The European Commission is close to approving a support system for hybrid RES auctions concerning new projects on non-interconnected islands, as minor adjustments are now being made to the existing proposal before the green light is given by Brussels, the energy ministry has informed.
The support system will offer prospective investors tariffs for new projects, while the capacities to be offered at these sessions will be determined by connection terms set by distribution network operator DEDDIE/HEDNO.
Besides taking into account the number of hybrid RES stations each non-interconnected island will be able to host, the operator will also consider the period during which respective islands are planned to be linked with the mainland grid, as it would be pointless to install too many RES units on islands in the present, for greener energy mixes, it they are to be interconnected in the near future.
The country’s new RES auctions, mixed sessions, which were approved last week by the European Commission for 2022 to 2025, will feature a number of key changes, including an entirely different bidding system entitling investors to just one bid for their projects instead of a succession of descending bids, as has been the case until now.
The energy ministry believes this revised bidding system will lead to a further reduction in tariff levels for projects.
In another important change, the new mixed RES auctions will feature separate starting prices for solar and wind technologies, instead of one price for both, as the two technologies have different installation costs.
The new regulations will also ensure that each of the two RES technologies will be represented by at least 30 percent of the capacity on offer as both solar and wind are considered vital for the energy mix.
In another key change, the new regulations will impose representation limits on players.
Approximately 3 GW of 4.2 GW in new RES projects are planned to be remunerated through the new mixed RES auctions.
The energy ministry is planning to announce a first auction, offering tariffs for 600 MW, by the end of the year so that it may be staged in March, 2022.
Technology-specific RES auctions have not been ruled out by the European Commission if an appropriate balance in tariffs for wind and solar energy units is not achieved through the mixed RES auctions.
Approximately 3 GW of 4.2 GW in new RES projects to be remunerated through mixed RES auctions approved by the European Commission earlier this week will concern land-based wind and solar energy facilities, according to energypress sources.
The energy ministry is planning to announce a first auction, offering tariffs for 600 MW, by the end of the year so that it may be staged in March, 2022.
The ministry aims to offer tariffs for a total of 1 GW in wind and solar energy units in 2022, through mixed RES auctions, as was announced earlier in the week.
Technology-specific RES auctions have not been ruled out if an appropriate balance in tariffs for wind and solar energy units is not achieved through the mixed RES auctions, Brussels has pointed out.
Local energy authorities plan to officially announce, by the year’s end, a mixed RES auction under new terms just approved by the European Commission for an inaugural March session to offer tariffs to new land-based wind and solar energy facilities with a total capacity of 600 MW.
The new Brussels-approved terms will remain valid until 2025, the aim being to offer tariffs to RES and CCHP (combined cooling, heat and power) units totaling 4.2 GW over 20-year contracts.
It has yet to be specified how this capacity will be divided. The total cost of the remuneration plan is estimated at 2.27 billion euros.
The 600-MW capacity planned for the March session could be increased if officials deem that a sufficient number of new RES projects have reached maturity levels for tariffs.
A total of 1 GW in new RES projects are planned to receive tariffs in 2022, while, to facilitate proceedings, participants will lodge applications and supporting documents in a one-step process.
The country’s new RES auctions plan, designed to offer investors six mixed wind and solar energy auctions until 2024, each with a capacity of 350 MW for a grand total of 2.1 GW, is expected to be announced in July, enabling preparations for the first of these sessions to begin in autumn.
Energy ministry officials have been involved in a series of virtual meetings with Brussels authorities for the new RES auction plan, the latest session taking place last week.
As previously reported by energypress, the negotiations have focused on specific details, not structural matters, concerning the new RES auction plan.
The provision of an additional 1-GW capacity for projects under special categories, including small-scale units with capacities of up to 1 MW, is considered a certainty.
In addition, ministry officials are confident Brussels will endorse a Greek proposal making available a portion of this additional 1 GW for saturated areas, namely the Cyclades, Crete, Evia and the Peloponnese.
The agenda for the ongoing talks does not include RES auctions for offshore wind farms, from the additional 1-GW capacity for special-category projects, energy ministry officials pointed out.
Any RES auction progress for offshore wind farms will need to wait until conditions have matured for the establishment of a support framework. This will need to be preceded by a legal framework.
A ministerial decision on the terms, conditions and scheduling of one last mixed RES auction for solar and wind energy capacities to be held under the current legal framework is expected within the next few days.
A capacity of 350 MW will be offered to the auction’s participants early in 2021. It remains unclear if the capacity on offer will be evenly distributed for the solar and wind energy sectors.
Once the ministerial decision is delivered, RAE, the Regulatory Authority for Energy, will officially announce the auction.
