EC calls for CO2 cuts; NECP revisions, RES boost ahead

The European Commission has announced a new European Climate Law proposal for even more ambitious CO2 emission cuts in the EU, calling for reductions of 55 percent by 2030, instead of the present goal of 40 percent. If adopted, this proposal will prompt further revisions of National Energy and Climate Plans and RES installation increases by EU member states.

Compared to previous NECP objectives, RES facilities in most parts of the EU will need to increase by levels of between 20 and 30 percent by 2030, while energy consumption must drop further, between 15 and 20 percent, if the new Brussels proposal is adopted, reliable sources have informed.

Adoption of the proposal will require greater green-policy effort by member states and much bigger investments.

CO2 emissions produced by vehicles and buildings could be taxed, while more generous subsidy programs could be offered for energy efficiency upgrades.

In Greece, a 55 percent CO2 emissions cut by 2030 would require a further increase in RES installations so that a 19-GW target, by 2030, included in the country’s current NECP may be exceeded.

This more ambitious objective will enable the actualization of a greater number of possible projects on stand-by, currently representing a capacity of 76 GW. However, bigger investments for network reinforcement, increased interconnections and energy storage facility installations will be needed.

 

PPC CO2 emissions down 71.1%, lignite-fired output fades

Power utility PPC’s CO2 emissions plunged 71.1 percent in the first half, from 1.97 million tons in January to 568,900 tons in June, reflecting the significantly diminished role of lignite in generation.

Lignite’s dominant energy mix role has been taken over by natural gas, supported by rising RES output and electricity imports.

Lignite-based electricity generation slid for most of the six-month period between January and June, dropping to 1.41 million tons in February, 882,240 tons in March, 730,970 tons in April and 564,900 tons in May before edging up to 568,900 tons in June.

CO2 emission right costs have been on an upward trajectory over the past couple of months, rising well over customary levels of about 20 euros per ton to reach as high as 29.66 euros per ton. Current levels appear to have stabilized at between 26 and 27 euros per ton.

Despite these higher CO2 emission right price levels, PPC’s operating costs are not expected to rise as a result of its big cutback on lignite-fired production.

PPC’s share of overall electricity production is projected to keep falling as independent producers and traders move in to fill the lignite void through natural gas and RES generation, plus electricity imports.

Athens-Crete interconnection work commences at both ends

Work at both ends of the Athens-Crete grid interconnection, Greece’s biggest infrastructure project at present, has begun in earnest, power grid operator IPTO sources have informed.

In the lead-up, IPTO subsidiary Ariadne Interconnection, developing the project, and contractors signed contracts totaling approximately one billion euros last month.

Various preliminary studies and construction work are now underway. A high-voltage subsea cable is planned to run from Heraklion, Crete to Megara, slightly west of Athens.

Also, a converter station will be built close to the Cretan village Damasta.

A converter station will not be needed at Megara, on the Athenian side of the project. Instead, the interconnection’s line will run through an underground passage to reach a central unit, where the converter station will be installed.

IPTO has discussed the project with local communities to minimize any inconveniences. Requests made by locals, determined to conceal any visual impact, were taken into consideration by authorities when planning the project’s route.

Revisions were made to an environmental impact study approved by the energy ministry last April.

IPTO made significant changes for the Megara end of the interconnection, significantly increasing the operator’s budget for the project. Changes included the adoption of subterranean line passages. Similar-minded revisions have also been agreed to for the Cretan end’s Korakia area.

Once launched, the Athens-Crete grid interconnection promises to offer electricity consumers overall annual savings of 400 million euros in Public Service Compensation (YKO) surcharges, included in electricity bills.

The project will also offer major environmental benefits as CO2 emissions resulting from the overall electricity supply effort for Crete will be reduced by 60 percent once the Athens-Crete interconnection is fully launched.

This project represents Crete’s major-scale link. A preceding smaller-scale link from Crete to the Peloponnese has also been incorporated into the effort.

Just Transition Fund excludes support for all gas projects

The EU’s Just Transition Fund, takings its cue from the European Investment Bank, has left natural gas projects of its funding list, noting it will not provide financial support for any investments concerning production, processing, distribution, storage or consumption of fossil fuels.

This exclusion creates issues for all the country’s natural gas projects, big or small, which authorities would have wanted to be supported by the Just Transition Fund.

