Greece’s new support plan for the renewable energy sources (RES) sector has been completed and is set to be forwarded to the European Commission’s Directorate-General (DG) for Competition before public consultation procedures are launched, offering sector experts the opportunity to submit observations.

The new model will be based on a combination of feed-in-premiums and tenders to be implemented along EU guidelines.

Upper limits for feed-in-premium prices concerning all RES technologies will be set before tender procedures are carried out for the installation of specific capacities.

Winning bidders will be determined by the level they are prepared to reach below the upper limit price. They will then be given the green light to proceed with investments.

Quite obviously, the level of the feed-in-premiums to be set will play a crucial role in the new model. Setting the ideal price level will be a tricky task as, on the one hand, investors will need to be given solid incentives, while, on the other, the RES special account cannot be overburdened. Also, Greece’s economic climate, the country’s current financing difficulties, and the local risk factor all need to be taken into account.

According to energypress sources, the energy ministry believes that an Internal Rate of Return (IRR) of between 8 and 12 percent is reasonable for the new RES plan.

Based on these figures, the plan’s feed-in-premium upper limit for wind energy facility is expected to drop to 98 euros per MWh for wind-energy facilities. A price decline to 100 euros per MWh is also intended for small hydropower plants, while an increased price of 90 euros per MWh has been set for photovoltaic systems exceeding 500 KW. Fixed feed-in-tariff prices will be maintained for PV systems below 500 KW.

Sources have noted that two tenders will be staged, one for all PV categories, big and small, initially for capacities of 50 MW, followed by a second tender for small PV facilities of less than 500 KW, offering capacities of 20 MW.

PV sector officials have reacted positively to the new RES plan, believing it will gradually reinvigorate the sector. On the contrary, wind-energy and small hydropower firms generally believe the prices offered cannot ensure sustainable investments unless highly favorable wind-energy and hydropower potential exists.

Greece’s new RES payment plan has been delayed. Based on the country’s most recent bailout agreement, the plan was supposed to have been ratified by the end of 2015 and implemented at the start of 2016. An extension of several months had been granted to a previous deadline.