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Brussels talks on demand response, flexibility mechanisms today

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Greece’s demand response mechanism (interruptability) and a transitional flexibility mechanism are on the agenda for talks today, at a technical level, between Greek government and Brussels officials.

Greece has not yet submitted an application for an extension of the country’s demand response mechanism as the energy ministry is still gathering related details from the European Commission, primarily on the extension duration it should apply for.

Ministry officials want to know if a two-year extension for the demand response mechanism is feasible. Otherwise, Greece could apply for a one-year extension.

Both the demand response mechanism and transitional flexibility mechanism are crucial for the proper functioning of the market, according to a recent study conducted by the power grid operator IPTO, a prerequisite for the double application.

IPTO delivers study needed for Greek demand response extension bid

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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.

Industry to react if demand mechanism request is rejected

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An application submitted by Greece to the European Commission for an extension of the country’s existing demand response mechanism (interruptability), a pivotal energy cost-saving tool for industry, faces the risk of being rejected if the mechanism does not precede or coincide with notification concerning the flexibility mechanism, industrial sources have warned.

A strong industrial sector reaction can be expected if the demand response mechanism extension request is rejected, the sources added.

An extension of the demand response mechanism is needed for two basic reasons, the sources said. Firstly, this mechanism is necessary for countering grid sufficiency issues during emergency situations, periods of high electricity demand, as well as non-availability of RES sources due to unfavorable weather conditions – either separately or combined.

Also, the demand response mechanism is the only dynamic currently giving demand an electricity market role.

Even when the target model is launched, much time will still be needed before the new market framework is fully implemented and mature enough to ensure demand is offered fair participation in the market’s dynamics, the sources explained.

CAT plan, outdated by changing energy strategy, to be reworked

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A Greek plan for a fixed CAT mechanism that had been submitted to the European Commission by the previous energy ministry is now considered inadequate, primarily as a result of the country’s changing energy plan.

A new CAT mechanism plan will now be prepared early next year once Greece’s revised National Energy and Climate Plan and the power utility PPC’s business plan and withdrawal schedule for its lignite units have both been finalized.

The CAT plan produced by the previous Syriza government’s energy minister Giorgos Stathakis was based on factors no longer relevant as a result of these upcoming changes.

The previous government’s plan also included legislation designed to enable state-controlled PPC to seek CATs for its Ptolemaida V power station, a lignite-fired facility in development but with an indefinite future.

Power grid operator IPTO will conduct an extensive study identifying the system’s needs. This study will serve as the basis for Greece’s new permanent CAT plan, to be forwarded to Brussels ahead of negotiations.

Also, the energy ministry intends to apply to Brussels for extensions to Greece’s transitional CAT plan and the demand response mechanism, a vital energy cost-saving tool for industry.

Industry: Demand response, target model needed for CATs

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The implementation of the target model and demand response mechanism are necessary for the acceptance of a permanent CAT mechanism for capacity, energy-intensive industrial enterprises have underlined.

The industrial sector’s views on the matter, presented through public consultation held by the energy ministry, were reiterated yesterday by EVIKEN (Association of Industrial Energy Consumers) official Antonis Kontoleon at an IENE (Institute of Energy for Southeast Europe) conference.

Industrial sector sources raised questions as to why authorities are currently pushing to implement the CAT mechanism by December, ahead of the target model, at a cost of 400 million euros for consumers.

Substantiated energy ministry details on the problems the proposed CAT mechanism is meant to resolve are insufficient, industrial sector officials noted, while questioning whether alternatives offering equivalent results have been thoroughly examined.

 

Viohalco electricity deal with PPC sets standard for industry

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Leading metal processing company Viohalco, Greece’s second-biggest electricity consumer, has reached an electricity supply agreement with the main power utility PPC following many months of negotiations, achieved following concessions by both sides and the constructive role of two crucial factors that set standards for the wider industrial sector.

Viohalco accepted a 10 percent tariff increase in exchange for an extended three-year agreement, from 2018 to 2020, offering clarity and foreseeable electricity costs until the end of this period, the biggest benefit of the deal. The industrial enterprise’s electricity consumption reaches 1.2 TWh, representing a considerable part of its overall expenses.

