Editorial: A new era of extreme price movements in energy commodities
During the last couple of years of the pandemic we have witnessed profound movements in the price of energy commodities. In spring 2020 the price of oil reached negative levels for the first time, while 2021 marked tremendous rises in the price of natural gas in Europe and Asia with TTF rising from 15 to 160 Euros per MWh.
Another relatively new commodity that recorded a rapid rise in its price was CO2 emissions (EUAs) that are now trading for over EUR 70 in the European market. Together with expensive natural gas they have led to an extreme rise in the price of electricity for most European markets. Power prices now tend to fluctuate intensely with rises and drops of over 20% daily depending on the weather, since renewables have reached higher levels of penetration and the system is affected by high or low wind conditions.
At the same time, markets are liberated in most markets and commodities, while the energy market is more globalized than ever. Together with speculation and other developments, such as options trading and retail playing an increased role, the result is more pronounced price movement than before.
Naturally, it is traders that stand to benefit the most from these extreme price movements, with traditional trading houses such as Trafigura and Vitol recording record profits for 2020 and expected to follow up in 2021. However, smaller traders with a more regional focus may also take advantage of price swings, while the importance of hedging is more evident than ever for players in the electricity market.
PPC with strong results for the first nine months of 2021
Public Power Corporation remains on track for achieving the goal of annual profitability despite the energy crisis, the company said on Tuesday.
Presenting its nine-month results, PPC said its repeat operating profits totaled 626.5 million euros in the January-September period, from 696 million in the same period last year, showing significant resilience to the energy crisis. PPC announced the reduction of lignite participation in electricity production to 21% from 26% and the positive impact from hedging against price fluctuations in electricity and natural gas.
George Stassis, PPC's chairman and CEO, commenting on the results said in the third quarter of 2021 PPC showed the necessary social responsibility to help its customers, while managed to preserve the resilience of its performance. "2021 is a transition year for PPC as we seek to return to operating profitability," Stassis said.
PPC's turnover rose 5% to 177.4 million euros in the nine-month period, domestic electricity demand rose 3% to 42,948 GWh, while PPC's average market share eased to 63.7% from 69.3% in the same period in 2020.
After tax results showed a loss of 42.2 million euros in the nine-month period from profits of 12.8 million in the same period last year.
Terna to issue €300 mln common bond loan
GEK Terna on Tuesday announced the issue of a 300-million-euro common bond loan.
The company’s board approved the bond issue plan, which will be linked to a sustainability clause.
The bond will be of a seven-year duration and will be distributed to investors in a public offering.
The bonds will be listed in the fixed-income category of the Athens Stock Exchange.
Issuance is dependent on market conditions.
Motor Oil: Earnings increased in Q3 to EUR 85.2 billion
Motor Oil reported sales of EUR 2.987 in the Q3 2021 compared to EUR 1.638 in Q3 2020. A significant rise took place in its earnings, since they reached EUR 85.2 million compared to 44.28 million last year.
The significant turnover increase in the 3rd quarter of 2021 compared to the 3rd quarter of 2020 and in the 9-month period of 2021 compared to the corresponding period of 2020 is attributed to the increased sales volumes (by 21% in the 3rd quarter of 2021 and by 15% in the 9-month period of 2021) in conjunction with the increased prices of petroleum products denominated in US Dollars (on average by 76.4% in the 3rd quarter of 2021 and by 62.8% in the 9-month period of 2021).
The increase in the Company sales volume is attributed to the normalization of the conditions in the international economy, as a result of lifting the restrictions imposed on travelling, as well as to the high utilization of the Refinery Units throughout the 9-month period of 2021 due to the fact that the maintenance works, with the emphasis on the Mild Hydrocracker Complex, had been executed in the period January -February 2020 i.e. before lockdown was imposed.
The recovery of the demand for petroleum products in the three markets in which the Company traditionally operates (Domestic, Exports, Shipping) in combination with the strengthening of the international refining margins and the increase of the industrial sales volume of the Refinery led to the generation of EBITDA Euro 113.5 million in the 3rd quarter of 2021 compared to Euro 62 million in the 3rd quarter of 2020 and EBITDA Euro 285 million in the 9-month period of 2021 compared to negative EBITDA Euro 16.8 million in the corresponding period of 2020.
In the 3rd quarter of 2021, the net financial expenses reached Euro 6.2 million compared to Euro 2.8 million in the corresponding quarter of 2020. There was a notable improvement in the net financial expenses in the 9-month period of 2021 as they were reduced to Euro 7.4 million compared to Euro 41.1 million in the corresponding period of 2020. The improvement is attributed to a great extent to gains from derivative hedging transactions. It is pointed out that in the 9-month period of 2020, and especially in the 2nd quarter, extreme volatility in oil prices was noted as a result of the restrictions imposed on travelling on a global scale.
The Earnings before Tax (EBT) reached Euro 89.8 million in the 3rd quarter of 2021 compared to Earnings Euro 38.2 million in the corresponding quarter of 2020 while the Earnings before Tax in the 9-month period of 2021 reached Euro 225.4 million compared to Losses before Tax Euro 119.9 million in the corresponding period of 2020.
The Earnings after Tax (EAT) reached Euro 70 million in the 3rd quarter of 2021 compared to Earnings Euro 28.8 million in the corresponding quarter of 2020 and Euro 173.5 million in the 9-month period of 2021 compared to Losses Euro 93 million in the corresponding period of 2020. The tax rate on fiscal year 2021 earnings is 22% compared to a tax rate of 24% for the fiscal year 2020.
