A finalized power compensation mechanism plan prepared by RAE, Greece’s Regulatory Authority for Energy, and believed to have been received at the energy ministry does not make any distinctions that exclude lignite-fired power stations from CAT payments, energypress sources have informed.
The CAT remuneration eligibility of lignite-fired power stations has drawn attention in recent times as this detail is believed to be crucial to the sustainability of lignite power stations and mines included in the main power utility PPC’s bailout-required disinvestment of lignite units. The CAT payment eligibility of lignite units is seen as pivotal to the success or failure of the sale procedure.
It remains to be seen if the finalized Greek power compensation mechanism plan, to be forwarded by the energy ministry to the European Commission in September or October, will be approved in Brussels.
Conventional power stations such as lignite units need to meet a CO2 emission upper limit of 550 grams per KWh to qualify for CAT payments, according to current EU regulations. However, EU officials are still negotiating details for a finalized clean energy package. A five-year adjustment period for existing facilities appears probable.
On a visit to Athens earlier this month, Klaus-Dieter Borchardt, Director of the European Commission’s Directorate-General for Energy, appeared willing to exempt Greece from strict EU regulations as acknowledgment of lignite’s important role in the country’s energy mix. However, no details of any exemption plan have yet to be been released.
In a decision reached on April 17, the European Commission recognized the special role of lignite-fired electricity generation for energy supply security in Greece.
According to the RAE plan, CAT payments would be made available through annual auctions offering Reliability Options four years in advance. CAT payments would be valid for one year for existing facilities, while new units would secure CATs for seven years, as an investment and financing incentive, according to the plan.