A government pledge, expressed publically, ensuring Viohalco energy cost-savings and competitive electricity tariffs through an extension of Greece’s demand response mechanism (interruptability), was a second crucial factor leading to the industrial player’s three-year deal with PPC.

The measure 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.

Swift Brussels response on CAT plan promised by Moscovici

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Greece has been promised solid indication of the European Commission’s intent on the country’s effort to secure CAT remuneration for two lignite-fired power stations, Megalopoli and Meliti, included in main power utility PPC’s bailout-required disinvestment of lignite units.

CAT remuneration for the power stations is seen as a crucial incentive to draw investors to the sale.

Though Brussels is not expected to deliver its decision on Greece’s CAT plan any sooner than April, which stretches well beyond the schedule of PPC’s ongoing disinvestment effort, the European Commissioner for Economic and Financial Affairs Pierre Moscovici, who met yesterday with Greek energy minister Giorgos Stathakis, is believed to have promised a swift response in the form of notification.

PPC has already announced it will upload this notification, regarded as the European Commission’s final position with virtually absolute certainty, into the disinvestment’s data room for investors to appraise. The European Commission’s views on the Greek CAT proposal’s details, including duration, remuneration levels and procedures, are expected to be included in the notification.

Stathakis, the energy minister, also held another important meeting yesterday with officials of EVIKEN, the Association of Industrial Energy Consumers, to discuss the government’s efforts aimed at securing  Greece’s demand response mechanism (interruptability), a pivotal energy cost-saving tool for industry.

EVIKEN officials emerged content from the meeting and confident the energy ministry is committed to this effort. Details concerning the ministry’s moves to be made on the matter have not been disclosed.

Demand response mechanism time extension a ‘top-priority issue’

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A time extension for Greece’s demand response mechanism (interruptability), a pivotal energy cost-saving tool for industry, stands as a top-priority government matter for 2019, sector officials have pointed out.

This measure – compensating 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 – concerns the entire manufacturing sector and can serve as a base for the development of an industry-friendly policy, sector sources

The government must prioritize its application to the European Commission for a time extension of the measure as an independent tool rather than as part of an energy sufficiency mechanism, officials noted.

An extension of between three and five years needs to be sought by the government if it intends to follow up on promises of support to the manufacturing sector, sector officials stressed.

Industry, seeking clarity, demands two-year electricity tariff deals with PPC

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The country’s energy-intensive industrial sector is demanding two-year electricity tariff agreements, until the end of 2020, with the main power utility PPC, for greater clarity and stability concerning energy costs to be faced next year.

Shorter-term energy cost planning threatens the sustainability of enterprises in certain sub-sectors, industrialists have warned, adding that energy-cost support for the industrial sector, playing a vital role in Greece’s economic recovery effort, is essential.

Local industrial enterprises, appearing united and adamant, are refusing to sign PPC electricity tariff agreements limited to 2018 and insist on two-year deals.

Separate CO2 emission right cost payments, as is the arrangement at present, would be accepted, industrial sector officials have indicated.

An existing demand response mechanism (interruptability) – compensating major-scale 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 needs – expires in 2019 but the new market conditions to be shaped by a succeeding permanent CAT mechanism remain unclear.

EVIKEN, the Association of Industrial Energy Consumers, has urged energy minister Giorgos Stathakis to seek European Commission approval for a continuation of the demand response mechanism in tandem with the permanent CAT mechanism.

 

Environmental benefits offered by French demand response system

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A European Commission decision to approve a French demand response mechanism proposal is based on two main criteria, the mechanism’s positive impact on energy investments and the amount of time power stations are required to operate.

The demand response mechanism contributes to the security of supply, can help avoid the construction of new power stations and support the maintenance of existing facilities.

On a longer-term basis, until 2030, France’s demand response mechanism replaces the need for the construction of new flexible power stations while, in the short term, until 2023, the mechanism may encourage the termination of carbon-fired electricity generation, in accordance with an energy plan announced by France’s energy ministry. Subsequently, France’s demand response mechanism is expected to positively impact France’s electricity generation mix.

It is generally more environmentally friendly to reduce consumption than to produce additional electricity, and the mechanism can render the construction of additional power plants unnecessary.

The mechanism also promises to favorably impact the amount of time power stations need to operate as demand response operators may be able to react more quickly than electricity generators.

