ΑΝΑLYSIS

SEPTEMBER
2018

BREF COMPLIANCE
FOR GREEK LIGNITE PLANTS

A Cost Benefit Analysis

September 2018

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A. The EEA method .............................................................................................................................

B. From current state to BREF compliance .....................................................................................
C. From IED to BREF compliance ..................................................................................................

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In April 2017, the EU has agreed to approve the new Best Reference Document for Large
Combustion Plants (LCP BREF) which contains the new emission limit values for the
pollutants emitted by these plants as well as the best available abatement technologies which
can be implemented in order to achieve compliance with the new BREF limits. The decision
was published in the official Journal of the European Union on August 17 2017 1. According
to Article 15 of the Industrial Emissions Directive (IED) (2010/75/EE), all plants must
comply with the new limits four years from that date, i.e. August 17 2021.

Clearly this also applies to Greek lignite plants (see Table 1). However, the environmental
permits of 5 existing lignite plants that have recently been issued do not comply with the new
BREF limits. Instead, the corresponding environmental permits state that after the
expiration of the Greek Transitional National Plan (June 2020) in which they are all
included, the emission limit values with which the plants will comply are the less strict limits
included in the IED. Moreover Greek officials have discussed the possibility of evoking a
derogation of the IED (derogation of article 15(4)) in order for plants to avoid compliance
with the new BREF limits should the costs for complying exceed the corresponding
environmental benefits.

It therefore becomes important to quantitatively compare the environmental benefits with

the abatement costs to achieve full compliance with the new BREF.

Table 1: Emission Limit Values (IED and new BREF) as they apply to Greek lignite plants
Pollutant Emission Limit Values (mg/Nm3)
Industrial Emissions New LCP BREF
Directive
Existing Plants New Plants Existing Plants New Plants
Sulfur dioxide 200 150 130 75
(SO2)
Nitric Oxides 200 200 175 85
(NOx)
Dust (PM) 20 10 8-12 5

1 https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32017D1442&from=EL

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According to the definition of a plant in the IED, there exist eleven lignite plants in Greece
currently. Nine of these are located in the region of Western Macedonia and two in the
regional unit of Arkadia in the region of Peloponnese. Their overall gross nominal and net
capacities are 4.375 MW and 3.912 MW, respectively. The three oldest plants in the Greek
lignite fleet are 43 years old, whereas the newest, has started its operation 15 years ago. Table
2 shows their capacities (gross, net and thermal), their commissioning date and their status
with respect to the Industrial Emissions Directive (2010/75/EE).

Table 2: Basic characteristics of Greek lignite plants

Plant Gross Net Thermal Commissioning IED
Capacity Capacity Capacity Date status
(MW) (MW) (MWth)
Kardia I 300 275 762 1975 LLD2
Kardia II 300 275 762 1975 LLD
Kardia III 325 280 812 1980 LLD
Kardia IV 325 280 812 1981 LLD
Ag. Dimitrios I- 600 548 1.524 1984 TNP3
II
Ag. Dimitrios 620 566 1.574 1985-86 TNP
III-IV
Ag. Dimitrios V 375 342 892 1997 TNP
Amyntaio I-II 600 546 1.525 1987 LLD
Meliti I 330 289 796 2003 TNP
Megalopoli A 300 255 839 1975 TNP
Megalopoli B 300 256 822 1991 TNP
Total 4.375 3.912 11.120

These plants constitute a major source of environmental pollution and some of them are
amongst the most polluting plants in Europe burning coal or lignite. Using the official data of
the Ministry of Environment and Energy, which we have been collecting through access to
information requests, the average concentrations of the three major pollutants for the five-
year period 2012-2016 were calculated.

Figure 1 presents the average in time concentration of sulfur dioxide (SO2) emitted by each
plant as well as the corresponding upper emission limit value of the new BREF.
2
LLD: The plant has a Limited Lifetime Derogation according to article 33(1) of the Industrial Emissions Directive. The plant
may operate up to 17.500 hours in the period 2016-2023
3
TNP: The plant participates in Greece’s Transitional National Plan. All plants participating in the TNP may emit limited masses
of pollutants in total and should fully comply with IED’s Emission Limit Values by 30/6/2020 at the lastest.

