27-06-2008

ATHENSPLUS • FRIDAY, JUNE 27, 2008
ECONOMY & FINANCE
Power officials fear cuts will be
unavoidable as temperatures rise
Demand at peak hours outpaces capacity by about 2,500 MW, imports necessary
BY CHRYSSA LIAGGOU
Greece’s main electricity utility, the
Public Power Corporation (PPC),
and the grid operator (DESMHE)
are concerned that the distribution
system will face shortages of up
to 1,200 megawatts in capacity at
peak hours this summer and that
planned power cuts will be necessary.
Energy savings
Officials say a great deal
will depend on the energy
savings consumers will
make
The main factor considered to
be causing the shortages is the extensive
use of air conditioners,
which is estimated to raise the
peak consumption level by 2,500
MW. Even if the potential for
power imports from Italy, as well
as from Greece’s northern neighbors
is fully tapped, the deficit cannot
be covered at peak hours.
As the number of air conditioners
in use goes up every year,
demand is estimated to increase
There is no mistaking the fact that
private residential building activity
has taken a dive in Greece
in recent months. According to the
most recent data compiled by
the National Statistics Service,
the number of building licenses issued
in March in Greece was
down by 46.6 percent and the total
surface area approved for construction
was 50.1 percent lower
than a year earlier.
The drop was even sharper in
Attica, where the number of licenses
fell by 48.2 percent and the
total surface area by 53.9 percent
compared to March 2007.
In fact, this was the sharpest
drop of the last 10 years, and the
clearest indication of the growing
reluctance by developers and
households to invest in new
houses.
This is not surprising, considering
the especially unfavorable
conditions that currently prevail.
A recent survey by real estate
agency REMAX shows that in the
144 districts of the country where
the firm operates, only 23 percent
by about 400 MW in relation to
2007. As a result, PPC and
DESMHE fear that total demand
will exceed 10,500 MW, even at
times when temperatures do not
exceed 40 degrees Celsius.
A first indication of what is likely
to follow came last week, when
demand topped 9,500 MW when
temperature hit a high of 38 degrees
on Thursday.
DESMHE officials say they have
already secured imports of about
600 MW from the north, and that
there is contact on a daily basis
with the respective authorities in
Albania and the Former Yugoslav
Republic of Macedonia for the addition
of 200 MW, but availability
will largely depend on domestic
demand in these two countries.
A further capacity of 400-500 MW
will be added from the link with
the Italian grid.
Greek independent producers
are also expected to contribute
about 250 MW to available capacity,
by implementing special
power-saving schemes in return
for rebates. Aluminium of Greece’s
own power-producing plant, now
in experimental operation, is seen
of all sales in the first four months
of the year were of newly built
apartments. By contrast, 43 percent
of all transactions involved
houses older than 26 years. In
Athens and Thessaloniki, the respective
rates were higher, at 48
percent and 50 percent.
“Houses between five and 10
years old cost nearly as much new
ones, so those wishing to find
cheaper solutions should look at
those that are older than 20 years,”
says REMAX managing director
Stelios Samoladas.
The survey also showed that
prospective buyers are also increasingly
looking for smaller
apartments than previously.
being launched into normal production
next month.
The difficulties expected during
the summer period are “at the top
of our priorities,” says PPC’s CEO
Takis Athanasopoulos. The necessary
maintenance work is progressing
and significant projects
in upgrading the distribution system
have been completed, he
says.
“PPC is making every possible
effort to meet the requirements for
HOME & PROPERTY
Another option
‘Houses between five and 10
years old cost nearly as much
new ones, so those wishing to
find cheaper solutions should
look at those that are older
than 20 years’
The four power plants in Ptolemaida, Macedonia, produce about 60
percent of Greece’s electrical power.
In the Athens area, 29 percent
of the apartments sold were between
71 and 90 square meters,
while those from 91 to 110 sq.m.
represented 21 percent. The upmarket
northern suburbs accounted
for 28 percent of sales in
the Athens basin and the southern
suburbs for 24 percent.
Twenty-two percent of sales
were in the western suburbs,
where prices are more attractive,
while the center of Athens had a
13 percent share of houses sold in
the first four months of the year.
Some real estate agents take the
view that demand will pick up in
the autumn, and not just because
of the greater discounts or offers
being made by developers. The
main reason is seen as the Finance
Ministry’s intention to revise official
property prices upward in
early 2009. The experts believe the
revision will be in the order of 25-
30 percent on average, and that
many prospective buyers will
hasten to finalize purchases before
the government makes the
revision.
even the most extreme high temperatures,”
says Athanasopoulos.
Officials say a great deal will also
depend on the savings consumers
will make. If air conditioners
remained switched off between
12.30 p.m. and 2 p.m., demand
would automatically drop by
2,500 MW and enable the system
to cope without any planned cuts.
PPC is launching a publicity
campaign in this direction in the
next few days.
Buyers look to older, smaller, cheaper homes
Interest in new homes continues to wane, according to the most recent figures
The total area of new
apartments licensed for
construction in March was down
50 percent from a year earlier.
IN BRIEF
Current account deficit
keeps swelling
Greece’s current account deficit grew 5.7
percent in the first four months of the year, to
12.85 billion euros, the Bank of Greece said.
The oil deficit shot up 42.6 percent to 4 billion
euros, from 2.8 billion at the end of April 2007.
Higher payments for ship orders, totaling 5.23
billion euros, widened the trade deficit 16.45
percent to 14.7 billion. These unfavorable
developments were partly offset by European
Union inflows, as well as shipping exchange
earnings, which were up 22.5 percent to 6
billion. The current account deficit is projected
to exceed a record 15 percent of GDP,
reflecting the country’s deteriorating
competitiveness.
● ●●●
Central bank chief warns of
significant uncertainties
President of the Republic Karolos Papoulias
(photo, left) congratulates the new governor
of the Bank of Greece, Giorgos Provopoulos
(center), and Deputy Governor Eleni Louri-
Dendrinou (right), after their swearing-in
ceremony last Friday. Provopoulos, an
associate professor at the University of Athens
with long experience in commercial banking,
warned in his first circular to central bank staff
this week that the global financial upheaval
and economic difficulties posed significant
uncertainties and challenges.
● ●●●
Greek-owned merchant
fleet getting younger
Greek shipowners have invested more than 90
billion euros in new ships in recent years and
their current orders awaiting delivery
represent 17 percent of the world’s total, a
National Bank of Greece study says. The
average age of Greek-owned vessels, 36
percent of which are tankers, is projected to
drop to below 11 years in 2001, from the
present 14 years. Net income from shipping
topped 17 billion euros in 2007, or 7 percent of
the country’s gross domestic product.
Shipping and related sectors account for 4
percent of Greek employment.
● ●●●
Incomes in Greece
near EU average
Per capita income in Greece in terms of
purchasing power parity stands at 98 units,
just below the EU-27 average of 100,
according to Eurostat figures. The most
prosperous European Union members are
Luxembourg (276) and Ireland (146), and the
poorest Romania (41) and Bulgaria (38). EU
candidate Turkey scores 42.
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