ATHENS (Reuters) – Greece’s Public Power Corp (PPC) said on Wednesday that a 1.4 billion euro ($1.6 billion) coal-fired plant project is at risk without a capacity remuneration mechanism, following a jump in carbon emissions costs.
Capacity mechanisms are measures introduced by some EU member states to compensate power producers for making available electricity. They ensure demand for electricity is always met and secure a steady flow of money to producers for energy security.
PPC said that company president Manolis Panagiotakis had written a letter to the European Union’s top competition official, Margrethe Vestager, saying the mechanism was “absolutely necessary” to ensure the viability of PPC’s Ptolemaida unit, under construction in northern Greece.
“The opposite, would have a catastrophic impact on PPC and eventually on the Greek energy market and on the economy,” PPC said.
Greece has been in talks with the European Commission for a capacity mechanism for PPC, which is 51% owned by the Greek state. The mechanisms must conform with EU guidelines on state aid.
PPC makes most of its electricity from lignite and is the second-biggest producer of lignite in the European Union.
The company said in its statement, citing Panagiotakis’ letter, that its planned retirement of 1,900 MegaWatt lignite units and the startup of its Ptolemaida plant will enable it to cut its carbon emissions by 57% by 2022 from 2017 levels.
Reporting by Angeliki Koutantou and Renee Maltezou; Editing by Susan Fenton