On 31 March 2016, the European Commission approved an aid scheme for electricity producers which are capable to supply flexibility services ("increase or decrease the amount of electricity injected into the electricity system") for the Greek electricity Transmission System Operator. 



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Inception date: 31 Mar 2016 | Removal date: 31 Mar 2017

Production subsidy

On 31 March 2016, the European Commission approved a EUR 225 (approx. USD 281.25) million production subsidy aid scheme from Greece. The aid in form of a pre-determined tariff payment will support operators of individual plants in Greece, which are capable of ramping up electricity generations when needed. The scheme is in force for 12 months, i.e. 31 March 2017.

More specifically, individual plants capable of increasing electricity generation (ramping) at a minimum rate (greater than 8 MW/min with three hours' notice) and connected to the High Voltage Network are eligible for remuneration under this aid scheme. The measure aims to secure flexibility services since many plants are at risk of "economic retirement or mothballing". The measure, therefore, provides incentives in the form of direct grants. The eligible beneficiaries will be determined with uniform price auctions, where the lowest bids will be selected.  However, the maximum amount per beneficiary shall not exceed EUR 15 million (approx. USD 17.6 million). 

Flexibility services in Greece's interconnected electricity system are required due to the "sunset effect" ("a rapid increase in net demand in evening hours due to falling solar generation and increasing demand". Therefore, other sources of electricity generation such as gas plants are needed which "increase and decrease generation sufficiently quickly and at minimal notice". 

In this context, the European Commission noted that the aid "risks distorting competition and affecting trade within the internal market. Electricity generation as well as electricity wholesale and retail markets are activities open to competition throughout the EU". Therefore, the measure "has the potential to affect intra-Union trade and to distort competition".

Regardless, the Commission has decided not to raise objections to the aid on the grounds that the measure "contributes to an objective of common interest and is necessary" and hence is compatible with the Guidelines on State aid for environmental protection and energy 2014-2020 ('EEAG'). 

The state aid is notified under the following objective: Environment and Energy.

A state act in the GTA database is assessed solely in terms of the extent to which its implementation affects foreign commercial interests. On this metric, the financial support granted here is discriminatory.