IPTO factors Balkans into adequacy report calculations

IPTO is taking into account current and potential grid capacities of neighboring Balkan markets for its preparation of an updated adequacy report, a study to serve as a base for various new plans, including the shaping of Greece’s requests for a Capacity Remuneration Mechanism (CRM) and Strategic Reserve, an updated National Energy and Climate Plan (NECP), and private-sector investment decisions for new natural gas-fired power stations.

IPTO is also factoring into its adequacy report calculations the heightened investment interest and activity in Greece’s RES sector, energy storage, now that this domain appears set for initiation, as well as the introduction of new elements to mechanisms and energy exchange markets, including the demand response system, remunerating major-scale electricity consumers when the operator asks them to shift their energy usage or stop consumption during high-demand peak hours, so as to balance the electricity system’s needs.

Electricity grids in the Balkans are being revamped, creating unprecedented electricity export opportunities for Greek exporters. The EU’s intention to impose a carbon border tax on electricity imports from non-EU countries adds to Greece’s export potential to the Balkans, as well as more new natural gas-fired power stations than the quantity included in the current NECP.

Given the developments, Greece now probably needs four new natural gas-fired power stations, including power utility PPC’s Ptolemaida V.

Private-sector firms are pushing ahead their plans for the development of such units, as was highlighted by a related joint announcement last Friday from GEK Terna and Motor Oil.

 

Strategic reserve milestones set for next two months

A series of milestones have been set until autumn in preparation for Greece’s prospective Strategic Reserve Mechanism, which, if achieved, will enable its launch towards the end of the year.

The timeline and milestones leading to the possible launch of a Strategic reserve mechanism, keeping certain generation capacities outside the electricity market for operation only in emergencies, was discussed in detail during an online meeting yesterday between energy minister Kostas Skrekas and European Commission authorities.

Strategic reserves can be necessary to ensure security of electricity supply when electricity markets are undergoing transitions and reforms and are meant to insure against the risk of a severe supply crisis during such transitions.

Three main prerequisites will need to be satisfied by the end of July, the first being the completion of a market reform plan, intended to intensify competition in the wholesale electricity market.

The plan’s preparations will include the involvement of Pantelis Kapros, Professor of Energy Economics at the National Technical University of Athens, according to sources.

A new adequacy report, or updated study on grid sufficiency proving the need for the introduction of a Strategic Reserve mechanism, will also be needed.

Thirdly, the energy ministry will need to have fully responded, within the next month, to an extensive set of questions forwarded by European Commission officials on the prospective mechanism.

If these steps go well, an indefinite prospect at present, then a clearer picture on the mechanism’s details should have emerged by early autumn.

Any Strategic Reserve formula reached will need to be applied for a brief period so that an ensuing Capacity Remuneration Mechanism, to support new natural gas-fueled power stations, can immediately follow, the European Commission’s Vice-President Margrethe Vestager, also Brussel’s Commissioner for Competition, appears to have made clear to Skrekas, the energy minister, at a recent meeting.

Meanwhile, power utility PPC’s updated decarbonization plan is aiming for a withdrawal of all its lignite-fired power stations by 2025, at the very latest.

 

Brussels strategic reserve conditions discussed by RAE, IPTO, ministry

A new adequacy report and a new market reform plan, two conditions set by the European Commission for Greece’s adoption of a strategic reserve mechanism, have been discussed during an online meeting between RAE, the Regulatory Authority for Energy, power grid operator IPTO, and the energy ministry.

The European Commission’s Vice-President Margrethe Vestager, also Brussel’s Commissioner for Competition, during a preceding meeting, earlier last week, with energy minister Kostas Skrekas, called for a new adequacy report, in other words, an updated study proving the country’s need for a strategic reserve mechanism to cover actual grid needs.

The Brussels official also requested a new market reform plan detailing reforms designed to intensify competition in the wholesale electricity market.

Pantelis Kapros, Professor of Energy Economics at the National Technical University of Athens, has been asked to contribute to this new market reform plan, sources informed.

