EDEY powers expanded, company entitled to offshore wind farm earnings

The powers of EDEY, the Greek Hydrocarbon Management Company, have been expanded to cover a range of areas following a legislative revision made by the government.

EDEY has authority over matters such as management, control and monitoring of all relevant contracts that have been established in the past by the Greek State on behalf of third parties; exploration and evaluation of the country’s hydrocarbon potential, as well as assignment planning and supervision of exploration and evaluation of project potential.

EDEY also oversees applications for participation in tenders, in accordance with relevant provisions of existing law.

The company’s equity capital has been set at one million euros, paid by the Greek State in three equal installments, annually.

In addition, earnings resulting from the management of the Greek State’s rights and responsibilities regarding the development and operation of offshore wind farms will be regarded as income for the company.

 

Alexandroupoli area offshore wind farm projects prioritized

Northeastern city Alexandroupoli’s prospective offshore wind farm projects holding old licenses, or which have submitted license applications, will be given priority as pilot-program area projects.

This area’s development of offshore wind farm projects will move ahead faster than projects at other offshore areas entering competitive procedures.

The energy ministry yesterday submitted a legislative revision establishing Alexandroupoli as a pilot area for offshore wind farm projects.

Covering an area south of the Evros region’s coastline and north-northeast of the island Samothrace, this pilot area will be able to host offshore wind projects with capacities of up to 600 MW.

In addition, a presidential decree defines – based on recommendations by the country’s offshore wind energy farm authority – other offshore wind farm installation areas and the capacities of projects they can host, set at a maximum of 200 MW.

Offshore wind energy framework submitted to Greek parliament

The Greek energy ministry submitted to parliament a new bill of law concerning the offshore wind sector, the licensing process of renewables and environmental measures.

The new law provides the opportunity to install offshore wind farms in marine regions, thus increasing the share of renewables in the country’s energy mix and reducing fossil fuels.

The Greek government will specify marine zones where interested investors may take part in auctions to secure offshore projects.

First offshore wind farm auction by 2025 for tariffs over 2 GW

A draft bill including a development and operation framework for offshore wind farms has been forwarded for consultation, now underway. The development paves the way for a first auction for the sector, expected by early 2025 and seen offering investors tariffs for a total capacity of more than 2 GW.

Prime Minister Kyriakos Mitsotakis has set an objective for a launch of the country’s first offshore wind farms by 2030.

The number of offshore plots to be offered to investors at the first auction remains undetermined at this early stage. But authorities will strive to offer a sufficient number of offshore plots to ensure the achievement of Prime Minister’s objective of a 2-GW total installed capacity for the sector by 2030.

This capacity target could be boosted if National Energy and Climate Plan (NECP) revisions require a greater number of wind energy capacity installations by the end of 2030, as part of the country’s effort to reduce carbon emissions.

Offshore windfarm framework published for consultation

The government has just published for consultation a draft bill concerning a framework for offshore wind farms. Its content offers priority to older licenses and applications.

Authorities aim to have the framework ratified as soon as possible so that procedures leading to the utilization of the country’s offshore energy wind potential can begin as soon as possible.

According to the draft bill, investors wanting to research specific offshore fields will need to submit permit applications to EDEY, the Greek Hydrocarbon Management Company. Applicants will need to meet technical and financial criteria.

Offshore fields will be transferred to investors offering the lowest bids for tariffs covering a 20-year period.

The energy ministry aims to have the draft bill ratified within July.

 

 

PPC seeking big-name offshore wind farm partnerships

Power utility PPC is seeking to establish a strategic partnership with a major international partner or partners for co-development of offshore wind farms in Greek territory as a follow-up to its partial acquisition of energy firm Volterra’s renewable energy portfolio, namely 112 MW in wind and solar energy projects, both already operating and under construction.

PPC is looking at offshore wind farm collaborations with the likes of Norway’s Aker, France’s Total and EDF, as well as Germany’s RWE. The Greek power utility has already held discussions with some of these companies, according to sources. Partnerships could be established with one company or even two, offering 33.3 percent shares to each.

According to the sources, PPC aims to have reached an agreement for offshore wind farm collaborations within the summer, concurrent to the energy ministry’s establishment of a legal framework for an offshore wind farm sector in Greek sea territory.

The ministry’s framework for the sector is nearing completion and could be forwarded for consultation as soon as mid-June.

This explains why PPC is currently giving preference to offshore wind farm projects in Greece over wind and PV project acquisitions in the Balkans, which the company has kept a close watch on for investment opportunities since the end of 2021.

