NOME - PPC

The third NOME-type auction is in the electricity market for 2018 is set to take place today, with the starting price increasing to EUR 36.34/MWh from EUR 32.05/MWh in previous auctions due to higher CO2 emission prices. Recall that in the previous two auctions in 2018 (February and April ) the price shaped at EUR 41.5/MWh and EUR 42.05/MWh respectively compared to an average SMP of EUR 50/MWh in the first four months. The SMP currently stands above EUR 60/MWh and although this is seasonal it should remain higher than usual driven by CO2 emission prices which currently stand at c.EUR 16/ton. Recall that NOME auctions has been government’s key measure for reducing PPC’s market share which currently stands at around 80% and should fall to 62.2% by the end of 2018 and to 49.24%  by the end of 2019. The continuation of the NOME scheme after 2019 will be determined by Greece’s creditors in September 2019 depending on progress on PPC’s market share reduction and other structural measures in the operation of the market. In 2017 PPC recorded a loss of approximately EUR 97m derived from the spread between the NOME price and SMP, an amount that is expected to be surpassed this year. 

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