PPC awaits Brussels energy strategy to decide on Ptolemaida V

Power utility PPC will wait for the European Commission’s finalized decisions on a strategic plan intended to end the EU’s reliance on Russian fossil fuels before it decides on the operating and conversion details of its prospective Ptolemaida V power station in northern Greece, to be launched as a lignite-fired facility before being converted to natural gas.

The PPC board is now expected to decide on Ptolemaida V’s conversion date towards the end of this year, according to sources.

Ptolemaida V, expected to undergo a trial run in the second half of the year before being launched late in the year or early in 2023, will be introduced as Greece’s last lignite-fired power station.

Early in April, prime minister Kyriakos Mitsotakis announced extensions to withdrawal dates for older lignite-fired power stations that were originally headed for closure prior to 2025. At the time, the prime minister also informed that Ptolemaida V could now operate as a lignite-fired unit until 2028.

Revisions to the country’s decarbonization plan have been prompted by energy security concerns following Russia’s invasion of Ukraine and the exacerbation of the preceding energy crisis as a result of this war.

The Greek government has decided to increase lignite mining output as a safety measure should Russia interrupt its natural gas supply.

A year ago, PPC had announced it intended to convert Ptolemaida V into a natural gas-fired facility as of 2025, but the latest energy security concerns froze this plan.

 

Household, business electricity demand down 6.7% in April

Higher energy prices prompted a 6.7 percent decrease in electricity demand among households and enterprises in April, compared to the equivalent month a year earlier, according to a monthly report released by power grid operator IPTO.

Overall electricity demand fell at a smaller rate of 3.79 percent as demand for high-voltage electricity supplied to the industrial sector rose by 3.3 percent, the IPTO data showed.

Higher electricity demand in the industrial sector has been linked to export activity as well as pre-determined electricity tariff agreements, protecting producers from the steep energy price rises of late.

High-priced electricity and, by extension, more expensive products, has impacted the purchasing power of consumers, forcing many shops to restrict their business hours.

Output at natural gas-fueled power stations fell 48.8 percent in April, compared to the same month a year earlier, while lignite-fired power stations increased their production by 57.2 percent, the IPTO report showed. Overall, electricity production fell 19.9 percent in April compared to a year earlier, the data showed.

RES production rose, favorable weather conditions being a key factor, to take green energy’s share of the country’s energy mix to 57.34 percent, the IPTO figures showed.

Lignite extraction boosted as part of emergency plan

Power utility PPC has boosted its lignite mining output by an additional 5,000 to 6,000 tons a day for its Meliti and Agios Dimitrios power stations in northern Greece and by an extra 7,000 to 8,000 tons a day for its Megalopoli power station in the Peloponnese, in response to Prime Minister Kyriakos Mitsotakis’ call, early in April, for increased lignite reserves should Russia disrupt its natural gas supply to Europe.

The objective is to increase lignite extraction by 45 to 50 percent over a two-year period for reserves amounting to more than 15 million tons, up from the present quantity of 10.5 million tons, which would enable lignite-fired production to reach 6.5 TWh annually, up from 4.5 TWh projected in the current energy plan.

The majority of PPC’s seven lignite-fired power stations will need to be temporarily withdrawn if increased lignite quantities are to be accumulated at the yards of these power stations.

Of the country’s seven lignite-fired power stations, just one, Agios Dimitrios IV, is scheduled to operate today.

The additional 2 TWh of electricity generation that could be produced annually as a result of this initiative would still not suffice if Russia were to stop supplying natural gas to Europe.

Greece’s annual electricity consumption is estimated at 55 TWh. Last year, natural gas-fueled electricity generation covered 20 TWh of the country’s overall electricity demand, with 40 percent of the natural gas used supplied by Russia.

This means Russia’s natural gas was responsible for 8 TWh of Greece’s electricity generation last year. The Greek plan for an additional 2 TWh in generation through greater lignite production would only cover 25 percent of electricity currently produced using Russian natural gas.

