The RES special account is expected to begin receiving new revenues, through green certificates, midway through 2022 when auctions for energy source guarentees are planned to be launched, according to Greece’s Recovery and Resilience Facility (RRF) plan.
The establishment of this new trading system for green certificates, by DAPEEP, the RES market operator, is part of a wider restructuring of the RES special account. The initiative will make available 202 million euros in subsidies, through the RRF, for projects launched from January 1, 2021 onwards.
The aim of the trading system will be to enable consumers to voluntarily support RES electricity by selecting green electricity supply contracts. DAPEEP, to operate the system, will hold auctions through which electricity suppliers will obtain Guarantee of Origin certificates to offer green tariffs to their customers.
LAGIE, the Electricity Market Operator, is working on details of a new formula for RES special account participation, the objective being to establish a new mechanism to replace a RES-supporting supplier surcharge.
An initial LAGIE plan entailing “green certificate” purchases whose cost would reflect respective retail market shares was presented by Greek authorities as an example and basis for further development in the bailout’s third review.
A solution based on the principle that a green market, as part of the prospective energy exchange – through the use of “green certificate” purchases, as in other countries – would suffice to provide a full solution has already been rejected.
On the contrary, authorities generally believe that a new mechanism is needed if an extraordinary increase of the existing RES-supporting ETMEAR surcharge for consumers is to be avoided.
The new plan being looked at is based on a number of factors. LAGIE would issue green certificates as guarantees of origin, currently issued by RES producers themselves, and then use these certificates to generate funds for the RES special account. Suppliers would each need to purchase a quantity of “green certificates” to be determined by their respective retail market shares. These would be auctioned at the energy exchange. A minimum price would be set for the “green certificates”. Each “green certificate” would represent 1 MW of renewable energy produced.
It is estimated that an amount of approximately 150 million euros per year would be needed to avoid RES special account deficits without increasing the ETMEAR surcharge for consumers. Given this context, a minimum price level of 15 euros per “green certificate” would need to be set. However, such a level is well over price levels for equivalent certificates issued in other countries.
It would be reasonable to question why such a change is needed in the first place, as suppliers would be charged either way. LAGIE authorities have noted that the new system would be compatible with international market regulations, whereas the current system is exclusively applied in Greece.
It remains unknown whether the new system, on the agenda of the bailout’s fourth review negotiations beginning today, could be approved by the country’s lenders.