Brussels wants swifter lignite unit withdrawals for subsidies

The European Commission appears set to demand a more ambitious decarbonization plan from Greece, including a swifter withdrawal of lignite units and a long-term deadline specifying the complete removal of lignite units as a condition for support subsidies concerning the main power utility PPC’s ligite units currently on offer to investors through a bailout-required disinvestment.

Athens has requested CAT remuneration eligibility for PPC’s units included in the lignite units sale, representing 40 percent of the power utility’s lignite capacity, in an effort to boost the procedure’s appeal and maximize sale prices.

Though the European Commission has yet to offer an official response, it is believed Brussels authorities have not embraced the Greek request and are expected to demand specific decarbonization commitments before giving anything in exchange to support the PPC sale.

A similar decarbonization plan was adopted in Germany. Lignite-fired units with a total capacity of 2,739 MW and limited lifelines were withdrawn sooner than planned in exchange for compensation worth 1.6 billion euros – in the form of state aid.

It should be pointed out that the subsidy support requested by PPC cannot be provided in the form of CATs as EU directives explicitly point out that aid for production adequacy is incompatible if it counters an objective to phase out energy sources detrimental to the environment, such as fossil fuels.