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Figure 1: Average SO2 concentration for each plant over the period 2012-2016 and
Emission Limit Value in the new BREF for plants of this type (130 mg/Nm3)

It is clear that with the exception of Meliti I, which is barely below the new ELV (129,2
mg/Nm3), all other Greek lignite plants do not comply with the new BREF limits for SO2.
Amyntaio in particular with 1087 mg/Nm3emits on average 8,4 times than what the new
European environmental legislation allows. The second worse is Ag. Dimitrios V with 668
mg/Nm3, more than 5 times above the new ELV, whereas the two other Ag. Dimitrios plants
emit on average 313 mg/Nm3 and 445 mg/Nm3, 2,4 and 3,4 times above the ELV,
respectively. Despite the fact that both Megalopoli A and B have installed wet flue gas
desulfurization units to reduce their SO2 emissions, they still emit significantly above the
new ELV (187 mg/Nm3 for Megalopoli A and 307 mg/Nm3 for Megalopoli B).

Figure 2 shows the average in time concentration of nitric oxides (NOx) emitted by each
plant as well as the corresponding upper emission limit value of the new BREF.

Figure 2: Average NOx concentration for each plant over the period 2012-2016 and
Emission Limit Value in the new BREF for plants of this type (175 mg/Nm3)

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Only Meliti I and Megalopoli A comply with the new BREF, whereas the two older Ag.
Dimitrios plants (I-II and III-IV) emit on average two times above the new limit with 353
mg/Nm3 and 354 mg/Nm3, respectively. All four Kardia plants and Amyntaio also emit
significantly above the new limit value, with average concentrations ranging from 233
mg/Nm3 (Amyntaio) to 316 mg/Nm3 (Kardia III).

Finally, figure 3 shows the average during the period 2012-2016 concentration of dust
emitted by each plant as well as the corresponding upper emission limit values (ELV) of the
new BREF. Note that for the two Ag. Dimitrios plants (I-II and III-IV) the emission limit
value of 8 mg/Nm3 applies since both plants are above the 1000MWth threshold, whereas for
the rest of the plants the corresponding limit is 12 mg/Nm3.

Figure 3: Average dust concentration for each plant over the period 2012-2016 and
Emission Limit Values in the new BREF for plants of this type (12 mg/Nm3, and 8 mg/Nm3
for Ag. Dimitrios I-II and III-IV)

Four out of eleven lignite plants comply with the new BREF (Meliti I, Megalopoli A,
Megalopoli B, Ag. Dimitrios III+IV), whereas the other seven do not. Notice that the two
older Kardia plants emit 17 (Kardia I) and 19 (Kardia II) times above the new limit value.
However, this has not prevented the Greek government to request extended hours of
operation for all four Kardia plants during the period 2016-2023, without any intention to
install new electrostatic filters in order to reduce this gross violation of environmental
legislation. The European Commission has rejected the request

From these three figures it becomes apparent that only Meliti I is compliant with new BREF
with respect to the emissions of the three major pollutants, whereas the rest of the Greek
lignite plants are above the emission limit values with respect to all or some of the pollutants,
and by huge factors in some cases. Amyntaio is the biggest outlier in terms of SO2 emissions,
Ag. Dimitrios I-II and III-IV with respect to NOx emissions, and Kardia I and II in terms of
dust emissions.

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Despite Meliti I’s compliance with the new BREF, the plant was included in Greece’s TNP,
which aims at rendering all plants included, compliant with the less strict limits of the IED
by June of 2020. This choice was therefore clearly wrong, and can be interpreted as an effort
to offer more room for pollution for the other plants included in Greece’s TNP, namely Ag.
Dimitrios I-II, III-IV and V, and Megalopoli A and B. The same error was also made with the
inclusion of Megalopoli A, Megalopoli B and Ag. Dimitrios III-IV regarding dust emissions,
and Megalopoli A regarding NOx emissions.

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A. The EEA method
In this section we will estimate the environmental cost from the lack of compliance with the
new stricter emission limit values contained in the new BREF, or else, the benefits for the
environment and public health from the application of appropriate abatement technologies
which will lead to full compliance with the new BREF regarding the emissions of the three
main pollutants. Meliti I will be excluded from the analysis since it is already compliant with
the new BREF, as shown in the previous section.

