It is claimed that the large variation in the values of the average annual variable production cost per NII would render the settlement mechanism for the market complicated.
(23) Consequently, YPEKA takes the view that developing the necessary infrastructure for the operation and supervision of the electricity market in conjunction with market opening on the isolated systems on the NIIs entails costs that outweigh the benefits that may accrue to consumers from market opening.
(24) The application does not contain a date by which the requested derogation would expire.
3.
THE RAE OPINION
3.1. SCOPE OF THE DEROGATION
3.1.1.
Derogation from Chapter III of Directive 2009/72/EC
(25) RAE takes the view that the derogation from Chapter III, in accordance with Article 44(1), should not concern the installation of new power capacity that can be developed in an isolated system, but
only
the refurbishing, upgrading or expanding of the existing production capacity. Existing generation capacity consists of the power plants that already operate or are under construction on the NIIs. Any new power plant that will be installed on those islands is considered new generation capacity.
(26) RAE notes that independent power producers (‘IPPs’) (i.e. other than PPC) have demonstrated a strong interest for developing RES and cogeneration power plants in all micro isolated systems during the last two decades. Consequently, third-party access to the power systems of all NIIs concerning RES and combined heat and power (‘CHP’) development should not be restricted.
(27) RAE states that it does not oppose granting a derogation for the activation of new conventional power plants, provided certain conditions are met. However, Article 44(1) of Directive 2009/72/EC does not provide for the possibility of derogation for new capacity.
(28) RAE deems that capacity expansion of existing conventional plants concerns mainly a short-term lack of capacity in the NIIs arising from unexpected damages on existing capacity or delayed installation of new capacity, especially during high-demand periods (e.g. summer peaks). These expansions are subject to an open tendering procedure according to Article 8 of Directive 2009/72/EC. Such a procedure is time-consuming and not suited to the urgent nature of emergency situations.
(29) RAE accepts that PPC, should cover any such emergency situations. Taking into account that PPC is able to move mobile conventional units from islands in which there is a capacity surplus to those with a capacity deficit, this solution might also be the most economical one.
(30) RAE stresses that any derogation must allow specifying the appropriate licensing procedure for emergency case situations, and, specifically, which of the criteria mentioned in Article 7 of Directive 2009/72/EC must be examined by the competent licensing authorities.
(31) RAE deems that derogation should be granted with a limited duration such as a maximum of 10 years.
3.1.2.
Derogation from Chapter VIII of the Directive
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