fiscal and non-fiscal incentives towards Eco-mobility for all EU countries Traffic Regulations (i.e. Purchase incentive or Other Benefits (i.e. free Infrastructure promotion Country Tax benefits and exemptions bus lanes, low emission subsidies parking) measures zones) Austria Belgium Bulgaria Croatia Cyprus Czech Republic Denmark Finland France Germany Greece Hungary Iceland Ireland Italy Latvia Lithuania Luxembourg Malta Netherlands Norway Portugal Slovakia Spain Sweden Switzerland United Kingdom Source: European Fuel Observatory, HAEE’s analysis 72
Regulators need to understand the changes underway and seek new solutions and market designs that can support the transition of electricity market Forecast of total annual demand for electricity (GWh), [2006-2028] Historical Data Low demand Scenario Reference scenario High demand scenario 65120 65000 62720 60000 60020 55000 52278 50000 45000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Source: ADMIE 73
6. Renewable Energy Sources 74
Greece shows a high potential for exploiting renewable energy technologies in all sectors of final consumption Share of energy from renewable sources in the EU Member States (%), [2017] Greece target for 2020: 18% ✔ 71.20% Greece target for 2030: 35% 70% 60% 50% 32.60% 40% 27.30% 21.50% 30% 17.00% 17.50% 13.30% 10.70% 20% 6.40% 10% 0% Source: Eurostat 75
Over the past years, a significant effort has been observed towards increasing the share of RES in electricity generation Historical data of RES electricity generation in Greece (TWh), [1990-2016] Total 16 14 12 10 8 6 Hydro 4 Wind Solar 2 Biomass - Wastes 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: IEA 76
The process of reforming and strengthening the RES support mechanism aims to increase investment confidence for RES projects in Greece Installed Capacity of RES in Greece by type (MW), [Dec 2016 - Dec 2018] 6000 Photovoltaics < 10kw Biogas-Biomass Photovoltaics Small Hydroelectric Stations Wind turbines 5000 2555 4000 3000 239 2000 2140 1000 82 351 0 Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2016 2017 2018 Source: DAPEEP 77
Five regions in Greece cover almost 74% of the total installed capacity for both wind and solar power Installed capacity by region (%), [2018] Euboea 10.41% Central Greece Sterea Ellada Wind Solar Thessaly 14.00% 24.98% 26.32% Peloponnese Rest Peloponnisos 21.15% 14.90% 16.75% Central Anatoliki Makedonia and East Macedonia Kedriki Makedonia Macedonia Thraki & Thrace 14.00% Western Dytiki Ellada Greece Source: DAPEEP 78
Thanks to the progress of technology, wind energy is the cheapest option for new power plants Cumulative wind capacity by region (MW), Installed MW per wind energy producer , [2018] [2018] TERNA Energy 536.1 ANEMOS (ELLAKTOR) 285.6 375 119 IBERDOLA Rokas 250.7 61 EDF HELLAS AE 238.2 EREN GROUP 210.9 2 19 ENEL GREEN POWER 200.5 28 MYTILINEOS GROUP 153.5 907 100 200 CF VENTUS 85.0 104 PPC Renewables 67.5 ENTEKA 67.0 79 550 90 EUNICE 60.6 RF ENERGY 60.4 ΝΙΙs:322 Installed MW per manufacturer [2018] 194 VESTAS 1483.6 ENERCON 621.8 SGRE 538.7 NORDEX 150.1 OTHERS 34.4 Source: HEDNO & ELETAEN 79
Massive growth of solar power will offer valuable support in various appliances in society, industry and business Energy efficiency of photovoltaics Cumulative solar PV capacity by region (MW), 1540 (kWh/KWp), [2014- 2017] [2018] 1530 1520 216 329 1510 98 1500 108 275 1490 1480 1 317 1470 275 27 2014 2015 2016 2017 104 79 The total land area occupied 310 9 by Photovoltaics is about 40.000 acres ΝΙΙs:159 The area occupied by lignite stations and lignite mines is about 253.000 acres Source: DAPEEP , HEDNO & HELAPCO 80
Despite the stochastic nature of RES, their contribution to electricity demand is 19.7% on average for 2017 and 2018 Total electricity consumption (GWh), total electricity generation from RES (GWH) and average system marginal price (€/MWh), [2017-2018] 6,000 80 70 5,000 60 4,000 50 3,000 40 30 2,000 20 1,000 10 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2017 2018 Total consumption Total generation from RES Average System Marginal Price (Right Axis) Source: DAPEEP 81
