L 42/98
EN
Official Journal of the European Union
23.2.2022
(c) the interconnector resulting from the completion of Phase I will be used to its maximum available capacity, and is expected to be congested most of the time, until the completion of Phase II.
The full application of Regulation (EU) 2019/943 and Directive (EU) 2019/944 would lead to the integration of Crete in the electricity markets, through a single or two bidding zones, leading to the following two scenarios: — one bidding zone: the integration of Crete in the electricity wholesale market through the Greek mainland bidding zone would entail high redispatching costs, estimated by IPTO S.A. to be around 240 million euro per year on an estimation based on 2019 data and to be supported by Greek consumers, — two bidding zones: the integration of Crete into the electricity wholesale market as a separate bidding zone would not be a sustainable solution.
The completion of Phase II following a short transition period is expected to relief any structural congestion between the electricity network of Crete and the Greek continental electricity network.
(43)
In the light of what has been said in recitals (41) and (42), Greece notes that a solution applicable to the transitional period needs to be found.
Since Phase 1 started in trial period from 3 July 2021 and in commercial period from 1 November 2021, that solution needs to be implemented smoothly and in a short time period, without important changes to the current legal and regulatory framework, given the need for the market participants to adapt and the temporary nature of the solution.
In that respect, the ‘two bidding zones’ approach seems incompatible with the time constraints, especially when considering the process which needs to be followed to establish a new bidding zone, in accordance with Article 14 of the Regulation (EU) 2019/943 and Article 32 of the Regulation (EU) 2015/1222.
(44)
Based on an assessment performed by IPTO S.A. and evaluating the costs for the operation of the market in Crete under the three scenarios, namely the hybrid model suggested by the Application, the one bidding zone approach and the two bidding zones approach, the resulting annual benefits of the hybrid model are estimated to amount to EUR 156 million.
As regards the other two scenarios, namely the one bidding zone approach and the two bidding zones approach, the annual benefit is estimated to amount to EUR 121 million, and EUR 113 million respectively.
Therefore, Greece considers the proposed hybrid model would be the optimal approach during the transitional period.
(45)
The Greek authorities have pointed out that the actual participation of Crete’s market participants into the Greek electricity market is hampered by the lack of appropriate metering infrastructure on the island (see recital 42 above).
(46)
Moreover, while the use of the new interconnector (Phase I) would bring about considerable advantages, by reducing the cost of electricity supplied in the island and CO2 emissions, the interconnector is expected to be congested most of the time, until the completion of Phase II (see recital 7 and 42 above).
(47)
For those reasons, the integration of Crete’s market participants into the Greek electricity market would cause high redispatching costs if carried out through the extension of the Greek bidding zone to Crete (see recital 7 and 42 above).
On the other hand, the creation of a separate bidding zone for Crete is not proportionate for a short period of time and given that the completion of phase II should relieve any structural congestion between the electricity network of Crete and the Greek continental electricity network (see recital 8 and 43 above).
(48)
In light of what has been said in recitals (42) to (47) as well as in recitals (7) and (8), the Commission concludes that Greece has demonstrated that there are substantial problems for the operation of the electricity system in Crete as a small connected system, until the full interconnection to the continental grid is completed.
The temporary hybrid model proposed by the Greek authorities aims at addressing those problems and yields significant benefits compared to the full integration of the Crete’s system into the Greek electricity market during the transitional period.