Avax confirms talks for the sale of Volterra
Avax confirmed in November that it engages in talks with potential investors for the potential sale of its electricity supply subsidiary, Volterra.
The group also stated that so far there is no final decision made for Volterra's sale.
Enel to accelerate renewable investments in Greece
Greece’s looming de-lignitization will necessitate a much greater reliance on renewable sources of power generation in order to avoid an energy crisis, ENEL group CEO and general manager Francesco Starace told reporters during the annual Capital Markets Day event.
He also said ENEL’s strategic priority to promote a “road map” for renewable energy sources in the country, including storage units, along with efforts to cover any current gaps in Greece’s energy market.
Starace also extended kudos to the Greek government for a recent legislative reform to facilitate energy storage.
For the group’s overall strategy, he said accelerated de-carbonization aims for zero exploitation by 2040, 10 years earlier than the previous target, as well as a gradual departure from the natgas sector over the next two decades.
TERNA ENERGY: New wind farms with a total capacity of 90 MW to be developed in Poland
TERNA ENERGY further strengthens its presence in the Renewable Energy Sources market of Poland, promoting four new projects with a total capacity of 90 MW. The four (4) wind farms are in the initial stage of licensing and TERNA ENERGY will mature, build and operate them in the context of its strategy for continuous expansion of its activity in the field of clean energy production.
TERNA ENERGY already operates in Poland eight (8) wind farms with a total installed capacity of 102 MW, which means that with the addition of the four new projects of 90 MW, the Group in the next period will almost double its installed capacity there.
The development of TERNA ENERGY Group continues uninterruptedly, with its investment plan evolving smoothly but also intensively in all areas of activity. The Group’s goal to reach 3,000 MW of total installed capacity (wind farms, photovoltaic parks and storage systems) within the next five years, stands. The Group has more than 1,300 MW in operation, under construction or ready for construction in Greece, Central and Eastern Europe. Also, additional wind projects with total capacity of more than 1,800 MW in various areas in Greece are in the phase of licensing maturity. At the same time, new photovoltaic parks with a total capacity of 1,700 MW are being planned and developed and storage systems with total capacity of about 2,000 MW are being promoted. Finally, the Group has been active in offshore wind parks, where it plans, in joint venture with OCEAN WINDS, to develop projects in the Greek seas.
New climate law calls for an end to lignite by 2028
The highlights of the draft Climate Law were presented by Greece’s Minister of Environment and Energy Kostas Skrekas.
The new framework will become the roadmap for the country to achieve carbon neutrality by 2050 in line with the European Union’s latest energy and climate goals.
The revised climate goals, according to the proposed law, are as follows:
A 55% reduction in greenhouse gas emissions by 2030 compared to 1990,
An 80% reduction in greenhouse gas emissions by 2040 compared to 1990,
Climate neutrality by 2050.
The draft sets the end of 2028 as the latest possible date for the decommissioning of all lignite plants, with a review in 2023 in order to maintain the security of supply.
When it comes to buildings, from 2023 the installation of new oil boilers for heating is prohibited wherever there is a natural gas network available. From 2030 the use of oil boilers will be prohibited entirely.
The climate law also includes provisions about electric mobility:
From 2023, one quarter of new corporate cars must be electric or hybrid, with emissions of up to 50 grams per kilometer,
From 2030, all new vehicles must have zero emissions,
From 2025, all new taxis and one third of new rental cars in Athens and Thessaloniki will have to be electric. The goal is to have 2,000 electric taxis by 2023. At the end of 2023, the measures will be reviewed with the goal of introducing them in other regions of the country.
The Hellenic Association for Energy Economics will host the 17th IAEE European Energy Conference “The Future of Global Energy Systems”, in Athens, from 21 to 24 September 2022, the first physical IAEE European Conference in the post Covid-19 era.
The Conference provides an ideal opportunity for the presentation of new advances and research results in the energy sector, thus, academicians, researchers, managers, industrial participants and students are welcome to share their research findings and present their academic papers to global experts.
The conference is intended for:
For the detailed list of topics, abstracts submissions and important deadlines, you may visit HAEE’s website here.
The largest Conference on Ecomobility is co-organized for the 5th consecutive year by the Hellenic Association for Energy Economics and the financial portal insider.gr, on Thursday, January 20, 2022, at the Hellenic Motor Museum.
For the first time since the beginning of the pandemic, the Ecomobility Conference will be held in the physical presence of all speakers, while respecting all applicable safety measures. In a unique symbolic venue, the Hellenic Motor Museum, delegates will have the opportunity to take part in the debate on ecomobility, network with the most important representatives of the sector, and tour 3 floors of exhibits that showcase the evolution of automobiles from the end of the 19th to the end of the 20th century.
The Conference will be live streamed giving the opportunity to all those interested to watch the sessions free of charge.
The organizers will give a certain number of participants the opportunity to attend the Conference in physical presence. In order to ensure that the total number of attendees does not exceed the limits imposed by the coronavirus protection measures, a strict first come, first served policy will be applied. Proof of electronic registration will be requested for entering the conference venue.
The Conference will be held in Greek.
Stay tuned to our website for the upcoming agenda, confirmed speakers and registrations details.