First demand response auction in July, TFRM validity to get extra month

The energy ministry, anticipating the European Commission’s imminent approval of Greek government proposals for a demand response mechanism and a transitory flexibility remuneration mechanism (TFRM), has signed related ministerial decisions so that the mechanisms, vital tools for industrial energy costs, can be implemented immediately once Brussels has given the green light.

Official approval of the plans by the European Commission is expected within the next few days.

Power grid operator IPTO has been informed by the ministry so that it can prepare the first demand response auction, seen taking place within July. IPTO announced a registration procedure yesterday, setting a July 23 deadline for applicants.

The TFRM’s validity is expected to run for an additional month, compared to the initial term agreed to by Athens and Brussels, to make up for its delayed delivery.

Over the past few days, Greek authorities have needed to respond to numerous questions forwarded by Brussels officials, seeking explanations and clarification on both the demand response and flexibility mechanisms.


Ministry awaiting Brussels nod for demand response, TFRM

The energy ministry, anticipating the European Commission’s approval of Greek government proposals for a demand response mechanism and a transitory flexibility remuneration mechanism (TFRM), has decided to sign related ministerial decisions, possibly even today, so that the mechanisms can be immediately implemented once Brussels has given the green light.

Though the two sides have come closer on the mechanisms, it still remains unclear when the European Commission will go ahead with its approval.

Over the past few days, government officials have needed to respond to a series of questions from Brussels, seeking explanations and clarification on details concerning both mechanism plans.

The European Commission’s Directorate-General for Competition is treating both mechanism proposals as one package.

Domestic energy-intensive industries are urgently awaiting the package’s approval in the hope that Greek power grid operator IPTO can stage a demand response auction before July is out.

Under terms agreed to so far, IPTO will be permitted to offer up to 800 MW through demand response auctions, down from 1,030 MW allowed through the preceding plan.

Also, the demand response mechanism will be made accessible to a greater number of companies, including smaller players, through a reduction of a consumption lower limit.

In addition, the demand response mechanism is expected to be valid for a one-year period, not two years, as was requested by EVIKEN, the Association of Industrial Energy Consumers.

The TFRM is expected to be divided into two stages, the first running until the launch of target model markets, scheduled for September 17, under the same terms that applied for a mechanism that expired in March, 2019.

The TFRM’s second stage is seen running from the launch of the target model until a permanent flexibility mechanism is introduced. Its capacity is expected to be drastically reduced to 750 MW from 4,500 MW. Remuneration levels are also expected to drop.


Ptolemaida V CATs jeopardized by PPC action against TFRM

A delay by the European Commission in endorsing the country’s permanent CAT capacity mechanism is jeopardizing the main power utility PPC’s new Ptolemaida V power station from being included in this mechanism.

A mechanism induction agreement for Ptolemaida V needs to be signed by the end of the year if this new lignite-fired unit is to be eligible.

A rigid interpretation by Brussels of regulations and directives concerning the matter has market officials already believing the deadline will be missed.

The European Commission has set the implementation of the target model as a prerequisite for the CAT mechanism to be approved. This practically means that participants cannot sign mechanism agreements before January of February, at best, when the dry run begins.

PPC’s position on the transitory flexibility remuneration mechanism (TFRM) is also crucial to the matter.

The power utility has taken European Court action against the TFRM seeking its non-implementation and, instead, a direct transition to the permanent mechanism by contending, amongst other things, that market reforms are in progress through target model requirements. PPC has also questioned the necessity of the TFRM.

A withdrawal of PPC’s legal action would lead to a more flexible interpretation of regulations by the European Commission on the permanent CAT capacity mechanism, pundits believe.