They include a power utility PPC plan for a combined gas-fueled cooling, heat and power plant in Kardia, northern Greece, for coverage of the west Macedonia region’s telethermal needs, announced by the energy minister Costis Hatzidakis just days ago.

Other Greek project plans such as the Alexandroupoli FSRU and the development of an underground natural gas storage (UGS) facility at a virtually depleted offshore gas field south of Kavala have already been rejected by the EIB, unless hydrogen is incorporated into their plans to convert them into eco-friendly projects.

Natural gas, emitting approximately half the amount of CO2 produced by coal, also spills out methane, an undesired greenhouse gas.

Climate protection advocates insist new natural gas units could end up operating for decades, which would threaten the EU objective for zero emissions by 2050.

Big CO2 cost drop for PPC mid, high-voltage consumers, clause abolished

Power utility PPC’s abolishment of a CO2 emissions cost clause concerning its mid and high-voltage consumers, a long-standing demand by EVIKEN, the Association of Industrial Energy Consumers, has resulted in a considerable reduction of CO2-related costs for these consumer categories.

CO2-related costs for mid and high-voltage consumers fell sharply to 6 euros per MWh in April, down from levels of 13.40 euros per MWh in January, 13.56 euros per MWh in February and 11.14 euros per MWh in March. CO2 emission costs have dropped considerably, internationally, in recent times.

The CO2 cost level is expected to remain unchanged for May as lignite-based generation has been restricted.

 

RWE, to invest €1bn in Greek RES market, signing MoU today

German energy group RWE intends to invest approximately one billion euros in Greece’s renewable energy market over the next few years.

Details of the investment plan will be included in a Memorandum of Understanding expected to be signed today by the company heads of the German group and Greek power utility PPC at a Greek-German economic forum in Berlin.

RWE’s investment plan includes providing PPC expertise for its decarbonization effort. A prospective conversion of an existing PPC lignite-fired power station into a biomass facility, as well as joint investments in solar and wind energy projects with PPC subsidiary PPC Renewables are among the projects listed in the investment plan.

German renewable energy investment interest is focused on solar and wind energy projects. Other related technologies such as offshore wind facilities, as had been reported in the past, are not being considered.

RWE chief executive Rolf Martin Schmitz had informed Greek Prime Minister Kyriakos Mitsotakis of the German energy group’s interest to invest and provide knowhow at a meeting in Germany last October.

Between 2012 and 2018, RWE reduced its CO2 emissions by 60 million tons, a 30 percent reduction. The group, looking to be fossil fuel-free by 2040, will focus on further development in the RES and energy storage domains, an investment effort estimated at 1.5 billion euros. Germany has pledged to be carbon-free by 2038.

PPC chief supports use of CO2 clause, simplification expected

Power utility PPC’s chief executive Giorgos Stassis has defended the company’s need to maintain a CO2 cost clause included in its electricity bills as protection against emission cost increases, at a meeting with RAE (Regulatory Authority for Energy) officials.

The authority is working on revisions aiming to simplify electricity-bill clauses for greater transparency to household and business consumers.

Numerous complaints have been made by customers feeling confused by the current terms. RAE wants to establish terms enabling clearer price comparisons of supplier terms.

PPC’s right to maintain its CO2 clause has been questioned. At the RAE meeting, held yesterday as part of ongoing public consultation, the power utility’s chief contended creditor banks insist on the measure’s maintenance, adding its cancellation would require further electricity tariff hikes.

RAE may decide to continue permitting CO2 clauses once the target model is introduced, according to sources. If so, the current format will be revised to  offer consumers clarity, the authority has already stressed. Decisions are expected in about two weeks.

PPC given a month for CO2 surcharge transparency requirements

Power utility PPC is not honoring code of conduct requirements concerning transparency of information provided to consumers on CO2 emission cost surcharge calculations, RAE, the Regulatory Authority for Energy, has noted in a letter to the utility.

PPC has been asked to inform RAE on corrective action within a month or face a fine, according to the letter.

This development supports a recent complaint expressed by EVIKEN, the Association of Industrial Energy Consumers, disapproving a CO2 surcharge cost formula applied by PPC to its mid and high-voltage power supply.

In its letter to PPC, forwarded just days ago, RAE has asked the power utility to comply – promptly and fully – with industry regulations by providing necessary billing information to its consumers.