Shipping sector developing offshore wind farm interest

The shipping industry, domestic and foreign, is expressing growing investment interest for offshore wind farms and is awaiting the emerging sector’s regulatory framework to develop such projects in Greek sea territory, energypress sources have informed.

Though plans are still nascent, a considerable number of shipping companies and shipowners are already in talks with consultants for related feasibility studies.

Conditions for shipping industry players are favorable. Their earnings have skyrocketed amid abnormal market conditions, worldwide, ever since the outbreak of the pandemic in early 2020. These higher earnings have generated additional capital for investment, prompting shipowners to consider the potential of offshore wind farms.

Anticipating strong growth in this emerging sector, metals production group Viohalco plans to proceed with an investment estimated to be worth 70 and 100 million euros, which, through subsidiary Cenergy Holdings, will merge the knowhow of group members Hellenic Cables and Corinth Pipeworks for the establishment of the world’s first industrialized unit for floating wind turbines.

Norway’s Equinor, the world’s biggest developer of offshore wind farms, has already expressed interest to develop projects in Greece, proposing an area between the Cyclades islands of Tinos, Syros and Mykonos.

In addition, TERNA Energy has reached an agreement with Ocean Winds, a partnership between EDP Renewables and Engie, for co-development of offshore wind farms offering a 1.5-GW capacity. Also, Mytilineos has reached an agreement with Denmark’s Copenhagen Offshore Partners. Hellenic Petroleum (ELPE) is currently engaged in talks with a major foreign company and Motor Oil has signed an agreement with Abu Dhabi Future Energy Company (Masdar).

Power utility PPC is currently involved in talks with at least five foreign companies, including Australia’s Macquarie, which recently acquired a 49 percent stake in PPC subsidiary DEDDIE/HEDNO, Greece’s distribution network operator. PPC is also believed to be in talks with American fund Quadum.

The Copelouzos group has joined forces with RF Energy to establish Aegean Offshore Wind Farms, a company planning to develop offshore parks offering an 850-MW capacity.

Greek shipowners own 5,514 ships, controlling 32 percent of the world’s tankers, 25 percent of bulk carriers and 22 percent of LNG carriers, the latter category being crucial for Europe’s effort to end its reliance on Russian natural gas.

 

Offshore wind farm financing support to follow framework

The energy ministry, pressing ahead to finalize the legal framework for offshore wind farms, is concurrently working on a plan to secure financial support for the country’s first wave of investments in this sector.

The financial support plan is intended to cover both fixed-bottom and floating wind farm projects, while prospective funds are anticipated from the REPowerEU initiative as well as the island decarbonization fund, energypress sources have informed.

Authorities are looking to include a fixed-bottom offshore wind farm project that has already secured production permits as a pilot project linked to the REPowerEU plan.

Fixed-bottom offshore wind farm projects have already been tried and tested abroad, meaning they do not represent a financing risk in terms of technology and feasibility.

On the contrary, floating offshore wind farms are a technology making its first steps, globally. Any investment uncertainty will need to be eliminated before financing for this technology can go ahead.

Offshore wind farm framework imminent, consultation in June

A framework for the development of offshore wind farms in Greek sea territory is nearing completion at the energy ministry and, according to sources, is expected to undergo consultation within the next month.

Sea plots will be offered through one auction, offering investors the opportunity to secure both plots and tariffs for prospective offshore wind farms. A previous plan had entailed two auction stages.

Interested parties will need to submit related applications to EDEY, the Greek Hydrocarbon Management Company, coordinator of the overall procedure. Investors, if deemed by EDEY to meet financial criteria, will be given the green light to study the generation potential of specific sea plots.

Investors will be given a period of between one to two years to study the prospects of sea plots to be offered through the auction.

Offshore plots, primarily northeast of Evia, off Skyros, Limnos, as well as port city Alexandroupouli, in the northeast, will be offered to investors. These plots are expected to offer wind energy potential of up to 10 GW.

It remains unclear how a number of investment plans that have already been granted licenses will be handled.

 

Offshore wind farm potential in Greece highlighted at industry event

Offshore wind farms have tremendous potential for development in the Greek market, and could be a game changer, Panagiotis Ladakakos, president of ELETAEN, the Greek Wind Energy Association, has told an industry event.

Floating offshore wind farms are a better option for Greece than fixed-bottom offshore wind farms as a result of the country’s great sea depths, which would increase the installation difficulties of fixed-bottom units, event participants agreed.

The ELETAEN president proposed the establishment of a framework offering a clear and detailed road map, adding that targets should be set for the next decade and beyond, all the way to 2050.

RES spatial map revisions incorporating Greece’s sea territory, as well as an action plan for the development of needed infrastructure concerning ports, shipyards and the supply chain are also needed, the ELETAEN president noted.

