RES producers rethink 2-year contract freezes as DAM falls

Changing wholesale electricity market conditions that have led to lower prices are prompting RES producers to reconsider exercising a right to suspend, for two years, long-term operating contracts with RES market operator DAPEEP in order to establish PPAs or to engage in direct market participation.

Last month, numerous RES producers submitted applications to have their long-term operating contracts with DAPEEP suspended for two years but are now taking a step back and reevaluating whether it would be wise to do so.

Suspension applications submitted in February represented a total RES capacity of over 1,000 MW but investors who followed through to freeze their tariff agreements with DAPEEP, for two years as of March 1, totaled roughly 85 MW.

In January, when the two-year suspension right was introduced, RES producers representing roughly 150 MW went ahead with PPA suspensions. This figure is forecast to drop even lower, to a level of about 50 MW, in March.

Lower day-ahead market prices in the wholesale electricity market are forecast to remain low for quite some time. This is encouraging electricity consumers interested in establishing PPAs with RES producers to demand far lower prices for long-term supply agreements.

PVs through support program reach 2,000, 8,700 to follow

Some 2,000 roof-mounted solar panels representing a capacity of 12 MW have been installed through the government’s subsidy support program, dubbed PV Stegi, and are operating, while a further 8,700 such systems, totaling 60 MW, are expected to follow in the coming months, once their investors have signed agreements with RES market operator DAPEEP, energypress sources have informed.

It is estimated that these projects will absorb roughly 50 percent of the subsidy support program’s budget of 230 million euros.

Though these figures do highlight the market’s interest in the support program, they also illustrate that the program, launched nearly ten months ago, has moved along at a slower-than-expected pace.

Delays in the provision of subsidies to applicants are the main reason behind this slowness. progress. Interested parties are being forced to provide initial amounts of own capital for their roof-mounted solar panel installations and to then wait, for unspecified periods of time, to receive the subsidy support they are entitled to.

Self-production is flourishing in Greece and, according to latest projections made by SEF, the Hellenic Association of Photovoltaic Companies (HELAPCO), is set to surpass last year’s record-breaking performance of 250 MW, which resulted in a capacity increase for the sector of over 100 percent. More PV systems were installed last year, alone, than in all previous years, combined.

SEF has projected PV installations this year will reach approximately 300 MW, of which 60 MW will be developed through the PV Stegi subsidy support program.

 

Green-energy Guarantees of Origin auction delayed

RES market operator DAPEEP’s inaugural auction offering Renewable Energy Guarantees of Origin, appears set to be delayed by at least two months as its set of rules have yet to be approved by RAAEY, the Regulatory Authority for Waste, Energy and Water. The inaugural auction had been planned for within the first fortnight of January.

RAAEY deemed that numerous revisions were made to the auction’s proposed regulations following comments submitted during public consultation and, as a result, has decided that an additional round of consultation is now needed so that interested parties may be informed and given an opportunity to comment on these changes, sources informed.

The authority is expected to officially decide on an additional round of consultation for the auction at a board meeting either today or next Thursday.

As a result of the changes, the inaugural auction is now not expected any sooner than late March. DAPEEP is believed to be ready to stage the auctions from a technical point of view.

The auction will offer Guarantees of Origin by RES plants operating from January 1, 2021 onwards.

The procedure will include linking the Greek register of Guarantees of Origin with corresponding European registers, establishing a connection with all markets on the continent.

RES producers utilizing 2-year DAPEEP contract suspension

RES producers appear eager to make the most of a new legislative revision permitting them to suspend, for two years, project operating contracts with RES market operator DAPEEP so that they may directly participate in the wholesale electricity market or establish PPAs.

Roughly ten RES facilities representing approximately 150 MW have already suspended their project operating contracts with DAPEEP since the revision’s implementation just days ago, energypress sources have informed.

Market officials anticipate an even bigger wave of project operating contract suspensions by RES producers from March onwards, one key reason being that banks, which needed time to study the revision, are now expected to offer their consent far more readily than they had done for the first wave of movers.

DAPEEP has forecast that over 90 percent of RES producers who meet requirements will end up temporarily suspending their operating contracts with the RES market operator.

