Greece extends Meliti lignite plant operation for energy security in winter

Greece has extended the operation of the Meliti lignite plant by three months to maintain the stability of its energy system.

The 330 MW Meliti lignite plant, comprised of one unit in Florina in the north, was supposed to be taken offline at the end of December, according to the country’s decarbonization plan. However, low water availability in hydroelectric dams this year combined with increased winter demand has led the Independent Power Transmission Operator (IPTO or ADMIE) to extend its operation until the end of March 2025.

Lignite uncompetitive, but still necessary

Data that Deputy Minister of Environment and Energy Alexandra Sdoukou revealed in parliament show conventional power plants produced 19,050 GWh this year, but Meliti only contributed 106 GWh. Namely, older lignite units are uncompetitive, since their production costs are estimated at EUR 130 per MWh to EUR 150 per MWh, given the extra burden of high CO2 charges. Most of them only produce when daily prices exceed this point, with the exception of the new Ptolemaida 5 unit, which has slightly lower costs.

Government-controlled Public Power Corp. (PPC) operates all coal plants.

According to the decarbonization schedule, Meliti would have been taken offline at the end of 2024, followed by the three units of Agios Dimitrios in Kozani in 2025 and, finally Ptolemaida 5, by 2028 at the latest.

Regardless, lignite made a comeback in recent months. Its share in the daily mix increased in August to 5.5%, and again this month. There were even particular days with low renewable electricity production, when lignite surpassed 15%.

New gas plants to step in

It shows coal’s continued importance as a backup for Greece. Notably, the country is expected to add two new natural gas plants soon, with Metlen Energy and Metals’ 826 MW unit set to become commercially operational at the end of this year. The company recently changed its name from Mytilineos.

Another one is GEK Terna and Motor Oil’s unit in Komotini, with a capacity of 877 MW, currently under testing. The Thermoilektriki Komotinis project is worth EUR 375 million.

The two facilities are expected to take over from lignite, covering any gaps and maintaining the security of supply.