Transcript The Revythoussa LNG terminal

Risk Management through Regional
Markets Integration in SEE
Prof. Kiriakos Vlahos
Prof. of Management Science, ALBA
Board Member, RAE
Southeast Business Forum, Istanbul 2012
The Greek economic crisis in numbers
Southeast Business Forum, Istanbul 2012
Impact on electricity consumption
Southeast Business Forum, Istanbul 2012
Impact on energy companies
Liquidity crisis
• €1 billion of uncollected bills
Debt refinancing problems
• Even the healthy companies find it hard to refinance
debt.
Overcapacity
Investment “anorexia”
• Important investments are cancelled or indefinitely
delayed
Southeast Business Forum, Istanbul 2012
Regional Market integration is the long-term solution
National economies are small and very volatile
and risky
The evolution of national energy companies
into regional players would help them diversify
and manage country risk
Regional market integration would offer a
solution to the problems of over and undercapacity in different parts of the region
Southeast Business Forum, Istanbul 2012
Regional comparison – GDP growth
Southeast Business Forum, Istanbul 2012
Interconnections vrs. Market integration
Traditionally, interconnections were seen as the
means for limited reserve sharing and economic
energy exchanges.
In addition to the above market integration
offers the means of mitigating the risks
resulting from year-on-year economic volatility.
Southeast Business Forum, Istanbul 2012
…Promising results in the background
 The Third EU Package and the European Electricity Target
model are triggering reforms and opening the way for Market
integration.
 “Connecting Europe Facility” initiative of the EC has
incorporated SEE
 Decision makers realize that regional cooperation is the only
way forward (best case) or unavoidable (worst case)
 Market forces are increasingly interested for cross-border
transparent trading of energy in the SEE region

Market integration is not that far from reality
Southeast Business Forum, Istanbul 2012
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