CHP

Administratively set tariffs for small-PV tariffs ending

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RES and CHP units involved in auctions for tariffs as of May 1, 2024 will be subject to grid-injection restrictions as well as compulsory integration of energy storage systems, according to a draft bill just forwarded by the energy ministry for consultation.

European Commission approval will be required before these new terms can be applied in the Greek market.

The draft bill also includes a provision ending administratively-set tariffs for small-scale PVs as of May 1, 2024. Projects under a Special Program for the Development of Photovoltaic Systems at buildings are planned to be exempted from this revision.

Also, RES projects developed at areas with saturated networks or linked to mainland interconnections servicing the Cyclades islands or Crete will be subject to a December 31, 2024 deadline for administratively set feed-in tariffs.

RES investors behind small-scale PVs projects for which operating terms have already been established or for which complete applications have been submitted to RES market operator DAPEEP until April 30, 2024 will have until August 31 to submit declarations certifying their readiness to operate in order to maintain their administratively set feed-in tariffs.

New RES units total 1.5 GW over just 5 months; NECP target exceeded

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Renewable energy facilities representing a capacity of 1.5 GW were launched over a period of just five months between early June and November last year, data provided by power grid operator IPTO data has shown.

RES facilities in operation totaled 12.2 GW in early November, 2023, up from 10.65 GW in early June, 2023, the IPTO data showed.

The November tally included 5.06 GW in wind farms and 6.55 GW in solar energy farms. As had been anticipated, solar energy farm launches recorded a bigger increase, which reached 1.28 GW, compared to five months earlier.

Wind farm capacity growth recorded a more modest rise of 261 MW. The remaining 35 MW in increased RES capacity resulted from biomass-biogas, small-scale hydropower and CHP installations.

RES facilities possessing connection terms totaled roughly 15.5 GW in November, 2023, which, combined with 12.2 GW in RES facilities already operating by that month, results in an overall RES portfolio capacity of 27.7 GW.

This figure greatly exceeds the country’s 2030 target for installed RES capacity, set at 23.5 GW in the revised National Energy and Climate Plan.

 

Ministry multi-bill filled with energy sector initiatives

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An energy ministry multi-bill to be forwarded for consultation imminently, possibly this Friday, following numerous revisions, includes at least twenty energy-sector provisions.

These include a new legal framework for boosting grid capacity; Apollo, a 20-year RES support program envisaged to offer solar-energy output to low-income households and local government organizations; a revision facilitating a new combined heat and power (CHP) plant planned by power utility PPC at a former lignite-fired facility in Kardia, northern Greece; an SVP for floating solar farms as a pilot project, beginning with 10 MW at sea and 8 MW in lakes and reservoirs; as well as an SVP for the development of offshore wind farms, an effort overseen by EDEYEP, the Hellenic Hydrocarbons and Energy Resources Management Company.

The multi-bill also includes pending issues announced last year, such as a new electricity theft framework; and a revised universal electricity supply service – currently offered by the top five electricity suppliers, based on market share, as a last-resort service to non-punctual consumers who have been blacklisted by suppliers – to be limited to four months.

Many energy-sector provisions in urban planning multi-bill

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The energy ministry has included a host of provisions that essentially constitute a mini energy bill into its urban planning multi-bill, which includes over 120 articles and is expected to be submitted to Parliament by the end of this week.

The series of energy-sector provisions, more than 20 in total according to energypress sources, include legislative revisions concerning floating PV systems; an SPV for offshore wind farm preliminary research; Apollo, an energy-cost offsetting program aiming to cover a significant proportion of farmers’ energy needs; and CHP units planned by power utility PPC.

The addition of extra energy-sector provisions ahead of the multi-bill’s delivery to Parliament has not been ruled out. They are expected to be divided into six categories.

The revisions will include terms enabling the installation of RES and CHP units – with or without integrated electricity storage batteries for self-consumption – on non-interconnected islands.

Also included are terms for the development of ten offshore solar farm pilot projects with capacities of between 0.5 MW and 1 MW for a total capacity of 10 MW. These will be exempted from competitive procedures for their operating contracts.

Based on the revisions, EDEYEP, the Hellenic Hydrocarbons and Energy Resources Management Company, will be able to establish subsidiaries and an SPV for commissioning wind and seabed studies at marine areas to be allocated for a first wave of offshore wind farms.

Greece, according to the National Energy and Climate Plan, aims to have begun developing 1.9 GW in offshore wind farms by 2030.

 

 

PPC tender for pumped-storage station at Kardia mine

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Power utility PPC plans to launch, around a year from now, a tender for the construction of a 148-MW pumped-storage station at the location of the company’s withdrawn lignite mine in Kardia, northern Greece.

The project, budgeted at between 170 and 180 million euros, is expected to be completed three years after a contract for its construction has been signed.

