Megalopoli V launch ready, hidden unit costs disclosed

The main power utility PPC’s new Megalopoli V power unit, which has been put through an extended trial run, offering the facility priority system rights, is now set for its commercial launch.

A related statement by IPTO, the power grid operator, has been delivered to RAE, the Regulatory Authority for Energy, which is expected to approve the power plan’s launch within the next few days, sources said.

Once commercially launched, Megalopoli V will need to offer competitive prices shaped by its variable costs, a development that is expected to impact the wholesale electricity market.

The first signs of impact have become apparent over the past few days. The utility has temporarily stopped operating, following the trial run’s completion, which has led to an increase in the level of lignite-fired electricity production as well as higher gas-fueled generation by independent units, currently finding more space in the market, as suggested by day-ahead market data released by LAGIE, the Electricity Market Operator.

According to this data, the heightened activity of lignite-fired units has disclosed the high variable costs of certain units, especially during hours when these units are shaping the System Marginal Price (SMP).

It has become apparent, for example, that PPC’s Agios Dimitrios units will today exceed 56 euros per MWh, a cost level carrying notorious utility issues such as overstaffing and bloated remuneration packages.

According to LAGIE’s day-ahead market data, PPC’s Agios Dimitrios 2 is today offering an SMP of 59.22 euros per MWh, Agios Dimitrios IV is at 56.2 euros per MWh and Kardia at 54.5 euros per MWh. Quite clearly, such levels offer plenty of capacity for correction and cost reduction, as is expected to be highlighted in a study now being conducted by the consulting firm McKinsey.

The timing of Megalopoli V’s commercial launch does not appear to have been left to chance. Its 500 MW to be offered to the system will be added to the CATs to be targeted by PPC. (It should be noted that this new unit is actually an 800-MW facility but 300 MW remains unavailable because the network has yet to be upgraded.