Free CO2 emission rights for Balkan units would spell bad news for PPC

The development of coal-fired power stations in the western Balkans, combined with their provision of free carbon emission rights, as is being anticipated by the countries planning these units, would come as bad news for Greece’s main power utility PPC, now preparing a bailout-required list of carbon-fired power stations to be placed for sale.

A market test will be conducted after summer to determine the level of investor interest in these PPC units. The prospect of free CO2 emission rights for carbon-fired power stations in neighboring Balkan countries would certainly diminish the overall investor interest in PPC’s equivalent units. Consequently, PPC hydropower stations will need to be added to the Greek utility’s sales list.

Plans by former Yugoslav states to develop ten coal-fired power stations in the western Balkan region suggest that these countries are relying on qualifying for free carbon emission rights offered by the European Commission to less developed countries.

Otherwise, these prospective coal-fired power stations would not be sustainable when eventually incorporated into the EU’s ETS (Emission Trading Scheme). Carbon emission right costs are expected to keep increasing as a means of encouraging electricity generation investments in other technologies and help the EU reach climate change targets.

Free CO2 emission rights are made available to less affluent European states as a transitional measure to help them shoulder the cost of needed infrastructure upgrades.

It is estimated that the annual CO2 emissions of prospective western Balkan coal-fired power stations could reach 23.7 million tons. Given the anticipated rise of emission right costs, the ventures would not be sustainable.

Though these western Balkan countries have yet to be included in the ETS, all have expressed an interest for EU membership. EU accession talks with Serbia and Montenegro are believed to have reached an advanced stage.