The analysis will be performed using the method applied by the European Environment
Agency (EEA) to quantify the damage associated with individual power stations and other
industrial facilities4. The method is based on estimates of marginal damage costs as €/tonne
of emissions above a certain threshold. These marginal damage costs have been derived
using a full impact pathway approach (IPA) and are provided by the EEA as national
averages (see Table 3 for marginal costs for Greece). The full IPA approach takes a very
detailed sequential pathway from emission, to exposure, to impact quantification and
monetization. Emissions are tracked over extended distances (the whole of the EU and
bordering countries) and account is taken of the formation of secondary pollutants,
especially nitrate and sulphate aerosols, and ozone. Since the marginal costs in the EEA
method are derived from a full IPA approach, the former constitutes a reliable simplification
of the latter, which also takes into account transboundary effects of environmental pollution.
According to Holland (2017)5, the assessment of the damage costs using this method is
considered conservative since it is not possible to include all pollution impacts, and the
values adopted for mortality, in particular, are low compared to those recommended
elsewhere (e.g. by OECD and USEPA). These biases need to be considered in evaluating any
application for a derogation.

Table 3: Marginal costs for Greece in €/tonne

SO2 NOx PM10 PM2.5
Low High Low High low High low high
VOLY VSL VOLY VSL VOLY VSL VOLY VSL
Marginal
cost 4000 11671 1390 3142 12123 36937 18669 56883

The EEA method consists of computing the difference in tonnes emitted annually by each
plant, from an initial to a final state and for all three pollutants. For example, if one wants to
estimate the damage for the environment and public health caused by the fact that most
Greek lignite plants currently emit significantly above the emission limit values of the new
BREF, then the current emission levels of Greek lignite plants should be used as the “initial”
state, whereas the emission levels corresponding to the new BREF emission limit values
should be taken as the “final” state. Then, by multiplying these differences with the Greece-
specific estimates of the marginal damage costs per tonne from the EEA study, and making
all the necessary adjustments (inflation, sectoral corrections, discount rates, GDP uplift etc),
4
https://www.eea.europa.eu/publications/costs-of-air-pollution-2008-2012
5
http://env-health.org/IMG/pdf/20180129_guidance_on_cba_for_ied_derogations_mholland.pdf

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one can estimate the cost for the environment and public health from remaining at the initial
state, or else, the benefits from achieving the desired state through the application of
appropriate abatement technologies.

B. From current state to BREF compliance

In order to compute the cost from maintaining the current average emission levels presented
in figures 1-3 and not complying with the new BREF, the official data provided by the Greek
Ministry of Environment and Energy were utilized to compute for each pollutant the mass
(in tonnes) emitted annually by each plant as an average over the five-year period 2012-
2016. We then estimated the average flue gas volume emitted annually from each plant
(stack) by dividing the mass emitted with the corresponding pollutant concentration. By
multiplying this average flue gas volume with the emission limit values of the new BREF, one
obtains an estimate of the pollutant mass that each plant would emit if it were compliant
with the BREF. Subtracting the average mass currently emitted from each plant for each
pollutant with the estimate of the pollutant mass that would be emitted in the case of BREF
compliance, yields the difference (in tonnes) which is necessary in order to apply the EEA
method. This difference was then multiplied with the Greece-specific marginal damage costs
per tonne from the EEA study (Table 3), to yield the damage costs from not complying with
the BREF. Using the same assumption as the EEA (2014) for particulate matter, 65% of PM
was assumed to exist in the form of PM2.5, while the remaining 35% in the form of PM10 and
hence the corresponding marginal damage costs per tonne in Table 3 were used in this
analogy.

Given the fact that that the marginal costs from the EEA study (Table 3) correspond to 2005,
the result was corrected for the inflation. Since the damage costs from the lack of compliance
of Greek plants with the new BREF are not limited to Greece, the Greek inflation rates do not
accurately reflect the corresponding effect. According to the recommendation of Holland
(2017), the inflation data from the EU’s Harmonised Index of Consumer Prices6 presented in
Table 4, were used instead. Thus, to correct from 2005 (year for the calculation of marginal
costs in the EEA report) to 2018, the abovementioned result was multiplied by 1,219.

