By Elaine Green
The European Union has declared that Public Power Corporation’s (PPC) exclusive rights to lignite mines may contravene competition laws. PPC refutes the charges, claiming that there are plenty of other lignite mines in Greece for private enterprise to exploit. It has just two months to rectify the situation, says the EU Commission.
The main contention is the fact that PPC, which has run the state-owned mines in Florina, northern Greece, since the late 1950s, pays no levy on the lignite, giving it an unfair advantage over competitors. The situation undermines the liberalisation of the sectro, which began on paper three years ago, but in reality has changed nothing, say critics.
“The EU allegations are incorrect,” PPC’s general manager of mining business units, Costas Kavouridis, told the Athens News. “We pay a 0.4 percent levy to the local authority in Florina, where our mines are located. This money is used for local environmental projects and to boost the productivity of the sector.”
More than 60 percent of electricity output in Greece is fuelled by lignite, with PPC producing 98 percent of the raw material, the commision points out. Kavouridis said that the figures are a distortion of reality. Two private mines operate in Greece, he added, producing 1.5 million tonnes of lignite a year, compared to PPC’s 70 million tonnes, the former comprising 5 percent. A further 32 percent of lignite mining capacity is also available for those who wish to mine it, a PPC press release said.
However, Kavouridis also revealed that the private companies do not use lignite for themselves. Since they do not have power plants of their own, they mainly sell it back to PPC. A similar levy applies although if the firms were to use the lignite for their own use, there would be no duty payable, Kavouridis said.
Greece’s output of lignite had increased in the last five years despite the fact that the country had signed the Kyoto Environmental Pact, which defines lignite as a major pollutant, being one of the main sources of carbon dioxide emissions, the EU said.
Kavouridis found it ironic that Germany, the EU’s leading lignite producer at 180 million tonnes a year, only pays levies on new deposits of the fuel. Greece is the number two in the lignite stakes. The vast majority of Germany’s mining of the substance attracts no tax or levy. The UK even receives mining subsidies from the EU, Kavouridis added.
The ministry of development also used similar arguments in replying to the EU in December on the ussie, stating that the UK’s coal mines are the largest of their kind, and known deposits (as opposed to nes sources) do not attract any duty. Th eletter added that in Germany “incentives are given for investments aiming at the development of their own sources for reason of security of supply (and) the increase of employment”.
“PPC has invested an enormous amount in the lignite mines it leases on a licence agreement from the state,” Kavouridis said. “The includes money invested on land and to relocate villagers. These years of investment are one of the reasons why PPC can offer cheap electricity,” he added. A press release from PPC said that the company is charged more than any other firm with open cast lignite mines for electricity generation in the EU.
Meanwhile, Development Minister Dimitris Sioufas has green-lighted a decision giving PPC installation and operational rights on additional temporary power production units on 13 islands unconnected with the national grid, totalling a capacity of 68 megawatts. The deal is part of an Olympic Games plan to prevent power shortges and was made possible after the Regulatory Energy Authority (RAE) withdrew previous objections that there should be tenders for the provision, overseen by the regulator. Asked to respond on the lignite issue, RAE told this newspaper it was not yet in a position to do so.
(From Athens News)