The prospective Kardia pumped-storage station is one of five such units planned by PPC, their total capacity expected to reach 1,000 MW.

Pumped-storage stations can offer long-term electricity storage, making them necessary in power systems with high penetration of renewables, as is expected to be the case in the Greek energy system by 2030, when, according to a draft of the updated National Energy and Climate Plan, renewables will hold a 79 percent share of the power generation mix.

PPC is already staging a tender offering a contract to a consultant specialized in such projects for a feasibility study, basic design and technical specifications of the Kardia pumped-storage unit.

In addition, PPC is carrying out power system stability studies, which are necessary for the project’s design. The findings of the studies will be passed on to the consultant selected through the tender.

The Kardia pumped-storage project plan received an environmental permit last May, as part of a wider investment plan also involving PPC’s former steam power plant and the adjacent lignite mine, also withdrawn.

This plan also includes development of a CHP unit that will support the operation of a regional heating system for Kozani, Ptolemaida and Amyntaio, as well as the conversion of the Kardia III and Kardia IV power stations into modern capacitors. Tenders for the capacitors are already underway.

 

Mytilineos given green light for CHP plant in North Macedonia

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The Mytilineos group will develop a cogeneration plant (CHP) in North Macedonia with 50 million euros in state support, in accordance with a legislative proposal submitted by the government in late January.

This investment qualifies as a strategic investment and, as a result, stands to benefit from the relevant legislation. It will also secure a guaranteed price for energy produced.

The heat and power plant will have an electrical capacity of 90-105 MW plus 135-150 MW of thermal energy. Its annual electricity production is expected to amount to roughly 1,150 GWh with corresponding thermal energy production reaching 275 GWh.

An agreement for the purchase of the energy produced is expected to be established within three months of the signature of the state aid agreement.

Agreement reached for PPC’s CHP plant in northern Greece

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Power utility PPC’s delayed combined heat and power (CHP) plant in the west Macedonia region, northern Greece, to produce electricity and also cover the region’s thermal energy needs, has been put on track for development following talks and an agreement between leading energy ministry and PPC officials.

Remuneration terms for the prospective CHP facility’s output were agreed to at the meeting, securing its sustainability. As a result, PPC is soon expected to stage a tender offering a contract for the facility’s construction, planned to be completed over an 18-month period.

The west Macedonian CHP, to be installed at Kardia, will have an electrical capacity of 105.34 MW and a thermal capacity of 66.47 MW. It will be fueled by natural gas, while its engines will be hydrogen-ready for a hydrogen gas (H2) proportion of over 10 percent in the natural gas mix, without any compromise on engine efficiency and power output.

RAE nearly done with processing for backlog of RES license applications

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RAE, the Regulatory Authority for Energy, is close to completing its processing effort for a backlog of some 1,400 RES license applications representing approximately 24 GW in wind and, primarily, solar projects.

RAE’s processing of a backlog of applications submitted during four cycles from September, 2018 to June, 2019 has been completed, while the authority’s examination of applications submitted in September, 2019 is expected to be completed within the next few days, sources informed.

Once RAE officials complete their processing of last September’s applications, they will begin work on applications submitted last December, which should result in the completion of processing work for the entire backlog by the end of this month, officials have estimated.

A small fraction of the RES license applications submitted during the four cycles between September, 2018 to June, 2019 were rejected. More specifically, of 811 applications examined by the energy authority, 246 were granted production licenses for 1.522 GW in wind energy projects and 430 investment plans were given licenses for 6.2 GW in solar projects.

Meanwhile, public consultation staged by RAE for new rules concerning producer certificates in the RES and combined heat and power (CHP) domains has been completed.

A new platform being developed by RAE for producer certificates will be simple, safe and transparent, and also linked to platforms operated by other entities, including DAPEEP, the RES market operator, so that applications may be swiftly processed, authority officials have informed.

RES applications continue at steady rate, 2.5 GW in June

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Production license applications concerning new RES projects have continued at a steady rate, while the balance between various technologies has remained unchanged, industry figures for June have shown.

Solar energy production license applications, numbering 126 of the overall 215 submitted in June, continued to hold the lion’s share and represented 2.1 GW of the 2.5 GW total.

As for wind energy, license applications for 76 projects with a total capacity of 384.71 MW were submitted in June. A total of 12 small-scale hydropower applications were made for a capacity of 10.03 MW. One cogeneration, or combined heat and power (CHP), application representing a capacity of 2 MW was made.

A total of 14 companies submitted multiple applications representing 119 projects with a capacity of 1,757.5 MW, of which 196.9 concern wind energy stations.

