Lignite-based power production sinks to record low

Confirming forecasts of the past few years, lignite generated just 30 percent of Greece’s electricity demand in April, a historic low for the country’s prime energy source that increases the difficulty of main power utility PPC’s aim to reduce electricity costs for consumers of all categories, from household to industrial.

The first signs of concern had emerged back in 2007 when the power utility’s administration, at the time, had warned of a falling level of lignite being utilized for electricity production. At the time, lignite was covering between 55 and 60 percent of the country’s electricity demand.

A combination of factors in recent years has led to lignite’s lower contribution to electricity supply in Greece, including inadequate strategic planning, and falty initiatives at a political level.

The mining activity in Megalopoli, slightly southwest of central Peloponnese, serves as a key example. Two of the area’s four lignite mines have been depleted, while the remaining deposits at the location, estimated at less than 160,000 tons of low-quality coal with limited combustion potential, are expected to be fully extracted within the next ten years and wasted on outdated, low-efficiency power stations.

Other lignite mines around the country are also plagued with serious issues. A facility in Klidi, Florinia, northern Greece, is not operating as a result of landslides that have not been attended to.

The country’s most technologically advanced lignite-fueled station, in Meliti, northern Greece, is providing for one third of the level of electricity being generated by other similar-sized facilities. The potential at Meliti has been bogged down by a tender concerning a nearby mine in Vevi, which has remained stagnant for nine years. Meanwhile, deposit levels at existing mines continue to dwindle.

The crucial question at this stage is whether the negative trend is reversible, which would allow PPC to implement a softer pricing policy for consumers. PPC’s recently appointed CEO, Manolis Panagiotakis, believes so.

As for investments, some signs of activity are becoming apparent. Just days ago, PPC’s board decided on a series of moves concerning lignite mines. A total of 43.6 million euros will be invested for maintenance of mining equipment as a first step. PPC has announced it also plans to utilize mining equipment that has sat idle as a result of a shortage of staff.

PPC’s current administration believes that if various issues affecting the company’s operational ability are resolved, lignite may cover an additional six percent of the country’s electricity demand.