Regulator’s measures produce impressive savings for system

A series of cost-cutting measures implemented by RAE in the wholesale electricity market a little over a year ago have produced impressive results for the 12-month period covering August, 2013 to August, 2014.

The measures, according to data on the market for the 12-month period, led to significantly reduced electricity purchasing costs at PPC, the Public Power Corporation. They were reduced by 604 million euros and stemmed from reductions in variable costs, amounting to 493 million euros, the elimination of the variable cost recovery mechanism (MAMK), a measure worth 79 million euros, and reduced special consumption tax (EFK), which was 32 million euros lower.

Although the initial objective of the measures was to reduce the system’s production cost by replacing part of photovoltaic production with lignite-powered electricity production, which would have led to net savings of 250 million euros, in practice, a reduction in electricity production by independent producers led to an increase in production at PPC’s gas-powered electricity stations, while also prompting an increase in imports. Both these developments contributed significantly to the savings achieved by the system.

According to RAE data, production at gas-powered PPC electricity stations increased by 96 percent, and imported energy rose by 279 percent.

Lignite-powered electricity production did not increase to the levels that had been anticipated, but, nevertheless, the RAE measures produced net savings of 110 million euros for the system. These would have been even greater had the special consumption tax imposed on natural gas for electricity production been scrapped.