Additional LNG shipments, accelerated development of RES projects, and an energy-saving policy for households, businesses and industry will also be needed to cover the gap.

Lignite re-emphasis temporary measure for security, PM says

A government decision for an increased lignite share of the country’s energy mix is purely temporary and driven by energy security concerns, Prime Minister Kyriakos Mitsotakis clarified during a speech yesterday in Kozani, northern Greece.

The same goes for Athens’ thoughts about extending the lives of state-controlled power utility PPC’s two lignite-fired power stations, Meliti and Agios Dimitrios V. PPC plans to withdraw these units by the end of 2023, as part of the country’s decarbonization strategy, but this exit date may now be delayed.

The technical future of PPC’s Ptolemaida V, a new convertible power station, is unclear. During yesterday’s speech, the Greek prime minister informed that, if needed, this facility would operate as a lignite-fired facility until 2028, before switching to natural gas. This switch could be made at an earlier date if the war ends and natural gas prices fall significantly, seen as unlikely at present.

This overall change in direction is directly linked to the European Commission’s decision to significantly revise the EU’s Fit for 55 plan, originally setting a target for a 55 percent reduction of carbon emissions by 2030, compared to 1990 levels. Details of the Fit for 55 revisions, prompted by the impact on markets of Russia’s ongoing war in Ukraine and the EU’s resulting decision to drastically reduce its reliance on Russian natural gas, are expected to be announced by the European Commission in May.

The EU’s new energy strategy is expected to lead to an increase in the use of biomethane and green hydrogen, as well as reduced gas consumption, regardless of the supplier, be it Russia, the USA, Qatar or Algeria.

Authorities admit the international LNG market cannot increase production to a level that would fully replace Russian gas supply.

PPC capable of boosting lignite extraction by 43%, utility tells

Power utility PPC has the capacity to increase its lignite extraction to as much as 15 million tons annually, from 10.5 million tons at present, for a 43 percent increase to full-capacity lignite-fired generation, in the event of a Russian disruption of natural gas supply to Europe, according to an updated annual mining plan submitted by the utility to the energy ministry.

Even so, this increased production could still not be enough to fill the enormous gap that would be left by a Russian cut in natural gas supply.

The country’s lignite-fired electricity generation can increase to 6.5 TWh annually from the present plan of 4.5 TWh, according to the utility plan. However, PPC would need to hasten the development of a series of projects to boost productivity at its lignite mines and increase the amounts of lignite stocks at the yards of its seven lignite-fired power stations – five Agios Dimitrios units, as well as Meliti and Megalopoli.

The annual plan’s objective is to increase lignite stocks at each of the five Agios Dimitrios facilities to 1.75 million tons from 1.2 million, while also increasing the amount at Meliti to 300,000 tons from 220,000 tons this month, as well as the lignite stock at Megalopoli to 500,000 tons from 270,000 tons.

Prime Minister Kyriakos Mitsotakis is expected to comment on Greece’s lignite alternative, given the Russian threat, at the official launch, tomorrow, of a major-scale solar energy farm developed by Hellenic Petroleum ELPE at Livera, close to Kozani, northern Greece. Offering a 204-MW capacity, this facility is one of Europe’s biggest.

Excess energy group profits taxed 90% as crisis measure

The effectiveness of a government measure that will heavily tax excess profits of energy groups as an extraordinary energy-crisis measure remains to be seen and will be determined once groups have announced their financial results for 2021 and RAE, the Regulatory Authority for Energy, has completed a related inspection.

Given the fact that the RES sector is returning surplus amounts to the Energy Transition Fund, supporting energy crisis measures, the tax measure will be directed at all other technologies, namely lignite, hydropower and natural gas.

The RAE check will compare the earnings of energy companies – in electricity production and supply – between the October-to-March periods of the past two years to determine if excess energy group profits exist, and if so, their size. Any increase in earnings will be taxed 90 percent, according to the extraordinary energy-crisis measure.

