PPC compensation mechanism, market test talks at crucial stage

The European Commission is expected to show its cards next week on Greece’s quest for lignite compensation mechanisms supporting power utility PPC and the results of a market test concerning the utility’s availability of lignite-produced electricity to third parties.

These issues are expected to be discussed in detail by energy ministry and Directorate-General for Competition officials during a virtual meeting next week, following correspondence as well as a virtual meeting, on March 8, between energy minister Kostas Skrekas and the European Commission’s Vice-President Margrethe Vestager, also Brussel’s Commissioner for Competition.

State-controlled PPC has requested a strategic reserve mechanism for its lignite-fired power stations, still needed but nowadays loss-incurring as a result of higher CO2 emission right costs, as well as compensation for its premature closures of these units, currently being phased out until 2023.

All still appears to be vague on PPC’s market test for third-party access to its lignite-based electricity. The test was completed some time ago, failing to attract any real interest from rival suppliers.

The percentage of lignite-based electricity made available by PPC, initially set at 50 percent of total lignite-fired output and then lowered to 40 percent, is viewed, by third parties, as too small for any real gains.  Brussels has yet to comment on the market test’s result.