EVIKEN is maintaining an aggressive stance, insisting that the power utility’s information to consumers on surcharges imposed continues to lack detail.

Energy-intensive industrial consumers have questioned CO2 surcharges of 12.65 euros per MW/h for high-voltage supply and 13.09 euros per MW/h for mid-voltage supply concerning December, 2019. Consumers have requested full details on these charges.

EVIKEN, comparing lignite production figures for April and November, believes the CO2 surcharge rate for December should have been less than 12 euros per MW/h. It has demanded related and fully transparent data for every month of 2019.

 

Additional energy costs a big concern for mid-voltage manufacturers

CO2 emission cost charges have developed into a major concern for mid-voltage manufacturers following recent market changes such as electricity tariff hikes and a reduced punctuality discount, offered when bills are paid on time.

The operating details of a CO2 emission cost adjustment mechanism, prompting charges that do not reflect actual costs, are seen as the main problem by manufacturers.

These charges are revised when CO2 emission right cost increases are greater than 10 percent and remain unchanged when the emission charge change is less than 10 percent.

As a result, the current system is leading to charges that do not reflect actual costs.

Electricity tariff changes for medium-voltage manufacturers, especially the termination of a CO2 emission cost discount, have increased their energy costs by 11 to 12 percent, making them less competitive.

The majority of these manufacturers are exporters and risk losing foreign markets, which would decrease production levels and place jobs at risk.

The issue is a concern for some 30 Greek manufacturers employing thousands and needing to overcome energy costs that represent between 30 and 40 percent of total production cost.

“Authorities need to understand that a measure prompting 10 percent electricity price increases or decreases is of little significance to an enterprise whose electricity cost represents just 2 percent of production cost, for example, but, on the other hand, is huge for an enterprise whose electricity cost represents 40 percent of production cost,” a leading industrialist told energypress.

Brussels CAT restriction a setback for Ptolemaida V

The European Commission has announced tough CAT remuneration mechanism restrictions for lignite-based power stations, effective as of July 4, a major setback for the CAT eligibility prospects of power utility PPC’s Ptolemaida V unit, now being developed.

According to some sources, the new capacity mechanism restrictions, announced in the Official Journal of the European Union last Friday, end all CAT qualification hopes for Ptolemaida V.

Despite this latest unfavorable development, state-controlled PPC and the energy ministry have remained optimistic and contend hope remains under certain conditions.

Power stations emitting over 550 grams of CO2 per kilowatt-hour will no longer be eligible for the capacity mechanism, according to the new restrictions.

Greek Parliament recently ratified a related energy ministry bill without prior EU approval.

Capacity mechanisms have been used by EU member states to fund electricity generation that may not be cost-effective or as clean as renewable power but is needed to guarantee supply during periods of peak demand.

Ministries to extend Kardia unit time limits, EC stance unclear

The energy and economy ministries are set, any day now, to deliver a joint ministerial decision offering an operating time extension for the main power utility PPC’s lignite-fired Kardia III and IV power stations from a current 17,500-hour limit to 32,000 hours.

The decision will not make specific reference to the Kardia facility but will note that an operating extension to 32,000 hours will be permitted for units offering telethermal services to surrounding regions.

For quite some time now, energy ministry officials have been negotiating the matter with the European Commission but it remains unclear if Brussels will offer its  consent for the two Kardia unit extensions.

This specification frames Kardia III and IV and satisfies a long-standing request by residents of Ptolemaida, in the country’s north, for a lifetime extension of the units as the wider region’s heating depends on them in the winter.

Energy minister Giorgos Stathakis and state-controlled PPC’s chief executive Manolis Panagiotakis had both promised residents, power station employees and local MPs that an extension would be granted.

The government recently called for snap elections on July 7.

More recently, the energy ministry has expressed increased confidence of an approval despite the strict terms of the EU’s debarbonization policy.

 

 

 

PPC requested to improve CO2 surcharge transparency

RAE, the Regulatory Authority for Energy, has requested greater billing details from the power utility PPC on its CO2 emission surcharges for medium and high-voltage consumers.

RAE president Nikos Boulaxis informed PPC’s chief executive Manolis Panagiotakis of the authority’s transparency request in writing several days ago.