The 14 multiple applicants were: Juwi Hellas, New Solar Developments, Hellenic Petroleum Renewable Energy Sources, Egnatia Group, European Solar Farms Greece, Thessaloniki Energy Solar, Serres Power, Verde, Terna Energy, Siemens Gamesa, ABO Wind Hellas, Rensol Energy PV, Karatzis and Peloponnisiakos Anemos.

Applications submitted to RAE, the Regulatory Authority for Energy, between December, 2018 and June represent a total capacity of 8 GW. They number over 1,000, placing pressure on the processing demands at RAE, authority official Dionysis Papahristou noted.

Surge of RES investments expected in the Peloponnese

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A decision by RAE, the Regulatory Authority for Energy, to make available over 400 MW for wind, solar and other RES installations in the Peloponnese is expected to generate heightened RES investment activity for the region.

The power grid operator IPTO is expected to have completed a 400-KV transmission line linking Megalopoli, Patras and Acheloos by the end of the year.

This stretch, from Megalopoli to Acheloos, along with a submarine grid interconnection linking the mainland with the Peloponnese, from Rio to Antirrio, makes up the western corridor of a grid expansion towards the Peloponnese.

These links will enable the development of new wind, solar, small-scale hydropower, biomass and biomass units following a seven-year period of complete stagnancy.

According to sources, the RAE decision is expected to offer 100 MW for wind energy installations; 100 MW for solar projects, not including roof-mounted PV systems, which are not subject to limits; 100 MW for small-scale hydropower units; 80 MW for biomass, biogas and combined heat and power (CHP) units; and 30 MW for energy community projects.

 

 

Provisions of the new law for RES and CHP: A brief legal analysis

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Preliminary remarks 

After completion of the relevant consultation, the Parliament passed Law No. 4414 / 09.08.2016  under  the  title  “New  support  scheme  for  electricity  stations  from Renewable Energy  Sources  and  Combined  Heat  and  Power  High  Performance  -Provisions for legal and functional separation of supply and distribution industries in the market of natural gas and other provisions” (Gov. Gazette A’139 / 09.08.2016), which regulates, among other highly important issues for the Greek energy market, the new  support  scheme  for  electricity  produced  by  Renewable  energy  Sources (RES) and Combined Heat and power High Performance (CHP) stations.

The new regime falls within the broader ambit of the EU common policy towards tackling climate change. In the context of achieving national and EU targets for the penetration of  renewables  in  the  energy  market,  the  new  scheme  adopts  the requirements of  section  3.3  of  the  “EU  Guidelines  for  State  aid  in  the  field  of environment and energy for 2014-2020 ” aiming to support the further development of RES in Greece.

Reforms in the RES Special Account 

Τhe normative  intervention  undertaken  by  the  legislator  to  correct  the  lingering structural dysfunction  of  the  financing  of  the  RES  support  mechanism,  as articulated in  Article  23  of  the  Law,  is  οf  fundamental  importance.  The said provision establishes  a  new  source  of  revenue  of  the  RES  Special  Account  that reflects the  cost  which  is  avoided  by  the  Suppliers  due  to  the  presence  and penetration of  RES  in  the  energy  market  (“merit  order  effect”).  This legislative section is  based  on  the  reasoning  that  the  financing  of  the  RES  Special  Account administered by LAGIE is realized in a distorted way, resulting to Suppliers paying reduced amounts that do not reflect the actual economic value contributed by RES Producers.  In  this  way,  Suppliers  receive  a  substantial  benefit  from  the  Special Account, which in essence, according to the perception of  the legislator, constitutes an  indirect  subsidy  of  their  cost  (which  is  part  of  the  variable  component  of  the tariffs they offer to their customers). In other words, the deficit of the RES Special Account, which Law No. 4254/2014 (introducing the so-called “New Deal”) sought to  address  through  the  retroactive  cut  of  the  guaranteed  compensation  of  RES producers,  is  causally  linked  to  the  benefits  earned  by  the  Suppliers,  who  do  not bear  the  obligation  to  contribute  in  uplifing  a  deficit  systemically  linked  to  their economic advantage. The reasoning behind this legislation is extremely important because  it  automatically  undermines  the  legal  and  regulatory  foundations  of  Law No. 4254/2014.

In particular,  the  Explanatory  Statement  of  the  Law  recognizes  the  ‘structural inability to resolve the Daily Ahead Scheduling (DAS)”,   owed to the decrease of the System Marginal Price (SMP), due to the participation of RES / CHP power stations in the DAS, which is not taken into account when determining the charges owed by Suppliers, with  a  consequence  to  create  a  deficit  in  the  RES  Special  Account.

Through the provisions of Article 23, Suppliers are asked now to assume the related costs through  two  new  charges  that  take  into  account  the  benefits  resulting  from the existence of RES during the liquidation of the electricity market, without placing any  further  burden  on  consumers  by  increasing  the  Special  Emissions  Reduction Tax for Gas Emissions (ETMEAR).

