SPEF, the Hellenic Association of Photovoltaic Energy Producers, has forwarded a comprehensive proposal to the energy ministry for the country’s prospective renewable energy (RES) support plan, as part of ongoing public consultation procedures. The SPEF proposal is expected to impact proceedings and prompt debate.
Further growth in the RES sector, a government objective, combined with a reduction of the RES-supporting ETMEAR surcharge added to electricity bills, can be achieved, according to the SPEF proposal.
Tariff-related payments for RES producers, including the new feed-in-premium system proposed by the government, are a fundamental part of the association’s proposal. It contends that such payments do not help shape the System Marginal Price (SMP), but, instead, cannibalize it as RES production enters Daily Energy Planning at zero prices. This means that greater contributions of RES energy to the system lead to lower SMP levels, subsequently demanding higher ETMEAR surcharge amounts. This cannibalizing effect is known as the Merit Order Effect.
According to SPEF estimates, if the government’s target of an additional 2.5 GW of new RES projects by 2020 is achieved, and no changes are made to the formula determining the SMP, then the ETMEAR surcharge will need to be increased by a total of 5.8 euros per MWh (4.3 euros for the additional RES capacity and 1.5 euros per MWh for the futher contraction of the SMP as a result of the RES arrivals).
SPEF also noted that suppliers are benefiting from excessive profit margins as the fall in oil and natural gas prices has not been factored into electricity prices. Suppliers, as a result, could take on part of the burden of the ETMEAR surcharge currently supported by consumers, which would make a surcharge hike unnecessary, the association noted. Such a move could lead to the reduction of electricity bills, it added.