Table 4: Change in HICP, 2005 to 2018

HICP Inflation Index, base year 2005
Year (%) (%)
2005 2,20 100,00
2006 2,21 102,21
2007 2,16 104,42
2008 3,35 107,92
2009 0,32 108,26
2010 1,61 110,00
2011 2,72 113,00
2012 2,50 115,82
2013 1,35 117,38
2014 0,43 117,89
2015 0,03 117,92
6
http://www.inflation.eu/inflation-rates/europe/historic-inflation/hicp-inflation-europe.aspx

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 2016 0,24 118,21
2017 1,54 120,03
2018 1,57 121,91

In addition, the marginal damage costs per tonne presented by the EEA are national
averages, accounting for all sources and sectors. Industrial sources tend to be less closely
linked to population than some others (e.g. traffic) and hence it is anticipated that they will
have lower damage costs per unit emission. According to the recommendation of Holland
(2017) and in order to account for this discrepancy, the result of the calculation was then
multiplied with the sectoral correction factors for public power, used by the EEA study
(2014) -originally from Eurodelta II- specifically, 0,87 for SO2, 0,78 for NOx and 0,5 for
PM.

Figure 4 shows the application of the aforementioned methodology and calculation steps for
all existing Greek plants to estimate the annual damage costs from maintaining the current
average emission levels and not complying with the emission limit values in the new BREF.

Figure 4: Low and high estimates of annual damage costs from maintaining the current
average emission levels and not complying with the emission limit values in the new BREF

The total annual damage cost is € 92-583 million. Ag. Dimitrios is the most costly lignite
complex (3 IED plants) with ~€ 30-240 million, mainly due to the combined effect of its high
SO2 and NOx emissions, whereas Amyntaio is the most costly single IED plant with annual
damages of € 23-170 million, due to its huge SO2 emissions. The Kardia complex (4 IED
plants) is responsible for an annual damage cost of € 37-155 million resulting predominately
from the huge exceedance of the BREF limits in dust from Kardia I and II plants.

C. From IED to BREF compliance

The environmental permits for the Megalopoli A, Megalopoli B and Ag. Dimitrios plants that
have recently been issued do not comply with the new BREF limits, despite the fact that the
first two were issued after the publication of the new BREF. Instead, all three environmental

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permits state that after the expiration of the Greek TNP (June 2020) in which they are all
included, the emission limit values with which the plants will comply are the less strict limits
included in the IED. Moreover, several Greek officials have discussed the possibility of Greek
plants evoking the exception of article 15 of the IED, paragraph 4, according to which:

“By way of derogation from paragraph 3, and without prejudice to Article 18, the
competent authority may, in specific cases, set less strict emission limit values. Such a
derogation may apply only where an assessment shows that the achievement of
emission levels associated with the best available techniques as described in
BAT conclusions would lead to disproportionately higher costs compared to
the environmental benefits due to:
(a) the geographical location or the local environmental conditions of the installation
concerned; or
(b) the technical characteristics of the installation concerned.
The competent authority shall document in an annex to the permit conditions the reasons
for the application of the first subparagraph including the result of the assessment and the
justification for the conditions imposed.”

Therefore, it becomes highly relevant to quantitatively compare the environmental benefits

from full compliance with the BREF instead of remaining compliant with the less strict IED,
with the abatement costs in order to achieve BREF compliance for all five lignite plants
included in Greece’s TNP. Amyntaio and Kardia are not relevant for such an analysis, since
both plants are expected to retire in the imminent future since both of them have a Limited
Lifetime Derogation (article 33 of the IED) and their 17.500 hours of operation are close to
being exhausted.