Ministry pushes for energy-storage project progress

Deputy energy minister Alexandra Sdoukou has made clear her determination to remove obstacles that could delay investments concerning the installation of standalone batteries by companies that submitted successful bids to a first energy-storage auction.

Swift development of energy-storage projects is seen as crucial by the energy ministry so that the need for RES output cuts, performed to prevent grid overloading, may be restrained.

Earlier in the week, the deputy minister chaired a meeting involving various sector officials for an update on the progress of standalone battery projects, equipment orders, plans and timetables.

Aristotelis Aivaliotis, the energy ministry’s General Secretary of Energy and Natural Resources, officials from power grid operator IPTO and RES market operator DAPEEP, as well as the heads of renewable energy and storage projects all took part in the meeting.

Sdoukou appeared determined to speed up procedures concerning the issuance of connection terms for energy storage projects and to also establish a system for monitoring their progress. Investors were asked to send monthly reports on the progress of projects.

At the meeting, IPTO ensured that all RES projects with standalone batteries will have received connection terms by the end of February. Also, the deputy energy minister asked DAPEEP, the RES market operator, to prepare operational contract details.

A total of twelve energy-storage projects developed by seven companies secured the first auction’s entire capacity of 411 MW at an average price, for a year, of 49,748 euros per MW.

Helleniq Energy and Intra Energy (Intrakat) submitted successful bids for three projects each, PPC Renewables secured operational support for two projects, while Aenaos (Mytilineos), Energiaki Techniki, Energy Bank and the Agapi Ilios energy community submitted successful bids for one project apiece.

Most RES producers holding contracts seen turning to PPAs

More than 90 percent of RES producers meeting requirements for two-year suspensions of their project operating contracts with RES market operator DAPEEP, in order to engage in direct market participation or establish PPAs, will make the most of this option, the operator has estimated.

DAPEEP’s estimate represents the basis of a Budgetary Estimate of Revenue and Expenditure Report concerning new projects linked to National Energy and Climate Plan objectives. The RES market operator has forwarded this report to all relevant agencies.

DAPEEP expects roughly 2,100 MW in new RES projects with tariffs to penetrate the RES market in 2024.

The measure offering RES producers two-year suspensions of their project operating contracts with DAPEEP is particularly appealing to producers as this two-year period will not be deducted from existing 20-year tariff agreements with the operator.

It also promises RES producers sale of their output at levels probably higher than guaranteed-income levels offered by their existing project operating contracts with DAPEEP.

A legislative revision permitting RES producers to suspend their operating contracts by two years is scheduled to come into effect February 1.

Investors behind large RES projects of over 1 MW that either received operating permits or were electrified after March 28, 2023, will be eligible, as will small RES projects under 1 MW that were electrified following this date.

Small-scale Cyclades PVs nearing readiness to operate

Small-scale RES projects of up to 400 kW that had undergone a bidding process for tariffs through a RES auction organized by the distribution network operator DEDDIE/HEDNO to cover the Cyclades, along with equivalent auctions for projects in the Peloponnese and Crete, are nearing readiness for operation.

A follow-up procedure offering finalized connection terms to these Cyclades RES projects has begun and is expected to be completed next week, when all 51 projects for which successful bids had been submitted to the Cyclades auction should have received their connection terms, energypress sources informed. These 51 projects represent a total capacity of 18 MW, the sources added.

The energy ministry, as previously reported, has decided to end administratively-set tariffs for small-scale RES projects a year ahead of schedule. A relevant bill is expected to soon be submitted to Parliament.

Under the resulting system, investors behind new RES projects will need to participate in RES auctions to secure their tariffs, which will be lower compared to administratively-set tariffs.

However, small-scale RES projects in the Cyclades will be exempted from the new system and will still be able to secure administratively-set tariff agreements with DAPEEP, the RES market operator. These projects will also be exempted from substantial grid-injection cut rules.

The outcome of RES auctions concerning small-scale projects in the Peloponnese and Crete has been put on hold in anticipation of a court ruling following charges filed by plaintiffs alleging foul play.

