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18th Roundtable with the Government of Greece
Athens 9&10 July 2014
“Initiatives for Economic Growth
and Regional Development”
The role of natural gas
Spiros Paleoyannis, Chief Executive Officer
Agenda
• The Greek electricity market under transformation
• Reforms (and uncertainties) also in the Greek gas market
• Managing transition towards the creation of a fully competitive gas market
• DEPA’s Vision and Strategy
Remain the market leader in the domestic market• Network expansion to new regions• Employment of CNG and small-scale LNG technology • Natural gas use in the transport sector• LNG as marine fuel
Play a key role in infrastructure development and supply in the region• Aegean LNG• Greece-Bulgaria Interconnector (IGB) • East Mediterranean Pipeline
The Greek electricity market under transformation
Reforms but also uncertainties in the Greek electricity market
The new regulatory regime has changed the landscape and
resulted in drastic reduction of gas demand for power
generation
Even recently constructed CCGT plants at risk
Vertical increase of electricity imports
Very probable ToP clause for DEPA in 2014 (and consequently
for a large number of its customers)
“Small PPC” under formation
Reforms and uncertainties also in the Greek gas market
Government to withdraw EPAs gas supply exclusive rights soon
Supply activities will be legally separated from distribution ones in accordance with the European target model
Distribution will be a fully regulated business, under strict rules for access to network and for applicable tariffs
All industrial customers nationwide will become eligible by 1st Oct 2014. Commercial and residential customers will follow within the next few months (or years)
Changes will affect not only the retail but also the wholesale gas market
Reforms may have an impact on EPA’s shareholders (including DEPA)
Managing transition towards a fully competitive gas market
DEPA in order to secure a smooth transition proposed:
Ownership unbundling in DSOs and ESCs to reflect current shareholding status in EPAs
Longer duration of the distribution licenses to be granted to DSOs
Licenses to ESCs to be granted with no expiration date
Expansion of the territories of EPAs to include also (at least) the areas of the three “new EPAs” and achieve economies of scale
Incentives to be secured for the development of the network (especially in the new areas)
Support the use of gas in both traditional and new innovative by all means
5
Vision and strategy
Str
ate
gic
en
ab
lers
Co
re in
itia
tive
s
Achieve competitive,
well-diversified and
flexible supply
Remain the market
leader and continue
to drive growth in the
domestic market
Play a key role in
infrastructure
development and gas
supply in the region
Optimise wholesale
margins
Contribute to the creation of a green, competitive and efficient energy market
Build a fit-for-purpose organisation to win in a competitive gas market and prepare carefully for future
differentiation in related businesses
Ensure long-term leadership in a competitive market and capture growth both in Greece and in the region
I II III IV
V
VI
DEPA’s investment plans
NETWORK EXPANSION TO NEW REGIONS
CNG AND SMALL & MID-SCALE LNG TECHNOLOGY
TRANSPORT SECTOR
LNG AS MARINE FUEL
POSSIBLE DIVERSIFICATION IN RELATED BUSINESS
DEPA SA is
committed to
expand the
network in new
regions, so they
can benefit
from natural
gas
12 refueling
stations under
development
Promotion of
natural gas in
taxes and
professional
vehicles
LNG use in ships
applies to EU
restrictions and is
cost friendly
Participation
in electricity
supply
Participation
in upstream
activities
DEPA SA has
studied the
possibility of
natural gas
penetration in
isolated areas
through CNG and
small and mid
scale LNG
technology
Network expansion to new regions
• New legislation for distribution and retail gas market liberalization is expected
to pass from the Parliament in the next two months
• DEPA has already invested 148 mil € in the areas of Central Macedonia,
Eastern Macedonia & Thrace, and Central Greece and Evoia and is willing to
develop further the network within certain areas and cities
• DEPA SA is committed in supplying with minimum cost new regions, including
certain islands to benefit from natural gas use
CNG and Small Scale LNG Technology
• DEPA SA has studied the possibility of natural gas penetration in isolated areas
through CNG and small and mid-scale LNG technology.
• CNG infrastructure already employed
Existing EPAs
Investments
2002-2013: 764,21 mil.€
2014-2018: 117,80 mil.€
Natural gas use in the transport sector
• Under development 12 refueling stations
• 5 refueling stations already in operation: Anthousa, Nea
Liosia, Kifisia, Nea Philadelphia, Thessaloniki
• Second development phase will cover all the country
Stakeholders’ cooperation for the promotion of natural
gas in taxes and professional vehicles
• 600 buses & 110 municipal garbage trucks are natural gas fueled
• Taxis, Private cars, Vehicles and Trucks in Athens and Thessaloniki are
natural gas fueled
LNG as marine fuel
• International Regulations for sulphur content of marine fuels (IMO, EU Directive 2012/33- Decisions
Marine Environment Protection Committee-ΗΠΑ)
• LNG use in ships already applies to certain EU countries, since it is cost and environment friendly
• On global scale a significant number of ships are LNG-fueled and the number of ships is increasing. In
Greece the first LNG ship is expected to be a Hellenic Seaways Ferry
• At an early stage LNG use in ships would start in certain Ports e.g. Piraeus, Thessaloniki and Patras
• It is estimated that with 10-20% use of LNG in Piraeus port, the gas quantities to be absorbed will be
~ 420 - 840 mcm natural gas annually
Brittany Ferry (210 m length) estimated to be ready in 2017
will be the biggest in Brittany’s fleet
Viking Grace (218 m length) connecting Turku (Finland)-Stockholm (Sweden)
took service on January 2013
DEPA’S projects of European and
regional interest
•Aegean LNG
•Greece-Bulgaria Interconnector (IGB)
•East Mediterranean Pipeline
SE Europe is a growing and thirsty for gas sources and routes diversification
market
DEPA’s vision is to create a new gas gate to Europe and establish Greece as a
physical and pricing gas hub in the region
International ProjectsGreece as a transit and trading hub
Aegean LNG:
•Will be able to supply up to 5 bcma into Greece and then in
conjunction with IGB to the Balkans and even to CE Europe
•It is classified as a Project of Common Interest by EU.
•The feasibility study was completed and the Environmental
Impact Assessment Study is in progress.
Aegean LNG is the closest and least expensive re-gas facility to SE and CE Europe.
It will be the first FSRU to target both the broader SE European market and not only
through IGB and other pipelines of local nature,
Aegean LNG is at the crossroad of several key infrastructure projects, including cross
border pipelines and gas storage.
International ProjectsGreece as a transit and trading hub
Greece – Bulgaria Interconnector (IGB):
•Will initially transport 3 bcma of gas to SE and central
Europe starting from 2016, expandable up to 5 bcma
•It is classified as a Project of Common Interest (PCI) and
will receive a €45million grant by EU through the EEPR
framework.
•Technical design is completed, the permitting procedure
almost finalized, FID to be made in Q4 2014 and
construction will start in Q2 2015
• First gas in 2016.
International ProjectsGreece as a transit and trading hub
Eastern Mediterranean Pipeline:
•will create a new supply route from the Levantine
basin exclusively to EU countries, initially carrying
8 bcma.
•is classified as a Project of Common Interest (PCI)
by EU.
•its prefeasibility study have shown conclusively
that East Med is technically feasible and less
expensive than the LNG option.
•the inquiry for the feasibility study is in progress
