PPC seeking free emission rights from EU, amid rising cost

The main power utility PPC, backed by the government, has reraised the issue of having Greece included on a list of countries entitled to free emission rights, an exemption granted to EU member states whose GDP is no more than 60 percent of the EU average. The Greek economy currently measures 62 percent of the EU’s GDP average.

PPC’s recently appointed CEO, Manolis Panagiotakis, wants to push for the exemption amid the face of increasing emission right costs, currently at 7.5 euros per ton. The PPC head regards the level as an enormous financial burden for the corporation, generated by its lignite production activity.

Emission rights were trading at levels of about 7.3 euros per ton in the first quarter of this year, up from levels ranging between 5.8 euros and 7 euros in the final quarter of 2014. Going further back, emission rights were selling for between 4.75 and 5.2 euros per ton in May last year.

As for the burden on PPC – assuming the power utility does not roll over the expenses onto consumer electricity bills – an emission rights level of 7 euros per ton translates into an annual cost of approximately 350 million euros for the power corporation. At 10 euros, the yearly cost for PPC would be half a billion euros. Should emission right costs double, from their present level, to 15 euros per ton, the annual cost for PPC would reach 750 million euros.