Coal-fired thermal power plant Ptolemaida 5 will be converted to gas in 2025, three years earlier than planned. The facility under construction is set to be the last of its kind in Greece as all others are scheduled for shutdown by 2023.
Soon after state-controlled Public Power Corp. (PPC) officially announced it intends to switch the only new coal plant to natural gas in 2025, Greece’s Secretary General for Energy and Mineral Resources at Ministry for the Environment and Energy Alexandra Sdoukou confirmed the country is “saying goodbye to the coal age” earlier than planned.
The company was supposed to run the facility under construction on lignite until 2028. President and Chief Executive Officer Georgios Stassis recently hinted at the possibility to push the deadline forward.
Time for EU funding running out
As the coal power plant in the Western Macedonia region is planned to be finished next year, it is even more doubtful that it could avoid heavy losses due to rising prices of carbon dioxide emission certificates and the cost of the switch to the other fossil fuel. Even if the CO2 costs remain the same by 2028, PPC would be burdened with more than EUR 1 billion, almost as much as the new unit would be worth.
Prime Minister Kyriakos Mitsotakis determined the 2028 coal phaseout date just a year and a half ago
If the European Union decides to stop funding fossil gas projects at the end of 2025, the expenses for the switch from coal to gas would rise further. Another issue is the retail price of district heating for the impoverished local community.
Furthermore, PPC, also known as DEI, issued five-year green bonds worth EUR 775 million tied to environmental performance. The government has a 51.1% stake in the utility. Prime Minister Kyriakos Mitsotakis vowed at the United Nations General Assembly in September 2019 to phase out coal by 2028.
PPC plans to add hydrogen but environmentalists are against fossil gas
Stassis said Ptolemaida 5 would be converted to a combined cycle gas-fueled system with the ability to add hydrogen to the basic fuel. He told the parliament the capacity would be almost doubled, to 1.15 GW from 660 MW. All other coal plants are planned for closure by 2023.
PPC has sunk EUR 1.4 billion into Ptolemaida 5, but after numerous failed attempts to obtain a derogation for the plant, it has decided to convert it into an unsustainable fossil gas unit, the Europe Beyond Coal campaign said. Greece’s intention to install six fossil gas plants of 3.3 GW in total is already in contradiction of its National Energy and Climate Plan, without accounting for the addition of Ptolemaida 5, it warned.
Former coal communities deserve far better than to be tied to more fossil fuels, like gas, says Mahi Sideridou from Europe Beyond Coal
“PPC has finally realized it has wasted billions on Ptolemaida 5, and caused untold damage to people’s health and the Greek economy. The fact that the EU’s fourth-largest lignite producer is abandoning coal tells you everything you need to know about the state of the industry. Now PPC needs to turn its full attention to the country’s enormous renewable energy potential. Former coal communities deserve far better than to be tied to more fossil fuels, like fossil gas,” Europe Beyond Coal’s Managing Director Mahi Sideridou said.
Fossil gas is in the same position as coal was 15 years ago, and will face a similar crisis of stranded assets in years to come, said Dimitris Tsekeris from WWF Greece.