Power bill surcharges left unchanged, budget money needed for special a/c deficits

RAAEY, the Regulatory Authority for Waste, Energy and Water, has decided to keep unchanged, for 2024, two surcharges included in electricity bills, a RES-supporting ETMEAR surcharge as well as an YKO surcharge supporting public service compensation.

The authority, whose decisions, taken to protect electricity consumers from higher energy costs, has called for budget funds to be used to cover any resulting deficits to the special accounts for renewable energy and public service compensation.

RES market operator DAPEEP and distribution network operator DEDDIE/HEDNO, respectively managing RES and public service compensation special accounts, have both forecast account deficits for 2024.

According to sources, public service compensation special account data forwarded by DEDDIE/HEDNO to RAAEY showed a 300 million-euro deficit for 2023 and forecast an equivalent deficit for 2024.

The deficits have been mainly attributed to energy-crisis electricity subsidies offered to all consumers through funds transferred from the public service compensation special account to the Energy Transition Fund.

According to ESPEN, the Greek Energy Suppliers Association, a sum of 460 million euros was transferred to the Energy Transition Fund from the public service compensation special account between August, 2022 and April, 2023.

DAPEEP, the RES market operator managing the RES special account, informed RAAEY of a 196.74 million-euro deficit for 2023, sources informed.

RAAEY decided to keep the RES-supporting ETMEAR surcharge unchanged for 2024, at 17 euros per MWh, based on a wholesale electricity price average scenario of 111 euros per MWh for this year, which, according to the operator, would result in a RES special account surplus of 6.55 million euros at the end of 2024.

However, the wholesale electricity price average for 2024 will most likely end up below the 111 euros per MWh and result in a RES special account deficit.

The country’s wholesale electricity price has averaged approximately 100 euros per MWh since last summer.

DAPEEP contract suspensions for RES producers as of Feb. 1

A legislative revision by the energy ministry permitting RES producers to suspend, for two years, project operating contracts with RES market  operator DAPEEP so that they may directly participate in the wholesale electricity market or establish PPAs is scheduled to come into effect February 1.

In the lead-up, DAPEEP is expected to launch, within the first few days of January, an online platform accepting operating contract suspensions. Contracts will be suspended once applications have been inspected by the operator. The inspection process will be swift, officials have noted.

Investors behind large RES projects of over 1 MW that either received operating permits or were electrified after March 28, 2023, will be eligible, as will small RES projects under 1 MW that were electrified following this date.

Green-energy Guarantees of Origin auction in January

RES market operator DAPEEP plans to stage an inaugural auction offering Renewable Energy Guarantees of Origin early in the new year, within the first two weeks of January, according to energypress sources.

The forthcoming auction will come following months of preparations by DAPEEP. The effort will be completed with a link of the Greek register of Guarantees of Origin with the corresponding European registers.

The Greek system’s link with the corresponding European system will establish a connection with all markets on the continent.

Two pending issues remain ahead of the inaugural auction. RAAEY, the Regulatory Authority for Waste, Energy and Water, needs to approve relevant regulations and the platform, almost ready, must be completed. Neither issue is expected to delay the operator’s plans.

Proceeds generated at Renewable Energy Guarantees of Origin auctions will be injected into the country’s RES special account as an additional source of revenue.

A relevant legislative revision was made in the summer of 2022 to facilitate the introduction of Renewable Energy Guarantees of Origin, designed to provide transparency to consumers on the proportion of electricity that suppliers source from renewable generation, required of all EU member states.

Project group to prepare framework for RES output cuts

A project management group recently founded by the energy ministry will, as its first task, prepare a recommendation for the ministry concerning the establishment of framework regulating green-energy output cuts over a long-term period, meeting the grid’s needs and further RES penetration for at least ten to fifteen years.

The group, led by head coordinator Stavros Papathanasiou, professor at the National Technical University of Athens, includes officials from the energy ministry, energy exchange, power grid operator IPTO, distribution network operator DEDDIE/HEDNO, and RES market operator DAPEEP.

The proposed permanent framework is expected to distribute RES output cuts across various project categories.

