5 August 2018 | ΑΠΕ-ΜΠΕ | Interview with Alan Svoboda, Executive Director of Sev.en Energy
1. You are interested in investing in Greece as the third adjustment program of the economy is about to end. What are your estimates for the future of the Greek economy?
We are aware of the challenges Greece faced over the past few years. However, according to European and Greek officials, as well as the top international credit rating agencies, the economy is well on a path of recovery and growth.
What is of particular interest to Sev.en Energy is the profound transformation the Greek energy market is undergoing at the moment. It is a process we are well aware of, as we have been through the same process in the Czech Republic. We believe that Sev.en Energy, with its expertise, can assist Greece along this transition towards to new target model.
Also, we’re aware of the profound transformation of the Greek generation mix. Sev.en Energy’s mission is to facilitate this process by providing a perspective to conventional power plants, as long as they are needed to ensure the stability of the system or as a backup source. This way we offer a robust basis for a swift transition of the energy sector towards a fully sustainable future.
2. Lignite power generation is greatly impacted by the cost of purchasing CO2 allowances. Some believe that if the forecasts for a further increase in the price of CO2 allowances are confirmed, lignite units will not be sustainable. How do you comment on this?
Indeed, CO2 emission allowances are a significant cost factor that I am sure all contenders will carefully take into consideration. Their prices have risen significantly over the past year.
As mentioned above, Sev.en Energy believes that there is still a need for conventional power plants in the generation mix in the foreseeable future. In Greece, particularly, we see lignite-fired power plants playing a crucial role as a base load provider and backup operator. We are open to a dialogue with the local authorities how to best secure the long-term future of these assets, for example through the Power Adequacy Mechanism or other potentially supporting schemes for lignite power plants.
3. Will you proceed with investments to modernize the units if you win the contest? Have you decided to proceed with the construction of the second power plant in Meliti, Florina?
The question is probably a bit premature at this point. Sev.en Energy has just been granted access to the data room and we’re reviewing different options. We will assess the technical state of the power plants and based on this discussion, with relevant parties make any necessary investments.
With regards to the Meliti II project, we are open to any profitable options. However, given current prices of CO2 emission allowances, the likelihood of this investment is currently lower than it might have been a year ago.
4. Will you bid regardless of whether the lignite units are included in the Power Capacity Adequacy Mechanism being developed?
We are aware of the government’s efforts to negotiate the inclusion of lignite units in the new, permanent power-efficiency mechanism. We also appreciate that the European Commission has recognized the importance of lignite production for power supply security in Greece.
Sev.en Energy, as other participants are, is closely monitoring these developments as they have a direct impact on the long-term viability of the assets that are going to be sold.
We strongly believe that energy systems operating with growing shares of volatile renewable electricity generation require reliable assets to, first, provide a robust and currently indispensable complement to those renewable assets in the overall energy mix and, second, to support the curbing of electricity prices for industrial and household consumers.
5. You have signed an agreement with the GEK TERNA group to jointly submit a binding offer. What is the purpose/aim of this cooperation?
Our interest in the two units is serious and we want to turn this into a successful venture. Our strategic partnership with the GEK TERNA Group combines Sev.en Energy’s unique operational and technical experience in the lignite mining and generation, with GEK TERNA’s leading position and deep knowledge of the Greek energy production and supply sector. This is a partnership with a long-term perspective, starting with the submission of our joint bid for the Megalopolis and Meliti units. We believe that, together, we can offer a robust basis for the future of lignite power generation sources in Greece.
6. PPC has decided to transfer to the new scheme, where all employees currently working in the units to be sold. What are your plans for the staff? Will you maintain their jobs beyond the statutory six-year mandatory period? Also, how do you comment on the reactions of the PPC workers union (GENOP)?
People are the most important part of Sev.en Energy Group and we would expect to treat those in Meliti and Megalopolis in exactly the same way: we believe a culture of excellence requires highly talented employees and we will commit to delivering market-leading training and achievable and clear paths for performance-based career progression. As our track record shows, we have always tried to prolong the lifetime of the power plants where economically possible. This way, we safeguard employees’ positions for a longer period of time.
7. Are you considering engaging in other market segments (e.g. supply, RES, natural gas, etc.) or will you limit yourself solely to lignite power production?
Right now, we fully focus on the current tender concerning the acquisition of the lignite units in Megalopolis and Meliti. We expect nevertheless that our partnership with GEK TERNA will go beyond the current privatization.
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