 

 

 

Strategic reserve procedure for PPC lignite units hastened

The energy ministry, driven by the EU’s decision to end its reliance on Russian natural gas as soon as possible, is striving to hasten procedures aiming for European Commission approval of a strategic reserve mechanism concerning power utility PPC’s lignite-fired power stations.

The ministry is now completing certain required studies and pending procedures in preparation for Athens’ official application to Brussels.

Even so, government officials remain adamant that Athens’ decision to end all lignite-based electricity generation by the end of 2028 does not need to change, and must not change, even though the EU now appears more tolerant towards the use of coal.

The government officials also believe that no revisions are needed for an even more ambitious lignite phase-out plan set by PPC, according to which all the utility’s lignite facilities will be withdrawn by 2023, except for a new unit, Ptolemaida V, planned to switch from lignite to natural gas in 2025.

Power grid operator IPTO plans to deliver an energy sufficiency study to the energy ministry within the next ten days, while the ministry may be ready to submit its package of prerequisites to Brussels by the end of the month.

This would pave the way for Athens to lodge an official application for a strategic reserve mechanism, as well as a capacity remuneration mechanism.

No need for lignite schedule revisions, officials determine

The country’s decarbonization plan, not responsible for the sharp rise in electricity prices, does not require any revisions, lignite continuing to contribute to the energy mix in accordance with the grid’s needs, government officials have determined following a weekend meeting during which the country’s energy mix was examined.

Lignite has played a bigger role in the country’s energy mix over the past few days, covering more than 20 percent of electricity generation needs, up from 10.5 percent in January.

According to data provided by power grid operator IPTO, six of power utility PPC’s lignite-fired power stations will operate today. Agios Dimitrios I, II, IV and V, Megalopoli IV and Meliti will all contribute to the grid, according to IPTO.

Officials participating at the weekend meeting also examined the progress of the country’s hydrocarbons sectors. EU member states are looking for ways to reduce their dependence on Russian gas.

Hellenic Petroleum (ELPE) recently conducted seismic surveys at its ‘Ionio’ license, an Ionian Sea block southwest of Corfu. EDEY, the Greek Hydrocarbon Management Company, is now awaiting the investor’s next steps.

Brussels to propose windfall profit support for consumers

The European Commission, fearing the energy crisis will be prolonged, is moving towards adopting a French EU presidency proposal that would offer energy consumers support through redistribution of windfall profits earned by electricity producers in the RES, hydropower, nuclear and lignite sectors.

The European Commission strategy also includes a call for regulatory intervention to contain retail electricity prices.

The Brussels proposal, contrasting the European Commission’s energy-crisis stance until now, is included in a preliminary plan that was due to be officially announced next month but has been leaked by the EURACTIV media outlet.

Spain has already taken similar-minded action by taxing excessive earnings generated by nuclear power stations and large-scale RES facilities.

RES output high in ’21, demand back to pre-pandemic level

The RES sector set a new production record in 2021, reaching 17,193 GWh, up from 14,800 in 2020, a 16.2 increase, while, in another important development last year, electricity demand rebounded to pre-pandemic levels of 2019, totaling 52,322 GWh, up 4.7 percent compared to 2020, data provided in a latest monthly report from power grid operator IPTO has shown.

Another eco-friendly energy source, hydropower, also ended 2021 with a record production level of 5,293 GWh, 82.5 percent higher than the 2020 total of 2,900 GWh, the IPTO report showed.

The RES and hydropower sectors, combined, provided 46.1 percent of the country’s overall electricity production in 2022, which reached 48,721 GWh.

Lignite-fired generation fell by 7 percent, to 5,341 GWh, in 2021, reflecting this high-polluting and high-cost energy source’s continual retreat.

Power utility PPC has been regaining ground during the energy crisis of the past few months, increasing its retail electricity market share to 63.9 percent in December from 63.1 percent a month earlier, the IPTO data showed.

PPC’s retail electricity market share has increased by nearly two percentage points  since September, when the energy crisis hit.

