By Georgios Syntzanakis (1)
Electric energy is the sole product that must be produced the very moment the consumer needs it, giving it a different price at each hour or season used. Hourly prices reflect real cost and signify the need to resort to energy- and resource-saving systems. Pricing policy and rates must reflect costs and should not allow contortions that add an extra burden. An example to avoid is the development of the Greek electricity system in the last decade. Twelve years ago the peak of demand used to be around the Christmas season. Gradually, owing to the massive sales of air-conditioning systems, the peak has shifted to July.
We had warned about this trend, recommending specific measures, but unfortunately no decision was made to prevent the current situation. As a result, the Development Ministry is today forced to apply uneconomic measures to avoid power cuts and secure energy sufficiency this summer. Last July’s blackout, when the peak of system use came to 9,350 megawatts, the top 1,000MW of which were needed for only up to 50 hours per year, illustrates the system’s unorthodox growth, creating a power sufficiency problem and therefore uneconomic investments, not just in the production system but also in the systems for transfer and distribution.
The measures recently announced by the ministry are in the right direction, but must immediately lead to specific and possible action. Greece’s electrical energy problem today and until 2008 relates to covering peak demand, so specific measures are needed to deal with it. The continued leasing of wind-powered generators to cover peak demand of minimal duration leads to inexpedient rates. While the Public Power Corporation (PPC) sells electricity for an average of 0.074 euros per kilowatt/hour, its cost at peak time rises to 9 euros per KW/h. The problem then requires immediate handling to cut peak demand and avoid installing uneconomic units that will raise the price of electricity. The measures we believe must be taken are the following:
1. Mobilizing an intervention mechanism to limit peak demand, improve the power coefficient and reduce the costs of production, transfer and distribution.
2. Programming the installation of units of decentralized production close to consumers through supportive service contracts with the power transmission system operator (DESMHE).
3. Providing new, multi-zone price products, starting with modernizing high-voltage rates and expanding them to mid-consumption consumers. The Regulatory Authority for Energy’s president has referred to time-charging, which leads to saving energy and resources, a fair and financially viable use of the system that does not burden small consumers.
4. Mobilizing existing reserve power, installed to half of high-voltage and medium-voltage consumers, to limit their peak, would also secure some power when the network is down.
5. Immediate tackling of the reactive load problem in southern Greece through installing condensers and production units of reactive load in order to stabilize the system.
There are today some applicable solutions available besides enforcing the southern system with new production units, yet immediate decisions are needed along with the adoption of a strict and specific timetable to quickly repair the omissions and problems of the past.
(1) Georgios Syntzanakis is former general director of PPC’s production and distribution department and a board member of the Southeastern Europe Energy Institute.