The same EEA method was used in order to estimate the environmental benefits for the five
plants. The pollutant masses in tonnes that would be emitted annually by each of plant if it
complies with the new BREF were exactly those computed in the previous subsection. To
estimate however the pollutant masses that would be emitted every year if the plants were
only complying with the less strict IED limits, the 5 year average flue gas volume -previously
computed as well- was multiplied with the IED ELV. As in the previous subsection, the
differences between the two masses for each pollutant were then multiplied with the Greece-
specific marginal costs to obtain the low and high estimates of the annual environmental
benefits per plant from complying with the new BREF. The result was then also corrected for
inflation and the fact that Greek power plants belong to the public power sector (sectoral
correction). Finally, each result was then multiplied with the expected lifetime of these plants
in order to compute the overall environmental benefits, which could then be directly
compared with the abatement costs. According to several public statements and studies, it
was assumed that all five plants will have retired by the end of 2030.

Moreover, in line with European Commission practice, future environmental benefits should
be discounted at a rate of 4%. Although incomes per capita across the EU have been static in
recent years, adjustment should also be made for future income growth, recognizing that this
will increase willingness to pay for health protection. Using estimates of GDP/capita for each
country out to 2050, weighted average growth rates for the EU based on OECD were
calculated by Holland (2017). The average GDP uplift for the next decade -the time horizon
of this analysis- was estimated to be 2,06%. Holland (2017) also recommends to subtract this

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from the 4% discount rate, thus yielding an adjusted discount rate of 1,94%. Figure 5 shows
the results of the computation in both the undiscounted and discounted forms.

Figure 5: Low and high estimates of the environmental benefits until 2030 from
complying with the emission limit values in the new BREF instead of the less strict IED
limits. Left: undiscounted. Right: with an adjusted discount rate of 1,94%.

The total benefits from transitioning from a hypothetical compliance with the IED emission
limit values to full BREF compliance until 2030 are € 115-816 million (undiscounted),
whereas compliance of the 3 Ag. Dimitrios plants results in the greatest benefits with € 99-
680 million in total, with Ag. Dimitrios I-II having the most significant contribution.
Discounting the benefits with an adjusted discount rate of 1,94% to reflect their net present
value results in a reduction of the absolute value of the benefits (€103-729 million), without
changing the relative comparison between the lignite plants.

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In order to assess the eligibility of Greek lignite plants for an article 15(4) derogation, the
environmental benefits from full compliance with the new BREF should be compared with
the abatement costs to achieve compliance. These consist of the installation costs of the
appropriate abatement technology and the corresponding operating costs for the period until
2030. The analysis was performed for all plants in Greece’s Transitional Plan with the
exception of Meliti I, which already complies with the ELVs in the new BREF regarding SO2,
NOX and dust emissions.

By taking into account the current average emission levels of each plant, the Best Available
Technologies (BAT) according to the new BREF, the efficiency rates that each abatement
technology needs to accomplish in order for the plant to comply with the new BREF, the
appropriate abatement technologies were chosen for each plant and each pollutant and are
shown in Table 5, together with the corresponding installation and operating costs for the
period until 2030.

In particular, according to the new BREF, as well as the old one (published in 2006), wet
Flue Gas Desulphurisation (wFGD) is the technology to be used in large combustion plants
with a thermal capacity above 300 MWth. In addition, the use of wFGD instead of dry
scrubber technologies for reduction of SO2 emissions has the added advantage of reducing
emissions of heavy metals, in which the Ag. Dimitrios complex is amongst the leaders in the
EU7. Because of that and the fact that all three Ag. Dimitrios plants are significantly larger
than 300 MWth (see Table 1), wFGD, was chosen for the compliance of these plants with the
new SO2 limits. The two Megalopolis plants already have wFGD systems installed. However,
since both plants emit above the SO2 ELV of the new BREF, an upgrade to these systems is
necessary. As far as NOx emissions are concerned, the method of Selective Non Catalytic
Reduction (SNCR) was chosen for all plants in Greece’s TNP with the exception of
Megalopoli A, which already complies with the new 175 mg/Nm3 emission limit value. SNCR
was chosen because it is significantly cheaper than Selective Catalytic Reduction (SCR), the
other secondary abatement technology capable of significant reductions in NOx emission.
However, since we wanted to assess the worst case scenario and many have argued that
SNCR might not be a suitable abatement technology for achieving the new BREF limit of 175
mg/Nm3, we also considered the possibility of implementing SCR systems. Finally, upgrades
of the electrostatic filters are required for the Ag. Dimitrios I-II and V plants in order to
reach the new 8 mg/Nm3 and 12 mg/Nm3 emission limit values for dust, respectively.

