ECONOMY

Power demand peaks test limits of Greece’s distribution grid

Heat waves in Greece regularly test the capacity of the country’s electricity grid, highlighting its problems and questioning its adequacy. The main characteristic of the nation’s system is the concentration of most of the power production in the north, while most of the consumption is in the south of the country. This imbalance in the system puts the grid at risk of power failures at anytime, while increasing the chances of a general blackout, as happened on July 12, 2004. The question of strengthening the system in the south has been the focus of discussions several times in the past decade. For the first time, the issue of the system’s deficiency was put on the table in 2001, due to the upcoming Olympic Games three years later. The Development Ministry then ordered the competent authorities – the Power Distribution Regulator (DESMHE), the Public Power Corporation (PPC) and the Regulatory Authority for Energy (RAE) – to draft a plan to secure the adequacy system by 2004. The committee created concluded that given the imbalance of the system, it was «imperative to secure the installation of new production capacity totaling 600 megawatts by 2003-2004, preferably in the south and close to the capital.» However, it took two years before PPC was given permission to build its new unit in Lavrion. The government of the time showed indifference even though there was no indication of interest from private investments that might have brought about the liberalization of the market. The insufficiency in power was highlighted by another committee that was set up right after the July 2004 blackout by Development Minister Dimitris Sioufas. The conclusion of that committee was that the country’s system operates marginally and its sufficiency relies on imports. Demand for electricity increases by 4.5 percent every year, aggravating the situation. A great part of PPC’s production potential (old units) often proves unreliable, with function failures or low performance. Worse, the delays in the institutional framework for the liberalization of the market have discouraged private investment. Furthermore, several problems have led the only non-PPC electricity producing unit, that of Hellenic Petroleum in Thessaloniki, to operate in low-output conditions, accumulating losses. The new head of DESMHE, PPC and the ministry concluded a year ago that the problem’s solution does not lie in installing new production units but in «demand management.» Official data showed that the system’s peak exceeds 9,000 MW for no more than 50 hours a year, so the construction of new power plants to cover this peak would have been the least economically sound solution. Some of the demand management measures have paid off, but others, such as time charging, have not yet been applied. The country’s power system may have been strengthened since 2004 but remains a liability, with power imports being uncertain as there are just a few interconnections. The nightmare of a blackout will return every summer at peak times until some long-term plans are made.