lignite power station

Lignite-fired generation cost overtakes CCGT in March

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Lignite-fired power station generation price levels have risen above those of combined-cycle gas turbine (CCGT) power plants for the first time since the introduction of a temporary recovery mechanism, prompting market officials to declare the end of lignite as an energy source that can be relied on for lower-cost energy production.

RAE, the Regulatory Authority for Energy, set a regulated price of 227.27 euros per MWh for lignite-fired power stations for March, above the price level of 191.73 euros per MWh for CCGTs.

These figures, reflecting the operating costs of the two power-generating technologies, show that lignite-fired plants now cost more to run than gas-fueled power stations.

RAE, in setting its prices, has also taken into account a surcharge of 10 euros per MWh imposed on natural gas intended for electricity generation.

Just months ago, in January, the regulated price for lignite-fired power stations was set at 216.27 euros per MWh, well under that for CCGTs, at 343.64 euros per MWh.

Regulated prices levels for the two power-generating technologies converged in February. They were set at 205.61 euros per MWh for lignite-fired power stations and 210.44 euros per MWh for CCGTs, before a complete overturn in March.

Wholesale electricity prices up over past week

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Wholesale electricity price levels rose over the past week, the average market clearing price rising by 4.76 percent compared to the previous week to 151.95 euros per MWh, with upper and lower levels reaching 218.35 and 80.16 euros per MWh, respectively.

The past week’s highest average market clearing price was recorded on March 2, reaching 160.60 euros per MWh.

During the same period, wholesale electricity price levels in other parts of Europe ranged from 136 to 195 euros per MWh, while prices yesterday ranged from 141 and 167 euros per MWh.

Electricity demand remained low, for this time of the year, while lower RES and hydropower unit output led to a slight increase in prices at the Hellenic Energy Exchange, according to an analysis by IENE, the Institute of Energy for Southeast Europe.

RES units averaged a daily output of 36 GWh for an energy-mix share of 29 percent over the past week, official data showed. RES output totaled 251 GWh for the week, an 11 percent reduction compared to a week earlier.

Hydropower facilities covered 2 percent of demand, injecting just 16 GWh into the grid, 14 percent less than a week earlier. Natural gas-fueled power stations generated 286 GWh over the past week, covering 33 percent of demand, while lignite-fired power stations produced 145 GWh to cover 17 percent of electricity demand.

Electricity demand remained virtually unchanged over the past week, at 897.131 MWh, compared to 897.306. It peaked at 138.128 MWh last Thursday, while the week’s low was recorded on February 27, at 107.471 MWh.

The low-voltage category, including households, represented 56 percent of electricity demand over the past week, the medium-voltage category represented 19 percent of demand, the high-voltage category, or energy-intensive industry, represented 17 percent, 5 percent concerned the Cretan grid, while electricity losses of 3 percent were also recorded.

Rising CO2 right prices making lignite power stations costlier

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Natural gas prices have been sliding of late but the cost of CO2 emission rights has climbed steadily to rise above 100 euros per ton, a trend that has renewed concerns about energy costs in Greece, especially as lignite’s share of the country’s energy mix is still considerable and currently holds an 18.86 percent share.

Prior to Russia’s war on Ukraine, analysts did not expect such CO2 emission right prices any sooner than 2030. The energy transition and an EU decision for stricter ETS terms, approved in European Parliament just days ago, are key factors behind the rise.

A surplus of CO2 rights in the market has been reduced, prompting many companies to rush and buy quantities, which has increased demand and prices.

Gas-fueled power stations gain ground over lignite-fired power stations when gas prices fall and CO2 emission rights increase.

The TTF natural gas index is currently at approximately 49 euros per MWh. If it drops further to a level of 40 euros per MWh, the variable costs of natural gas-fueled power stations will be lower than those of lignite-fired power stations.

CO2 emission right prices have soared since 2017, when their average price was just 5 euros per ton. They increased to an average of 15 euros per ton in 2018, 24 euros per ton in 2019 and 2020, 52 euros per ton in 2021 and 80 euros per ton last year.

The total outlay on CO2 emission rights by producers rose to 851.7 million euros in the first nine months of 2022 from 539.4 million euros during the equivalent period of 2022.

PPC aims to launch pivotal Ptolemaida V unit in March

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Power utility PPC is aiming to launch its new and pivotal Ptolemaida V power station, a 660-MW facility undergoing a final stage of trial runs, by late March.