Brussels approval of CAT plan not assured, legal experts warn

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The European Commission’s approval of Greece’s CAT mechanism plan should not be considered certain as it contravenes EU directive targets for a gradual reduction of support funds for facilities making a negative environmental and economic impact, legal officials have told energypress.

The Greek government, preparing to submit the country’s CAT plan, prepared by RAE, Greece’s Regulatory Authority for Energy, to Brussels, is hoping for an approval as this would boost the chances of a successful bailout-required sale of lignite units by the main power utility PPC. Two teams through to the sale’s second round are gearing up to submit binding offers in October.

The Greek CAT remuneration plan is believed to not make any distinctions that exclude lignite-fired power stations from CAT payments. The units included in PPC’s sale package represent 40 percent of the power utility’s overall lignite capacity.

An EU directive concerning the issue notes that member states should consider alternative production sufficiency ways that do not make a negative impact on the objective of phasing out environmentally or economically damaging subsidies, the legal sources pointed out.

Taking this into account, the inclusion of lignite-fired power stations in the CAT plan could affect its chances of approval in Brussels.

The legal experts added that energy supply sufficiency could be achieved through a combined plan involving aspects of the CAT plan, without remuneration for lignite-fired power stations, and an extension of the existing demand response mechanism (interruptability) – compensating major-scale 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 needs.

Industry: CAT plan serves PPC units sale, not market needs

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The industrial sector has serious objections to a finalized CAT remuneration plan prepared by RAE, Greece’s Regulatory Authority for Energy, and delivered to the energy ministry, which will seek the European Commission’s approval.

Industrial sources believe the ministry is aiming for the remuneration mechanism to be activated whenever it is determined that excessively high prices are causing problems in the market, along the lines of an Italian model.

However, the key problem in the Greek market is sufficiency, not price levels, especially now that a number of older power stations are planned to be withdrawn from the system, industrialists have noted.

The new CAT mechanism plan has also raised questions about the future of the demand response mechanism (interruptability) – compensating major-scale 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 needs.

In addition, a public consultation procedure on the new CAT model has not been staged. Such a mechanism can only be adopted if the market and all participants offer their consent, one source told energypress.

However, the industrial sector and electricity producers will be hard pressed to agree to such a plan whose objective is clearly to reinforce the sustainability of lignite units as a means of ensuring the main power utility PPC’s successful bailout-required disinvestment of lignite units – in terms of sale price achieved.

The finalized power compensation mechanism delivered by RAE to the energy ministry does not make any distinctions that exclude lignite-fired power stations from CAT payments, sources have informed.

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.

 

 

Brussels unofficially approves new demand response mechanism

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The European Commission has unofficially approved a Greek government request for an extension of the country’s demand response mechanism (interruptability), following negotiations, energypress sources have informed.

Formal approval of the mechanism is expected in January, following the festive season.

The development comes as good news for the country’s industrial sector, which, on a number of occasions, had expressed deep concern to the Greek government over the energy cost-saving tool’s expiration in September. The industrial sector has been pushing for an extension as soon as possible.

The demand response mechanism enables major industrial enterprises to be compensated when the TSO (ADMIE/IPTO) requests that they shift their energy usage by lowering or stopping consumption during high-demand peak hours so as to balance the electricity system’s needs.

Greece’s new mechanism will be extended for two years with an option for an additional year, to be determined by the market’s prospective level of maturity and findings of a grid capacity study expected from IPTO, the power grid operator, whose results will indicate whether the country’s grid faces any sufficiency issues.

The demand response mechanism approved by Brussels authorities consists of two interruptability services, planned to take effect following five-minute notifications.

The first of the two services, designed to ensure grid adequacy, foresees production facility interruptions for as long as 48 hours, while the second service, designed to provide grid flexibility, foresees shorter one-hour disruptions.

The Greek government, given the unofficial agreement, is now seeking approval to stage a demand response mechanism auction before the extension’s official approval in January, to protect the grid from any sufficiency issues in January.

Industrial producers back this initiative as rights purchased at the auction would ensure them payment for interruptability services offered to the grid should the country experience an energy crisis in the winter, prior to the mechanism’s official approval.

