Market distortions continue to persist in Greece’s electricity market, causing an accumulation of new problems that are being swept under the rug, which is negatively impacting the renewable energy sources (RES) sector.

The problem has once again been brought to the fore, this time as a result of the current negotiations between the Greek government and the country’s lenders in the effort to complete the first review of the country’s third bailout deal, which is shedding light on the RES special account deficit.

Distorted implementation of the RES-supporting ETMEAR surcharge added to electricity bills is at the heart of the problem, as pointed out by RES sector officials, who contend the mistakes committed in the past have not served as lessons.

The problem was reiterated yesterday by the administration of Terna Energy, Greece’s biggest RES enterprise, at a general shareholders meeting. Manolis Maragoudakis, the enterprise’s chief executive, who reminded that the RES special account is in deficit territory and is forecast to remain so until the end of the year, noted: “One of the reasons has to do with the distorted method being used to calculate the ETMEAR surcharge, as the System Marginal Price (SMP) being applied as a base does not express anything. It is probably a figure of the imagination, which, however, needs to be increased and adjusted so that it may also reflect the market’s other costs.”

The issue has been repeatedly raised in the past, to no avail. The drastic SMP level drop, which does not reflect actual market costs and the full scale of the RES sector’s contribution, is increasing the amount that needs to be covered by the RES special account and therefore increasing the deficit.

As has been pointed out many times in the past by RES officials, competitive RES operations contribute significantly to the reduction in the cost of electricity for consumers, while also supporting the national economy and employment, as they help lessen the need for imported fuels. RES units replace imports and reduce emissions. This RES sector contribution is not reflected anywhere in terms of how the market functions. A recent study conducted by European regulators also pointed out the issue.

RES sector officials favor the mandatory sale of RES production in the daily market at a price to be determined hourly and which includes a market premium.