PPC lignite compensation effort key to Brussels negotiations

Greek authorities have taken to a higher European Commission level a compensation request by the state-controlled power utility PPC, seeking 200 million euros, annually, for the gradual withdrawal of its loss-incurring lignite-fired power stations between 2021 and 2023, hoping for a favorable outcome with the next two months.

If, however, the effort fails to produce a positive result, Greece’s ten-year dispute with the European Commission over the country’s continued reliance on lignite for electricity generation could drag on.

In this case, Greece will probably not agree to settle a long-running antitrust case that has prompted the government to offer PPC’s rivals 40 percent of the utility’s lignite-based generation until the lignite-fired power stations are withdrawn.

Greece cannot be expected to adopt a mechanism offering PPC’s rivals access to lignite-based output if the European Commission refuses to approve cost-offsetting measures for the utility, as has been the case in other EU member states, local sources contend.

Germany and Dutch energy companies have benefited from such offsetting measures in the past.

All issues will need to be resolved as one package deal or there will be no deal at all, sources said.

At this stage, a new European Court antitrust case against Greece, for PPC’s lignite monopoly, would make little, if any, sense as the country’s lignite-based generation will have greatly diminished by the time the case is heard.