Natural gas prices have been sliding of late but the cost of CO2 emission rights has climbed steadily to rise above 100 euros per ton, a trend that has renewed concerns about energy costs in Greece, especially as lignite’s share of the country’s energy mix is still considerable and currently holds an 18.86 percent share.
Prior to Russia’s war on Ukraine, analysts did not expect such CO2 emission right prices any sooner than 2030. The energy transition and an EU decision for stricter ETS terms, approved in European Parliament just days ago, are key factors behind the rise.
A surplus of CO2 rights in the market has been reduced, prompting many companies to rush and buy quantities, which has increased demand and prices.
Gas-fueled power stations gain ground over lignite-fired power stations when gas prices fall and CO2 emission rights increase.
The TTF natural gas index is currently at approximately 49 euros per MWh. If it drops further to a level of 40 euros per MWh, the variable costs of natural gas-fueled power stations will be lower than those of lignite-fired power stations.
CO2 emission right prices have soared since 2017, when their average price was just 5 euros per ton. They increased to an average of 15 euros per ton in 2018, 24 euros per ton in 2019 and 2020, 52 euros per ton in 2021 and 80 euros per ton last year.
The total outlay on CO2 emission rights by producers rose to 851.7 million euros in the first nine months of 2022 from 539.4 million euros during the equivalent period of 2022.