RAE’s older 225m-euro CAT plan to be used for 2016

An older CAT plan prepared by RAE, the Regulatory Authority for Energy, under its former president Nikos Vassilakos, whose five-year term expired in February, has been used as the basis for a temporary CAT plan to cover 2016. The European Commission has received notification from energy minister Panos Skourletis of the plan, which had been previously endorsed and, as a result, is expected to swiften progress towards implementation.

All natural gas-fueled power stations and certain hydropower stations will be paid 45,000 euros per MW for ensuring the grid’s flexibility, according to energypress sources. It seems that the CAT mechanism will not cover capacity availability, meaning lignite-fired stations will not be entitled to any support from the mechanism.

The total cost of payments through the CAT mechanism in 2016 is estimated to reach 225 million euros, 55 percent of which will be channeled to the main power utility PPC and the other 45 percent to independent producers.

The previous CAT system, which expired at the end of last year, cost 570 million euros annually. Electricity producers will not receive any amounts for 2015 as the country’s lenders did not approve retroactive CAT payments for the year.

The demand for greater flexibility of the country’s power grid is the result of the increased penetration of renewable energy source (RES) production, especially photovoltaic and wind-energy systems. This has created a need to cover fluctuating capacities and an inability to forecast production levels, which are determined by weather conditions.

The energy ministry and lenders agreed to implement a temporary CAT mechanism for 2016 as more time is needed for wholesale market revisions.

As for the fixed CAT mechanism, procedures are progressing. Energypress sources have reported a plan based on the UK-model may be used. RAE has already hired a UK consultant.