The Greek Energy Landscape in Transition
The Greek energy market has undergone a profound and complex transition, shifting from a vertically integrated, state-owned monopoly to a liberalized and increasingly competitive system, albeit one that is still evolving. A central theme of this transformation is the fundamental shift in philosophy, from an energy sector viewed as a tool for national development and social policy to one driven by market principles and European Union directives.
While significant progress has been made in unbundling state-owned enterprises and attracting private investment, the market’s liberalization remains incomplete. This is best exemplified by the “Greek paradox,” where wholesale electricity prices have plummeted due to a surge in renewable energy generation, yet final consumer costs remain among the highest in Europe. This divergence stems from systemic frictions, including high balancing costs, intra-day price volatility, and a regulatory framework that has yet to adapt to a modern, renewables-heavy grid fully.
Looking forward, Greece is pursuing a dual-pronged strategic path. On one hand, it is committed to an ambitious decarbonization agenda, with plans to phase out coal and massively expand its renewable energy and storage capacity. On the other hand, it is simultaneously investing heavily in new natural gas infrastructure and exploring for domestic hydrocarbon reserves to enhance its energy security and geopolitical influence. There are significant strategic implications related to this complex landscape for business customers.
Deregulation of the Greek Energy Markets
The shift from state control began in the late 1990s, driven not by domestic policy but by EU directives to create a single, competitive energy market. These mandates required the separation, or “unbundling,” of competitive activities like supply from monopolistic ones like network operation. Greece established the Regulatory Authority for Energy (RAE) in 1999 to oversee this complex and politically sensitive process. The goal was to ensure a transparent market and allow new suppliers to compete. While initial reforms started in 1999, a more significant structural change came with Law 4001/2011, which formally split the state-owned monopolies. The Public Power Corporation (PPC) was broken into four distinct entities:
- PPC retained its roles in generation and supply.
- HEDNO (ΔΕΔΔΗΕ) took over the distribution network.
- IPTO (now ΑΔΜΗΕ) became responsible for the transmission network.
- OOEM (ΛΑΓΗΕ) was charged with operating the wholesale market.
A similar unbundling process was also applied to the natural gas sector, with the state-owned DEPA (ΔΕΠΑ) being spun off. The push for privatization accelerated in 2010 as a condition of Greece’s economic adjustment programs. The government began selling off state-owned assets to reduce its market share and attract foreign direct investment. A key milestone was the 2017 sale of a 24% stake in ADMIE to the State Grid Corporation of China.
However, this transition has not been smooth. The process was driven by external directives rather than a domestic agenda, creating a clash between the EU’s market-driven philosophy and Greece’s historical use of energy as a social tool. The government’s continued majority control of key entities like PPC creates market asymmetries, allowing it to leverage historic, low-cost assets in ways new entrants can’t match. This tension between political control and market efficiency, compounded by the financial crisis, has made full liberalization a contentious and ongoing process.
How is the Greek Electricity Market Structured?
The modern Greek electricity market is based on the European “Target Model,” designed to integrate national markets. This system is managed by the Independent Power Transmission Operator (IPTO) and the Hellenic Energy Exchange (HEnEx), which provides the trading platforms. The wholesale market is a mandatory pool with four key sub-markets for trading energy and ancillary services from long-term to real-time:
- Forward Market: For long-term hedging against future price risks.
- Day-Ahead Market (DAM): The primary spot market where most wholesale electricity is traded.
- Intra-day Market: Allows for real-time adjustments, which are crucial for managing renewable energy volatility.
- Balancing Market: Ensures the real-time balance between supply and demand to maintain system security.
Who are the Key Players in the Greek Electricity, Natural Gas, and Oil Markets?
While the market is officially liberalized, a few large players still dominate.
In the electricity market, the Public Power Corporation (PPC) remains the largest player in Greece, controlling a vast network of assets and serving millions of customers. Its dominance is challenged by independent players like Mytilineos (Protergia), Motor Oil, Elpedison, and Heron, who have invested heavily in natural gas-fired and renewable energy plants.
In the natural gas market, the primary importer of pipeline gas and LNG is DEPA Commercial, but private firms like Prometheus Gas and international traders like Axpo also operate in the market.
The oil market is dominated by two large refiners: HelleniQ Energy and Motor Oil, both of which have diversified into other energy sectors.
Why Wholesale Savings Don’t Reach Consumers
A significant paradox exists in Greece: wholesale electricity prices are falling due to the surge in renewables, but final consumer bills remain high. In fact, while in 2019, the Greek wholesale energy market was the most expensive in Europe, in 2025, it has fallen to 9th place. However, energy bills remain high for both domestic and business consumers – this may be masked somewhat by government intervention in the form of subsidies.
In general, this paradox is not due to a simple case of price gouging, but rather a result of systemic issues, according to a report from the Alba Graduate Business School. The merit-order effect is a key factor. When abundant solar and wind energy enter the market, they suppress wholesale prices, sometimes to zero, especially during midday. However, these savings are offset by two main issues:
- High Balancing Costs: The system operator incurs significant costs—projected to exceed €1 billion in 2025—to manage real-time fluctuations between supply and demand. These costs are passed on to consumers.
- Intra-day Price Volatility: Known as the “duck curve,” prices spike sharply in the late afternoon and evening as solar generation wanes, forcing a reliance on more expensive gas-fired plants. Since retail bills often average prices across these periods, the benefit of cheap midday energy is diluted.
This market architecture, coupled with a lack of transparent balancing settlements and insufficient energy storage, prevents the full value of renewable energy from reaching the end-user. Without further reforms, high consumer costs will likely persist, impacting the competitiveness of Greek industry.
What Types of Energy Contracts are Available to Businesses in Greece?
The modern market offers a variety of contracts tailored to different business needs and risk tolerances. NUS can support you in evaluating your risk profile and finding the best contract type for your business, following your procurement strategy.
- Variable/Floating Rate Contracts: These plans tie your price directly to the wholesale market price, such as the Market Clearing Price (MCP). They offer potential savings during low-price periods but expose your business to significant volatility. This can be a good option for businesses with the ability to actively manage their consumption and shift loads from peak to off-peak periods.
- Fixed-Rate Contracts: These contracts lock in a stable, predictable price for a set term, typically 12 months. They offer crucial budgetary certainty and protection from market spikes; however, this will usually not offer the best price.
- Hybrid/Seasonal Contracts: Offering a middle ground, these plans combine elements of both. For example, a contract might provide a fixed price during high-demand winter months and switch to a variable rate for the rest of the year. This allows businesses to balance price protection with some market exposure.
How Can Businesses Mitigate Volatility?
The Greek market now demands that businesses become active, strategic energy purchasers. The key principle is that the lowest price isn’t always the best; a business must balance budgetary stability and risk management against market volatility. For large consumers, the multi-layered market presents opportunities for sophisticated strategies, and NUS can help refine your energy strategy, leveraging the available products in the market, and managing your risk against market volatility
- Hedging: Businesses can use the forward market to negotiate long-term contracts, locking in future prices to manage cost and promote price competition.
- Demand-Side Management: By analysing consumption and billing structures, a business can shift energy-intensive operations to low-price midday hours, significantly reducing operational costs and supporting grid stability, where the business model allows.
How Can NUS Consulting Group Help Your Business?
This transition from a passive consumer to an active market participant requires a more sophisticated approach to energy procurement, where managing your costs becomes a strategic business function.
NUS can support in navigating contract options, mitigating price volatility, and positioning your business for future opportunities in a dynamic and increasingly sophisticated market.
For more information contact your NUS consultant, or contact us online.