The new RES support scheme is anticipated to reduce the cost burdened by the society Value of RES supporting scheme including Photovoltaics <10 kw and RES in Non Interconnected Islands (million €), [2017] Total:1.849 200 163 199 150 100 50 1485 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec RES Photovoltaics < 10kw RES in NII Total 2017 Value of ETMEΑR, Lignite fee and CO2 emission allowances (million €), [2017] 140 Total: 1.073 120 100 151 80 32 60 40 20 888 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ETMEAR Lignite fee CO2 emission allowances Total 2017 Source: DAPEEP 82 ETMEAΡ: Ειδικό Τέλος Μείωσης Εκπομπών Αερίων Ρύπων
Market Information Current Situation - The current status consists of Auctions System, held by RAE (Regulator), usually 2 times per year - The auctions are held separately for each technology (Wind, Solar) for Solar<20MW & Wind < 50MW - Common Auctions are held for Solar>20MW & Wind>50MW - A project is in a Ready to Auctions Status, after the issuance of the Final Connection Offer by the TSO (ADMIE) Near Future Market Situation The Greek Energy Market is expected to reach the target model at the end of June 2020 Participation in the market. Energy Exchange will operate since June 2020 • Option for private PPAs (typical length 5-7 years). The auctions system will also remain as • an option Regulatory Authority of Energy (RAE) Currently more than 10.000 MW capacity have been submitted and are awaiting to be • issued Due to the extent of the awaiting applications, there is a strong possibility that RAE will • shortly suspend the submission of new applications for some period Competition in the Wind and Solar market 83
Since 2016, a new support scheme for renewable projects has been adopted, based on Feed-in Premiums (FiP) Snapshot of the FiP based support scheme €/MWh Reference Value (RV) RV Excess Sliding Feed-in Premium Market Income (Revenue) Rebated amount Source: HAEE 84
During the last two years, three auctions for renewable energy projects have been held by the Regulating Authority for Energy (RAE) RES Auctions 2018 June 2018 December 2018 Category Ι (PV<1 MWp) Category Ι (PV<1 MWp) 83 Projects – Auctioned Power 53,4835 MWp 192 Projects – Auctioned Power 60,35 MWp Starting Price: 85 €/MWh Starting Price: 81.71 €/MWh Minimum Price: 75,87 €/MWh Minimum Price: 63 €/MWh Maximum Price: 80 €/MWh Maximum Price: 68 €/MWh Weighted Average Price: 79,0196 €/MWh Category ΙI (1 MWp < PV < 20 MWp) Category ΙI (1 MWp < PV < 20 MWp) 8 Projects – Auctioned Power 52,91896 MWp 27 Projects – Auctioned Power 86,46 MWp Starting Price : 80 €/MWh Starting Price : 71.91 €/MWh Minimum Price : 62,97 €/MWh Minimum Price : 63 €/MWh Maximum Price : 71 €/MWh Maximum Price : 71.9 €/MWh Weighted Average Price : 63,81281 €/MWh Category ΙII (3 MWp < Wind < 50 MWp) Category ΙII (3 MWp < Wind < 50 MWp) 8 Projects – Auctioned Power 170,925 MW 14 Projects – Auctioned Power 170,925 MW Starting Price : 90 €/MWh Starting Price : 79.77 €/MWh Minimum Price : 68,18 €/MWh Minimum Price : 55 €/MWh Maximum Price : 71,93 €/MWh Maximum Price : 65,15 €/MWh Weighted Average Price : 69,53437 €/MWh Source: RAE
RES Auctions 2019 12 of December 2019 April 2019 Category ΙI (1MWp < PV < 20MWp) Common Category – Big Projects (PV>20 MWp & Wind>50MWp) 43 Projects 8 Projects of 637.78MWp (7 Projects Planned Auctioned Capacity: 105,464 MW succeeded) Auctioned Capacity: 455.56 MWp Category ΙII (3 MWp < Wind < 50 MWp) Final Capacity: 437.78 MWp 16 Projects Starting Price: 64.72 €/MWh Minimum Price: 53 €/MWh Planned Auctioned Capacity: 225,450 MWp Maximum Price: 64.72 €/MWh Weighted Average Price: 57.03 €/MWh June 2019 Category ΙI (1MWp < PV < 20MWp) Planned Auctioned Capacity: 430 MWp Starting Price: 69.26 €/MWh Minimum Price: 61,95 €/MWh Maximum Price: 67,7 €/MWh Weighted Average Price: 62.78 €/MWh Category ΙII (3 MWp < Wind < 50 MWp) Planned Auctioned Capacity: 400 MWp Starting Price : 69.18 €/MWh Minimum Price : 59,09 €/MWh Maximum Price : 69,18 €/MWh Weighted Average Price: 67.32 €/MWh Source: RAE
