Greek power imports stop on unpaid bills
22/06/2012 at 17:50
Power traders in at least four countries have reduced or halted electricity exports to Greece due to non-payments, helping to force market prices sharply higher in a potential blow to struggling industries and raising the risk of blackouts during the tourist season.
With Greece deep in crisis, power grid operator LAGHE owes foreign and domestic suppliers 3 27 million euros dollar 410 million, a court document obtained by Reuters showed, as its revenue falls due to the recession and a refusal by many Greeks to pay their bills.
Trading sources told Reuters that at least four trading companies in Switzerland, Italy, Bulgaria and Germany have either lowered or cut off sales to Greece due to high credit risk and delays in payments over the past 2-3 months for power they sold.
"We have stopped power sales to Greece," said Claus Urbanke, head of new markets at Statkraft, a Nordic utility which trades electricity throughout Europe
"We have quite considerably reduced volumes in order to control risk exposure in Greece due to the delays of payments by the market operator," said a Swiss-based trader. The traders asked not to be identified or their companies named as they are not authorised to speak to the press
Greece imported more than 10 percent of its power demand in the third quarter of 2011, which includes the summer when heavy air-conditioning use boosts consumption. Already the drop in imports has affected the internal Greek power market dramatically. Prices there are usually 30-40 euros per megawatt-hour for baseload 24-hour delivery but prices for Saturday settled as high as 96 euros in some hourly trading slots, with traders citing a combination of the import cuts and hot weather as the reason
Industrial consumers who are suffering as Greece endures its fifth year of recession usually buy power on long-term contracts and are not immediately affected by power market moves. However, if the prices remain high, they will eventually get passed on to companies that are often struggling for survival
Greece is connected to the Italian, Bulgarian, Macedonian, Albanian and Turkish e lectricity markets and sometimes exports excess power to its neighbours. Not all imports have been affected. Some suppliers from Bulgaria, including its state-owned power company NEK, said they were not experiencing any delays in Greek payments and that the trade continued
However, if a sharp drop in imports were to coincide with a prolonged heatwave, power supplies might be cut during the peak season for tourism, one of the few major foreign exchange earners for the uncompetitive Greek economy
Altogether 16 million tourists visited Greece last year. The holiday sector accounts for 15 percent of economic output and one in five jobs in a country where unemployment has hit a record high of almost 22 percent
Energy supplies to the main tourist areas are complex. About a quarter of visitors go to Greece's two major cities, Athens and Thessaloniki, and most of the rest head for the islands. Some, such as Corfu, are connected to the national grid but others have their own oil-fired power stations. These include Crete, which alone hosted three million visitors in 2011. Greece's state electricity supplier PPC has said it secured enough oil to run its island power plants this summer
At the heart of the energy system's cash crunch is a hole in the accounts of LAGHE, out of which privately-run utilities are reimbursed. LAGHE could not be reached for comment. Two private electricity retailers went bankrupt without honouring their obligations to LAGHE, even though their funds were released last week to support the electricity market
C reuters