The European Commission said on July 30 that the EC has found the planned Greek mechanism to remunerate flexible electricity capacity to be in line with EU State aid rules.

Under this mechanism, flexible power capacity providers such as gas-fired power plants, flexible hydro plants and, in a second stage, demand response and storage operators can obtain a payment for being available to generate electricity or, in the case of demand response operators, for being ready to reduce their electricity consumption.

According to the Commission, this flexibility in power capacity will allow the Greek transmission system operator (TSO) to cope with the variability in electricity production and consumption, in particular during evening hours, when decreasing solar energy generation coincides with increasing demand for electricity.

To limit costs, the TSO will select the flexible capacity providers through competitive auctions, with a maximum tendered volume of 4,500 megawatts. The measure will apply until the end of 2019, the Commission said.

The EC said the Commission concluded that the scheme will allow a smooth transition towards a reformed electricity market, which Greece committed to implement as part of the European Stability Mechanism support programme, while limiting distortions of competition in line with EU State aid rules.