Regulatory Framework – Development Stages Auctions Procedure or PPA Bond Issuance for TSO Bid Bond Issuance for RAE 87
Compared to current levels, solar power installed capacity is expected to grow by 51% in 2027, while wind power installed capacity to grow by 69% Long-term forecast of RES installed capacity in Short-term forecast of RES installed Greece (MW), [2019 – 2030] capacity in Greece (MW), [2019] 13,793 16000 Wind turbines Photovoltaics 6,200 6,108 14000 Rest RES Total 6,100 12000 6,000 5,893 10000 6,749 5,900 8000 5,966 5,800 6000 5,638 5,700 3,000 4000 5,600 6,077 5,500 2000 2,555 5,400 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Source: DAPEEP & ADMIE 88
Coffee Break Duration (16:00 – 16:30) 89
Part 4 7. Hellenic Energy Exchange Duration (16:30 – 18:00) 90
7. Hellenic Energy Exchange 91
PXs in Europe & in South East Europe Spain & Portugal (1997) OMIE Electricity / Natural Gas Poland (1999) TGE Electricity / Natural Gas Netherlands & UK (1999) APX Electricity Norway, Sweden, Denmark (2001) Nord Pool Electricity Germany (2002) ΕΕΧ Electricity / Natural Gas Czech Republic (2007) Romania (2000) OPCOM PXE Electricity / Natural Gas Electricity / Natural Gas Slovenia (2008) South Pool Electricity Bulgaria (2014) Central Europe (2008) IBEX EPEX Spot Electricity Electricity / Natural Gas Italy (2009) Serbia (2015) GME / ΙΡΕΧ SEEPEX Electricity / Natural Gas Electricity Hungary (2010) HUPX Croatia (2016) CROPEX Electricity / Natural Gas Electricity 92
The Hellenic Energy Exchange is expected to launch operations by June 2020, as part of a plan to restructure the domestic electricity energy market, lower energy cost and strengthen security of supply Timeline November June June February November 2018 2019 2020 2018 2017 Official MoU: Operation Establishment LAGIE + of HEnEx of EnEx Clear ATHEX Aggregators OTC contracts Establishment of HEnEx Balancing Market under the Target Model 93
Commercial Relationships in Competitive Markets Generator 1 Generator 3 Generator 2 PX sales Bilateral TSO Contracts / OTC PX PX Trader 2 Supplier 1 Wholesaler 3 purchases Supply Contracts Final Final Final Final Final Consumer 2 Consumer 5 Consumer 1 Consumer 3 Consumer 4 94
Power Exchanges Functions & Characteristics Standard Products Anonymous Multilateral Reliability TRADING MATCHING Easy Access Security SETTLEMENT CLEARING Liquidity Price Reference DELIVERY BROADCAST 95
DAM price formation: Supply/Demand balance Price S D Residential demand Commercial Industrial demand demand Market clearing Price units Peak reservoir Exports Hydro Coal (CCGT) Combined cycle gas Nuclear turbine Imports Renewables MW Market clearing volume 96
Price Drivers 97
Impact of RES on market prices Snapshot of the appearance of negative prices in Day-Ahead Prices of EEX per hour (€/MWh), [4/2/2011 – 5/2/2011] 80 60 51.35 50.7 48.71 40 38.49 Greater Volatility of Prices 20 19.99 16.9 15.12 14.08 Higher Occurrences of 0 Negative Prices coming from: -9.3 -20 Must-run nature of wind and • solar energy -36.82 -40 Lack of Flexible back-up • generation -60 1 3 5 7 9 11 13 15 17 19 21 23 1 3 5 7 9 11 13 15 17 19 21 23 4/2/2011 5/2/2011 Source: EEX 98
Hellenic Energy Exchange will organize and operate Greece’s new electricity, natural gas and environmental markets The imminent framework of Greek energy market Transmission Retail Power System Wholesale Market Exchange Operator Market Producers Hellenic Energy ADMIE Suppliers Exchange Suppliers Clients RES Day Financial Balancing Producers Ahead & Energy HEDNO Intraday Products RES Markets Aggregators NII OTC Contracts Traders EnEx Clear Self- suppling customers 99
Settlement and clearing is an important part of a market Bilateral trading Trading with several Bilateral trading with netting counterparties without netting A A A B PX C B C B C D E D E D E One transaction Several Always only for counterparties one each counterparty and counterparty! transactions 100
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