A transitionary ten-month plan of revisable CATs (Capacity Availability Tickets) leading to a new model based on unique bid auctions ensuring grid flexibility was forwarded for public consultation yesterday by RAE, the Regulatory Authority for Energy. The same plan had been previously submitted to the European Commission’s Directorate-General for Competition.

According to sources, the plan, which has been revised following a series of observations made by the European Commission, will be approved by the end of the month. The new CAT plan, to also take in any adjustments that may required during the public consultation procedure, will apply retroactively, as of January 1, when approved.

This development may represent the only decision of significance to be taken by RAE until a new government is sworn in.

Details of the new CAT system will include payments of 45,000 euros per MW for natural gas-fueled electricity stations and hydropower stations to ensure grid flexibilility. The new model will not include CATs rewarding power adequacy availability, meaning that lignite-fired stations will not be eligible.

Also, as previously reported by energypress, the overall cost of the new CAT system will be significantly reduced to 225 million euros, annually, from 570 million euros at present. A 55 percent share of the new CATs will concern PPC, the Public Power Corporation, while the other 45 percent will support independent producers.

The ten-month transitionary period will be utilized as an attempt to implement fully functional auctions, staged by IPTO, the Independent Power Transmission Operator. The details of equivalent systems already being used in other European Union member states will be taken into account during the transition stage. The transitionary model will provide CATs rewarding flexibility to stations with respective total capacities of around 5,000 MW.

The unique auctions, to concern 2016, a year during which electricity needs will be greater – based on an IPTO study – will be available for production amounts of at least 5,000 MW. If, during the transitionary period, IPTO deems that there is a need to also support power adequacy availability, and not just flexibility, then the operator will be able to implement a combined system, along the lines of a model applied in the UK.

It must be noted that the dominant position held by PPC in the Greek electricity market will make the implementation of a fully functional and productive auctions system a difficult task.

Entrepreneurs behind independent thermal units have already expressed heightened concerns about the significantly reduced CATs, which they regard as a negative development. The sustainability of such ventures will, instead, depend on whether the auctions will prove successful or not, the sector’s entrepreneurs believe.