RAE (Greece): Introduction of Forward Baseload Products in the Greek electricity market (NOME auctions)
In Greece, the Regulatory Authority for Energy (RAE) has recently introduced a new scheme of “Regulated Auctions for Forward Baseload Electricity Products” in the Greek electricity market. This new mechanism, known as “NOME auctions” and foreseen by the law L. 4389/2016, as amended applies, was inspired by the French NOME (ARENH) scheme and aims at reducing the share of the incumbent electricity producer and supplier in the Greek wholesale and retail energy markets.
The “auction products” refer to baseload energy that is provided by the incumbent to the independent retail suppliers. The products are virtual, in the sense that they are not produced by specific generation facilities and their delivery does not depend on actual electricity plant operation. The volume of products to be auctioned is linked to an equivalent decline of the incumbent’s retail market share per year until 2020.
Diagram 1: Incumbent’s retail market share graphical depiction since the deployment of the NOME Mechanism:
The aforementioned law provides the necessary interventions for the introduction of the Regulated Auctions for Forward Baseload Electricity Products mechanism in the current market organisation, qualified as “Mandatory Pool”, as well as its basic features, such as the appointment of the Market Operator, LAGIE S.A., as the competent Body for conducting the Auctions, the eligibility criteria for participation to the Auctions, the obligation of the incumbent to sell the volumes of electricity provided through Regulated Auctions, as well as to accept all financial transactions linked to these Auctions, the criteria for the development of the “Reserve Price” Methodology and the methods for monitoring and supervising the mechanism.
The Regulatory Authority for Energy was also provided with specific authorisations for the design and implementation of the mechanism (issue of Decisions and/ or Opinions to the Ministry of Environment and Energy), such as the development of the detailed Reserve Price Methodology (€/ΜWh) of the Auction, the definition of the volume of products to be auctioned and the frequency of Auctions per year, the development of Auction Rules and Specifications, the issuance of the Exchange Code for Electricity Forward Auctions, which sets out all rules and procedures for the operation of the mechanism, as well as the preparation of the semiannual Impact Assessment Reports.
The following diagrams show the results of the three NOME Auctions which have already taken place in terms of the quantity attributed to each participant as well as the relevant biding price.
Diagram 2: First NOME auction results (25.10.2016)
Diagram 3: Second NOME Auction results (31.01.2017)
Diagram 4: Third NOME Auction results (26.04.2017)