‘EC to announce separate support system for offshore windfarms in 1Q ‘22’

The European Commission will announce a separate support system for offshore windfarms in the first quarter of 2022, the energy ministry’s secretary-general Alexandra Sdoukou has informed in a Euractiv interview, indicating this will facilitate Prime Minister Kyriakos Mitsotakis’ recently announced objective for an additional 2 GW in offshore wind farms by 2030.

Greece, which plans to withdraw all lignite facilities by 2028, will greatly depend on the addition of new RES units to replace the resulting capacity loss, Sdoukou noted.

The country plans to double its wind and solar energy capacity by 2030 so that the RES sector can represent 64 percent of Greece’s total electricity generation, the official pointed out.

A series of measures boosting the trust of local communities to host wind energy facilities will be needed, Sdoukou said, admitting resistance at local level has risen along with a growing recognition by the public of the advantages offered by wind turbines for eco-friendly energy.

PPC lignite reserves, stations ready for winter, official assures

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

 

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.

Minister calls meeting on winter energy sufficiency challenge

Energy authorities are expected to focus on the challenge of assuring energy sufficiency over the winter season at a meeting of today, called by energy minister Kostas Skrekas as a result of production capacity concerns at the country’s lignite facilities.

Maintenance level cutbacks at the country’s lignite-fired power facilities, in anticipation of their decarbonization-related withdrawals, may end up affecting the performance of some units, but their contribution to the grid could be crucial as a result of the wider impact of the energy crisis on the market.

The energy minister called today’s meeting in response to a letter forwarded by power utility PPC, controlling the country’s lignite facilities, to power grid operator IPTO, in which current problems faced by lignite-based electricity generation were stressed.

Lignite-based output up 7% in first nine months, data shows

Despite the decarbonization plan’s ongoing phase-out of the country’s existing lignite-fired power stations, lignite-based electricity output recorded a 7 percent increase in the first nine-month period, compared to the equivalent period a year earlier, according to official data released by power grid operator IPTO.

Also, lignite-based electricity generation represented 9 percent of the energy mix in September, contributing 358 GWh, the IPTO data showed.

Lignite-based electricity generation for the year’s first nine-month period represented 11 percent of the energy mix, resulting in the 7 percent year-on-year increase, the data showed.

Renewables represented 20 percent of the energy mix in September, according to the IPTO data.

 

Fossil fuel subsidies exceed amount for renewables in 2019, EC report shows

Greece spent one percent of GDP on fossil fuel subsidies in 2019, exceeding the 0.9 percent level allotted for renewable energy subsidies, a European Commission report published yesterday has shown.

However, fossil fuel subsidies in Greece are on a downward trajectory whereas subsidies for the RES sector and energy efficiency are steadily rising, the report added.

Of 1.6 billion euros made available for fossil fuel subsidies in 2019, the biggest percentage concerned diesel and petroleum products, the remainder going to the natural gas and lignite sectors.

Energy source subsidies in the EU totaled 176 billion euros in 2019, up 8 percent from 2015, the report noted.

Subsidies for energy efficiency increased during this period by 43 percent to 5 billion euros while subsidies for energy production increased by just 4 percent to 3 billion euros, primarily for renewables, the Brussels report showed.

 

 

 

Lignite-fired power stations still playing key grid sufficiency role

Lignite-fired power stations remain a vital contributor to the electricity market’s daily programing, despite energy demand being at normal levels of approximately 6,200 MW at present.

Yesterday, three lignite-fired power stations, Agios Dimitrios II, III and IV, were mobilized along with natural gas-fueled power stations, RES units, hydropower and electricity imports, to cover a demand level of 128.545 GWh.

Power grid operator IPTO has revised its grid sufficiency report for this coming winter, noting that all the country’s lignite-fired power stations will need to be mobilized during periods of high demand.

According to the IPTO report, the country’s grid will require capacities of up to 8.8-9.5 GW between December and February, during cold weather conditions.

Such levels will require input from all the country’s available lignite-fired power stations, seven in total, offering a total capacity of 1,800 MW, it has been estimated.

