Greece: Heavy burden for PPC’s HPPs because of new target model

, SEE Energy News

PPC has sent a warning to the Regulatory Authority for Energy (RAE), the Energy Ministry and electricity transmission system operator ADMIE, as it has identified a concerning drop, for this time of the year, in water reserve levels at its hydropower plants. The electricity market’s new target model has led to serious collateral damage in Public Power Corporation’s (PPC) hydropower reserves that may affect the water supply of Thessaloniki, the second largest city, next summer. The problem is attributed to the market’s new target model, which has been under fire from both the Energy Ministry and RAE due to the high wholesale prices, with authorities investigating possible unfair practices.

PPC officials say that every day ADMIE has been asking the utility to increase the amounts of energy produced at HPPs to cover demand, as the thermal energy producers have issued offers at very high rates. Consequently, the water reserves, which should be a backup plan for the summer months, have fallen to a worrying level, leading to concerns about system’s stability next summer.

Possible effects may emerge for the water supply of Thessaloniki, which is served by the Aliakmonas River dams. PPC said that, unless the situation reverts to normal, there will be problems with Thessaloniki’s water supply next summer. For example, in just one day, ADMIE asked PPC to contribute some 20 GW to the system from hydropower plants, a quantity that under normal circumstances would amount to a week’s contribution. In fact, ADMIE is forced to ask PPC to increase the share of hydro production, because the algorithm on which the online platform for producers’ offers operates is designed to choose the cheapest unit by priority. Therefore, when independent producers increase their prices, hydro production is covering an ever increasing part of demand. The final prices are contained, but the water reserves are emptying.