The European Commission has just launched a market test concerning its recent agreement with energy minister Kostas Skrekas to end power utility PPC’s monopoly of lignite-based electricity production.
Interested parties – suppliers and traders – will, by February 15, need to respond to 15 questions looking to assess the agreement’s prospects.
Brussels’ questions focus on the agreement’s ability to generate competition in the wholesale and retail electricity markets, enable new market entries, and end PPC’s market dominance by 2023.
The agreement will apply until 2023, when state-controlled PPC plans to have gradually withdrawn its lignite-fired power stations as part of the country’s decarbonization effort.
Brussels’ questionnaire also includes a rough presentation of the pricing formula to be applied to lignite-based electricity amounts that PPC will be required to offer to holders of supply licenses through bilateral agreements, regardless of whether these companies operate in the Greek market or not.
PPC’s lignite-based electricity is planned to become available to rivals as of October this year. Market test participants, in one question, have been asked to clarify how much sooner they would need to know the terms and conditions.
As part of the agreement, PPC, in 2021, will need to make available 50 percent of its previous year’s lignite-based production to rivals, followed by 40 percent of the previous year’s output in 2022 and 2023.
In practical terms, based on these terms, independent suppliers will be able to purchase close to 3 TWh, in total, this year, and between 2 and 3 TWh in 2022.
Efforts to end PPC’s lignite monopoly had dragged on for 14 years prior to the recent agreement.