He added that power grid operator IPTO must take initiatives to plan sea transmission hubs for offshore wind farms, as this technology’s growth also depends on network development.

A pilot competitive procedure for a large-scale offshore wind farm project or projects would serve as a catalyst, the ELETAEN president added.

Greece’s potential in this sector was also highlighted by Francois Van Leeuw, co-CEO of Belgium’s ParkWind, one of a number of Belgium companies that participated in the event, staged as part of a three-day official visit to Greece by Belgium’s King Philippe and Queen Mathilde.

 

RES and energy storage licenses in less than 2 years from 5 at present

The time needed by investors to secure RES project and energy storage licenses will be reduced to less than two years, from five at present, according to a RES licensing simplification draft bill prepared by the energy ministry, expected to be announced within the next few days.

Through the simplified licensing procedure, the ministry will aim to facilitate RES licenses representing a total capacity of 12,000 MW and investments estimated at 10 billion euros by 2030.

The ministry’s legislative initiative will be carried out over two stages, the first concerning RES and energy storage project licenses, and the second offshore wind farms.

The revisions will enable investors to push ahead with licensing steps simultaneously rather than successively, as is the case at present.

Also, the procedure will include criteria filtering out prospective RES applicants deemed to not be genuinely interested in developing projects.

 

 

 

 

Consultation for RES licensing simplification, energy storage

Consultation is set to begin within the next few days for an energy ministry draft bill carrying a second round of measures designed to further simplify the RES licensing procedure and establish, for the first time, a complete framework concerning the development of energy storage projects, energypress sources have informed.

A third section of measures concerning development and operation of offshore wind farms, initially intended to be incorporated into this draft bill, is not yet ready. It will be released for consultation at a latter date, the intention being within the year’s first quarter.

The second round of RES licensing simplification measures will improve the country’s investment prospects as the overall time needed for licensing will be drastically reduced from five years at present to 14 months, according to the energy ministry.

Measures in the current draft bill include an initiative fusing three licensing steps into one – operator connection terms; installation license; and an operating contract with RES market operator DAPEEP. Until now, these three RES licensing steps have needed to be taken successively.

EDEY studying Norwegian upstream diversification

EDEY, the Greek Hydrocarbon Management Company, is exploring, with the expertise and support of Norwegian scientists, the prospect of incorporating carbon capture and storage (CCS) and offshore wind farms into its range of activities, taking Norway as an example.

The effort is being conducted with financial support from the European Economic Area (EEA) grants mechanism, established by Norway, Iceland and Liechtenstein with the aim, amongst other matters, of strengthening bilateral ties with 15 European countries, including Greece.

Norway, which has accumulated years of expertise through hydrocarbon extraction, has successfully combined its upstream sector with new energy fields such as CCS and offshore wind farms.

According to EDEY chief executive Aristofanis Stefatos, the objective is to make note of the most positive aspects of these Norwegian synergies to help Greece develop important projects needed for the energy transition, without excluding exploration of natural gas deposits in Greek seas should market conditions become appropriate.

The EDEY study with Norwegian experts, titled “Review of the Transformation of the Norwegian Oil and Gas Industry during the Energy Transition and its application in Greece”, began last April and has been included in the EEA Grants program covering 2014 to 2021.

 

 

‘EC to announce separate support system for offshore windfarms in 1Q ‘22’

The European Commission will announce a separate support system for offshore windfarms in the first quarter of 2022, the energy ministry’s secretary-general Alexandra Sdoukou has informed in a Euractiv interview, indicating this will facilitate Prime Minister Kyriakos Mitsotakis’ recently announced objective for an additional 2 GW in offshore wind farms by 2030.

Greece, which plans to withdraw all lignite facilities by 2028, will greatly depend on the addition of new RES units to replace the resulting capacity loss, Sdoukou noted.

The country plans to double its wind and solar energy capacity by 2030 so that the RES sector can represent 64 percent of Greece’s total electricity generation, the official pointed out.

A series of measures boosting the trust of local communities to host wind energy facilities will be needed, Sdoukou said, admitting resistance at local level has risen along with a growing recognition by the public of the advantages offered by wind turbines for eco-friendly energy.

Offshore wind farms, storage, RES licensing, climate in bills

Two legislative initiatives by the energy ministry, one for climate change rules, the other for a second round of RES licensing simplification revisions, development of offshore wind farms, and a framework for the installation and operation of energy storage units, will be presented at a cabinet meeting today.

The country’s climate rules will make official Greece’s target for a 55 percent reduction in carbon emissions by 2030, compared to 1990 levels, aligned with the EU’s new and more ambitious “Fit for 55” climate-change package.