The new regime provides two new sources of revenues for the RES Special Account. One source of revenue derives from the cost levied on each charge representative in the wholesale electricity market for the part corresponding to the energy supplied to all consumers of the Interconnected System and Network, excluding exports. The second source  of  revenue  derives  from  the  cost  that  may  be  applied  each  year, starting from  2018,  to  charge  load  representatives  for  the  energy  absorbed  for consumers they  represent  within  the  interconnected  system,  with  a  purpose  to progressively reduce  the  amount  to  be  recovered  from  consumers  through  the ETMEAR tax.

Article 23 also provides that the modification of the Electricity Exchange Code and the Grid Code for determining the methodology parameters will be introduced by decision of RAE, applicable  from  01/10/2016.  This decision is also of  great importance since  the  methodology  to  be  applied  should  not  over- or  under compensate the RES Account.

Changes in the electricity sales process from RES 

The new law seeks to establish a framework for a smooth transition from the old system of  fixed  retail  prices  (feed-in-tariffs)  to  the  new  system  of  differential increments and tendering (feed-in-premium).

The new regime is based on the development of a new support mechanism for the operation of RES (operating aid), which provides a premium in addition to the price shaped in the wholesale electricity market. This increase will be  granted  for  the validity support period of RES and CHP of each power station and will take the form of a  differential  value  (FiP),  taking  into  consideration  the  revenue  resulting  from their participation in the electricity market.

The incremental  increase  was  adopted  on  a  station  category  level  (sliding premium) and  not  as  a  steady  increase  (fixed  premium),  so  that  the  financial assistance mechanism  is  not  affected  by  variations  of  the  future  price  in  the wholesale market. This way attempts to ensure control and a predetermined size of the total  income  received  by  certain  stations  from  RES  and  CHP,  targeted to minimize both the phenomena  of  overcompensation  and  undercompensation  of electricity produced from RES and CHP stations.

More specifically,  the  RES  and  CHP  power  stations  put  into  operation  in  the Interconnected System  from  1.1.2016  are  included  in  the  support  scheme  in  the form of  operating  aid  and  on  the  basis  of  a  Price  Differential  Compensation (Differential Increment) for the electricity they produce. The differential premium is calculated on a monthly basis, whereas the validation, billing and settlement of transactions involving  the  differential  increase  processes  will  be  determined  by  a decision to be issued by the Minister of Environment and Energy, which is expected to be issued within three months from the entry into force of this Act.

The adoption of this differential increment allows a relatively “smooth” transition to the  new  scheme,  taking  into  account  that  the  support  system  via  fixed guaranteed price (FiT) will be active until December 31, 2016.

Conducting competitive tendering procedures for power stations from RES and CHP

Furthermore, from  1.1.2017,  the  support  system  enters  into  force  in  the  form  of operating  aid  for  RES  and  CHP  power  stations,  through  a  competitive  bidding process.  The Minister  of  Environment  and  Energy  decision,  issued  upon  RAE’s opinion,  will  set  the  installed  power  per  technology  and  /  or  the  category  of  the electricity  from  RES  stations  which  is  tendered  through  competitive  bidding processes.  The RES and CHP stations selected through the  competitive  bidding process will be endorsed in the support system of operating aid and will conclude Operational Support Contracts of Differential Increment for the electricity produced from RES and CHP (CEMR), as well as Functional Support Contracts of Fixed Price (S.E.S.T.). The competitive tendering procedure will be announced by RAE and the condition  for  participation  will  be  the  payment  of  a  fee,  payable  in  favor  of  RAE.

Especially, for  the  year  2016,  a  RAE  decision  for  launching  the  pilot  competitive bidding process for photovoltaic systems will be issued within three months from the entry into force of the law.

Transitional Law

During the  transitional  period,  a  mechanism  seeking  to  optimize  the  hourly electricity infusion  forecast  of  RES  and  CHP  stations  during  their  participation  in Day Ahead  Market  will  apply.  In the absence of the  intraday  market,  such  a mechanism is considered desirable in order to reduce deviations from the forecasts of the DAS and the requirements of service use, but also so as to gradually operate as a  preparation  for  the  RES  and  CHP  stations  with  respect  to  services  and obligations to be undertaken with the implementation of the new electricity market model.

Concerning RES projects that have signed purchase agreements by the end of 2015, it is  projected  that  they  will  retain  the  old  tariffs,  as  long  as  they  are  constructed and operating (normally or under a test period) until 30/06/2018.

For further information contact:

Metaxas & Associates (Attorneys At Law)

54 Asklipiou Str.
114 71 Athens,
Greece
Tel.: +30 210 33 90 748
Fax.: +30 210 33 90 749
e-mail: info@metaxaslaw.gr