Market reforms, demand response enter flexibility mechanism talks

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Officials of RAE, the Regulatory Authority for Energy, currently engaged in talks with represnentatives of the European Commission’s Directorate-General for Energy and Directorate-General for Competition, in the Greek capital to attend “The Athens Conference on European Energy Law amd Policy”, are grappling with electricity market reform issues, which need to be resolved before any new capacity mechanisms are successfully implemented.

Electricity market reforms need to be implemented to ensure fair payment for gas-fired power units through an effective flexibility remuneration mechanism before RAE’s proposed mechanism can be further discussed.

A maximum remuneration amount of 25,000 euros per MW set by RAE, significantly less than the 45,000 euros per MW offered to producers through the previous mechanism, stands as a core issue.

The absence of the demand response mechanism, and, by extension, major-scale consumers, including industrial, from the new model, is another major issue. RAE will need to convince Brussels officials of this intention.

The European Commission has insisted on including the demand response mechanism (interruptability) in the temporary flexibility remuneration mechanism (CATs), but RAE has not made any such provisions.

RAE contends that there are no immediate prospects for the implementation of a flexibility remuneration mechanism that includes a demand response mechanism.

 

Brussels officials in Athens this week, PPC units sale on agenda

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A market test needed to measure the level of investor interest in a bailout-required sale package of main power utility PPC lignite units is expected to be proceed as scheduled, by the end of next month, even if certain revisions to a proposal forwarded by Greek officials is necessary, various sources agree.

A finalized list of the PPC units to be offered for sale will need to be delivered within the next five to six weeks if the procedure is to remain on schedule.

Brussels authorities representing the European Commission’s Directorate-General for Competition and Directorate-General for Energy are expected to travel to Athens towards the end of this week for talks on various issues.

All sides involved in the negotiations – European Commission, Greek government and PPC – will need to reach an agreement on the sale package of PPC lignite units if the current plan is to proceed.

Though the visit’s agenda has yet to be announced, all issues concerning the Greek electricity market’s liberalization effort should be examined, including the PPC sale of ligite units. The new temporary CAT mechanism and the Greek government’s extension request for the demand response mechanism (interruptability), enabling energy cost savings for major industrial enterprises, are also expected to be top-priority items on the agenda.

‘Interruptability’ mechanism legal challenge by PV groups postponed

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A legal case filed by two local PV producer associations, SPEF and PSAF, to the Council of State, Greece’s Supreme Administrative Court, against a ministerial decision supporting the demand response mechanism (interruptability) has been further postponed, beyond the hearing’s latest date, which had been set for September 19.

SPEF and PSAF have challenged the mechanism citing technical, financial and legal reasons. The plaintiffs contend that the mechanism has being unfairly applied and, as a result, proven detrimental to the interests of PV producers.

The mechanism enables major industrial enterprises to be compensated when the TSO (ADMIE/IPTO) requests that they shift their energy usage by lowering or stopping consumption during high-demand peak hours so as to balance the electricity system’s needs.

Following the latest postponement, the case is expected to be heard in 2018.

Greece’s current demand response mechanism is set to expire at the end of this month. Local industrialists are pressuring for a three-year extension. The Greek government is supporting this demand. Energy minister Giorgos Stathakis submitted an extension request to Brussels on July 25. If successful, the mechanism’s validity will be extended to September, 2020.

 

Demand response mechanism extension expected by end of month

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If unfavorable developments for the country’s power grid and industrial enterprises are to be avoided, the European Commission will need to endorse, by the end of this month, an application submitted by the energy ministry for a three-year extension to the demand response mechanism (interruptability), which would prolong its validity until September, 2020.

The mechanism, which was introduced here in early 2016 to enable major industrial enterprises to be compensated when the TSO (ADMIE/IPTO) requests that they shift their energy usage by lowering or stopping consumption during high-demand peak hours so as to balance the electricity system’s needs, is set to expire at the end of September, an unsettling prospect, as the mechanism is vital for the grid’s stability and also secures lower energy costs for industrial enterprises.

Energy minister Giorgos Stathakis forwarded an extension application to Brussels on July 25, roughly two months later than promised by Prime Minister Alexis Tsipras during a speech at SEV (Hellenic Association of Industrialists) meeting.

Despite the delay, industrial sector officials have expressed confidence that the approval will be offered on time to enable the mechanism’s extension.

It is believed that industrial enterprises would be forced to limit their operations without the demand response mechanism’s continued validity.