Trial runs at Ptolemaida V were interrupted by technical issues that arose in December, but the facility is expected to resume operating around January 22 for continual tests over a one-and-a-half-month period before its full-scale commercial launch.

This facility, to initially operate as a low-emitting lignite-fired power station before eventually converting to natural gas, promises to greatly contribute to the grid’s energy sufficiency.

If this winter’s weather conditions deteriorate and prompt a spike in energy demand, the energy sufficiency effort will greatly depend on PPC’s lignite reserves amassed at its lignite-fired power stations.

PPC has accumulated roughly three million tons of lignite at its lignite-fired power stations, close to its target of 3.5 million tons.

The power utility’s current lignite quantity would suffice to keep its lignite-fired power stations, seven in total, running continuously over one month, PPC officials noted.

PPC is aiming to double its overall lignite-fired electricity production this year, from 5 TWh to 10 TWh.

 

Trial run of PPC’s Ptolemaida V reaches full capacity

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Power utility PPC’s new, state-of-the-art Ptolemaida V power station has entered the final stage of its pre-launch tests. The facility is now injecting electricity into the grid, gradually boosting its input since early December without technical issues.

The new PPC facility was injecting electricity amounts of approximately 300 MW, nearly half its 660-MW capacity, by mid-December, before increasing its grid input to 450 MW last week, and has begun offering levels of as much as 616 MW since December 18.

As is standard practice, internationally, such new facilities undergo three phases of trial tests, the first undertaken by the project’s developer, in this case GEK TERNA.

Ptolemaida V, a project budgeted at over 1.4 billion euros, is expected to be ready for a full-scale launch by the end of February. It will initially operate as a low-emitting lignite-fired power station before eventually converting to natural gas.

Achlada mine set to reopen, ministry revokes older decision

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Energy minister Kostas Skrekas has revoked an older decision terminating the Greek State’s lease contract with Achlada Mining S.A. for the exploitation of a lignite mine in northern Greece’s Achlada area.

This decision will enable the mine’s reopening and ensure the nearby Meliti lignite-fired power station operates at full capacity to help the country secure energy sufficiency amidst the energy crisis.

Achlada Mining S.A. had had its Achlada mine license terminated after failing to meet lease contract payments.

In the lead-up to the minister’s decision to revoke the termination of Achlada Mining S.A.’s lease contract with the State, the company covered just over 10 percent of its 5.69 million-euro debt owed to the Greek State, making a payment of 659,867 euros in September.

The energy ministry has given Achlada Mining S.A. a 60-day period to deliver the rest of the amount, approximately 5 million euros. This debt concerns older lease amounts from 2017.

PPC holding back on lignite generation ahead of winter

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Power utility PPC has gradually been switching off its lignite-fired power stations in order to build up on lignite reserves at these facility grounds ahead of the upcoming winter season.

PPC is aiming for a lignite accumulation of approximately 2.5 million tons. The power utility’s current lignite reserves total 2.15 million tons. If PPC’s 2.5 million-ton winter objective is to be reached, the company’s lignite mines will need to operate at full capacity over the coming weeks, extracting amounts of 35,000 to 40,000 tons per day.

All seven of PPC’s lignite-fired power stations were operating at full capacity during summer’s peak periods. Now, just two of these units are operating, Agios Dimitrios III and V.

Agios Dimitrios II is undergoing maintenance, while Agios Dimitrios I and IV are on stand-by. Melitis is currently sidelined by a technical fault but is expected to be become available again on October 3. Megalopoli was closed for days but has become available as of today, if needed.

PPC’s lignite reserves have dwindled following strong demand during the summer, when PPC’s lignite share of the energy mix reached as high as 25 percent.

 

 

 

Electricity suppliers revise tariffs upwards for August

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Electricity suppliers have just announced tariff revisions, upwards, for August following the government’s implementation of a five-euro price cap on fixed charges.

These tariffs will apply as of today. Deducting the state’s support, worth 33.7 cents per KWh, the revised tariffs announced by suppliers range between 14.9 and 28 cents per KWh, the majority of suppliers offering tariffs between 23 and 26 cents per KWh.

The government’s decision to impose a price cap on fixed charges – after electricity suppliers opted to increase their fixed charges to keep their tariffs, the competitive aspect of electricity bills, as low as possible – as well as the related legislative revision procedure led to a one-week delay, enabling electricity suppliers who had not made accurate forecasts for August’s international prices to reexamine and reset their levels.

