First demand response auction in July, TFRM validity to get extra month

The energy ministry, anticipating the European Commission’s imminent approval of Greek government proposals for a demand response mechanism and a transitory flexibility remuneration mechanism (TFRM), has signed related ministerial decisions so that the mechanisms, vital tools for industrial energy costs, can be implemented immediately once Brussels has given the green light.

Official approval of the plans by the European Commission is expected within the next few days.

Power grid operator IPTO has been informed by the ministry so that it can prepare the first demand response auction, seen taking place within July. IPTO announced a registration procedure yesterday, setting a July 23 deadline for applicants.

The TFRM’s validity is expected to run for an additional month, compared to the initial term agreed to by Athens and Brussels, to make up for its delayed delivery.

Over the past few days, Greek authorities have needed to respond to numerous questions forwarded by Brussels officials, seeking explanations and clarification on both the demand response and flexibility mechanisms.

 

Ministry awaiting Brussels nod for demand response, TFRM

The energy ministry, anticipating the European Commission’s approval of Greek government proposals for a demand response mechanism and a transitory flexibility remuneration mechanism (TFRM), has decided to sign related ministerial decisions, possibly even today, so that the mechanisms can be immediately implemented once Brussels has given the green light.

Though the two sides have come closer on the mechanisms, it still remains unclear when the European Commission will go ahead with its approval.

Over the past few days, government officials have needed to respond to a series of questions from Brussels, seeking explanations and clarification on details concerning both mechanism plans.

The European Commission’s Directorate-General for Competition is treating both mechanism proposals as one package.

Domestic energy-intensive industries are urgently awaiting the package’s approval in the hope that Greek power grid operator IPTO can stage a demand response auction before July is out.

Under terms agreed to so far, IPTO will be permitted to offer up to 800 MW through demand response auctions, down from 1,030 MW allowed through the preceding plan.

Also, the demand response mechanism will be made accessible to a greater number of companies, including smaller players, through a reduction of a consumption lower limit.

In addition, the demand response mechanism is expected to be valid for a one-year period, not two years, as was requested by EVIKEN, the Association of Industrial Energy Consumers.

The TFRM is expected to be divided into two stages, the first running until the launch of target model markets, scheduled for September 17, under the same terms that applied for a mechanism that expired in March, 2019.

The TFRM’s second stage is seen running from the launch of the target model until a permanent flexibility mechanism is introduced. Its capacity is expected to be drastically reduced to 750 MW from 4,500 MW. Remuneration levels are also expected to drop.

 

Ministry preparing for Brussels demand response, TFRM approvals

Anticipating the European Commission’s approval of government proposals for a demand response mechanism and a transitory flexibility remuneration mechanism (TFRM), the energy ministry is preparing ministerial decisions for immediate signing once Brussels has given the green light.

These decisions will need to be signed by Greek officials before the two mechanisms can be implemented. The ministry is preparing the ground to have both mechanisms launched as soon as possible.

Brussels and Athens have reached an agreement on the mechanisms, prompting the energy ministry to deliver a finalized version of the demand response plan to the European Commission’s Directorate-General for Competition, ahead of this mechanism’s reintroduction.

The energy ministry expects power grid operator IPTO to be able to stage its first auction for demand-response capacities in July.

According to the agreement reached with Brussels, IPTO will be permitted to auction demand response capacities of up to 800 MW, below the previous limit of 1,030 MW.

Also, a greater number of participants will be eligible as enterprises with capacities of at least 2 MW will be able to take part, down from 3 MW in the previous mechanism. Troubled nickel producer Larco will not be excluded.

In addition, the new mechanism will run until September 30, 2021, not for two years as had been requested by EVIKEN, the Association of Industrial Energy Consumers.

As for the TFRM, it will remain valid until the implementation of a permanent CAT mechanism, which the energy ministry expects to launch in March, 2021.

The TFRM will be divided into two stages, the first running until the launch of target model markets, scheduled for September 17, under the same terms that applied for a mechanism that expired in March, 2019.

The TFRM’s second stage will run from the launch of the target model until a permanent flexibility mechanism is introduced. Its capacity is expected to be drastically reduced to 750 MW from 4,500 MW. Remuneration levels are also expected to drop.

Brussels grants Athens demand response, TFRM extensions

The European Commission has granted extensions for Greece’s demand response mechanism and transitory flexibility remuneration mechanism (TFRM), according to sources well-informed on the negotiations. They have dragged on for over seven months.