The group will also consider whether RES projects not injecting output into the system should be compensated, under specific terms and conditions.

Contract suspension rights for RES producers revised

RES market operator DAPEEP has revised terms permitting RES producers to suspend, for two years, project operating contracts with the operator in order to engage in direct market participation or establish PPAs, sources have informed.

Investors behind large-scale RES projects, over 1 MW, that received operating permits after March 28, 2023, as well as small-scale projects, under 1 MW, electrified beyond this date, will have the right to suspend project operating contracts with the operator to engage in direct market participation or establish PPAs, according to the revision.

Under the previous plan, investors who established, or would have established, contracts with DAPEEP up until December 31, 2023, for both small and large projects of under and over 1 MW, respectively, were eligible for the two-year contract suspension.

The new March 28 date was set as it marks the date, earlier this year, when the energy ministry’s draft bill on the matter was ratified.

As for projects already in operation, the two-year contract suspension right will apply from the date they were licensed, if over 1 MW, or electrified, if under 1 MW.

The overall procedure has been simplified and will be carried out through an online platform, enabling producers to sign new supplementary contracts with DAPEEP so that issues related to investor loans from banks are also covered.

DAPEEP contract suspensions for new and existing RES units

A decision by RES market operator DAPEEP will finalize a pending formula – delayed by several months, following a related legislative revision from the energy ministry – permitting RES producers to suspend, for two years, project operating contracts with the operator in order to engage in direct market participation or establish PPAs, energypress sources have informed.

No circular or further intervention from the energy ministry will be needed, the sources added.

The initial plan was to issue a circular in order to clarify a number of factors ahead of the formula’s implementation, but this step, which would have further delayed the process, seems to have been overcome.

As a result, the operator is expected, within the next few days, to invite interested parties to enter a relevant online platform that has been established and submit their requests to have contracts suspended.

The inspection process of legal details of companies submitting requests will be simple and swift. DAPEEP will establish supplementary contracts with investors so that issues related to bank loans are also covered.

Investors who have already established, or will establish, contracts with DAPEEP dated up to December 31, 2023, for both small and large projects of under and over 1 MW, respectively, are eligible.

An entire two-year suspension period will apply for new projects. As for existing projects already in operation, the two-year suspension period will apply from the date operating contracts were received, if projects are over 1 MW, or from the date of electrification, for projects under 1 MW.

Small-business subsidy returns solution sought for electricity suppliers

The energy ministry and ESPEN, the Greek Energy Suppliers Association, have held talks in search of a solution that would reimburse electricity suppliers for electricity subsidies they have provided, on behalf of the Greek State, to small businesses supplied up to 35 kVA, as well as all bakeries, regardless of supply capacity.

The total amount owed by the Greek State to electricity suppliers is estimated to have reached 800 million euros and has been pending for many months, despite the fact that this outstanding sum has been fully recognized, including legally.

Under the current reimbursement procedure, the Greek State only reimburses electricity suppliers for customers who have submitted formal declarations to RES market operator DAPEEP, managing the Energy Transition Fund that covers subsidies, once these formal declarations have been checked.

However, most customers tend to neglect filling in and forwarding these required formal declaration forms, hindering the reimbursement procedure.

An initial Brussels-approved subsidy support program for small businesses ran from February to November last year and has since been extended on a monthly basis.

Framework to offer investors RES grid-injection cut support

The energy ministry is preparing to form a working group that will be tasked with establishing a sustainable framework to support essential reductions in renewable energy source (RES) grid injections, for the prevention of grid overloads.

This working group will also shape incentives for ongoing RES projects, so that batteries may be integrated into these investments.

Energy ministry officials as well as representatives of all the country’s market operators – Regulatory Authority for Energy, Environment, and Water; power grid operator IPTO; distribution network operator DEDDIE/HEDNO; RES market operator DAPEEP – are expected to participate in the working group.

In addition, market players will be invited to offer regular views on the work being carried out by the working group, to ensure that the investment community’s positions have also been taken into consideration.

The working group’s interventions are planned to mitigate the impact of RES grid-injection cuts on investors, and also to ensure that investments in new RES plants will possess the required predictability in terms of project cash inflow.