PPC lignite-fired electricity package sales to rivals for ’22 progressing fast

Power utility PPC is moving ahead at full speed with its offering of lignite-fired electricity packages to rival suppliers as part of a recent antitrust agreement reached between the energy ministry and the European Commission.

Lignite-fired electricity packages offered by PPC to rivals, covering all four quarters in 2022, have so far resulted in sales amounting to 1,740 GWh for next year.

PPC will need to sell, to rival suppliers, lignite-fired electricity packages estimated at a little over 2,100 GWh for the first, second and third quarters of 2022.

Sales have so far reached 475 GWh for the first quarter, 382 GWh for the second quarter, 386 for the third quarter and 497 GWh for the fourth quarter.

Transactions for most of the 1,740 GWh in lignite-fired electricity sales completed have taken place through the European energy exchange, reaching 1,697 GWh.

Transactions through the Greek energy exchange were limited to 43 GWh, for quantities concerning 1Q in 2022. PPC made available bigger quantities without attracting buyers.

Analysts partially attributed this reservation to the adverse conditions currently faced by domestic suppliers, who, as a result of exorbitantly higher wholesale electricity prices, are being forced to spend far greater proportions of cashflow on electricity purchases covering the current needs of customers, which has prevented them from considering futures contracts.

 

PPC lignite antitrust legislation forbids back-to-back agreements

The energy ministry is preparing a legislative revision for its recent antitrust agreement with the European Commission, requiring state-controlled power utility PPC to make available lignite-fired electricity packages to rival suppliers.

The antitrust agreement, already launched by PPC and designed to break its lignite monopoly, requires the utility to offer quarterly lignite-fired electricity packages from September 10, 2021 to December 31, 2024, if still needed.

Details in the plan forbid PPC to conduct back-to-back agreements with rival suppliers, or sale and repurchase of lignite quantities.

According to the plan, PPC, from the fourth quarter of 2021 until 3Q in 2022, must offer rival suppliers lignite-generated electricity quantities representing 50 percent of generation in the corresponding quarters a year earlier.

The upcoming legislative revision will spare PPC from needing to split away lignite divisions into two new companies for subsequent sale, as had been stipulated by legislation ratified by the country’s previous administration.

All existing lignite facilities in Greece are expected to have been withdrawn by the end of 2023, according to the country’s decarbonization plan.

 

 

PPC must market over 2,100 GWh in lignite-fired power by end of month

Power utility PPC needs to move fast this month with its offering of lignite-fired electricity packages to rival suppliers as part of a recent antitrust agreement reached between the energy ministry and the European Commission.

According to the agreement, PPC must market lignite-fired electricity packages for the first, second and third quarters of 2022 by October 31, either through the European or Greek energy exchange.

The three packages also face imminent sale deadlines. All transactions for electricity quantities offered to PPC’s rivals through the first package will need to be completed by the end of November, while transactions for the 2Q and 3Q packages must be done and dusted by December 31.

As for the quantities to be offered, PPC’s 1Q and 2Q lignite-fired packages must total 872 and 515 GWh, respectively. The power utility’s 3Q package will need to offer rivals 50 percent of the company’s lignite-fired power generated in the third quarter this year.

According to data provided by power grid operator IPTO, PPC’s lignite-fired power stations produced 1,081 GWh in July and August, while September’s output has been estimated at 370 GWh.

Given these figures, totaling 1,451 GWh, PPC will need to offer a lignite-fired package of 725 GWh for the third quarter next year, taking the total offering for 1Q, 2Q and 3Q in 2022 to just over 2,100 GWh in futures contracts that must be marketed through either of the two aforementioned exchanges by the end of this month.

 

PPC fulfils 4Q antitrust lignite obligation for supply to rivals

Power utility PPC has fulfilled its fourth quarter antitrust obligations concerning the supply of lignite-fired electricity packages to third parties by securing futures contracts through the Greek and European energy exchanges for an electricity amount that exceeds the quantity stipulated in the government’s agreement with the European Commission, energypress sources have informed.