Some suppliers have increased their tariffs for August by 4 to 10 cents, compared to previous levels, set on July 25.

These increases reflect the unrest of suppliers as TTF gas prices continue on an upward trajectory, steadily over 200 euros per MWh. Wholesale electricity prices are now back over 400 euros per MWh, reaching 422.02 euros per MWh today.

Combined-cycle natural gas-fueled power stations will be remunerated at a rate of 422.39 euros per MWh in August, up from 292 euros per MWh in July. Open-cycle natural gas-fueled power stations will be remunerated at a rate of 594.76 euros per MWh in August, up from 408.47 euros per MWh in July. The month-to-month remuneration change for lignite-based production is minimal.

 

 

Day-ahead market split for RES, thermal units requested

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The Greek government has proposed target model structural changes, at a European level, that would split the day-ahead market into two entities, one for RES, hydropower and nuclear facilities, and another for natural gas and coal-fired power stations.

For the first of these two new day-ahead market entities, producers would forecast production quantities and be remunerated based on bilateral contracts, detached from the day-ahead market.

For the second of the two new entities, natural gas and coal-fired power station producers, covering remaining energy needs, would submit financial and volume offers based on existing rules.

The Greek proposal was presented by energy minister at an EU council meeting of energy ministers on July 26, energypress sources informed.

Preliminary talks on the Greek proposal have already been held. The European Commission plans to deliver alternative proposals for the target model’s functioning by September.

The day-ahead market determines clearing prices in the electricity market.

 

 

Lignite units back in full force, 34% of energy mix in June

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The country’s return to full-scale, lignite-fired electricity generation, an initiative taken to limit the use of natural gas, whose cost has surged amid the energy crisis, increased lignite’s share of the Greek energy mix to 34 percent in June, up from 19.9 percent in May.

Prior to the energy crisis, Greece’s existing lignite-fired power stations, environmentally unfriendly, were headed for withdrawal by 2023 as part of the country’s decarbonization effort.

The duration of their return will now depend on the length of the energy crisis. Ptolemaida V, a new lignite-fired power station planned to be converted to natural gas in the near future, will soon bolster the country’s lignite initiative. This facility’s launch is planned for October or November.

Many questions remain unanswered. The amount of lignite deposits available for extraction at mines is unclear. Also, Greece’s lignite mines and lignite-fired power stations could be short of personnel following the execution of voluntary retirement programs in recent years, as part of the decarbonization drive. In addition, the ability of these lignite units to operate continuously and fully cover a total disruption of Russian gas supply, including during winter, is questionable.

Continual use of the lignite-fired power stations could lead to technical problems. This, at present, is the biggest fear concerning their return.

Government officials contend current lignite deposits can cover the country’s needs until 2030, while new lignite mines could be created, if needed. Staff levels are also sufficient, the officials added.

 

Electricity producer price cap mechanism launched Friday

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A price-cap mechanism for electricity producer payments is set to be launched this Friday and is expected to generate approximately 580 million euros for the Energy Transition Fund in July, a sum to be utilized for subsidizing consumer electricity bills.

Of this sum, 150 million euros will be derived from natural gas and lignite-fired power stations as well as power utility PPC’s hydropower facilities, while the other 380 million euros will stem from the RES sector.

Most of July’s funds to be provided by the RES sector will not be newly generated money as RES units had already refunded money to the RES special account and its surpluses were then injected into the Energy Transition Fund. Under the new system, these amounts will be directly injected into the Energy Transition Fund.

Through the new mechanism, PPC’s hydropower facilities will be paid 112 euros per MWh and all RES units will be remunerated at a rate of 85 euros per MWh. The remuneration rates for natural gas and lignite-fueled power stations will be determined every month based on a series of factors. For the mechanism’s first month, natural gas-fueled power stations will receive 253.99 euros per MWh for their output and lignite-fired power stations will receive 206.72 euros per MWh.

 

Strategic reserve mechanism application to be withdrawn

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The energy ministry intends to withdraw its application submitted to the European Commission for a strategic reserve mechanism as a result of the government’s recent decision to revise its withdrawal plan for the country’s lignite-fired power stations in order to permit operations until 2028 instead of 2025, as was planned.

