Besides affecting consumers, any prospective disruption of natural gas supply to Greece would also have an impact on electricity production, as approximately 13 percent of gas demand is channeled to electricity production plants that run on gas. This proportion was even higher a year earlier, reaching 26 percent.
Responding to this risk, heightened by the ongoing conflict between Russia and Ukraine, PPC, the Public Power Corporation, has launched an intensive program aiming at boosting its lignite-based electricity production.
Should the worse-case scenario actually occur, and Russia disrupts its natural gas supply, a large proportion of consumers relying on gas for heating would turn to electricity, meaning demand for this energy source would increase. Also, from a purely business-minded perspective, an increase in lignite-based production would boost PPC’s profit margin, as the lignite alternative offers a considerably lower cost of production, especially at a time when the price of emission allowances remain low, under 5.5 euro per ton.
Apart from a major desulphurization investment being carried out by PPC in Agios Dimitrios, a project with a budget amounting to 29.5 million euro, the corporation is also conducting maintenance work, investments, repairs, and improvements at lignite-based stations in several parts of Greece. This project’s budget amounts to over 6.5 million euro.
During the first half of 2014 lignite-based electricity production covered 48 percent of domestic demand, a 6.9 percent increase compared to the equivalent period last year. Not including imports, lignite accounts for over 54 percent of the country’s electricity production.
PPC head Arthouros Zervos has set an objective for lignite-based production to reach 25,500 GWh. Industrial consumers, represented by the association of Industrial Energy Consumers, EVIKEN, have called for the lignite-based power production to increase to 27,500 GWh.