RAE, the Regulatory Authority for Energy, will drastically reduce the cost of the new Capacity Assurance Mechanism, bringing the plan considerably closer to an original proposal made by the European Commission as part of overall pressure applied by the country’s creditors.
Following a number of extensions, the current mechanism’s validity is due to expire on December 31. It remains unclear whether these adjustments being made by RAE will ensure the ongoing viability of the country’s independent electricity production units.
Certain sources said the the reductions had brought the mechanism to an absolute minimum in terms of the viability of independent producers, who are expressing concern over these borderline conditions being imposed by the troika.
The troika has pressured Greek officials for changes along its lines, threatening to otherwise take action over alleged state aid support for electricity in Greek industry.
The European Commission’s original proposal, rewarding capacity flexibility and not availability, reduced the total cost of Greece’s new Capacity Assurance Mechanism to 220 million euros. The country’s original plan was a long way off this level, at 570 million euros.
Ensuing negotitiations between the two sides have gradually lowered the cost of the mechanism to 273 million euros after previous reductions to 450 million euros and 327 million euros were rejected.
Of the 273 million euros, a 55 pecent share of the mechanism’s CATs (Capacity Availability Tickets) will back PPC (Public Power Corporation) production, while the other 45 percent will reward the operations of independent producers.
As disclosed by energypress, the country’s creditor representatives have insisted that a mechanism rewarding producers for capacity availability during low-demand periods is not necessary. They agreed to the need for a mechanism that supports producers for offering capacity flexibility to the system.
The country’s final troika-endorsed plan still needs to be approved by the RAE board before being forwarded for public consultation.