RAE, Brussels officials working on temporary CAT mechanism

RAE, the Regulatory Authority for Energy, and European Commission officials remain hard at work, deep into the summer, on Greece’s new temporary CATs, expected to replace the previous mechanism that expired in April, leaving the market without a flexibility mechanism over the past three months or so. As a result, electricity producers have been left without CAT payments for their output.

According to latest information, the European Commission is insisting on the inclusion of a demand response system into the new temporary CAT mechanism. RAE, however, believes that the demand response system should be excluded from the temporary mechanism, citing two main reasons.

The authority contends that implementing such a system will prove difficult in practice, adding that, if a formula is found, the overall procedure will be further delayed, ultimately cancelling out the temporary mechanism’s chance to operate as an intermediate measure.

RAE wants the new temporary CATs to be based on the old model, which did not include a demand response system, noting, however, that other features demanded by Brussels would be incorporated to make the new plan competitive.

Sources noted that RAE is moving to present for public consultation, within the current month, a flexibility plan prepared by IPTO, the power grid operator, as well as the basic mechanism features it is proposing.

As was previously reported by energypress, the system’s total flexibility needs anount to approximately 4,000 MW per year, according to the IPTO study.

RAE and IPTO are examining the prospect of introducing a plan that would include two products to share this 4,000-MW capacity. One would offer electricity producers three hours notice and demand roughly 1,600 MW. The other product would give producers a one-hour notice and require between 2,500 and 2,600 MW.

The temporary mechanism is expected to determine which production units will have the right to participate in auctions for both these products and in what order.

The transitional flexibility mechanism needs to be delivered to the European Commission by September, along with pre-notification of a plan for a permanent mechanism.