COVID-19 crisis creates new base for energy negotiations

The European Commission’s pause on tough fiscal rules, officially announced yesterday as a result of the coronavirus impact on economies, sets a new negotiating base for a range of unresolved matters, including energy issues.

Though Brussels’ temporary suspension of the Stability and Growth Pact purely concerns budgetary discipline, it is estimated that this decision will temporarily increase the EU’s tolerance of member-state demands on schedules and other issues such as energy.

Even if the DG Comp’s hardliners insist that a loosening of fiscal rules does not change member state obligations to individual funds, it is still estimated that the new landscape offers space for Greek officials to explore new possibilities.

The government, if it is deemed feasible, could seek greater flexibility on proposals that have been flatly rejected until now by the Directorate-General for Competition, including ideas tabled for power utility PPC’s lignite monopoly, which Brussels wants ended.

Brussels has insisted that Greece has not complied with a European Court decision ordering lignite access for third parties. Brussels has directly linked this demand to PPC’s binding target for an electricity market share contraction to less than 50 percent in 2020.

Brussels is not convinced the Greek government will manage to swiftly decarbonize, as the administration has announced. This lack of faith, combined with the government’s recent unilateral decision to abandon NOME auctions and the previous administration’s failed sale effort of lignite units has led to a call, by Brussels, for alternative restructuring measures between now and 2023.

A team of energy ministry officials is scheduled to be in Brussels this Thursday for an official presentation of a recent proposal entailing the participation of electricity suppliers in PPC’s lignite production.