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European Commission - Press release

Antitrust: Commission approves Greek measures to ensure fair access to lignite-fired electricity generation for PPC's competitors

Brussels, 17 April 2018

The European Commission has made legally binding under EU antitrust rules the measures submitted by Greece to ensure fair access to lignite-fired power generation for the competitors of Public Power Corporation (PPC), the incumbent electricity operator.

The measures are also in line with the EU's climate and energy objectives.

 

In its decision of March 2008, the Commission found that Greece had infringed competition rules by giving the state-owned electricity incumbent, PPC, privileged access rights to lignite, and called on Greece to propose measures to correct the anti-competitive effects of that infringement. Due to appeals at both the General Court and European Court of Justice, such corrective measures have not been implemented so far.

Today, the Commission has concluded that the amended final version of the remedies submitted by Greece on 19 January 2018 fully addresses the infringement identified by the Commission in its 2008 Decision, while also taking into account Greece's environmental objectives and current market circumstances.

The remedies aim at removing the privileges created by the special access rights granted to PPC. In particular, they provide that PPC will divest the lignite-fired units of Meliti (including the licensed unit of Meliti 2) and Megalopoli 3 and 4. The divestiture will include also the necessary employees and lignite mines.

The market test carried out by the Commission indicated that the proposed remedies are a satisfactory way of addressing the Commission's concerns. The assets to be divested will allow the purchasers to compete immediately and more effectively in the Greek wholesale electricity market.

In order to increase competition in the Greek market, PPC's competitors need to have access to base-load capacity, which in Greece is still significantly dependent on lignite, in particular during off-peak periods. More access to lignite-fired electricity generation capacity will help to increase the competitive pressure in the Greek wholesale market and to address the enduring distortions in favour of PPC.

At the same time, by divesting existing lignite-generation capacity and avoiding the further opening and exploitation of new lignite mines, the remedies also take into account Greece's environmental policy and the EU's 2020 objectives to reduce CO2 emissions.

Based on the proposed measures, PPC will launch a tender procedure for the divestment of the above mentioned plants by May 2018.

 

Background

In its Decision of 5 March 2008, the Commission found that Greece breached EU competition rules (Articles 106 and 102 of the Treaty on the Functioning of the European Union, "TFEU") because it granted and maintained privileged rights to PPC for the exploitation of lignite in Greece. This resulted in an inequality of opportunity between economic operators as regards access to primary fuels (i.e. lignite) for the production of electricity and enabled PPC to maintain or reinforce its dominant position on the Greek wholesale electricity market by excluding or hindering market entry by competitors.

The 2008 Decision provided that Greece had to identify concrete measures to correct the anticompetitive effects of the infringement. Subsequently, Greece submitted a number of measures it intended to adopt to ensure access by competitors of PPC to lignite and lignite-fired generation in the Greek electricity market. Those measures were made binding by a Commission Decision of 4 August 2009 but have never been implemented.

The 2008 and 2009 Commission Decisions were appealed by PPC. In September 2012, the General Court overturned these decisions, putting on hold the implementation of remedy measures by Greece. The Commission then appealed against the General Court's judgment. In July 2014, the Court of Justice set aside the General Court's judgments and referred the cases back to the General Court for a number of non-decided pleas. Finally, in December 2016, the General Court confirmed both decisions (see DEI v Commission T-169/08 RENV and DEI v Commission T-421/09 RENV), making the Commission's decisions final and binding.

The basis for today's decision is already set out in the 2008 Decision. It envisaged the possibility to revise the remedies imposed on Greece in case Greece changed its lignite exploitation policy with a view to taking into account EU environmental policies regarding CO2 emissions. With today's decision, the Commission has concluded that the revised measures submitted by Greece on 19 January 2018 are apt at solving the competitive concerns under current market circumstances and environmental targets.

The divestment of a portion of PPC's lignite-fired generation capacity has also been included in the Supplemental Memorandum of Understanding agreed and signed by Greece and the Commission acting on behalf of the European Stability Mechanism (ESM) as part of a more general effort to introduce structural reforms and increase competition in a variety of strategic sectors in Greece, including electricity.

More information, including the full version of the commitments is available on the Commission's competition website, in the public case register under the case number 38700.

 

 

IP/18/3401

Press contacts:

General public inquiries: Europe Direct by phone 00 800 67 89 10 11 or by email


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