A series of damages and operational faults at electricity production facilities in various parts of the country have had a considerable impact on the System Marginal Price (SMP) over the past few days.
Last Friday, when the SMP was at a level of 60.385 euros per MWh, two electricity production facilities in Ptolemaida, northern Greece, contributed a total of 267 MW over a 24-hour period. Then, a devastating fire broke out at the facilities over the weekend, severely impacting the market on Monday. The SMP level rose sharply to 67.593 euros per MWh, exceeded the 80-euro mark between 4pm and 10pm, and peaked at 145 euro per MWh at 7pm.
The SMP reaction cannot be entirely attributed to the withdrawal of these two production units. Besides the Ptolemaida units, two major facilities in northern Greece’s Agios Dimitrios and Kardia areas were – and continue to be – sidelined, deducting over 500 MW, combined, from the system. Furthermore, two units in Lavrio, southeast of Athens, are also currently out of action as a result of technical problems, while the operational potential of hydropower units has been severely limited. A number of these were put to full use for a few hours on Monday afternoon, generating nearly 1 GW.
Parallel to all these developments, a number of lignite-fired stations have been hampered by technical faults, preventing them from operating at full capacity.
The overall situation improved gradually over the next few days, lowering the SMP level to 63.522 euros per MWh on Tuesday, and 61.77 yesterday, while a level of 60.7 has been forecast for today. Despite the de-escalation, the level remains above the 60-euro level of one week ago.
The gradual decline has been primarily assisted by the input of hydropower units, which, during peak-hour demand in the afternoons, have increased their production levels, compared to Monday’s contribution, to reach 1.5 GW. In addition, privately-run units have increased their contributions during afternoon and evening hours. Two production plants operated by Elpedison and Protergia, for example, are scheduled to operate at full capacity today for a considerable number of hours, after 6pm.
These developments highlight the electricity market’s changing landscape, displaying, yet again, the important role played by temporary mechanisms for capacity assurance.
At the same time, besides the production side – its level of sensitivity of production sufficiency, even during low-demand periods, has once again been highlighted – these developments are of importance for retail supply as well as import activity. Retail suppliers operate at a marginal level and any fluctuation poses a serious threat. Their operating conditions will remain fragile if an environment lacking supportive mechanisms and, most importantly, NOME-type auctions, is maintained.