Investors will be given more time than usual to obtain supporting documents needed for auction participation as a result of the extraordinary lockdown-induced conditions, sources informed.
The session’s 350 MW to be offered represents the remaining capacity from auctions in 2020.
The energy ministry has submitted an application to the EU for an extension of competitive procedures concerning RES projects until 2024.
The new auction model is expected to incorporate improvements based on increased competition through more active target model participation and price reductions benefiting consumers, while also ensuring a clear-cut framework for RES producers.
The energy ministry is preparing to seek approval from the European Commission’s Directorate-General for Competition for an extension of at least two years for current RES auction regulations enabling separate auctions for wind and solar unit installations, as well as mixed sessions.
The current format is valid until the end of this year. If the DG-Comp rejects the ministry’s bid, then Greece will only be permitted to stage mixed RES auctions, until 2024.
Officials at the energy ministry and RAE, the Regulatory Authority for Energy, agree that RES auctions for separate technologies have been particularly effective and fruitful and should be given more time.
Energy ministry officials are currently preparing Greece’s application with supporting arguments.
In its extension bid, the ministry will stress that both major-scale wind and solar energy installations are necessary for grid stability.
It will also note that the characteristics of Greece’s landscape offer solar projects a competitive advantage, meaning that staging mixed RES auctions, only, would result in solar-project dominance and little capacity for wind energy tariffs.
Also, the ministry, in its quest, will insist that grid stability requires the development of smaller RES units at various network points and close to consumption centers. This, it will contend, cannot be achieved through mixed auctions, typically dominated by large-scale projects.
A mixed RES auction staged yesterday by RAE, the Regulatory Authority for Energy, produced a record-low bid of 49.11 euros per MWh, submitted by PPC Renewables for a 200-MW solar park in Kozani, northern Greece.
A total of five major RES projects – four solar farms and one wind energy farm – secured tariffs at the session.
The auction’s average bidding price was 51.59 euros per MWh, far lower than previous levels.
The session’s only wind energy project, ENTEKA’s 153-MW facility in Vermio, northern Greece, struck a record low price, for the wind-energy category, of 54.7 euros per MWh. This project involves funding from US fund Quantum Energy Partners.
A 70-MW solar park project on EREN’s portfolio secured a price of 50.68 euros per MWh. A 42-MW park by EDF emerged from the session with a price of 50.87 euros per MWh. Also, Spes Solaris, a member of the Panagakos corporate group, secured a price of 54.82 euros per MWh for a 37.94-MW solar park project.
Four projects – two solar and two wind – failed to secure prices. ENTEKA missed out with two wind farm projects measuring 72 MW and 63 MW. A 50-MW solar park by PPC Renewables and a 23-MW solar park by EDF also missed out.
Solar energy projects are expected to dominate a combined RES auction planned for April 2 by RAE, the Regulatory Authority for Energy, reflecting heightened investment interest in the PV sector of late. The April session’s application deadline expires tomorrow.
The level of investor interest for solar projects had overshadowed that of wind projects at a recent inaugural combined auction.
The total capacity for solar energy project applications is expected to be big, especially if PPC Renewables submits an application for a 200-MW solar energy park plan in Kozani, northern Greece, as the firm had also done in the previous combined RES auction.
PPC Renewables is expected to submit an application for another of its project plans, a 50-MW solar energy plant in Megalopoli, Peloponnese.
RES project investors will be offered a total of 600 MW at April’s combined RES auction following a 100-MW capacity increase granted by the energy ministry.
However, this 600-MW will only be offered in full if application capacities exceed the tally by 40 percent for a total of 840 MW.
The April auction’s starting price has been set at 61.32 euros per MWh.
A number of combined RES auctions have been staged in various parts of Europe over the past couple of years, the objective being to cover energy needs at the lowest possible price.
The cost of PV equipment has fallen sharply and is continuing to fall, enabling PV auction participants to bid more competitively.
However, license procedure bureaucracy remains a problem, especially for wind projects, slowing down maturity. Greek market investors are waiting for the government to deliver on a promise to simplify RES licensing procedures.
Hellenic Petroleum group subsidiary ELPE Renewables has agreed to buy an unfinished 204-MW solar energy project, Greece’s biggest, undertaken by Germany’s Juwi close to Kozani in Greece’s north, energy minister Costis Hatzidakis has announced, noting the two sides will sign an agreement on February 17.
Juwi has already agreed to a 5.73 cents per KWh tariff rate for this project. The German company took part in a mixed (solar and wind) RES auction held by RAE, the Regulatory Authority for Energy, last April.
