The fall in international crude prices has increased the competitiveness of gas-fueled power stations in Greece, where gas prices are pegged to oil prices and revised every three months, leading to changes in the country’s wholesale electricity market. This is also the case for other energy markets in Europe.
According to data provided by LAGIE, the Electricity Market Operator, gas-fuled power stations have significantly increased their input to the country’s grid in more recent times. The operator’s data showed gas-fuled power stations provided 21.49 percent of the grid’s needs in September, up from 17.99 percent in August and 19.58 percent in July.
The LAGIE data also showed a significant increase in the number of hours during which the grid’s System Marginal Price (SMP) is not determined by natural gas-fueled units but lignite-fired stations instead. For example, last January, 50.4 percent of SMP levels were determined by natural gas-fueled power stations, while the figure for lignite-fired stations was 29.44 percent. A complete turnaround took place by September, when 50.695 percent of SMP levels were determined by lignite-fired stations and 24.44 percent by gas-fueled units.
Natural gas sector authorities have attributed the development to the lower gas prices prompted by fallen crude prices, added recently to fuel-purchase invoices by power producers.
Natural gas prices have fallen to levels that have now made natural gas-fueled power stations more competitive than most lignite-fired stations. As a result, gas-fueled power stations have increased their number of working hours as they are in a position to make competitive electricity production offers to the market.