Besides offering crucial energy-cost savings to industrial enterprises, the mechanism also proved instrumental in the avoidance of detrimental developments during the energy crisis last winter, as is highlighted in the extension application sent to Brussels.

Earlier this year, prior to the Greek application’s delivery, Margrethe Vestager, the European Commissioner for Competition, indicated that the request, when received, would be handled positively, when asked a related question by a Greek Member of the European Parliament.

In July, the European Commisison endorsed an equivalent demand response mechanism extension request forwarded by officials of the autonomous Italian island Sardinia.

 

 

Electricity producers set for ‘interruptability’ fee returns

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Energy Ministry, SPEF (Hellenic Association of Photovoltaic Energy Producers) and IPTO (Power Grid Operator) officials are currently engaged in a torrent of talks aiming for the return, to electricity producers, of unallocated demand response mechanism (interruptability) funds concerning 2016.

According to a ministerial decision through which the demand response mechanism was initiated early in 2016, transitional supply security fee (MTAE) amounts withheld from electricity producers on a monthly basis and determined by their respective revenues, are injected into a special supply security fund that needs to be balanced at the end of each year and, separately, upon expiry of the mechanism. Unallocated funds need to be returned to electricity producers, according to the ministerial decision.

The demand response mechanism was introduced to enable major industrial enterprises to be compensated when the TSO (ADMIE/IPTO) requests that they shift their energy usage by lowering or stopping consumption during high-demand peak hours so as to balance the electricity system’s needs.

According to SPEF estimates, unallocated amounts in 2016 exceeded 10 million euros, which means that 25 percent of the MTAE-related amount withheld from electricity producers, including RES producers, will need to be returned.

SPEF officials contend that the return of this MTAE-related amount to electricity producers is particularly crucial for PV producers as the 3.6 percent amount taken from their revenues is disproportionately high given the sub-sector’s narrow profit margin. The return to producers of the unallocated MTAE-related amount would reduce the contribution of PV producers in 2016 to 2.7 percent of their revenues.

The MTAE contribution rates also stand to drop for all other producers, including wind energy producers, from 1.8 percent to 1.35 percent, and small-scale hydropower producers, from 0.8 percent to 0.6 percent.

SPEF sources noted that minor yet pending account balancing issues concerning thermal producers have held up the return process, adding that the energy ministry is determined to have the entire issue resolved.

 

Demand response mechanism extension bid sent to Brussels

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Greek authorities forwarded an application yesterday to Brussels seeking a three-year extension of the country’s demand response mechanism (interruptability), set to expire on September 30, sources have informed.

Industrial sector officials had grown increasingly restless in the lead-up as they had anticipated swifter action from the Greek government.

Taking into account the amount of processing time needed at the European Commission in the past, as well as August’s summer slowdown, a delay can be expected. An extended demand response mechanism will most probably not be implemented until 2018, assuming the Greek application is endorsed in Brussels.

The demand response mechanism enables major industrial enterprises to be compensated when the TSO (ADMIE/IPTO) requests that they shift their energy usage by lowering or stopping consumption during high-demand peak hours so as to balance the electricity system’s needs.

Industrial sector officials, in a letter forwarded to the energy ministry early in July, noted, amongst other issues, that the demand response mechanism needs to keep operating independently until market reforms are completed and a new permanent mechanism securing equal participation covering demand is implemented.

 

‘Interruptability’ mechanism foot-dragging troubles industry

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Industrial sector sources are greatly concerned by the Greek government’s slow progress in preparing an application for EU authorities intended to extend the validity of the country’s demand response mechanism (interruptability).

Greece’s demand response mechanism, set to expire on September 30, enables major industrial enterprises to be compensated when the TSO (ADMIE/IPTO) requests that they shift their energy usage by lowering or stopping consumption during high-demand peak hours so as to balance the electricity system’s needs.

Energy minister Giorgos Stathakis, who is in charge of the matter, has pledged to submit an extension application to the European Commission by July 15.

According to sources, industrial sector officials forwarded a letter to the minister a few days ago urging swifter action as the demand response mechanism, offering crucial energy cost savings to the sector, is set to expire in two-and-a-half months.

In the letter, the industrial sector officials noted that a three-year extension will need to be granted, adding that the mechanism must function independently until market revisions are completed for the adoption of a permanent mechanism.

