RES supporting surcharge now a competitive component of bills

The energy ministry is working on a plan to change the status of a RES-supporting ETMEAR surcharge included in electricity bills from regulated to competitive by having it incorporated into the pricing policy of suppliers, the objective being to reduce the burden of this surcharge for consumers.

The initiative represents part of the ministry’s wider effort to restructure the RES special account, remunerating renewable energy producers.

The anticipated reduction of the ETMEAR level is expected to be offset by revenues that will be generated by green certificates to be auctioned off by DAPEEP, the RES market operator, a plan taking its cue from a formula adopted in a number of EU member states, including the Netherlands and Poland.

Green certificate revenues could reach as much as 600 million euros per year, energypress sources informed.

Under the new system, suppliers will need to purchase a minimum number of green certificates in proportion with their sales, securing a revenue source for the RES special account.

DAPEEP will no longer need to collect revenues from consumers, instead collecting from suppliers through the new mechanism.

‘Green certificate’ plan on the agenda for 4th bailout review

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.