The installation cost for the new wFGD system for the Ag. Dimitrios III-IV plant was taken to
be the same as in the corresponding tender8 (€97 million). For the wFGD system of the Ag.
Dimitrios V plant, a contract has been signed in June 2017 for €68 million9. Since Ag.
Dimitrios I-II is of very similar capacity as Ag. Dimitrios III-IV, it was assumed that a new
wFGD system for this plant would cost the same (€97 million). According to a recently
7
http://www.tovima.gr/society/article/?aid=991347#.WyVuazK9THJ.facebook
8
https://ted.europa.eu/TED/notice/udl?uri=TED:NOTICE:209615-2018:TEXT:EN:HTML&src=0
9
http://www.jp-avax.gr/updocuments/J&P-
%CE%91%CE%92%CE%91%CE%9E%20%CE%9F%CE%B9%CE%BA%CE%BF%CE%BD%CE%BF%CE%BC%CE%B9%
CE%BA%CE%AE%20%CE%88%CE%BA%CE%B8%CE%B5%CF%83%CE%B7%2030.06.2017.pdf

13
published study on abatement technologies for the compliance of coal/lignite plants in the
EU with the new BREF10, the capital expenditure for technology upgrades for wFGD systems
is approximately 10% of new build costs. Hence, taking into account the cost of the new
wFGD system of the Ag. Dimitrios V plant and correcting for the smaller capacities of the
Megalopolis A and B plants, the upgrade of the existing wFGD systems in the two
Megalopolis plants is estimated to cost approximately €5,4 million each. According to the
same study, the unitary installation cost for a new SNCR system (including primary
measures) required for the reduction of NOx emissions is 50 €/KWe, whereas the
corresponding value for SCR is 120 €/KWe. Thus, taking into account the capacities of the
plants requiring the implementation of this technology, an estimate of the corresponding
installation costs is obtained. Finally, according to the study, the upgrade of ESP or fabric
filters for the reduction of dust emissions may cost up to 20% of the capital expenditure of
new ones, which are in turn estimated to cost approximately 75 €/KWe. Therefore, assuming
that the unitary cost of a filter upgrade is 15 €/KWe and taking into account the capacity of
the plant, the estimates of the corresponding costs are obtained.

The operating costs for the period until 2030 are the sum of fixed and variable operating
costs. According to the aforementioned study on abatement technologies for BREF
compliance of coal plants across the EU, the annual fixed costs are taken to be 3-4% of the
corresponding installation costs, whereas the annual variable operating costs, which
comprise mainly of the cost for the chemicals necessary for the implementation of each
abatement technology, were calculated based on the study’s estimate of 10 €/tonne for dust,
100-200 €/tonne for SO2 and 200-400 €/tonne for NOx. Since the assessment of the worst
case scenario for the owners of the lignite plants was of primary interest, the most expensive
estimates of the operating costs were considered in this analysis. The tonnes of the pollutant
removed annually from the implementation of the abovementioned abatement technologies,
which are necessary in order to computer the annual variable operating costs were calculated
using the current average emission levels multiplied with the efficiency rate of removal for
each abatement technology. According to the study, the removal efficiency for a wFGD
system may reach up to 98%, for a SNCR system 60%, a SCR system 85%, whereas for
electrostatic filters, 99,95%.

Table 5: Abatement technologies, CAPEX and OPEX to achieve BREF compliance

Plant / SO2 NOx Dust
Pollutant Tech. CapEx OpEx Tech. CapEx OpEx (m€) Tech. CapEx OpEx
(m€) (m€) (m€) (m€) (m€)
Ag. Dimitrios
wFGD 97 60 SNCR/SCR 30/72 27,5/54,3 ESP-U 9 23,5
I-II
Ag. Dimitrios
wFGD 97 60,9 SNCR/SCR 31/74,4 28,9/56,8 - - -
III-IV
Ag. Dimitrios
wFGD 68 40,1 SNCR/SCR 18,8/45 15,6/31,7 ESP-U 5,6 4,7
V
Megalopoli A wFGD–U 5,4 5 - - - - - -
Megalopoli B wFGD–U 5,4 5,4 SNCR/SCR 15/36 11,5/24 - - -
Totals 272,8 171,4 94,8/227 83,5/166,8 14,6 28,2