 

‘Interruptability’ extension bid not submitted, industry edgy

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Main power utility PPC’s mine in Amynteo, affected by a landslide a fornight ago, will not be taking part in the upcoming demand response mechanism (interruptability) auction, as had been expected, energypress sources have informed. This development will reduce the auction’s demand level by 45 MW.

The next demand response mechanism auction, through which the power grid operator IPTO will offer capacities of 750 MW and 900 MW over two sessions during one day, is scheduled to take place this coming Tuesday.

The operator has announced that three enterprises, Halyvourgiki, Greece’s oldest company in the steel industry, Halyvourgia Elefsinas, and Athens airport, are not entitled to participate.

Though participants are looking forward to the next demand response mechanism auction, offering energy savings, industrialists have expressed growing concern over the past few days as, according to sources, Greek government officials have yet to submit an official application to the European Commission seeking an extension of the measure.

The demand response mechanism, enabling major industrial enterprises to be compensated when the TSO (ADMIE/IPTO) requests that they shift their energy usage by lowering or stopping consumption during high-demand peak hours so as to balance the electricity system needs, is due to expire in November.

Industrial figures are counting on the government’s pledge for the measure’s extension. Otherwise their respective industrial enterprises will face steep energy cost increases.

Greek government officials need to take into account the customary slowdown of procedures at the European Commission during the summer months. Swift and immediate action is needed as the end of the measure’s validity, four months away, is closer than the time period suggests, indusrialists have warned.

 

Independent, 3-year extension sought for interruptability tool

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The Greek government’s plan to apply to the European Commission for an extension of the demand response mechanism (interruptability) should be made independently, request a three-year duration, and not be associated with a bid seeking more time for the exisiting temporary mechanism, EVIKEN, the Association of Industrial Energy Consumers, noted in a statement forwarded to energy minister Giorgos Stathakis yesterday.

A three-year time period for the fixed mechanism could enable the measure’s developmental qualities to take effect, the association noted.

EVIKEN, in its statement to the energy minister, stressed that the demand response mechanism is a key factor in ensuring a level playing field for local industry against European competitors, while also being a vital tool to restrict high energy costs burdening Greek industry.

The energy minister has announced he will seek an extension for the mechanism. The minister is also expected to seek certain revisions, including the exclusion, from the measure, of main power utility PPC mines, which absorb approximately 8 million euros of the measures 40 million-euro total cost.

The current demand response mechanism (interruptability), enabling major industrial enterprises to be compensated when the TSO (ADMIE/IPTO) requests that they shift their energy usage by lowering or stopping consumption during high-demand peak hours so as to balance the electricity system needs, is due to expire in November.

Most crucially, the energy minister will need to decide whether the RES sector, especially photovoltaic producers, will carry on covering most of the measure’s cost, or consider revising its funding system. Though the issue remains unresolved at this stage, the minister does not appear willing to proceed with any fundamental changes that may further burden state-controlled PPC.

 

 

EVIKEN officials discuss industrial issues with minister

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Energy-intensive industrial enterprise concerns were discussed at a meeting yesterday between EVIKEN (the Association of Industrial Energy Consumers) officials and energy minister Giorgos Stathakis.

The approaching ends of existing industrial electricity supply deals established between industrial firms and the main power utility PPC and the current cost-saving demand response mechanism have generated unease amid industrial-sector ranks.

The current demand response mechanism (interruptability), enabling major industrial enterprises to be compensated when the TSO (ADMIE) asks them to shift their energy usage (lower or stop consumption) during high-demand peak hours, so as to balance the electricity system needs, is due to expire in November.

At yesterday’s meeting, EVIKEN officials expressed their concerns over the demand response mechanism’s approaching end, fearing electricity cost increases that would negatively impact the industrial sector’s level of competitiveness.

Official market data indicates that manufacturers, battling amid the persisting Greek recession, are showing signs of recovery.

EVIKEN is expected to release an announcement today detailing its views and objectives for the near future, including details of its propoal forwarded to the energy minister for the demand response mechanism. A reaction by the association to the government’s agreement with the country’s lenders on the Greek bailout’s second review, announced yesterday, is also expected to be included in the EVIKEN announcement.

