The energy ministry, locked in an intense yet unpublicized battle with the European Commission over the state-controlled power utility PPC’s lignite monopoly and wider reforms for the electricity market’s further liberalization, has prepared a new proposal for Brussels entailing the establishment, by the country’s energy-intensive industries, of an SPV to which PPC would supply considerable lower-cost lignite-generated electricity amounts.
This electricity amount could, for example, be 40 percent of PPC’s lignite-fired production until 2023, when the power utility plans to have withdrawn all existing coal generators.
A European Court decision calling for access to third parties of 40 percent of PPC’s lignite-based electricity production has not been honored.
The government’s recent decision to abolish NOME auctions has angered Brussels, which expressed firm opposition to the prospect last summer, as the introduction of the auctions about three years ago, along with an instruction for the sale of PPC’s Meliti and Megalopoli coal generators, constituted an agreement of equivalent worth to the court decision.
Greece’s energy ministry has strongly resisted the continuation of NOME auctions or any other lignite-related auction procedure, arguing this is a loss-incurring procedure for PPC, which, worse still, has not helped reduce the power utility’s market share towards a contraction target of 50 percent.
The energy ministry is now looking to discuss its SPV plan with Brussels to see if it is feasible. A similar model had been applied in France in the past, prior to the country’s adoption of NOME auctions.