ECONOMY

State urged to fund private power plants

The Regulatory Authority for Energy (RAE), the independent body set up to monitor the newly opened-up energy market, recommends satisfying Greece’s electricity needs for the years to 2005 through private energy producing units, whose construction will be guaranteed by the State, because time is of the essence. The state-owned Public Power Corporation (PPC) lost its monopoly on power generation, but not that of distribution, after February 2001. Since then, hundreds of applications for power generation plants, many of them using alternative sources of energy, were submitted, and several were accepted. However, private electricity production is still some way off and will initially reach only industries, not households. In its report «Forecasts Concerning the Adequacy and Function of Electrical Energy Demand in Greece in 2005,» RAE reintroduces a proposal it had already made: for the State to undertake all risk on behalf of private investors in order to help them finish their power plants earlier than scheduled. The reason, says RAE, is that Greece needs at least three plants, generating a total of 1,500 megawatts, in order to avoid energy shortages. «Completion (of the plants) ahead of 2005 is most urgent,» the report says. When RAE first made the proposal, it had encountered scepticism both from the private sector, which feared state meddling in their business, and from the State, which is trying to contain expenditures. RAE has specified its proposal this time, based on the result of a study by the National Technical University of Athens (NTUA). RAE’s president, Professor Pantelis Kapros, is also a professor at NTUA. The proposal calls for the construction of three power plants, with a capacity of 500 MW each. Seventy percent of their cost would be guaranteed by the State, through an authority which oversees and manages electricity transport. The plants would be powered by natural gas. The state guarantee would help private operators achieve higher returns on their investment in a shorter period of time. RAE claims that these power plants would, in any case, be financially viable. The new plants would partly displace some oil-fueled PPC power plants which are less efficient and would, therefore, save money for PPC. This would also increase its profits, since it would acquire electricity at lower prices and distribute it to consumers.