10
https://europeanclimate.org/wp-content/uploads/2017/06/16-1213-rev2-DNV-GL-report-ECF-BREF-LCP2.pdf

14
The results indicate that compliance of the Greek TNP plants with the new SO 2 emission
limit value is the most costly in terms of both the installation and operating costs, followed
by compliance with the new NOx ELV. Since thermal power station Kardia, the primary dust
emitter in Greece, is not included in this analysis, and the exceedances of the new dust ELV
by the Ag. Dimitrios I-II and Ag. Dimitrios V plants are relatively small (see figure 3),
compliance with the new BREF can be accomplished at a relatively low expense. By summing
up all the abatement costs for all pollutants and plants until 2030, one deduces that the
overall cost of complying with the new BREF amounts to € 665 million (undiscounted) in
case SNCR is used for the reduction of NOx emissions and € 881 million for the case of the
SCR. Note that the use of a 1,94% adjusted discount rate until 2030 reduces the present
value of operating costs, which in turn leads to reduced overall costs of € 635 million (€ 842
million in case SCR is chosen for the reduction of NOx emissions instead of SNCR). It must
be noted that this is the maximum possible abatement costs since the starting point is the
current state and not the hypothetical case where plants have achieved lower emissions (e.g.
IED compliance) through some less efficient and less expensive abatement technologies.

15
Having estimated the environmental benefits of fully complying with the new BREF for the
five lignite plants participating in the Greek TNP, as well as the abatement costs for
achieving BREF compliance for each plant and for all three pollutants, it is possible to
compare the two for each plant in order to assess eligibility of Greek lignite plants for the
aforementioned derogation of article 15(4) of the IED.

For this purpose, the criterion presented by Holland (2017) will be used:

𝐸𝑛𝑣𝑖𝑟𝑜𝑛𝑚𝑒𝑛𝑡𝑎𝑙 𝐵𝑒𝑛𝑒𝑓𝑖𝑡𝑠
𝐴𝑏𝑎𝑡𝑒𝑚𝑒𝑛𝑡 𝐶𝑜𝑠𝑡𝑠 > 0,7
(1)

In other words, if the abatements costs are greater than the environmental benefits divided
by the factor 0,7, then the plant may be eligible for a derogation. According to Holland
(2017) and in line with the precautionary principle, the factor of 0,7 attempts to quantify the
omission by this cost benefit analysis using the EEA methodology, of several types of impact.
Moreover, according to the same study, in deciding whether a derogation should be given to
a lignite plant or not, the upper estimate of the environmental benefits from compliance with
the new BREF should be used.

Figure 6 compares the abatement costs to achieve BREF compliance with the environmental
benefits starting from the current state as well as from compliance with the IED with a time
horizon until 2030. In both cases, the environmental benefits have been divided by the factor
0,7 according to Holland (2017). It is clear that the environmental benefits starting from the
current state are much more significant than the abatement costs, even in the cases of
Megalopoli A and B where the absolute values are much smaller compared to the Ag.
Dimitrios plants. The same applies for the comparison with environmental benefits starting
from compliance with the less strict IED emission limit values. It must be noted that the
same is also true even if the factor 0,7 is not used. Specifically, the uncorrected
environmental benefits until 2030 from the full compliance of all five plants with the new
BREF starting from the IED are estimated at €816 million if no discount rate is used
(€729 million with a 1,94% adjusted discount rate), approximately 30% higher than the
abatement costs, whereas those starting from the current state at €3,33 billion
undiscounted (€2,97 billion if using a 1,94% discount rate).

