Energy minister to meet commissioner with seven energy issues on the agenda

The acceleration of de-lignification and the rapid penetration of Renewable Energy Sources, the two central pillars of government policy in the energy market, bring major reshuffles in the power mix but also rearrangement of units that will be called upon to lift the burden of power supply system security and adequacy.

The leadership of the Ministry of Environment and Energy, in the context of the practices applied by other European countries, has launched a series of requests to the European Commission to establish compensation mechanisms for natural gas and PPC plants that will be put into a back-up strategy, as well as for the compensation of the public company due to the costs of mine rehabilitation and staff exits. The government is also calling for the introduction of a mechanism to compensate for hybrid power generation and energy storage systems.

As the de-lignification progresses, so does the approval of the aforementioned mechanisms, while at the same time new fronts have opened for PPC with older competition cases.

On 13 May, the Vice President of the European Commission and Competent Commissioner for Competition, Margaret Vestager, will visit Athens, and will meet with the Minister of Environment and Energy, Costas Skrekas.

Assumptions
In detail, the cases that the two sides have to discuss are:

1. Capacity remuneration mechanisms (CRM). As Mr. Skrekas has announced, by June, the ministry will send  a proposal to the Commission for the establishment of the mechanism that will compensate the flexible and modern units so that they may be available at any time to cover electricity needs based on the orders of the Administrator.

2. Strategic Reserve Mechanism. An information has been sent to the European Commission in order to compensate mainly the lignite units of PPC for their relegation to strategic reserve status. The public company is recording financial losses for keeping them on alert and therefore seeks compensation.

3. Claim for compensation for closure of lignite plants and mines. This is a request to cover extraordinary expenses arising from the hasty closure of power generation units and mines of the public company.

4. Compensation scheme for hybrid stations on non-interconnected islands. It is a framework for strengthening power plants that combine RES power generation and energy storage.

5. Strengthening “green” bilateral power purchase agreements (PPAs). The Minister of Minister of Environment and Energy seeks, within the framework of relevant European practices, the subsidization of electricity generators from RES for the conclusion of bilateral contracts for the sale of electricity directly to energy-intensive industries or to suppliers who sell electricity to large consumers.

6. Lignite production auction mechanism. This is the old case from 2007 of the country’s condemnation of PPC’s monopoly access to lignite (anti trust case). Greece has agreed with the European Commission to establish a mechanism that will give access to the public company’s competitors in lignite energy products through auctions. For this, the preparation of a market test had been agreed, which according to the information did not receive a particularly warm response from the market.

7. Initiation of the investigation procedures of the European Commission for possible distortion of competition by PPC. This is the announcement of DG COMP about a month ago and concerns the results of a surprise audit carried out in 2017 by the European services at PPC.