Energy aggregation

Balancing market costs have risen to extremely high levels of approximately 12 euros per MWh during the first six weeks of the target model launch, from virtually zero levels under the previous system, consequently burdening the RES special account through feed-in tariff obligations as well as operating aid contracts with fixed tariffs. The cost, for the RES special account, is expected to rise further through HCHP aggregation-related projects.

Strangely, projects operating through feed-in tariff payments as well as operating aid contracts with fixed tariffs, do not have balancing market commitments, by law, yet, as pointed out by SPEF, the Hellenic Association of Photovoltaic Energy Producers, in a letter to RAE, the Regulatory Authority for Energy, the RES special account is burdened by these costs.

If the country’s biggest RES portfolio – handled by DAPEEP, the RES market operator – representing 75 percent of the total RES capacity in operation, is ending up with a balancing cost of approximately 12 euros per MWh in the target model’s new markets, then what should other smaller producers expect, producers have questioned.

Energy minister Costis Hatzidakis has described the various target model issues being confronted as growing pains that are not here to stay.

News of a license application submitted by the Mytilineos corporate group to represent RES producers for 500 MW is indicative of the energy aggregation trend that is expected to grow over the next few years.

Mytilineos is the Greek market’s second major player to have become active in renewable energy aggregation following the establishment last year of Optimus Energy, a venture involving Terna Energy, the country’s biggest green energy player.

Energy aggregation will enable a group of companies or local institutions to partner together to buy energy from a single developer, or multiple developers, at smaller volumes while retaining the economic advantages of a high-volume purchase.

In essence, Terna, Mytilineos, as well as other players expected to follow, are preparing for a new era in the energy sector that will enable RES production units to participate in the competitive market without support systems, subsidies or priorities.

Current RES auctions are transitional, until 2020, when the market’s new model is expected to be fully operational.

Balancing market costs excessive, further rise feared

Green aggregators emerging in preparation for new market era