According to the agreement, which has resolved a long-running antitrust case concerning PPC’s monopoly in the lignite sector, the power utility, in the fourth quarter, needed to offer third parties a total electricity amount representing at least 50 percent of lignite-fired generation recorded for the equivalent period last year.

PPC’s lignite-fired power stations generated 1,785 GWh in the fourth quarter last year, meaning the amount the utility was expected to provide for the corresponding period this year was approximately 893 GWh.

Until yesterday, a day ahead of today’s deadline of its futures contracts, PPC had already secured deals for electricity packages representing a total of 978 GWh.

A first package of futures contracts was exclusively offered through the European energy exchange in Leipzig on September 17 at an average price of 153.75 euros per MWh, followed by three more packages, on September 23, 24 and yesterday.

PPC Renewables, RWE set to finalize joint venture agreement

PPC Renewables, a power utility PPC subsidiary, and Germany’s RWE Renewables are expected to finalize a joint-venture agreement at the beginning of October for solar energy projects in Greece to offer a total capacity of nearly 2 GW.

PPC Renewables plans to contribute to the joint venture 940 MW in solar energy projects at Amynteo, the northern Greece location hosting 4,360 hectares in company lignite fields to be repurposed as part of the decarbonization effort. The Greek company has already received a first round of environmental permits.

RWE Renewables is at the final stage of its search for solar energy projects to total 1 GW.

The two partners will begin their collaboration with the Amynteo project. They plan to begin its development in the first half of 2022. PPC Renewables has established nine special purpose vehicles for these projects.

RWE Renewables, holding a 51 percent stake in the joint venture, has already established a Greek subsidiary, RWE Greece, currently being staffed.

Talks between PPC Renewables and RWE Renewables have intensified since early summer. The respective company heads, Konstantinos Mavros and Katja Wünschel, discussed the prospective partnership at the recent 5th Greek-German Economic Forum, while RWE officials have also visited Athens for negotiations.

PPC chooses Greek energy exchange for lignite-fired electricity packages

Power utility PPC has chosen to offer lignite-fired electricity packages to third parties through the Greek energy exchange, not the European energy exchange, as it was also entitled to, sources have informed.

This main reason behind this decision, part of an imminent mechanism to be implemented as a remedy to a long-running antitrust case concerning PPC’s monopoly in the lignite sector, is that PPC sees the forthcoming mechanism as a good opportunity for the domestic futures market to gain momentum and, by extension, help improve the utility’s cash flow.

The mechanism’s launch, coming at a time of elevated wholesale electricity prices, will help PPC’s rivals offset the period’s price volatility, which is crucial support that will enable independent players to compete more effectively in the retail electricity market and offer stable prices to consumers, the European Commission’s Vice-President Margrethe Vestager, also Brussel’s Commissioner for Competition, noted in an official announcement.

A legislative revision for the mechanism offering lignite-fired electricity packages to third parties is likely to be submitted to parliament today by the energy ministry.

The plan is expected to begin offering lignite-fired electricity packages to third parties by the fourth quarter.

 

PPC local, European exchange option for lignite packages

Power utility PPC will be entitled to choose whether to offer lignite-fired electricity packages to third parties through the Greek energy exchange or European energy exchange, according to details of an upcoming mechanism to be implemented as a remedy to a long-running antitrust case concerning PPC’s monopoly in the lignite sector.

PPC preference for the domestic energy exchange would keep open the option of physical delivery of these lignite electricity packages and ensure the company greater flexibility in its portfolio management. Opting for the European energy exchange would not permit physical delivery, making the deals purely financial transactions.

All that remains for the implementation of the mechanism, whose details have been agreed to by the government and European Commission, is a decision by the energy ministry on when to submit a related legislative revision to parliament, according to sources.

The legislative revision has been completed and the ministry is believed to be on standby for an appropriate date, the objective being to make a first round of lignite-fired electricity packages available to third parties by the fourth quarter this year.

All electricity suppliers will be entitled to purchase these packages, to have three-month durations.

As previously reported by energypress, the electricity quantity planned to be offered to suppliers through the mechanism in the fourth quarter this year will represent 50 percent of lignite-fired output in the equivalent period of 2020.

