Investor Relations - 03.06.2014

Booz study for lignite excavation cost


Booz & Co has conducted a study, on behalf of PPC, regarding the cost of lignite-fired electricity generation in 8 countries (Presentation with the relevant findings).

The comparative analysis, based on 2012 data, showed that the excavation cost of lignite (in Euros per ton) in Greece for PPC is the second lowest out of a total of 8 countries which were considered in the study. Specifically, the excavation cost in Greece is lower compared to 6 out of the other 7 countries which were considered in the study, namely: Germany, Czech Republic, Poland, Romania, Serbia, Turkey. Only Bulgaria has a lower lignite excavation cost (in Euros per ton).

However, the exceptionally low calorific value of the Greek lignite inevitably leads to a higher cost of lignite-fired electricity generation compared to the other countries.

·     In 2012, the calorific value of the Greek lignite was 1,200 kcal/kg, whereas in other countries it ranged,
on a weighted average, from 1,605 kcal/kg (Bulgaria) to 2,915 kcal/kg (Czech Republic).

·    The final full cost of lignite-fired electricity generation in 2012 in Greece was 59.93 €/MWh, compared to a range between 31.57 €/MWh (Bulgaria) and 54.19 €/MWh (Romania) in the other countries of the study.

Finally, the study includes a simulation, which shows that the electricity generation cost in Greece would be significantly lower if lignite had the same quality characteristics as in other countries.

For example, if the lignite in Greece had the same calorific value as in Germany, that is 2,195 kcal/kg instead of 1,200 kcal/kg, the cost of lignite-fired electricity generation would be lower by approximately 10 €/MWh and it would amount to approximately 49.8 €/MWh, compared to 53.6 €/MWh in Germany in 2012.

The main conclusion of the analysis is that lignite exploitation in Greece is characterised by high productivity levels compared to other countries, even though the cost is de facto being burdened by the low calorific value of the indigenous lignite.

PPC is continuously monitoring its cost, also in comparison with the other European countries, and continues its effort to improve productivity and reduce operating costs aiming at providing high quality services to consumers at the lowest possible cost.


Athens, June 3, 2014

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