Grid needs requiring power utility PPC to operate its lignite-fired power stations have cost the company considerably, lending credibility to the country’s request for a strategic reserve mechanism, a study containing revenue and cost details concerning all of Greece’s power stations over the past six months has shown.
This study has been forwarded to the European Commission as a preliminary step in the establishment of a Market Reform Plan being discussed between Athens and Brussels officials.
PPC has called for a sooner-than-planned withdrawal of its lignite-fired power stations as a result of the elevated cost entailed in operating these units, pushed higher by rising carbon emission right costs.
But the grid’s needs, as highlighted over the past few days of heatwave conditions, are preventing PPC from withdrawing lignite-fired units sooner.
Given the situation, the introduction of a strategic reserve mechanism, over a two-year period covering 2021 and 2022, has emerged as an alternative solution. This mechanism would enable PPC to seek compensation for maintaining its lignite-fired power stations on emergency stand-by.
The implementation of a capacity remuneration mechanism (CRM) will, according to Greece’s plan, ensue and offer incentive for new investments in projects such as gas-fueled power stations and energy storage.
The incorporation, into the strategic reserve mechanism, of the demand response system and natural gas-fired power stations is also being considered.
Athens and Brussels officials are striving for a finalized strategic reserve mechanism plan by the end of the year, which would enable its launch at the beginning of 2022.