Then, for every quarter in 2022 and 2023, lignite-fired electricity packages to be offered to PPC’s rivals will represent 40 percent of lignite-based production in equivalent quarters of the respective previous years.

According to the country’s decarbonization plan, all existing lignite-fired power stations will cease operating by the end of 2023.

 

Lignite-fired electricity packages to PPC rivals by fourth quarter

The energy ministry plans to soon submit to Parliament a legislative revision for a mechanism offering third parties access to power utility PPC’s lignite-fired electricity production. This move will enable the implementation of an agreement on the matter between the government and the European Commission as a remedy to a long-running antitrust case concerning PPC’s monopoly in the lignite sector.

Officials are aiming for a first round of lignite-produced electricity packages to become available to third parties imminently, by the fourth quarter of this year.

All electricity suppliers will be entitled to purchase these packages, to have three-month durations.

Electricity quantities planned to be offered to suppliers through the mechanism in the fourth quarter this year will be calculated to represent 50 percent of lignite-fired output in the equivalent period of 2020. Then, for every quarter in 2022 and 2023, lignite-fired packages to be offered to PPC’s rivals will represent 40 percent of lignite-based production in equivalent quarters of the respective previous years.

According to the country’s decarbonization plan, all existing lignite-fired power stations will cease operating and no longer participate in the electricity market by the end of 2023.

A prospective PPC facility, Ptolemaida V, is planned to be launched as a lignite-fired power station early in 2023 before it is withdrawn in December, 2024 for a fuel conversion and reintroduction.

 

 

Lignite area €5bn upgrade plan presented at cabinet meeting

The planned upgrade of Greece’s lignite-dependent areas – an effort of unprecedented domestic ambition budgeted at 5 billion euros that includes emblematic projects such as a hydrogen-producing facility, the country’s first; major-scale telethermal units; a 155-km natural gas pipeline in the north;  major-scale solar farms, including a 200-MW solar farm in Kozani being developed by Mytilineos for PPC Renewables; and the norther section of the E65 highway – will be presented at a cabinet meeting today.

A related draft bill includes provisions for the establishment of a special purpose vehicle for the overall effort, named Metavasi SA, meaning transition. The SPV will take over 16,400 hectares of power utility PPC’s lignite-related land, including fixed assets, except for property to be kept by the utility for its own green investments.

This transfer of 16,400 hectares represents 66 percent of PPC’s total land assets, currently measuring 24,700 hectares.

The Metavasi SPV will assume responsibility for the upgrade of the 16,400 hectares of land, currently hosting PPC lignite mines and lignite-fired power stations.

 

Technical chamber wants lignite maintenance in energy mix

TEE, the Technical Chamber of Greece, favors the continued use of the country’s modern lignite-fired power stations for an energy-mix representation of between 10 and 12 percent over the next few years, as a means of securing electricity sufficiency and strategic reserves.

The chamber’s administration has officially approved an internal vote adopting this position. Its scientific committee, comprised of metallurgical engineers, expressed strong reservations over a government decision to prematurely terminate lignite-fired electricity production as part of the country’s decarbonization plan.

Extensive public debate and a detailed study, essential for a matter of such strategic importance for Greece, should have preceded the premature lignite withdrawal decision, the TEE scientific committee pointed out.

An approved master plan for the lignite withdrawals was rejected by regional authorities in Greece’s two lignite-dependent regions, western Macedonia, in the north, and Peloponnese’s Megalopoli, as proposals forwarded by local authorities and citizens were not considered or discussed, the committee noted.

A total of 19 months have elapsed and over 2,500 jobs lost since the government’s decision to prematurely withdraw lignite-fired units in the two areas, but the administration’s master plan for a fair transition, intended to restructure these lignite-dependent local economies, continues to lack clarity, the committee stressed.

EU funds made available for the restructuring of the two lignite-dependent economies, just over 700 million euros and well under a five billion-euro amount initially announced, are very limited for a proper and fair transition, the chamber added.