Under the original plan, the strategic reserve mechanism would have been introduced to maintain lignite-fired power stations under the control of power grid operator IPTO for energy contributions during periods of high demand.

Within the framework of these developments, the government is also considering to withdraw a compensation application for power utility PPC’s premature withdrawal of lignite-fired power stations.

PPC’s plan entailed shutting down all existing lignite-fired power stations by the end of 2023.

However, the government is being forced to delay its decarbonization strategy as a result of the steep rise in gas prices prompted by Russia’s war on Ukraine.

Major RES input lowers electricity price to near zero Sunday afternoon

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Greatly increased renewable energy contributions – covering over 80 percent of demand – during yesterday’s weekend siesta hours of 2pm to 5pm pushed down the wholesale electricity price to virtually zero, or 0.09 euros per MWh.

RES input reached approximately 5 GW (wind and solar energy units), while demand was limited to just over 6 GW, enabling authorities to withdraw from the market lignite and gas-fired power stations.

On the same day, when RES input eventually fell and gas-fired power station contributions were brought back into the grid, the electricity price level rebounded to 283 euros per MWh by the evening.

The wholesale electricity price averaged 168.22 euros per MWh on Sunday, a 27 percent reduction compared to Saturday.

Similar price fluctuations were also recorded in other parts of Europe over the weekend. Negative prices were recorded in Germany and the Netherlands, at -2.49 euros per MWh, and they were even lower in Belgium, at -17.97 euros per MWh. These negative prices essentially mean that consumers are paid to use electricity.

Today, electricity market conditions are back to the ongoing energy crisis’ normal levels. The average wholesale electricity price is at 243.08 euros per MWh, up 44.5 percent compared to yesterday, despite RES input representing 51.1 percent of the energy mix.

FSRU at LNG terminal, Italy storage, lignite use decided

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Energy minister Kostas Skrekas has staged an emergency meeting with the country’s crisis management team to establish measures that would need to be implemented should Russia decide to disrupt its natural gas supply to Europe.

Gas grid operator DESFA will need to deliver a cost-benefit analysis to the ministry by tomorrow on a plan entailing the addition of an FSRU at the Revythoussa islet LNG terminal, just off Athens, as a capacity-boosting move.

In addition, the operator has until Tuesday to report back to the ministry on the progress of its talks with Italy’s SNAM aiming to reserve storage capacity at the neighboring country’s underground gas storage (UGS) facilities.

DESFA must also update its estimate on additional LNG shipments that would be required in Greece if Russia disrupts its natural gas supply to Europe.

Gas company DEPA Commercial, Greece’s biggest gas importer, is closely monitoring the availability of LNG shipments in international markets in order to secure additional shipments, if this is deemed necessary.

Furthermore, power utility PPC will forward, by Tuesday, to the energy ministry, its annual lignite extraction plan for continual operation of its available lignite-fired power stations.

 

 

 

 

Gas-fired generation up 72.3% in February, PPC holds ground

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Natural gas-fueled electricity generation rose sharply, by 72.3 percent, or 622 GWh, in February compared to the equivalent month a year earlier, according to power grid operator IPTO’s monthly report.

This increased generation essentially filled a gap created by lower hydropower production, which dropped by 76.3 percent, or 659 GWh, during the aforementioned period.

Lignite-fired electricity generation fell by 20.3 percent, or 105 GWh, in February compared to the same month in 2021, the IPTO report showed.

These changes highlight the importance of natural gas-fueled power stations for the country’s energy mix, supply security, and grid flexibility, market authorities told energypress.

Overall electricity generation in February reached 3,506 GWh, down 2.61 percent compared to the equivalent month a year earlier.

Natural gas-fueled generation represented a 54.13 percent share of this total production, renewable energy sources generated 40.02 percent, while hydropower units contributed 5.85 percent of the month’s total.

Market shares in the country’s retail electricity market remained virtually unchanged in February, the IPTO report showed.

Power utility PPC did not give away any ground, capturing a 64.23 percent share of the retail electricity market in February, marginally up from January’s 64.1 percent.

Mytilineos was ranked second with a 6.92 percent share, followed by Heron (6.48%), Elpedison (5.78%), NRG (4.19%), Watt & Volt (2.35%), Fysiko Aerio (2.04%), Volterra (2.01%), Zenith (1.89%) and Volton (1.49%).

