Gas units offering flexibility ‘need to be rewarded’

The continuation of a payment mechanism for gas units supplying capacity adequacy services to the electricity system, combined with a complementing mechanism to reward provision of flexibility, is needed, according to the Hellenic Association of Independent Power Producers, HAIPP, locally referred to as ESAI.

The association offered its opinion on the matter in public consultation procedures launched by RAE, the Regulatory Authority for Energy, for the restructuring of the Capacity Assurance Mechanism.

HAIPP noted that thermal units should be the main beneficiaries of the compensation mechanism as a result of their supply of both flexibility and capacity adequacy.

Elaborating on its position, the association forecast that, by 2020, renewable energy sources (RES) will be contributing a greater proportion to the electricity market as a result of EU requirements, while lignite-based production would be reduced because of the withdrawal of production plants. Moreover, demand will increase for a variety of reasons, including the prospective interconnection of the islands with the mainland grid, meaning that the requirements for adequate power availability will increase, the association contended. Subsequently, the fluctuating nature of power levels produced by RES units will increase the need for units offering flexibility to the system as a means of covering the fluctuations during high-demand periods.

Flexibility of capacity, HAIPP noted, stands as an objective that will need to be met through long-term planning, making compensation mechanisms that reward the supply of capacity flexibility an integral part of this process.