Greek grid ‘cannot support’ new gas-fired power plant

Source: Heren

2015/01/16

The Greek electricity grid might not be able to support the full capacity of a brand new gas-fired power plant because it could overload the system, sources have told ICIS.

Last September a spokesman for system operator DESFA said the new 811MW capacity gas-fired Megalopolis power plant should start testing on 12 January (see EDEM 15 Septmeber 2014).

The plant is owned by state-owned Greek incumbent the Public Power Corporation (PPC), which currently holds a monopoly over the Greek electricity market. A PPC spokesman said on Friday that the new gas-fired Megalopolis is in testing after the gas arrived at site on 5 January.

Three individual sources told ICIS that the system in the region where the new gas-fired plant is based cannot support the entire installed capacity of the plant.

The power plant is positioned in the Peloponnese region, where two lignite-fired units are operating as well as some wind farms. “It is quite spectacular that we now have two 400MW [gas] turbines which cannot operate at full power because the system where they are located cannot support it,” said one source with knowledge of the matter. He added that if there is wind only one of the units will be running to avoid a system overload.

A PPC spokesman did not deny or admit the claim, but said: “Whether the existing system will support the full load 800MW... depends on the operation of renewables in the region of Peloponnese in real time.”

Sources said it was possible PPC was planning to decommission some of its lignite units in the region, when it decided to build the power plant.

Megalopolis also has four other lignite-fired units. Two of these with a total capacity of 250MW were decommissioned in 2011 due to environmental restrictions. “There is no intention to decommission other lignite units in the area of Peloponnese,” PPC’s spokesman said.

Testing

Meanwhile most traders were unaware the power plant had started testing, since any electricity that would be fed into the grid did not appear on the transmission system operator (TSO) ADMIE’s daily schedule. The power from testing has not had a bearish impact on pool prices.

PPC’s spokesman said that because the unit is in the commissioning phase, it is not included in ADMIE’s daily schedule. “The necessary tests will be performed grid-off and grid-on,” he said. The testing being done off-grid, would explain the lack of a clear impact rippling into the day-ahead exchange price.

However, this adds uncertainty to the market as participants would not be warned in advance when testing would send additional electricity in the grid.

Market impact

With as much as 400MW able to enter the grid, pool prices would plummet. According to TSO data for Friday’s delivery, Greek consumption averaged at 6.4GWh.

“Plants in commissioning are like renewables. They produce irrespective of market conditions and receive any price that comes out,” said a Greek trader.

The power plant is expected to enter commercial operation at the end of June 2015. At that point, PPC said the unit will be included in ADMIE’s daily schedule. Once fully online the bearish impact will diminish.

“It will have a less bearish effect when it enters commercial operation, because it will be making priced offers above its variable cost,” said one trader. This is because the unit will only inject power if prices are high enough to provide a financial incentive. Gas-fired power plants are one of the most expensive types of power generation. Sophie Udubasceanu