Figure 6: SNCR is used for the reduction of NOx emissions. Comparison between
abatement costs to achieve full compliance with the BREF limits (red) and environmental

16
benefits starting from the current state (green) as well as environmental benefits starting
from compliance with the IED (blue).Left: undiscounted. Right: with an adjusted discount
rate of 1.94%

The calculations were repeated to assess the effect of implementing SCR for the reduction of
NOx emissions for all four plants which are above the new BREF limit (175 mg/Nm 3),
instead of the far cheaper SNCR technology. Although the difference between the
environmental benefits of achieving full BREF compliance starting from compliance with the
IED (blue) and the abatement costs (red) is reduced compared to the case where SNCR is
used for the reduction of NOx emissions, the former benefits remain greater than the
abatement costs for all five plants.

Figure 7: SCR is used for the reduction of NOx emissions. Comparison between abatement
costs to achieve full compliance with the BREF limits (red) and environmental benefits
starting from the current state (green) as well as environmental benefits starting from
compliance with the IED (blue). Left: undiscounted. Right: with an adjusted discount rate
of 1.94%.

It must be further noted that these comparisons presented in figures 6 and 7 would be even
more in favor of fully implementing the appropriate abatement technologies if one could
calculate the abatement costs starting from the hypothetical case where Greek plants were
already compliant with the IED. However, this is not feasible since the abatement
technologies which would have achieved IED compliance are unknown and, hence, it is not
possible to assess the additional abatement technologies that need to be installed or the
upgrade measures that need to be implemented in order to achieve compliance with the
BREF.

17
In this report we have first presented the current state of Greek plants in terms of SO2, NOx
and dust emissions. We then applied the EEA methodology to estimate the damages of not
complying with the new BREF emission limit values which can also be viewed as the benefits
for the environment and public health from achieving full compliance with the BREF. Two
cases were considered. In the first case the benefits were estimated starting from the current
state, which is fully known from the official emissions data obtained from the Ministry of
Environment and Energy. In the second hypothetical case, it was assumed that all plants
comply with the less strict IED limits. The benefits were then compared with the costs of
installing and operating appropriate abatement technologies for the five lignite plants which
are included in Greece’s TNP. The comparison centered around the lignite plants included in
Greece’s TNP (Ag. Dimitrios I-II, Ag. Dimitrios III-IV, Ag. Dimitrios V, Megalopoli A and
Megalopoli B) since the sixth plant included in the TNP (Meliti I) is already compliant with
the new BREF regarding emissions from the three main pollutants, and the other existing
lignite plants in Greece (Amyntaio I-II, Kardia I, Kardia II, Kardia III and Kardia IV) all have
a limited lifetime derogation and are expected to retire in the in the imminent future due to
the exhaustion of the 17.500 hours they are entitled according to article 33(1) of the IED.

It was found that the environmental benefits are greater than the abatement costs both for
each plant separately as well as overall, even if the starting point is a significant
improvement compared to the current state, i.e. compliance of all plants with the IED, and
even if the correction factor of 0,7, proposed by Holland (2017) is not applied. In particular,
the abatement costs for achieving full compliance with the BREF for the 5 lignite plants
amount to €665 million (including the operating costs until 2030), whereas the
environmental benefits starting from IED compliance, to €816 million. The benefits are
almost 4 times greater (€3,33 billion) if the starting point is the current state, where almost
all Greek plants emit far more than what the new BREF allows. These results remain
qualitatively the same if one applies an adjusted discount rate of 1,94% (resulting from the
subtraction of the estimate of 2,06% by Holland (2017) for the GDP uplift for the next decade
from the discount rate of 4% proposed by the European Commission). Furthermore, the
comparison between environmental benefits and abatement costs remains in favor of fully
implementing the appropriate abatement technologies even if Selective Catalytic Reduction
(SCR) is used for the reduction of NOx emissions instead of the less efficient and less
expensive SNCR.

It must be further noted that the comparisons between abatement costs and environmental
benefits would be even more in favor of fully implementing the appropriate abatement
technologies, if one could calculate the abatement costs starting from the hypothetical case
where Greek plants were already compliant with the IED, instead of starting from the
current state. However, this is not feasible since the abatement technologies which would
have achieved IED compliance are unknown and, hence, it is not possible to assess the
additional abatement technologies that need to be installed or the upgrade measures that
need to be implemented in order to achieve compliance with the BREF.

It becomes therefore clear that none of the five Greek lignite plants are eligible for a
derogation of article 15(4) of the Industrial Emissions Directive.

18
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