Besides the strategic reserve mechanism, RAE, IPTO and energy ministry officials also discussed details on prospective power purchase agreements (PPAs) between industrial enterprises and RES producers.

Vestager, at her meeting with Skrekas, the energy minister, recommended that Greece follow the examples of PPA models adopted by other EU member states, such as Spain.

PPC strategic reserve, lignite exit compensation hopes fade

Power utility PPC’s prospects for some type of compensation in the foreseeable future, either through the Strategic Reserve Mechanism for the corporation’s withdrawal of units from the market and availability for back-up services, or for the utility’s earlier-than-planned closures of lignite-fired power stations, appear to have dwindled.

The reduced likelihood of any such compensation money for PPC became apparent at a meeting yesterday between energy minister Kostas Skrekas and the European Commission’s Vice-President Margrethe Vestager, also Brussel’s Commissioner for Competition.

Progress was made on an antitrust remedy, through which PPC will soon begin offering rival suppliers lignite-based electricity packages, but the same cannot be said of the strategic reserve.

Vestager made clear, during yesterday’s session, that a strategic reserve plan proposed by the Greek government cannot be approved by the European Commission. Instead, she noted, a new grid sufficiency plan, one aligned with EU directives, will need to be prepared to enable the implementation of an acceptable mechanism.

Subsequently, a strategic reserve plan must be  prepared from scratch, incorporating, besides PPC’s facilities, the demand response mechanism.

According to estimates by some officials, Brussels’ approval of a finalized strategic reserve proposal, requiring considerable work, could take as long as a year.

PPC lignite electricity packages through futures market

State-controlled power utility PPC will soon begin offering rival suppliers lignite-generated electricity packages through the target model’s futures market, energy minister Kostas Skrekas and the European Commission’s Vice-President Margrethe Vestager, also Brussel’s Commissioner for Competition, have agreed at a meeting yesterday.

Vestager, during the session, also made clear that the balancing cost of a mechanism concerning power purchase agreements (PPAs) between industrial producers and RES producers cannot be subsidized, but, instead, will need to be aligned with terms that apply for other EU member states.

Athens expects to submit its PPA plan to Brussels in June for approval.

Also next month, the government plans to submit its support framework proposal for energy storage units.

As for the country’s Strategic Reserve Mechanism, the European Commission’s deputy requested a new proposal from Athens, in line with new EU directives.

Under the Strategic Reserve Mechanism, PPC and all other electricity producers opting to withdraw units from the market for back-up services, would be remunerated for sidelining these units for periods determined by IPTO, the power grid operator.

Vestager stressed that the country’s Strategic Reserve Mechanism cannot coincide with the wider Capacity Remuneration Mechanism (CRM).

The Brussels deputy also pointed out that a compensation request made by Greece for PPC’s redevelopment of lignite areas, part of the decarbonization effort, is legally baseless and cannot be pursued further.

Brussels favors uniting Strategic Reserve Mechanism, CRM

The European Commission is supporting the incorporation of a grid back-up model as part of a wider Capacity Remuneration Mechanism (CRM), energypress sources have informed.

A Greek government proposal for a separate Strategic Reserve Mechanism remunerating units made available by electricity producers for grid back-up services – an idea that has been backed by the energy ministry for quite some time now – does not appear likely to be approved by the European Commission, latest online talks between technocrats in Athens and Brussels have indicated.

Under the Strategic Reserve Mechanism, power utility PPC and all other electricity producers opting to withdraw units from the market for back-up services, would be remunerated for sidelining these units for periods determined by IPTO, the power grid operator.

Instead, the European Commission has tabled a proposal for the establishment of a single system that would include both a Capacity Remuneration Mechanism and a Strategic Reserve Mechanism, as two distinct components, respectively remunerating units active in the market and those maintained as reserves and used only when IPTO requires their services.

Athens and Brussels technocrats are holding these mechanism talks ahead of a forthcoming visit to Athens by the European Commission’s Vice-President Margrethe Vestager, also Brussel’s Commissioner for Competition, scheduled for May 13.