 

Strategic reserve necessary, exchange reacts satisfactorily

The end of the Greek energy system’s reliance on lignite, being phased out to help the global climate change effort, needs to be accompanied by a strategic reserve mechanism, which would maintain certain generation capacities outside the electricity market for operation during emergency cases until the ongoing transition to cleaner energy sources has been completed, the extreme heatwave conditions around the country over the past few days have highlighted.

Record-level electricity consumption, combined with power line damages caused by major fires, pushed the grid to the limit, raising fears of widespread power outages.

The government, currently seeking the establishment of a strategic reserve mechanism as part of a Capacity Remuneration Mechanism (CRM), needing European Commission approval, will need to highlight the heatwave-related events that have occurred in Greece over the past ten days.

Sidelined lignite-fired power stations needed to be brought back into action to help the grid meet electricity demand. They offered crucial production contributions representing between 14 and 18 percent of the energy mix.

Lignite-generated output also played a key part in the effort to maintain energy sufficiency last winter, in February, during heavy snowfall that damaged power infrastructure.

The energy exchange has performed rationally during the heatwave conditions, proving its ability to respond to the market’s demand and supply. Day-ahead market price levels rose sharply during the heatwave’s peak and are now subsiding.

 

 

Consumption record expected, industry on switch-off standby

Electricity consumption today is expected to exceed yesterday’s level of 10,700 MWh, a ten-year high, and reach close to 11,000 MWh, which would represent an all-time high, as the prolonged heatwave peaks.

Industrial consumers are awaiting switch-off orders from power grid operator IPTO. Up until yesterday, they had yet to receive such instructions, but a number of industrial enterprises have already switched off voluntarily, while Prime Minister Kyriakos Mitsotakis has urged consumers to exercise restraint in electricity consumption.

Authorities are placing their hopes for grid sufficiency in strong summer breezes forecast for Thursday that should cool temperatures and significantly boost generation through the country’s wind energy facilities.

Though still too early to judge, the grid appears to have stood up to the heatwave’s challenge so far. Minor technical issues and brief outages in various parts of the wider Athens area, Larissa, central Greece, and Agrinio, in the northwest, have been reported.

Authorities remain on edge as the resilience of a largely outdated grid remains uncertain amid daily consumption levels of 9,000 to 10,000 MWh for days on end.

Lignite-generated input is playing a crucial role. It covered between 16 and 18 percent of consumption yesterday. Power utility PPC’s lignite-fired Megalopoli III power station, which has been sidelined for months as part of the country’s decarbonization phase-out plan, operated most of the day yesterday.

 

Imports, lignite, technical issue avoidance key to grid stability

The role of electricity imports, mobilization of power utility PPC lignite-fired power stations that have been sidelined for months, such as Megalopoli III, and unexpected technical failures at grid infrastructure and power stations are three key factors that will determine the performance of the country’s grid over the next few days, during which the ongoing heatwave conditions are forecast to peak and reach temperatures of as high as 45 degrees Celsius.

Power grid operator IPTO has already asked PPC to mobilize the Megalopoli III power station, a 250-MW unit headed for withdrawal and out of action over the past nine months as a result of grid saturation at the network in the Peloponnese.

But the extreme electricity demand has forced this unit’s return, highlighting the grid’s continuing dependence on lignite-fired generation during times of extreme need.

Over the past few days, lignite-based electricity has represented 16 percent of the country’s overall generation.

As for electricity imports, Greece, ideally, will need to import a few hundred MW from North Macedonia, Bulgaria and Turkey. The import potential from these sources is limited to between 1,400 and 1,500 MW annually.

A new interconnection to link Nea Santa, northeastern Greece, with Bulgaria’s Maritsa area in the country’s south, designed to double the grid interconnection capacity between the two countries, will not be ready before mid-2022.

The demand response system, compensating industrial consumers when the TSO (IPTO) asks them to shift their energy usage (lower or stop consumption) during high-demand hours, so as to balance the electricity system’s needs, is another tool that could be activated to save and re-channel approximately 1,000 MW.