This had been preceded by complaints from EVIKEN, the Association of Industrial Energy Consumers, on the CO2 emissions formula applied by PPC for medium and high-voltage consumers.

The lack of billing information does not ensure transparency for industrial consumers, EVIKEN had noted in a letter forwarded to RAE in February, while urging the authority to intervene.

Eurelectric: Electric vehicles growth effort lacks local support

Domestic political support for the EU’s ambitious electric vehicle growth objectives over the next decade is clearly lacking, officials at Eurelectric, a sector association representing the electricity industry’s common interests at a European level, have warned, while also doubting Greece’s ability to meet these objectives amid the current climate, seen as unfavorable.

The EU’s auto-related CO2 emission reduction targets will require the introduction of approximately 40 million electric cars, vans and trucks on European roads by 2030, Eurelectric officials explained.

The continent’s fleet of electric vehicles will need to grow 40 times over the next 11 years, compared to figures registered in 2018.

Eurelectric admits this is a difficult target but believes it is achievable through appropriate investments and support.

Put into a local context, the target sets a big challenge for Greece as the country’s fleet of electric vehicles will need to grow from about 600 at present to 23,200.

Sector changes are urgently needed in Greece otherwise the country risks being left behind in the wider effort to electrify transportation, the Eurelectric sources stressed.

Big investments in recharging infrastructure are necessary, while swift action must be taken at governmental and regulatory levels, the sources added.

Eurelectric remains pessimistic about the prospects in Greece given the lack of initiatives taken so far in the electricity vehicles domain.

EU regulations have set a limit of ten cars per recharging unit but the number has reached 15 in Greece, the Eurelectric sources noted.

 

RES-focused Ellaktor in talks for sale of its Elpedison stake

The Ellaktor group has reached an advanced stage in talks with foreign investors interested in acquiring its 22.74 percent stake in electricity producer and supplier Elpedison, sources have informed, a reflection of the corporate group’s intensifying focus on the renewable energy sector.

Last December, the Ellaktor group took over listed wind energy subsidiary El. Tech. Anemos, Greece’s second biggest renewable energy company, as part of a strategy to bolster its position in the RES domain and better adjust to the EU’s decarbonization policy aiming for a drastic reduction of CO2 emissions by 2030 and elimination by 2050.

The corporate group’s takeover of El. Tech. Anemos promises to provide additional cash flow supporting the subsidiary’s investment plan.

The brothers Anastasios and Dimitris Kallitsantsis, who took over the Ellaktor group’s helm last July following a tumultuous battle between the group’s major shareholders, had committed themselves, as a key strategy, to not selling the group’s stake in El. Tech. Anemos but, on the contrary, strengthen the group’s standing in the renewable energy sector.

ELPE (Hellenic Petroleum) and Edison – acquired by EDF – hold a 75.78 stake in Elpedison as a joint venture, Ellaktor holds 22.74 percent, and Halkor has the other 1.48 percent.

 

Focus on Amynteo upgrade, Meliti II sidelined, for CATs

The energy ministry plans to focus on an environmental upgrade plan of the main power utility PPC’s Amynteo lignite-fired power station in the country’s north, intended to keep the facility running until all lignite deposits in the region have been depleted and, at the same time, sideline the development prospects of Meliti II – also in the north, in the Florina area – as a lower-priority project, as part of a wider effort to ensure CAT remuneration for existing lignite units.

The main power utility PPC, facing a bailout-required disinvestment, is currently selling lignite units and mines representing 40 percent of its overall lignite capacity.

A study conducted by PPC, as part of partnership talks with Chinese investors, has shown that Meliti II can only be a viable project with CAT remuneration support.

Under the EU’s current decarbonization regulations, an addition of Meliti II to the national grid will only be possible if the country’s other lignite-fired units are environmentally upgraded to an extent that would enable a Meliti II entry without any negative impact on the country’s greenhouse gas emission reduction targets.

Any new owner of Meliti II will need to factor in the investment cost of these strict decarbonization regulations.

Lignite units not excluded from local CAT payment proposal

A finalized power compensation mechanism plan prepared by RAE, Greece’s Regulatory Authority for Energy, and believed to have been received at the energy ministry does not make any distinctions that exclude lignite-fired power stations from CAT payments, energypress sources have informed.