The development promises to offer energy-intensive industries and electricity producers crucial support given the period’s adverse conditions. Both mechanisms are vital for energy-cost savings.

The agreement also paves the way for the establishment of a permanent Capacity Remuneration Mechanism (CRM). The energy ministry plans to assemble a special committee comprised of various electricity market officials for work on the CRM details.

Greece’s demand response mechanism and transitory flexibility remuneration mechanism (TFRM) had both expired – the former three months ago and the latter in March, 2019.

Both mechanisms were extended by Brussels despite Greece’s pending implementation of the target model, now behind schedule.

Suppliers also given lignite access by DG-Comp agreement

The Greek government and European Commission’s Directorate-General for Competition appear close to reaching an agreement that would give the country’s independent electricity suppliers access to state-controlled power utility PPC’s lignite-based production through a transitional mechanism running until 2023, when most of the utility’s lignite units are expected to cease operating.

This prospect comes hot on the heels of an agreement between Athens and Brussels enabling extensions of Greece’s demand response mechanism and transitory flexibility remuneration mechanism (TFRM).

PPC has monopolized Greece’s lignite sources and generation, but an agreement offering lignite access for all would open the door for independent suppliers as well as industry.

For quite some time, the DG-Comp has criticized PPC for not complying with a European Court decision requiring lignite access to third parties.

Settlement of the lignite dispute would leave just one pending energy-sector matter, the target model’s implementation.

Talks between Athens and Brussels on Greece’s energy sector matters have dragged on for at least seven months.

Athens and Brussels also appear to have drawn closer for an agreement on how lignite-based electricity will be priced.

Industrial energy cost reduction measures planned, deputy tells

The government is preparing to reduce a special consumption tax for energy-intensive mid-voltage companies and also push through a series of other measures aiming to reduce industrial energy costs, deputy energy minister Gerassimos Thomas has revealed in an interview with Greek daily Kathimerini.

The deputy minister said he is confident a Greek proposal seeking extensions for the country’s demand response mechanism and transitory flexibility remuneration mechanism (TFRM) will be approved by the European Commission.

The special consumption tax for energy-intensive mid-voltage companies will be reduced to the level offered to high-voltage companies, the deputy minister informed.

Also, a new public service compensation (YKO) mechanism offering benefits for high and mid-voltage industries will be introduced, he said.

Power grid operator IPTO needs to design and launch new demand response products in compliance with EU directives, the deputy minister noted while addressing the forthcoming launch of the target model in Greece.

The objective is to provide incentives to private-sector producers and industry for equal participation in the balancing and energy markets, he explained.

 

 

Industrial sector needs delayed demand response mechanism

The country’s energy-intensive industrial enterprises are keen to accept a solution that would also offer independent electricity suppliers access to power utility PPC’s lignite-based generation, acknowledging that delays in the government’s ongoing negotiations with the European Commission on across-the-board lignite issues will consequently delay Brussels’ approval of Greece’s request for an extension of the demand response mechanism, a key energy-saving tool for the industrial sector, and threaten the sustainability of a number of producers.

EVIKEN, the Association of Industrial Energy Consumers, recently informed the energy ministry of its position in writing.

Greece’s lignite-issue negotiations with the European Commission have dragged on for some time. Athens has received a list of new questions after responding to a dense set of previous questions.

The government’s proposal for an extension of the demand response mechanism was forwarded to Brussels late December following lengthy consultation with European Commission officials to ensure its details would be aligned with Brussels’ directives.

Even so, Greece’s industrial enterprises have been left without the support of demand response mechanism since February 7. Worse still, a new measure promising to reduce the cost, for industry, of a RES-supporting ETMEAR surcharge, has yet to be implemented.

As a result, certain industrial sectors, namely steel and cement, have slid further in terms of competitiveness while, in some cases, sustainability and job maintenance are also at stake.

Pundits believe Brussels has bundled together all of Athens’ pending energy sector issues.

Brussels ‘attaching unresolved market issues to target model’

Greece’s unresolved energy market issues, including demand response and flexibility mechanism requests, appear to have been bundled up into one package by the European Commission as it waits to see if the country will honor its commitment to launch the target model this summer, sources believe.

Brussels has held back on approving a demand response mechanism extension request and CATs rewarding flexibility. Sources believe the European Commission will maintain delay tactics, through ongoing correspondence, until the summer.

The Greek government forwarded a request for a demand response mechanism extension of two years in late December before presenting the plan in Brussels the following month.

