Commissie bekijkt Griekse gunning ligniet-productie aan monopolist PPC met argusogen (en)
The European Commission has warned Greece that the exclusive rights granted to state-owned power supplier PCC for the mining of lignite, which accounts for most of the electricity produced in the country, may be in breach of European competition rules and in particular of Article 86(1) of the EU Treaty. The Greek government has two months to justify or put an end to the exclusive rights, which protect the de facto monopoly of PPC thereby distorting competition three years after the electricity market was supposed to be liberalised.
The European Commission has reached the preliminary conclusion that the exclusive rights granted by the Greek state to the state-owned incumbent electricity supplier Public Power Corporation SA (PPC) for the extraction of lignite in Greece violate European Union rules.
In the Commission's view, there is a breach of Article 86 (1) of the EU treaty in conjunction with Article 82 because PPC is being able to protect its dominance of the Greek electricity market thanks to the exclusive rights in the lignite sector. This, in turn, leads to a potential abuse of PPC's dominant position, as other potential suppliers do not have the same access to lignite.
The investigation of the Commission, which was triggered by a complaint, has confirmed the existence of the exclusive rights granted through two State measures: Legislative Decree 4029/1959 and Law 134/1975. These exclusive rights are of very long duration and no royalty payment is directly attached to them.
The Commission has subsequently issued a Letter of Formal Notice giving Greece two months to either provide a satisfactory explanation for the rights or abolish them.
The Commission believes that the exclusive rights enjoyed by PPC in the lignite market affect competition in the market for the supply of electricity to big industrial customers (the so-called eligible customers). Remarkably three years after the formal opening of the Greek electricity market to competition, PPC is still the country's only supplier. In theory, 34% of the Greek electricity market is today open for competition, the lowest percentage in the EU, and eligible customers have the right to change their electricity supplier. In practice though, Greece is the EU Member State with the lowest rate of customers switching supplier.
Background
Over 60% of the electricity produced in Greece is generated through the combustion of lignite extracted locally. PPC accounts for 98% of all lignite production in Greece. PPC lignite extraction has increased in recent years despite the signature by Greece of the Kyoto Protocol, which identifies lignite has one of the main sources of carbon dioxide (CO2) emissions.
(1) Art 86 says that Member States « shall neither enact nor maintain in force any measure contrary to the rules of the Treaty » in particular the competition rules.