Installed RES capacity reaches 11,284 MW in June

Installed RES capacity reached a total of 11,284 MW in June, according to a latest report published by DAPEEP, the RES market operator.

Solar energy installations, at 5,788 MW, represent this total’s biggest share, followed by wind turbines, at 4,828 ΜW, hydropower, at 280 MW, biomass, at 131 MW, and combined cooling, heat and power (CCHP) units, at 255 MW.

As for the share of RES production by these technologies, 52.7 percent of output in June was provided by photovoltaics, 34.3 percent by wind turbines, 2.5 percent by roof-mounted solar panels, 4.6 percent by small-scale hydropower units, 3.1 percent by biomass-biogas units, and 1.6 percent by CCHP units.

RES project launches in 2023 forecast to reach record level

Renewable energy project launches in 2023 are expected to reach a record level and break the 2,000-MW barrier, according to a first quarter report released by DAPEEP, the RES market operator.

RES project launches this year are expected to total 2,016 MW, comprised of 412 MW in wind farms, 1,584 MW in PVs, 13.5 MW in small-scale hydropower facilities, 5.5 MW in biomass units, and 1 MW in combined cooling, heat and power (CCHP) units, the DAPEEP report noted.

The operator’s forecast on the overall market penetration of renewables in 2023 remained unchanged compared to its previous projection made in a preceding 2022 fourth-quarter report.

The average auction price of unused greenhouse gas emission allowances for the remainder of this year is forecast to reach 82 euros per ton, according to the DAPEEP report.

Funds expected to be raised through green-energy Guarantees of Origin auctions in 2023 are projected to reach approximately 5 million euros, the report noted.

RES project additions total 320 in first four-month period

A total of 320 new RES projects were connected to the grid during the year’s first four-month period, increasing the number of active links to 19,182, up from 18,862 at the end of 2022, a new report released by DAPEEP, the RES market operator, has shown.

Active contracts are estimated to offer a total capacity of 10.14 GW for a production level of 1.55 TWh, while the net value of contracts is worth 144.5 million euros.

DAPEEP divides RES projects into two sections, one for projects activated prior to January 1, 2021, and the other for newer projects activated beyond this date.

The portfolio of projects activated prior to January 1, 2021 consisted of 18 fewer projects at the end of April, down to 15,332, from 15,350 last December, the DAPEEP report showed. These withdrawals are either RES projects seeking market alternatives following the expiry of contracts with DAPEEP or projects that have stopped operating.

On the contrary, the number of projects activated from January 1, 2021 onwards increased to 3,850 in April from 3,512 last December, the DAPEEP figures showed.

The country’s overall green-energy capacity totals 10.5 GW, led by solar energy farms, totaling 5.1 GW, followed by wind energy farms, at 4.5 GW, roof-mounted PVs, at 371 MW, small-scale hydropower units, offering 267 MW, biogas-biomass units at 115 MW, and combined cooling, heat and power (CCHP) projects at 122 MW.

Until April, 2023, wind farms held the biggest share of the country’s green energy production, reaching 45.97 percent, followed by PVs, with 43.37 percent, small-scale hydropower units, with 4.29 percent, biogas, with 2.97 percent, roof-mounted PVs, with 1.73 percent, and CCHP units, with 1.61 percent.

 

DAPEEP collections pivotal in budget revenue returns boost

A state budget revenue refunds increase for the first half has been largely attributed to amounts collected by DAPEEP, the RES market operator, provisional budget execution data has shown.

State budget revenue refunds in the first half of the year totaled 3. 389 billion euros, 586 million euros over the target, set at 2.802 billion euros, with approximately 220 million of this influx injected into the state budget via DAPEEP collections facilitated by a temporary mechanism for partial returns of day-ahead market revenues, according to the provisional state budget data.

Also, a 367 million-euro sum was secured for the Energy Transition Fund from windfall earnings returns by energy producers between October 1, 2021 and June 30, 2022.

The Greek state budget recorded a primary surplus of 2.166 billion euros in the January-June 2023 period, up from a budget target for a surplus of 415 million euros and a primary deficit of 3.425 billion euros in the same period last year, the data showed.