The presentation prompted an extended period of correspondence between the two sides that ended up requiring Greece’s energy ministry to respond to a lengthy list of questions. The ministry’s responses to these questions were forwarded two weeks ago. Athens is now awaiting news from the European Commission.

Work still needed for demand response, flexibility approvals

European Commission officials of the Directorate-General for Competition have questioned various aspects of a Greek proposal seeking a two-year extension of the country’s existing demand response mechanism, a key energy-saving tool, as well as a proposal for a transitional mechanism rewarding flexibility.

Despite the hesitation, a series of meetings held Wednesday between the energy and environment ministry’s secretary-general Alexandra Sdoukou and DG Comp officials have been described as constructive.

Brussels officials appear to be gradually overcoming reservations stemming from Greece’s failure to meet previous commitments.

The energy ministry plans to address the DG Comp’s concerns on the demand response and flexibility mechanisms in a response to be forwarded today.

Sdoukou is scheduled to travel to Brussels in about two weeks for further talks.

Industry experts believe Greece’s demand response mechanism proposal stands a solid chance of being approved as it is based on a power grid operator IPTO study determining that a real need exists for the mechanism.

However, any chance of an approval by February 6, the expiry date of the existing demand response mechanism, has been ruled out. The industrial sector will be left without a demand response mechanism for a period of at least two months, it is estimated.

European Commission approval of the flexibility mechanism is seen as a less likely prospect as units offering flexibility to the grid face less of a financial strain and, moreover, flexibility will soon be rewarded within the framework of the target model.

Demand response mechanism proposal seeks two-year extension

A Greek proposal forwarded to the European Commission late in December for an extension of the country’s existing demand response mechanism, a key energy-saving tool for industry, is seeking an additional two years.

This application was forwarded along with a proposal for a transitional mechanism rewarding flexibility.

If an entirely new permanent demand response mechanism is granted a two-year lifespan, then the two-year extension for the existing system will cease to apply, sources informed.

The target model will need to be launched before a permanent mechanism can be implemented.

Conclusions to be drawn through the target model’s introduction will enable Greek officials to shape a proposal for the permanent mechanism, seen occurring late this year.

A previous demand response proposal forwarded to Brussels by former energy minister Giorgos Stathakis is no longer valid as the country’s energy plan has been completely reshaped since last summer’s change of government.

Demand response mechanism to be extended ahead of bid for new plan

The energy ministry has decided to extend a December 31 deadline concerning the country’s demand response mechanism (interruptability) into February, and, during this additional period, apply for a new two-year replacement.

A ministerial decision to facilitate this extension adheres to provisions offered by the European Commission, energypress sources informed.

This action will secure uninterrupted demand response mechanism coverage for the industrial sector. Power grid operator IPTO may stage one more demand response mechanism auction in January based on the support system’s existing terms.

The application for Greece’s new demand response mechanism, a key energy-saving tool for industry, will be along with another application for a temporary mechanism compensating flexibility.

Both mechanisms are considered crucial for the market’s proper functioning, a recent IPTO study determined.

The demand response mechanism compensates major-scale electricity consumers when the TSO (IPTO) asks them to shift their energy usage (lower or stop consumption) during high-demand peak hours, so as to balance the electricity system’s needs.

 

IPTO delivers study needed for Greek demand response extension bid

A supportive study needed by the Greek government to submit an application to the European Commission for an extension of the country’s existing demand response mechanism (interruptability), a pivotal energy cost-saving tool for industry, has been delivered to the energy ministry by power grid operator IPTO, tasked with preparing the additional study, energypress sources have informed.

The existing demand response mechanism is valid until December 31, following an approval last February. Industry is looking for a three-year extension.

Industrialists fear the effort to extend the demand response mechanism’s validity risks being rejected if it does not precede or coincide with notification concerning the flexibility mechanism.

The demand response mechanism compensates major-scale electricity consumers such as industrial enterprises when the TSO (IPTO) asks them to shift their energy usage (lower or stop consumption) during high-demand peak hours, so as to balance the electricity system’s needs.

On another front, IPTO will have completed all studies related to Greece’s new decarbonization and RES targets before the end of the year, the operator’s deputy chief Yiannis Margaris noted during last week’s Renewable & Storage Forum in Athens, staged by energypress.

These studies will enable technical and financial assessments concerning the updated National Energy and Climate Plan for an estimate of the cost of infrastructure required to reach the new decarbonization and RES objectives, the IPTO deputy official explained.