Market reforms before fixed CAT plan, Brussels indicates

Greece will first need to institutionalize electricity market reforms that will provide power stations with revenues they are entitled to based on actual market conditions before a permanent CAT (Capacity Availability Tickets) mechanism, to replaced the temporary CAT system, is submitted for processing and approval, the European Commission’s Directorate-General for Competition and Directorate-General for Energy have indicated, according to energypress sources.

The DG Comp and DG Energy in Brussels are not casting doubts over the principles and framework of the permanent CAT mechanism already prepared and delivered for public consultation by RAE, the Regulatory Authority for Energy. However, these authorities believe the permanent mechanism should be ushered in to cover resulting needs once specific electricity market reforms have been implemented.

The expected revisions will primarily focus on issues concerning the market’s Management Code.

RAE will now need to work on introducing revisions and complementary tools to the system so that compensation amounts provided for electricity production units accurately depict market conditions.

At the same time, IPTO, the power grid operator, will need to present a study focused on grid flexibility needs. These are rising as the RES sector’s contribution to the grid’s energy mix grows.

The overall conditions and results of these moves will be co-assessed before a permanent CAT mechanism proposal is submitted.

Swift action will need to be taken as the temporary CAT plan expires in April, 2017. If the permanent mechanism has not been endorsed and launched by then, electricity producers face the danger of being left without any compensation, which could threaten the sustainability of production units.