Legislation for a permanent demand response mechanism is not expected to have been ratified by November, when the current system expires.

Even so, EVIKEN officials emerged feeling confident of positive measures being taken following their meeting with the energy minister yesterday. The session was more constructive than previous meetings, industrial sources informed.

The uncertainty felt by industrial enterprises over future electricity supply deals with PPC was also stressed during the meeting.

The energy minister promised that a finalized plan for revisions to a RES-supporting ETMEAR surcharge would soon be announced. Upper limits for ETMEAR payments made by energy-intensive enterprises are expected to be set. This is expected to reduce surcharge-related costs for various industrial sectors.

IPTO seeking penalty claims for ‘demand response failings’

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The power grid operator IPTO is seeking penalty payments from industrial producers committed to the demand response mechanism, offering lower electricity tariffs for flexibility, over claims that they failed to comply with electricity usage reduction orders issued by the operator during the energy crisis in January.

According to regulations, penalties for such infringements range between 60 and 110 percent of compensation amounts offered to demand response mechanism participants over three-month periods.

RAE, the Regulatory Authority for Energy, which has been informed of the operator’s complaints and pursuit of penalty claims, acknowledges that certain industrial producers did not honor their obligations.

Some of the industrial producers believed to have failed to meet demand response mechanism requirements have, until now, refused to pay fines and, instead, are reacting against the IPTO complaints.

These industrial producers have apparently returned penalty invoices issued by the operator worth a total of 2.1 million euros.

At this stage, IPTO is examining whether the industrial producer rejections are justified. If so, the invoices will be cancelled. If not, the operator will insist on being paid the specified penalty amounts.

The demand response mechanism enables major industrial enterprises to benefit from electricity cost savings in exchange for shifting energy usage to off-peak hours whenever required by the operator.

 

Demand response mechanism extension needed by steel industry

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Steel exports need to serve as a driving force and bolster the sector for as long as local construction activity remains subdued and Greek production cannot be absorbed domestically, according to preliminary findings of an ongoing industry study being conducted by consulting firm Alvarez & Marsal.

The study’s final results will be used by the banking sector as guidance for possible steel industry bank loans worth 1.1 billion euros.

Despite the drop in industrial electricity tariffs, currently at satisfactory levels, the local steel industry is struggling.

Greece’s energy cost-saving demand response mechanism, a temporary plan set to expire in October, is vital for local industry. Local industrialists are hoping its validity will be extended.

The demand response mechanism (interruptability) enables major industrial enterprises to be compensated when the TSO (ADMIE) asks them to shift their energy usage (lower or stop consumption) during high-demand peak hours, so as to balance the electricity system needs.

At yesterday’s meeting, EVIKEN officials expressed their concerns over the demand response mechanism’s approaching end, fearing electricity cost increases that would negatively impact the industrial sector’s level of competitiveness.

Last week, Margrethe Vestager, European Commissioner for Competition, informed that the European Commission is open to the prospect of allowing an extension of Greece’s demand response system as it is considered compatible with EU law.

However, the Greek energy ministry needs to take the initiative and submit a formal application for the mechanism’s extension. No action has yet been taken. Failure to do so will threaten the sustainability of many industrial enterprises. Greece’s steel industry currently employs some 1,500 persons.

Brussels open to ‘demand response’ extension, commissioner says

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The European Commission is open to the prospect of allowing an extension of Greece’s demand response system, a vital energy-cost saving mechanism for the industrial sector that also protects wider energy supply security, as it is considered compatible with EU law, Margrethe Vestager, European Commissioner for Competition informed a Greek Member of the European Parliament in response to a related question.

Vestager made clear to Greek Euro MP Maria Spyraki that the Greek demand response mechanism does not represent a form of state aid, despite certain claims, and could be extended if the Greek government decides to officially submit such a request.

As equivalent mechanisms are utilized by other EU member states, an extension of Greece’s temporary demand response mechanism is crucial for the sustainability of the country’s energy-intensive industry. Greece’s temporary demand response mechanism is due to expire in October.

The demand response mechanism enables major industrial enterprises to benefit from electricity cost savings in exchange for shifting energy usage to off-peak hours whenever required by the operator.

Besides lowering energy costs for industry and, threfore, increasing industrial competitiveness, the demand response mechanism also offered crucial support to the country’s grid during the recent energy crisis.