 

PPC’s Ptolemaida V test run in summer, gas conversion in ’25

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Power utility PPC’s prospective Ptolemaida V power station in northern Greece, whose construction has almost been completed, is expected to undergo a test run this coming summer, as a lignite-fired facility, ahead of its launch late in the year or early 2022, while the unit will be converted into a natural gas-fired unit as of 2025, top-ranked company officials have informed.

The officials ruled out any possibility of a deviation away from the corporation’s natural gas conversion plan for the facility by 2025.

Any delay would be detrimental for PPC given the rising cost of carbon emission rights, currently at a level of approximately 90 euros per ton, leading to losses.

Carbon emission rights would need to drop to a level of no more than 45 euros per ton for Ptolemaida V to cover its operating costs as a lignite-fired facility, the PPC officials noted.

Meanwhile, a recent European Commission decision on its Taxonomy, essentially excluding ultra-modern power stations that are exclusively fueled by natural gas from its list of green investments, comes as a setback for the financing terms achievable for such facilities, the PPC officials pointed out.

The PPC officials admitted, however, that this Brussels decision will push investors to seek emission-reducing solutions, such as mixed natural gas and hydrogen solutions.

PPC is preparing such ventures following a recent announcement concerning a related collaboration with Motor Oil.

The European Commission’s Taxonomy is intended to serve as a guide for private and public-sector investments required to achieve climate neutrality over the next 30 years.

 

Gov’t utilizes EU terms to offer PPC lignite units more time

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The government has utilized flexible terms in European law, expiring tomorrow, concerning high-polluting power stations to secure a further extension for power utility PPC’s lignite-fired power stations, through additional operating hours, which, in some cases, could stretch as far forward as 2025.

Even so, the power utility insists this initiative will not change the corporation’s withdrawal plan for its lignite-fired power stations, according to which all existing units will be withdrawn by the end of 2023.

PPC, in an announcement, has informed that the additional operating hours secured for lignite-fired power stations will be used within the time limits of respective withdrawal plans that exist for units.

The power utility has avoided using its lignite-fired power stations to full capacity, even though they have developed into lower-cost options than natural gas-fueled power stations.

Under the current market conditions, wholesale electricity prices may have been lower if PPC used its lignite-fired power stations more frequently.

Greater use has been avoided by PPC as these units remain loss-incurring for the power utility given the increasing prices of CO2 emission rights and a variety of technical difficulties, sources told energypress.

 

PPC lignite reserves, stations ready for winter, official assures

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Lignite reserves are sufficient to meet elevated demand this winter, while the country’s lignite-fired power stations, hydropower facilities and lignite mines are all set to operate, Dimitris Metikanis, general manager of power utility PPC’s lignite production division has noted in Parliament, in response to questions over energy sufficiency and the energy crisis.

PPC has done all that is possible to prepare the country’s lignite and hydropower units for possible energy demand increases during the winter, the PPC official noted.

Maintenance levels for the country’s lignite facilities have been relaxed in recent times as these units are headed for withdrawal by 2023, as part of Greece’s decarbonization effort. However, the energy crisis may require the lignite units to be brought back into play this winter.

Adequate lignite sources are expected to prevent a reliance on electricity exports, while PPC’s lignite-fired power station Agios Dimitrios V is expected to return by the end of the year after being sidelined for desulfurization work, the official informed.

Daily electricity demand in Greece is projected to reach between 180 and 190 GWh during colder weather conditions from December to February, according to power grid operator IPTO projections.

Such demand levels will require contributions from all available lignite-fired power stations, seven in total – Agios Dimitrios I, II, III, IV and V, Melitis and Megalopoli IV – offering a total capacity of 1,800 MW.

 

Slight relaxation of lignite withdrawal plan, ’28 a firm date

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The government’s climate change rules concerning the country’s withdrawal plan for power utility PPC’s lignite-fired power stations appears headed for a slight relaxation by taking into account the difficulties brought about by the energy crisis, leaving 2028 as the only definite deadline for the withdrawal of the utility’s very last lignite facility, Ptolemaida V, a new facility yet to be launched.

A plan for an accelerated withdrawal of all existing lignite-fired power stations by 2023, announced by Prime Minister Kyriakos Mitsotakis at a UN Climate Action Summit in 2019, is now being reassessed and has been put through public consultation running until December 24, the objective being to ensure grid sufficiency in the face of changes.

