Public Consultation – Cost of New Entry

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Following ACER’s decision, No 23/2020 on the methodology for calculating the value of lost load (VOLL), the cost of new entry (CONE) and the reliability standard (RS) and pursuant to the provisions of article 25 of EU Regulation 2019/943 and the Law 4001/2011 (articles, 3, 12, 22, 30), the Regulatory Authority for Greece, with a view to supporting the notification of the planned capacity mechanisms, has initiated procedures for estimating the CONE, VOLL and RS.

Pursuant to Article 25 of the Electricity Regulation (EU) 2019/943, a RS indicates the necessary level of security of supply in a transparent matter. The RS shall be calculated using at least the VOLL and the CONE. The RS is used for the assessment of resource adequacy.

In the ANNEX1 of the ACER Methodology, CONE (‘Cost Of New Entry’) refers to fixed and variable cost of new entry. Based on articles 9-16 of the aforementioned Methodology, RAE has developed a dynamic model in order to provide estimations for CONEfixed and CONEvar of candidate “reference” technologies.

The assumptions used regarding the capital costs and annual fixed costs, variable costs, de-rating factors, WACC, economic lifetime and construction period, which were necessary for the calculations for CONEfixed and CONEvar, were based on literature review, (sources are provided in the table) but also on aggregated data from RAE records.

The table  presents the estimations of CONEfixed and CONEvar as well as the assumptions used for the calculations.

RAE invites all relevant stakeholders, to provide insight and comments on the assumptions made, according to their knowledge and field of expertise, by the 4th of June 2021.

All contributions will be published.

In case a participant opts for confidentiality, a specific reference shall be made.