Given Vestager’s comments, Greece’s energy ministry will need to show political will and take initiatives leading to the measure’s extension.

Besides a possible extension, Vestager’s remarks also pave the way for the eventual adoption of a fixed mechanism amid the country’s reformed energy market. The European Commissioner for Competition noted that a fixed mechanism could be implemented if any proposal forwarded by the Greek government meets EU regulations and clears state aid concerns.

Suppliers expected to take on new demand response mechanism’s cost

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The energy ministry does not intend to submit an application to the European Commission to have the country’s demand response mechanism renewed after it expires this coming fall, photovoltaic producers contended following a meeting yesterday with the energy ministry Giorgos Stathakis.

The issue was not addressed in an official announcement issued by the ministry following yesterday’s meeting. The energy ministry holds sole responsibility for submitting an extension application.

The Greek government is aiming to have the demand response mechanism incorporated into the country’s permanent CAT mechanism, expected to replace the temporary CAT mechanism, which expires in April.

The demand response mechanism could be extended if the permanent CAT mechanism’s arrival is delayed.

Unlike the current demand response mechanism, whose cost is shouldered by RES producers, the new version is expected to require electricity suppliers to take on its cost.

Greece’s industrial sector is particularly keen for an extension of the demand response mechanism, which enables major industrial enterprises to benefit from electricity cost savings in exchange for shifting energy usage to off-peak hours whenever required by the operator.

Approval of Greece’s permanent demand response mechanism previously requires endorsement of the temporary mechanism’s extension.

The European Commission has just endorsed a German equivalent.

According to sources, Brussels appears willing, at this stage, to endorse an extension of Greece’s temporary demand response mechanism, especially as a result of its valuable contribution to the recent energy crisis, and also because the current format complies with EU directives, both in terms of cost and the auctions expected.

 

 

Strong interest at today’s demand response auction

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IPTO, the power grid operator, has reported a high level of demand expressed at today’s demand response auction.

The demand response mechanism enables major industrial enterprises to benefit from electricity cost savings in exchange for shifting energy usage to off-peak hours whenever required by the operator.

Details published by the operator on yesterday’s session showed that demand for a first category offering industrial units a two-hour warning to disrupt energy usage reached 750MW, while demand in the second category, offering industrial units just a five-minute warning, reached 900 MW.

The price for the first category was shaped at 50,000 euros per MW while the second category’s price was 48,000 euros per MW.

Energy alert system lowered, industry’s cooperation pivotal

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Greece’s energy capacity warning system was lowered to Level 1 Alert yesterday after the grid’s operator determined that the natural gas reserves are now back up to a level sufficient to cover the country’s needs for a seven-day period.

The alert system had been raised to Level 2 last Wednesday, prompting the need for emergency action. RAE, the Regulatory Authority for Energy, and the energy ministry convened for emergency meetings and took action in order to ensure sufficient energy levels for the festive season. Additional LNG amounts were shipped in.

Natural gas-fueled power station operators volunteered to interrupt production at their facilities while IPTO, the power grid operator, activated the demand response mechanism, which enables major industrial enterprises to benefit from electricity cost savings in exchange for shifting energy usage to off-peak hours.

According to sources, the long-term demand response mechanism was activated for 48 hours, last Friday and Saturday, saving 550 MW, while the short-term mechanism was enforced for an hour on Friday afternoon, saving 650 MW.

The industrial sector’s cooperation proved pivotal in the effort to combat the energy emergency.

Industrial units to cut back power consumption today, tomorrow

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Industrial producers participating in the energy cost-saving demand response (disruption management) mechanism have been ordered to disrupt energy consumption today and tomorrow between 8am and 11pm each day.

The move is expected to conserve approximately 550 MW in electricity as part of the effort to overcome the country’s energy system alert. Placed on Level 2, it has prompted a crisis management team at RAE, the Regulatory Authority for Energy, to convene for emergency meetings this week.

A total of twenty industrial producers will cut back on energy consumption. These include cement producers Titan, Hercules and Halyps, the steel companies Sidenor, Sovel and Hellenic Halyvourgia, the paper mills Macedonian Paper Mills (MEL), PAKO, and Fthiotida,  chemical company Air Liquide, Fulgor cable producer and glassware producer Yioula.