Gradual progress being made on flexibility mechanism

RAE, the Regulatory Authority for Energy, and IPTO, the power grid operator, are currently focusing on the technical aspects of a transitional flexibility mechanism being prepared by Greece for imminent delivery to the European Commission.

Ongoing talks between officials in Athens and Brussels are gradually providing shape to the Greek proposal. At the same time, Greek officials are seeking to make necessary legal revisions concerning the electricity market that will ensure electricity producers of payments they are entitled to.

The European Commission’s Directorate-General for Competition and Directorate-General for Energy both demand that all required electricity market legal revisions are made prior to the implementation of any capacity mechanisms covering market needs.

The revisions required in Greece primarily concern compensation methods for electricity producers offering supplementary services to the grid.

As for the country’s transitional mechanism for electricity producers offering flexibility, the Greek plan appears to be settling for two products to be offered through auctions. The first of these, offering producers three hours notice, will require roughly 1,600 MW. The second, giving producers a one-hour notice, will require a capacity of between 2,500 and 2,600 MW.

Local officials are pushing to have the plan endorsed by the European Commission as soon as possible as the previous mechanism expired in April, leaving electricity producers without CAT payments.

Authorities are currently examining issues such as the technical feasibility of the current plan, which production units would be entitled to participate in auctions for the two aforementioned products, and their order of entry.

The procedure determining the level of compensation for units offering flexibility to the system (new transitional CATs) will be tendered. Two pre-determined upper limits are expected to be set for the two aforementioned products. The upper limit is expected to be higher for the product giving electricity producers a one-hour notice.