The repeated failure of Greek electricity utility Public Power Corporation (PPC) to sell 40% of its lignite assets, which was once again confirmed yesterday through the declaration of the sale tender as fruitless, proves beyond doubt that lignite is not only environmentally but also financially detrimental. 

© Marianna Plomariti / WWF Greece

PPCs’ sustainability is of interest to all in Greece. To achieve this, urgent measures are required to end the country’s dependence on lignite, including the abandonment of the loss-making new lignite plant “Ptolemaida V”, the continued ownership over the hydroelectric plants in order to convert them into pump-storage units for clean energy, as well as a through shift towards renewable energy production and energy demand and savings for both consumers and businesses.

The latest failed auction confirmed that Greece’s obsession with fossil fuels will lead to a dark future, as WWF Greece has been warning since 2011.

With support from across the political spectrum, PPC has for years insisted on an outdated electricity production model, with clear environmental and economic losses. It comes as no surprise that potential investors remain uninterested, even with the promise of lower lignite prices from the Achlada mine and state support to coal plants through the long-term capacity mechanism, announced in April 2019. PPC must urgently seek a more sustainable and innovative business model. Projects such as ‘Naeras’, the recently inaugurated pumped storage clean energy plant on the island of Ikaria, show the way for the future. After all, it was PPC that once pioneered in clean energy, through the construction of the first wind farm in Europe in 1982”, states Demetres Karavellas, CEO of WWF Greece.

The road to the latest in a series of failed attempts to sell highly polluting lignite assets has gone through various stages, culminating in the promise for state subsidies through the capacity remuneration mechanism. As the approval to the Greek capacity mechanism from the European Commission is pending, it is important to highlight the European Commission’s assurance that state support should not subsidise fossil-fueled power plants, which is clearly stated in a recent letter by Margrethe Vestager to the environmental organisations WWF and Greenpeace. In her letter of 12 July 2019, the outgoing Competition Commissioner states that “capacity mechanisms must not be backdoor subsidies for specific technologies, notably those using fossil fuels […]  The objective is that capacity mechanisms do not incentivise the construction of new polluting capacity, and Member States need to phase-out capacity payments to existing polluting capacity by 2025”. It is high time for PPC to use European climate and environmental legislation to get back on a financially and environmentally sustainable track, by ending its obsession with the obsolete and heavily polluting lignite.

For years now, WWF Greece has consistently proven that lignite is a dead-end and calls for an immediate plan to decommission lignite plants and a central strategic plan to achieve a fair transition to the post-lignite era. The new government and new leadership of PPC should look seriously at other large European electricity utilities which currently divest from fossil fuels and are taking a decisive turn to new opportunities for innovation and financial sustainability.

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