ELPE Renewables should be able to recommence the project’s development once the acquisition has been finalized. The solar energy park, located 15 km from Kozani, could be completed by the second half of 2021, it is estimated.
The total investment is expected to reach 150 million euros. The facility’s remaining construction work will create over 250 jobs, while locals and municipalities will be compensated 500,000 million euros annually through surcharges to be imposed over a 30-year period, the project’s expected lifespan.
The acquisition constitutes a decisive move for ELPE as it promises to cover more than two thirds of the group’s 300-MW short-term goal for installed capacity.
Established in 1996, Juwi is a member of the MVV Energie AG group, one of Germany’s leading energy corporations. Juwi has designed and developed 1,700 solar energy facilities with a total capacity of approximately 2,500 MW and 1,000 wind energy farms totaling roughly 2,300 MW. Its projects generate approximately 8 billion KWh of clean energy annually.
The participation level at today’s mixed RES auction will be subdued, or well under the accumulated capacities of company investment plans, meaning the planned 300-MW capacities for each of the wind and solar energy projects must be reduced.
Solar energy investors representing a total of 68 projects with a total capacity of 200 MW will take part. As for wind energy projects, investors behind 12 projects with a total capacity of 261.75 MW will participate at today’s RES auction.
A competition rule requires auction registrations to exceed the 300-MW levels for each category by 40 percent for the entire amounts to be offered. As a result of the subdued participation, the maximum capacity to be offered for solar energy will be 143 MW and, for wind energy, 189 MW.
In comments to energypress, market officials attributed the auction’s low turnout to a maintenance of complicated licensing procedures.
Prospective participants of Greece’s first mixed RES auction, scheduled for April 15 and designed to place wind and solar energy investors in the same bidding arena with equal terms for intensified competition, submitted eight applications representing a total capacity of 637.78 MW on the recent March 21 deadline.
This means that a total capacity of 456 MW will be offered to bidders instead of the entire 600-MW amount announced by RAE, the Regulatory Authority for Energy, as a result of a regulation designed to intensify competition.
The total amount requested through the applications would have needed to exceed the 600-MW total by 40 percent if the full amount were to be offered at the upcoming auction.
Confirming previous energypress reports, the overwhelming majority of applications concern solar energy projects.
Authorities are now processing applications to determine the eligibility of interested parties interested in taking part in April’s mixed RES auction.
Solar or wind energy projects over 20 MW, PV projects that have qualified for fast-track procedures, as well as mixed wind-and-solar projects to be jointly connected to the grid are all eligible for participation at the forthcoming mixed auction.
A 200-MW solar energy park project planned by PPC Renewables in Kozani, northern Greece, another 200-MW solar energy project planned by JUWI Hellas, as well as two projects totalling 104 MW and planned by Spes Solaris, a member of the Panagakos group, are among the major projects expected to take part in the mixed RES auction. The two Spes Solaris projects are fast-track procedure qualifiers.
Procedures leading to the country’s first mixed RES auction, to place the sector’s main players, wind and solar energy investors, in the same bidding arena with equal terms for intensified competition, begin today with the submission of online applications.
These will be followed by the submission of dossiers containing all required documents ahead of the auction, expected on April 15, according to an announcement made by RAE, the Regulatory Authority for Energy.
A total of 600 MW will be offered to auction participants. Amounts requested in applications will need to exceed this 600-MW total by 40 percent if the entire amount is to be offered at the upcoming auction.
Terna Energy, Mytilineos, PPC, the Panagakos group, as well as major foreign players such as Total Eren, Juwi, EDF and ENEL are among the firms likely to participate.
Mixed RES auctions have become standard practice in other European markets, the objective being to secure optimal solutions for coverage of energy needs at the lowest possible cost.
The country’s first mixed RES auction, to place the sector’s main players, the wind and solar energy investors, in the same bidding arena and intensify competition, as is the case abroad, is expected to take place in mid-April.
Wind and solar energy technologies each have their respective advantages. PV systems are clearly lower-cost systems but offer smaller capacity and renewable energy output. On the contrary, wind energy systems promise greater economies of scale, making them more competitive, but cost considerably more to manufacture.
PV system costs have risen by approximately 10 percent in recent times as a result of a rise in the price of silicon, a solar cell manufacturing component. The development is expected to further intensify the bidding competition at Greece’s forthcoming mixed auction.
Elsewhere, wind energy players were the most successful bidders of a recent mixed RES auction in Spain, whereas solar investors dominated a session in Germany. Overall, results around Europe have shown that solar energy players hold an advantage over wind energy bidders at mixed RES auctions.
Wind energy parks in central Europe and Spain are installed in lowland areas, whereas equivalent Greek facilities are set up at higher altitudes, significantly increasing installation costs.