The withdrawal of lignite-fired power stations, all operated by PPC, is a tricky equation as a swift procedure promising to curtail PPC’s lignite-related losses – these units are currently profitable, an energy crisis abnormality – needs to be balanced with grid sufficiency protection.

Grid insufficiency issues from 2022 to 2024, ENTSO-E warns

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Greece is not expected to encounter grid insufficiency issues from 2025 to 2030 but the period between 2022 and 2024 could be a concern, ENTSO-E, the European Network of Transmission System Operators for Electricity, has warned in a latest report covering Europe.

Greece has decided to withdraw most of the country’s lignite-fired power stations by 2023, ahead of the arrival of the new Ptolemaida V facility, for which finalized fuel decisions have yet to be taken, the ENTSO-E study pointed out.

The grid entry of new natural gas-fueled power stations in the second half of the decade is expected to offer equilibrium to any grid sufficiency issues, the report added.

Independent energy groups are currently planning and developing natural gas-fueled power stations, but, for the time being, a Mytilineos group unit is the only upcoming addition, planned for a launch in late 2022. All other investments are not expected to operate before 2024.

This could cause grid sufficiency issues between 2022 and 2024, if lignite-fired power stations are withdrawn without being replaced by natural gas-fueled power stations, the ENTSO-E report noted.

It also made note of Greece’s dependency on electricity imports during periods of shortages, highlighting the country’s grid is highly susceptible to extreme weather conditions. Greece will no longer be able to fully depend on electricity imports, the reported noted.

Also, the installation of batteries and pumped storage stations should not be considered a given as such investments will depend on regulatory framework conditions, ENTSO-E noted.

 

 

 

PPC unable to capitalize on lower-cost lignite production

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Power utility PPC has found itself unable to take full advantage of current market conditions making lignite-fired power generation lower in cost compared to natural gas-fueled generation as the utility has winded down on maintenance levels at lignite units in anticipation of their expected full withdrawal by the end of 2023 as part of the country’s decarbonization plan.

The utility’s decreased maintenance of its lignite units has led to technical issues not enabling the facilities to operate at full capacity.

The profit margin for lignite-based generation has increased considerably but PPC is not able to significantly boost production for increased sales of lignite-based electricity generation.

Lignite’s share of the country’s energy mix is currently at single-digit levels, registering a 9 percent share in September, according to a recent monthly report released by power grid operator IPTO.

Wholesale electricity prices ease as RES input increases

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Wholesale electricity price levels are expected to drop to an average of 130 euros per MWh in the day-ahead market today, down 20 percent compared to yesterday, a de-escalation attributed to increased RES input, the energy exchange has informed.

Stronger winds have been forecast, increasing the generation potential of wind energy units.

The maximum price in the day-ahead market today is expected to reach 186 euros per MWh and the minimum price will be 92 euros per MWh.

Natural gas-fired power stations are scheduled to contribute the lion’s share, 40 percent, of the day’s electricity needs, renewable energy sources will contribute 24 percent, electricity imports and lignite-fired power stations will each provide 15 percent, while hydropower facilities will contribute 6 percent.

Electricity demand for the today is forecast to drop by 2.5 percent compared to yesterday.

 

 

Grid faces new challenge today as heatwave persists

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The country’s grid stands to face yet another major challenge today as electricity demand could climb to a new record level, driven up by the sustained heatwave conditions, projected to reach levels of between 40 and 42 degrees Celsius.

Power grid operator IPTO projects electricity demand will reach 10,835 MW, which would be a new all-time high, following yesterday’s level of 10,662 MW.

Natural gas-fired power stations operated by power utility PPC and independent producers will once again contribute dominantly, exceeding 43 percent, according to energy exchange data.

PPC’s combined-cycle Lavrio IV will return to action today following the replacement of technical components at the unit, according to IPTO’s schedule for the day.

The overall input of renewable energy units is expected to rise marginally today, compared to previous days, and cover 16.5 percent of demand.

Electricity imports are also expected to cover 16.5 percent of demand today.

Lignite-fired power stations, including Megalopoli IV, back following repairs, are expected to represent 14.46 percent of the energy mix.

Major-scale hydropower facilities should cover a little over 9 percent of electricity demand.

The government’s crisis management team expects generation will reach required levels and, furthermore, could be boosted by greater output at wind-energy facilities as a result of stronger winds that have been forecast for today.

