Flexibility plan settled, auction starting price at €39,000/MW

Greece’s new and transitional flexibility remuneration mechanism was endorsed by the European Commission last week, as was expected, according to energypress sources, paving the way for this payment tool’s imminent implementation.

According to the sources, the mechanism will offer electricity producers providing flexibility to the grid a total capacity of 4,263 MW in 2018; include hydropower facilities, to be offered 750 MW, above the previous mechanism’s level of 582 MW and below the 1,000 MW level proposed by RAE, Greece’s Regulatory Authority for Energy; and offer a maximum auction starting price of 39,000 euros per MW, instead of 25,000 euros as was proposed in an original plan.

Besides the inclusion of hydropower facilities, the new flexibility remuneration mechanism will be open to natural-gas fueled power stations, as well as RES and Combined Heat and Power High Performance (CHP) units, for output not remunerated through existing RES payment mechanisms.

Also, major-scale industrial consumers participating in the demand response mechanism are not eligible to participate in the new flexibility remuneration mechanism.

The previous flexibility remuneration mechanism expired last April, which has tested the sustainability of independent power producers.

Natural gas-fired electricity producing units will need to be equipped to run on alternative fuel (diesel) or possess additional natural gas reserves to be eligible for the flexibility mechanism’s auctions.

Given the terms and conditions of the new flexibility remuneration mechanism, approximately 1,800 MW of the total 4,263 MW will go to the main power utility PPC, for the corporation’s natural gas-fired electricity producing units, while independent producers will battle for around 2,400 MW through an auction.