The PPC is treating the wider Central and Eastern European region as a single electricity area in which the deficits of one country cover the surpluses of the other with the new business plan for the period 2026 – 2040 announced last week.
A key element of the new plan is PPC’s penetration of electricity generation and supply in three new countries (Slovakia, Poland, Hungary), in addition to Romania, Bulgaria, Italy and Croatia where the group already has a presence. A common feature of these countries in this region is higher – compared to the rest of Europe – electricity prices, which from the consumer’s point of view is obviously negative, but from the investor’s point of view is an opportunity.
According to the data included in the investment plan presented by PPC Chairman and CEO George Stassis, over the three-year period 2023-2025, wholesale electricity prices in these countries ranged between EUR 102 and 112 compared to EUR 79-100 in Central Europe (Germany, Switzerland), EUR 64-91 in France and the Iberian Peninsula and EUR 36-56 in Scandinavia. The electrical ‘isolation’ of the East European countries is not very high. Europe has been repeatedly raised at the EU Energy Council by Greece and other countries in the region, but so far no effective measures have been taken to address it. According to PPC, there are no large-scale investments in cross-border interconnections on the horizon that would limit the price gap and restore the functioning of the single European electricity market. So PPC has chosen to turn a disadvantage into an advantage.
A second element is the complementarity of the production of Renewable Sources (wind and photovoltaic) that create conditions for balancing production deficits and surpluses. For example, the curve of solar production in Greece compensates for the corresponding curve of wind production in Romania. The same with photovoltaics in Croatia and wind power in Poland. Exploiting these synergies will ensure for the PPC optimization of energy flows and minimization of “green” energy cuts during periods of overproduction in a country/region.
The elements evaluated for further penetration in the region are also the energy deficit expected in the coming years due to a combination of factors such as: the growth of economies, the retirement of old (coal-fired) power plants, the increase in demand from Ukraine when the war ends combined with the fact that 27 gigawatts of power plants have been destroyed (up from 59 gigawatts before the war) and the additional demand from the new data centers to be built in the region, in which PPC also claims a leading role.
The PPC’s goal is to emerge at the forefront of the region’s utilities. A summary of the metrics of the new business plan include:
-Doubling of installed capacity to 24.3 GW in 2030, from 12.4 GW in 2025, with investments in renewables, flexible generation and storage, despite full de-lignification, which will be completed in 2026, and the closure of 40% of oil-fired power generation on the Greek islands.
– Investments between 2026 and 2030 are projected to reach Euro24.2 billion, of which 48% outside Greece. They will be financed, among other things, by a €4 billion equity issue expected to be completed in May.
-By 2030, 45% of installed capacity will be outside Greece, while the energy mix will include all modern forms of electricity generation (solar, wind, hydro, gas, storage), diversifying the Company’s portfolio both geographically and technologically.
Operating EBITDA at Euro4.6 billion in 2030 from Euro2.0 billion in 2025,
– Net profit more than triples to Euro1.5 billion in 2030 from Euro0.45 billion in 2025.
-Dividend per share reaching Euro1.4 by 2030 from Euro0.4 in 2024, with an average annual growth rate of around 24%.
