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This Report looks at electricity market reforms in Greece as a result of the Third Electricity Directive (2009/72/EC) and the Second Economic Adjustment Programme for Greece.
I. Introduction
The electricity market in Greece is currently undergoing a fundamental transformation in the context of completing harmonisation of its legislation with the Third Electricity Directive (2009/72/EC)1 and complying with the obligations undertaken in the Second Economic Adjustment Programme for Greece.' Key reforms are introduced aiming to enhance competition and remove significant distortions in the market, modernise and develop existing grids and infrastructure, move forward planned privatisation processes and permanently deal with substantive market liquidity shortages.
II. Grids and Infrastructure
1. Unbundling of Grid and Network Operators
a. Ownership unbundling of IPTO
Following the unbundling of PPC,3 Greece's vertically integrated electricity enterprise, through establishment of the Transmission System Operator HTSO4 in 2000 (which was then further separated into the Independent Power Transmission Operator IPTO 5, fully owned by PPC, and the market operator LAGIE6), in 2013 the Greek Government decided in favour of the full separation of IPTO from PPC and to privatise 66% of its shares, while leaving the remaining 34% to be acquired by the Greek State. In February 2014, the Greek Parliament enacted Law 4237/20147, which provided for above ownership unbundling and privatisation. Although the Law sets the second quarter of 2014 as the deadline for the finalisation of the tender procedure, the tender for privatisation of IPTO was published by PPC in April 2014 and is still ongoing. Moreover, by a resolution published on the 3o'11 of April 2014,8 RAE calculated and approved the yearly cost and - subsequently - the required revenue of IPTO for 2014, whose reasonable rate of return was raised to 8.5% from 8% in 2013. On the 30th of June 2014, RAE also published two resolutions regulating the methodology of calculation of the required revenue of IPTO for the next years.9 As an incentive for the implementation of major system development projects by IPTO, the possibility of adjustment of the reasonable rate of return of IPTO within a range of an additional 1% to 2.5% was introduced, which should also make IPTO more attractive in the eyes of potential share purchaser. In accordance with the above, RAE...