On the other hand, the prospect of stronger winds is unfavorable for firefighters seeking to subdue a number of fire fronts. Also, the risk of new fires is also higher. In such an event, the grid, under extreme pressure over the past ten days amid the sustained heatwave, would surely suffer further damages.

Distribution network operator DEDDIE/HEDNO crews are continuing efforts to restore power supply in fire-hit Varybobi, north of Athens. The northern section of Evia, northeast of Athens, and Pyrgos, northwest Peloponnese, have also been affected by power supply cuts as a result of fires in the regions.

PPC’s hefty lignite costs lend credibility to strategic reserve mechanism request

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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.

Second market test launched for PPC lignite power packages

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The European Commission has launched a second and revised market test to measure the level of interest of independent suppliers in power utility PPC’s lignite-generated electricity packages.

Suppliers have received a questionnaire as part of the procedure, staged following a subdued response to a first test in which participants more or less wrote off PPC lignite-generated electricity packages as a measure that could intensify competition in the electricity market. Participants have until July 14 to forward their responses.

A final antitrust agreement was reached at a mid-May meeting in Athens between energy minister Kostas Skrekas and the European Commission’s Vice-President Margrethe Vestager, also Brussel’s Commissioner for Competition.

Some revisions have been introduced to the lignite-based electricity package solution now being tested. The PPC packages would be offered through the energy exchange futures market, not through bilateral contracts with independent suppliers, as was originally proposed.

A second important revision concerns the pricing formula for these packages. It will now be determined through direct negotiation between the buyer and PPC through the futures market, without a market prices floor. Under the previous model, the price of the packages was based on the wholesale price minus a discount.

According to sources, the mechanism offering lignite electricity packages will remain valid until December, 2024, or, otherwise, will expire as soon as the country’s final lignite-fired power station has been withdrawn, if this precedes the aforementioned date.

Given these dates, the output of PPC’s Ptolemaida V, expected to be launched in 2023, initially as a lignite-fired unit before it converts to gas in 2026, will contribute to the lignite electricity packages.

Grid to rely on lignite units amid extreme weather for 2 more yrs

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The country’s grid sufficiency will rely on power utility PPC’s high-polluting and high-cost, for the utility, lignite-fired power stations for at least a further two years whenever extreme temperature fluctuations are experienced, as was the case last week, on Friday, when the heatwave pushed demand up to 9,258 MW, as well as Wednesday, when demand rose to similar levels.

PPC’s group of old lignite-fired power stations will need to keep offering solutions until at least 2023 during extreme weather conditions, be they heatwaves or snowstorms, a situation that will need to be seriously taken into account by the committee responsible for the new National Energy and Climate Plan (NECP).

The committee will stage its first meeting today to begin preparing the new 2030 NECP. Many uncertain factors still remain.

According to the existing NECP, now being revised, new natural gas-fired power stations offering a total capacity of 1,650 MW, plus Ptolemaida V – a lignite-fired unit to be converted to a natural gas-fired unit in 2025 for an eventual capacity of 1,000 MW – will need to be launched by 2030.

The new NECP will anticipate greater RES penetration by 2030 than the existing NECP. The existing plan expects renewable energy sources to cover 62 percent of overall electricity demand by the end of the decade, whereas the new NECP will increase this level to 72 percent.

Clearing price hits record level, averaging €128.15/MWh

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The clearing price at the energy exchange will exceed 130 euros per MWh for 15 hours today, pushing the average price to a record level of 128.15 euros per MWh.

Driven by the heatwave, electricity demand will climb to a 9,044-MW peak at 12.30pm, according to a forecast by power grid operator IPTO.

Four lignite-fired power stations, power utility PPC’s Agios Dimitrios I, II and IV and Meliti, have been recruited to support the grid’s needs today.

In addition, all of the country’s natural gas-fired power stations – PPC’s Aliveri V, Lavrio IV and V, Komotini and Megalopoli V, as well as the independent units Heron, Elpedison Thessaloniki, Elpedison Thisvi, Protergia and Korinthos Power – are expected to operate today.

Overall electricity demand is expected to reach 175,803 MWh. RES output is seen reaching 30,565 MWh, natural gas-fired power station generation should amount to 115,868 MWh, and hydropower production is expected to total 12,824 MWh.