New minister outlines sector issues ahead of policy speech

The reelected conservative New Democracy party government’s newly appointed energy minister Theodoros Skylakakis has, in recent days, been preparing a list of energy market problems and pending matters, with emphasis on major issues, such as new tariffs, RES production cuts – needed during periods of low demand to avoid grid overloading – as well as development plans for offshore wind farms and hydrocarbon exploration, ahead of his parliamentary speech in Parliament tomorrow, when key policies by the new government will be outlined by Prime Minister Kyriakos Mitsotakis and his associates.

In the lead-up, Skylakakis has held meetings with top officials representing key market players such as RAAEY, the Regulatory Authority for Waste, Energy and Water; power utility PPC; power grid operator IPTO; distribution network operator DEDDIE/HEDNO; gas grid operator DESFA; RES market operator DAPEEP; and EDEYEP, the Hellenic Hydrocarbons and Energy Resources Management Company, to discuss and take note of energy-sector problems and pending issues ahead of tomorrow’s speech in parliament.

The energy minister has also noted views expressed by RES sector officials on the new National Energy and Climate Plan. According to sources, Skylakakis’ predecessor, Pantelis Kapros – who served a short stint as energy minister in the caretaker government that held office between two rounds of voting, in May and June – has passed on a RES mix plan entailing a 60-40 share between wind and solar energy units, respectively.

Also, the new energy minister prefers to stick to a schedule that would terminate energy-crisis support measures at the end of September, rather than offer extensions, sources added.

 

RES contract suspension right, enabling PPAs, reexamined

The details of a formula included in a recent legislative revision, permitting RES project investors to suspend, for two years, their project operating contracts with RES market operator DAPEEP in order to engage in direct market participation or establish PPAs, will be reexamined from scratch by the next government’s new energy minister. The general election’s second round of voting takes place this Sunday.

The previous government’s energy ministry had indicated the two-year suspension right would only apply to RES projects that had not been connected to the grid until the revision’s date of ratification.

Energy ministry officials and other sector authorities remain split on the legislative revision’s specifics. The decision on which approach will be adopted has, as a result, been passed on to the next energy minister.

Once a decision has been reached, a related circular will be forwarded to DAPEEP so that the new formula can be applied.

Advanced negotiations between RES producers and industrial enterprises for the establishment of two-year PPAs have stagnated as a result of the indecision over the legislative revision’s details.

DAPEEP contract suspensions only for new RES projects

A recent legislative revision made permitting RES investors to temporarily suspend project operating contracts with RES market operator DAPEEP for two years to enable direct market participation or PPAs for these projects specifically concerns, according to the energy ministry, new projects that have not been connected to the grid by the revision’s date of ratification.

RES producers, it has been underlined, will be entitled to make use of this temporary suspension just once, which, in practical terms, means they cannot put on hold operating contracts with the operator for a few months, reactivate them at a latter date and then suspend again.

DAPEEP, the RES market operator, has already prepared a related platform to accept requests by RES investors for two-year suspensions of operating contracts.

The operator intends to launch this platform as soon as it receives an official update from the energy ministry on technical details.

‘PPAs must be registered to secure guarantees of origin’

Green-energy power purchase agreements (PPAs) will need to be registered with DAPEEP, the RES market operator, in order to secure renewable energy Guarantees of Origin, the operator’s president and CEO Giannis Giarentis has stressed in comments to energypress.

This essentially means that, otherwise, the green origin of electricity quantities supplied by producers to off-takers through bilateral contracts will remain uncertified.

PPAs not entered into the DAPEEP registry and, subsequently, not covered by Guarantees of Origin, will practically result in non-certification of energy derived from renewable energy sources. This would deprive such PPAs of cost-related advantages as they would be no different to bilateral contracts signed between off-takers and thermal plant owners.

The DAPEEP head official’s remarks come at a pivotal time for Greece’s nascent green PPAs market, taking its first steps with a first round of contracts capitalizing on a recently introduced exemption from a wholesale market cap for physical delivery contracts.