The structural problems in the balancing market are responsible for high electricity costs despite the significant penetration of renewable energy sources (RES), the Consumer Institute (INKA) says in a statement accompanying a recent study by the Energy Policy Network on the operation of the Greek electricity market.
According to INKA’s statement, the study, titled “Analysis of the Greek Balancing Market with 15-Minute DAM Settlement for September 2026,” and published in the international repository SSRN, examines why consumers are not benefiting from low-cost electricity generated by RES.
At midday, when higher RES output drives prices in the day-ahead market (DAM) down, even to negative levels, the system operator keeps thermal units running or brings them back online for reasons of security and stability of the electricity system, the study says.
As a result, according to the statement, the cheap energy available in the day-ahead market incurs additional costs in the balancing market, which are passed on to consumers through the LP3 Uplift Account.
INKA points out that RES producers incur losses because of curtailments and the lack of compensation for energy not fed into the system, while businesses and households face higher charges through the LP3 account.
Meanwhile, natural gas-fired units retain their place in the energy mix because of their flexibility.
According to the study’s conclusion, as highlighted by INKA, the problem is linked to the design of the wholesale market and the operation of the day-ahead market in relation to the technical constraints of the balancing market.
INKA notes that the study is available in the international repository SSRN.
SOURCE: AMNA