Brussels approval of CAT plan not assured, legal experts warn

The European Commission’s approval of Greece’s CAT mechanism plan should not be considered certain as it contravenes EU directive targets for a gradual reduction of support funds for facilities making a negative environmental and economic impact, legal officials have told energypress.

The Greek government, preparing to submit the country’s CAT plan, prepared by RAE, Greece’s Regulatory Authority for Energy, to Brussels, is hoping for an approval as this would boost the chances of a successful bailout-required sale of lignite units by the main power utility PPC. Two teams through to the sale’s second round are gearing up to submit binding offers in October.

The Greek CAT remuneration plan is believed to not make any distinctions that exclude lignite-fired power stations from CAT payments. The units included in PPC’s sale package represent 40 percent of the power utility’s overall lignite capacity.

An EU directive concerning the issue notes that member states should consider alternative production sufficiency ways that do not make a negative impact on the objective of phasing out environmentally or economically damaging subsidies, the legal sources pointed out.

Taking this into account, the inclusion of lignite-fired power stations in the CAT plan could affect its chances of approval in Brussels.

The legal experts added that energy supply sufficiency could be achieved through a combined plan involving aspects of the CAT plan, without remuneration for lignite-fired power stations, and an extension of the existing demand response mechanism (interruptability) – compensating major-scale consumers, such as industrial enterprises, when the TSO (IPTO) asks them to shift their energy usage (lower or stop consumption) during high-demand peak hours, so as to balance the electricity system needs.