The CAT remuneration eligibility of lignite-fired power stations has drawn attention in recent times as this detail is believed to be crucial to the sustainability of lignite power stations and mines included in the main power utility PPC’s bailout-required disinvestment of lignite units. The CAT payment eligibility of lignite units is seen as pivotal to the success or failure of the sale procedure.

It remains to be seen if the finalized Greek power compensation mechanism plan, to be forwarded by the energy ministry to the European Commission in September or October, will be approved in Brussels.

Conventional power stations such as lignite units need to meet a CO2 emission upper limit of 550 grams per KWh to qualify for CAT payments, according to current EU regulations. However, EU officials are still negotiating details for a finalized clean energy package. A five-year adjustment period for existing facilities appears probable.

On a visit to Athens earlier this month, Klaus-Dieter Borchardt, Director of the European Commission’s Directorate-General for Energy, appeared willing to exempt Greece from strict EU regulations as acknowledgment of lignite’s important role in the country’s energy mix. However, no details of any exemption plan have yet to be been released.

In a decision reached on April 17, the European Commission recognized the special role of lignite-fired electricity generation for energy supply security in Greece.

According to the RAE plan, CAT payments would be made available through annual auctions offering Reliability Options four years in advance. CAT payments would be valid for one year for existing facilities, while new units would secure CATs for seven years, as an investment and financing incentive, according to the plan.

 

 

European Parliament proposes 550g rule exceptions

Energy committee officials, meeting in European Parliament to revise an electricity market directive, have delivered a new proposal whose implementation would subject conventional power plants to a CO2 emission limit of 200 kilograms per KWh per year, as long as these plants belong to a category of back-up units that would contribute to the system only when necessary.

A decision has already been reached to exclude any plants that emit more than 550g of CO2 per KWh from public money, through eligibility for support mechanisms.

The latest proposal would offer some leeweay to plants exceeding this 550g limit, as long as they have qualified for the back-up reserve category.

The energy committee MEPs noted that power plants belonging to this back-up category are entitled to different emission limits as they will remain sidelined and called to action only if capacity mechanisms have proved to be insufficient. Subsequently, these back-up units will not cause the type of market distortions that could be caused by capacity mechanisms, officials agreed.

This additional proposal, offering some leniency, comes as an effort to bridge gaps between EU member states. Poland, for example, has reacted strongly against the 550g limit, noting it will affect the country’s electricity production.

Bleak future for Europe’s carbon-fired units, IEEFA study notes

European carbon-fired power stations, including conventional units operated by Greece’s main power utility PPC, face a difficult future as upgrades needed to meet stricter EU environmental standards will increase the cost of electricity generated by these units by as much as 10 euros per MWh and negatively impact their level of market competitiveness, according to a study conducted by the Institute for Energy Economics and Financial Analysis (IEEFA).

The study also notes that European carbon-fired power stations also face regulatory obstacles.

Numerous conventional carbon-fired power stations will need to be upgdraded to meet new regulations by 2021, the IEEFA study noted.

The study takes into account solid-fuel units with production capacities of over 50 MW operating around the EU. These units amount to just under 600.

It places particular emphasis on the 108 heaviest polluting units whose emission levels are at least 40 percent over revised EU levels.

Half of these 108 units belong to seven corporations, Greece’s PPC, PGE, Enel/Endesa, EDF, Tauron, CEZ and Drax, while PPC controls five percent of these heaviest-polluting units, the study noted.

The IEEFA study noted that upgrades needed by these carbon-fired units in order to combat NOx emission limits will add between 2 and 4 euros per MWh to the cost of electricity generation. A further 6 to 7 euros per MWh will be added to the cost of electricity by upgrades needed to combat SOx emissions, the study also pointed out. In total, the overall electricity production cost increase at certain units could exceed 10 euros per MWh.

Emission levels at two PPC carbon-fired power stations in the Agios Dimitrios area, northern Greece, were found to be 150 percent over EU limits, the IEEFA study pointed out.

On a wider level, Greek power stations exceeded EU emission limits by 50 to 150 percent in 2014, the IEEFA study found.

A PPC upgrade program to curb conventional power station greenhouse gas emissions has been in progress for some years now.

It has been estimated that a total investment of 31.5 million euros is needed by PPC to reduce its NOx emissions, while unit upgrades worth a further 75 million euros are needed to limit SOx emissions.