Lignite-fired power stations still operating despite elevated cost

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Despite their increased operational cost, power utility PPC’s lignite-fired power stations remain essential, on an occasional basis, to ensure electricity supply security by countering various concerns that may arise, including voltage instability at the grid’s northern section.

Power grid operator IPTO needed to bring into the system one or two lignite-fired power stations throughout most of May, despite the high cost entailed, which would normally keep these units sidelined.

No lignite-fired power stations needed to be used for grid sufficiency on May 13 and 16, as is also the case for today.

The northern section of the country’s grid can be susceptible to voltage instability as a result of the international grid interconnections in the wider area, facilitating exports.

Until recently, northern Greece’s west Macedonia region was the country’s energy epicenter, courtesy of PPC’s extensive lignite portfolio in the area.

Regular use of higher-cost lignite-fired generation has increased price levels in the day-ahead and balancing markets, which, by extension, is increasing costs for suppliers.

PPC’s increased CO2 emissions, when the utility’s lignite-fired power stations are brought into operation, is also directly impacting industrial consumers, who are burdened by the resulting additional cost, passed on by the utility.

CO2 costs have risen sharply of late as a result of rallying carbon emission right costs.

PPC aims for EBITDA repeat of €900m, carbon cut ‘on track’

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Power utility PPC is aiming for a repeat of last year’s EBITDA performance in 2021, a level of between 800 and 900 million euros, an objective to be supported by the corporation’s declining lignite-based electricity generation, both in terms of volume and energy-mix percentage, the company’s chief executive Giorgos Stassis has told analysts.

As part of its decarbonization effort, PPC plans to withdraw its Megalopoli III lignite-fired power station within the current year.

PPC managed to restrict its lignite-fired generation to 22 percent of total output in the first quarter this year, down from 44 percent a year earlier.

The utility needed to spend 138.5 million euros on CO2 emission rights in the first quarter, up from 119.7 million euros during the equivalent period last year, at an average cost of 31.7 euros per ton.

CO2 emission right prices have since risen further and currently register between 51 and 52 euros per ton.

Assuming CO2 emission right prices average 47 euros per ton in 2Q – this level could end up being be far higher – and PPC’s lignite-based generation remains at the current level, then the corporation’s carbon-cost outlay for this quarter will reach approximately 205 million euros, a 48 percent increase.

PPC, which recently borrowed through sustainability-linked bonds, committing itself to a carbon emission reduction of 40 percent by 2022, is confident this target will be achieved, the corporation’s administration told analysts.

 

Mytilineos considering new gas-fired power units in Balkans

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The Mytilineos group is examining the prospect of developing natural gas-fired power stations in Bulgaria and North Macedonia, seeing investment opportunities, like Greece’s other major energy players, in the Balkan region.

EU members Bulgaria and Romania, as well as non-EU members in the Balkan region, such as Albania, North Macedonia and Serbia, are announcing closures of old coal-fired power stations.

This development is creating investment opportunities as older units being withdrawn will, over the next few years, need to be replaced by new facilities, including natural gas-fired power stations.

A month ago, after receiving equipment for a new gas-fired power station unit in Agios Nikolaos, Viotia, northwest of Athens, Mytilineos informed that the company is examining the prospect of developing a similar combined cycle unit in Bulgaria.

Bulgaria, like Greece, is withdrawing its coal-fired power stations and aims to have completed the country’s decarbonization effort by 2025. The neighboring country will need to replace lost capacity through the introduction of natural gas-fired power stations and RES unit investments.

Extremely higher carbon emission right costs have made the withdrawal of coal-fired power stations a priority for Bulgaria and the wider region, one of Europe’s most lignite-dependent areas.

Greece, Bulgaria and Romania, combined, represent nearly ten percent of the EU’s total lignite electricity generation capacity.

Carbon emission right prices relaxed to 49.26 euros per ton yesterday after peaking at 56.65 euros per ton last Friday, following a months-long rally.

Last week, during a meeting with Greek Prime Minister Kyriakos Mitsotakis, North Macedonian leader Zoran Zaev disclosed that his government is discussing the prospect of a new gas-fired power station, in the neighboring country, with Mytilineos.

In Romania, projections for 2030 estimate the installation of 5.2 GW in wind energy units and approximately 5 MW in solar energy units.

Serbia, possibly offering even bigger green energy investment opportunities, aims to replace 4.4 GW of coal-fired generation by 2050. The country is now making plans for 8-10 GW in RES investments.