Speaking at a press conference in Athens, the chairman of the
“Hellenic Association of Independent Power Producers” (www.haipp.gr), Mr.
Anastassios Kallitsantsis, noted that investments for power generation from
natural gas in Greece are totally in line with the 2020 Climate Change strategy
of the EU, the IEA 2050 Road Map and the overall trends in the global energy
market.
Mr. Kallitsantsis stressed that HAIPP is firmly committed to
retaining the Cost Recovery Mechanism as part of the overall cost support
structure of large infrastructure investments in the power generation sector. “This
is essential for power generation units that use natural gas, as their continuing
operation is already at risk. Currently, their production is sold to the grid
at 7% below cost, allowing them to cover only part of their operational costs
and hence repay their loans”, said Mr. Kallitsantsis. He further noted that the
Association insists that, in case of change of the present cost structure, that
the total revenue for the producers must somehow remain stable.
Kallitsantsis also referred to the important contribution of
HAIPP’s members, stressing the fact that they have already invested in 7 state
of the art power generation units across the country, with total installed
capacity 2600 MW, covering 20% of Greek market needs. He stressed that these
investments have helped Greece avoid the threat of a blackout, serving, at the
same time, as a “shield” for the electricity system, at a time when RES have
gained a significant foothold in the country’s energy balance.
Professor Emmanuel Kakaras, General Director of HAIPP, observed
that PPC uses its cheap lignite production and its hydropower as “weapons”
against independent power producers. In fact, PPC, along with its 100%
subsidiaries, the Independent Power Transmission Operator (IPTO) and the Hellenic
Electricity Distribution Network Operator S.A. (HEDNO), has total control of
the Greek electricity market.
According to Prof. Kakaras, today the marginal system price
does not reflect the actual situation in the market and the units, the cost of
which exceeds the marginal system price, have to face excessive operational costs. He also noted that if the
cost of the most expensive unit in operation is taken into consideration, as it
is required by the market operation code, cost recovery would be at around 95
million euros (compared to 270 million euros today). Prof. Kakaras considers
the views held by certain quarters in favour of the abolition of the Cost
Recovery Mechanism to be part of PPC’s strategy to eliminate competition in
power generation.
As Professor Kakaras stressed, the cost for both the
consumers and the PPC could be reduced in the long run under four
prerequisites: optimization of PPC’s energy mix (with reduction of electricity
produced by inefficient units and the increase of production by lignite units),
electricity interconnection of most islands (and abolition of oil fuel operated
units), reduction of natural gas taxation and reduction of natural gas prices
at approximately the levels which currently apply in Spain.
The Deputy General Director of HAIPP, Mr. George Stamtsis also
criticized the ITO model, which is now being applied in Greece, as the least
independent of all models in Europe and added that it should be applied only during
a transition period. He also noted that healthy competition can be restored
only if IPTO is totally independent from PPC.
The liberalization of low voltage charges by June 2013, the abolition
of any cross-subsidies in PPC charges, as well as a constant comparison of PPC
costs with European best practice practices are, according to Mr. Stamtsis, the
three necessary steps for the opening of the retail electricity market in
Greece.