Greece’s legal framework on the climate will also propose a binding road map for the achievement of net-zero emissions by 2050, also in accordance with EU objectives.

As part of the RES licensing simplification procedure’s second round, the energy ministry has proposed the introduction of letters of guarantee, worth sizeable amounts, for RES connections to the network, the aim being to subdue excess investment plan applications, but will enable investors to have their say through public consultation before any decision is made.

 

Ministry taking steps for offshore wind farm development

The energy ministry is preparing legislation for offshore wind farms, to define areas that will be made available for development and also involve power grid operator IPTO for grid connections of these facilities via regional hubs.

The ministry intends to include this framework to legislative revision for a second round of RES licensing simplification as well as energy storage development.

This legislative bill promoting three green energy fronts could be presented to the cabinet as soon as this Thursday.

Speaking at yesterday’s UN COP26 summit talks on climate change, Greek Prime Minister Kyriakos Mitsotakis reiterated Greece’s objective to play a leading role in offshore wind farms through the installation of 2 GW by 2030. This ambitious objective was definitely intended as a signal to domestic and international investors.

 

 

Legal framework for offshore wind farms progressing

The legal framework for offshore wind farm investments has been completed and final decisions at the energy ministry are expected soon, sources have informed.

Competitive procedures offering offshore areas to prospective investors is the most probable approach that will be adopted for this emerging sector in Greece, the sources added.

Floating offshore wind parks are expected to emerge as the favored technology as a result of the great depth of Greek seas.

The current proposal at the minister’s office entails the staging of tenders even for preliminary research, an approach that has been adopted by other EU member states.

But this could change in favor of a model preferred by market players, through which offshore concessions would be made available to investors following related applications for preliminary research such as wind velocity measurements.

 

Listed players plan 16 GW in RES projects worth €16bn

Greece’s listed energy groups, alone, plan to invest a total amount of 16 billion euros over the next decade for the development of green energy projects representing over 16 GW, big figures highlighting the anticipated dominance of the green energy market in the years to come as the country transitions to cleaner energy sources and decarbonizes.

Investments are already anticipated in mature RES technologies, namely wind and solar energy facilities, while, once market and regulatory conditions allow, major investments will be made in energy storage as well as offshore wind farms.

Terna Energy, market leader in Greece’s RES market, plans to reach an installed capacity of 3,000 MW in the next five years. The company, the biggest wind energy player in Greece and southeast Europe, is currently developing wind energy projects representing 400 MW while a further 63 projects are nearing maturity.

Power utility PPC is making impressive RES market progress through its subsidiary PPC Renewables. PPC, according to the company’s updated business plan, will make investments totaling 3.4 billion euros until 2023, 34 percent of this amount concerning RES investments.

Green energy is also a key aspect in the Mytilineos group’s investment plans over the next few years. Its solar energy projects portfolio, representing 1,480 MW, is one of the biggest in Greece. The company possesses 300 MW in RES projects either operating, under construction or set for construction, as well as a further 100 MW headed for final investment decisions by the end of 2021. Mytilineos also plans to develop 20 energy storage projects, each with a 50-MW capacity.

Hellenic Petoleum (ELPE), both acquiring and developing RES projects, is aiming for a 2-GW RES portfolio by 2030.

Motor Oil Hellas recently acquired 11 operating wind farms with a total 220-MW capacity as well as a 20-MW facility still under construction from private equity fund Fortress. MOH is aiming for an operating RES capacity of 364 MW by the end of 2022 as well as a medium-term RES goal of between 500 to 600 MW.

Ellaktor is planning investments worth 1 billion euros for the development of 900 MW through its partnership with Portugal’s EDPR.

Contractor Intrakat also aims to push ahead with a one billion-euro RES investment plan. The company has joined forces with Gaia Anemos, possessing wind and PV production licenses representing approximately 1 GW, plus RES expertise.

RF Energy has reached an investment decision to develop an offshore wind farm with a capacity of 498.15 MW northeast of the island Limnos. The project is budgeted at two billion euros, according to the company.

 

 

 

Solar, wind, energy storage system costs ‘exceed’ RAE figures

The cost of installing and launching solar and wind energy facilities, as well as storage systems, exceeds levels presumed by RAE, the Regulatory Authority for Energy, RES agencies and investors have pointed out in public consultation staged by the authority on the cost of new entry for all electricity generation technologies.

RES equipment costs have not only failed to stabilize in recent times, but, on the contrary, struck an upward trajectory, RES officials highlighted.

Some public consultation participants pointed out that RAE’s figures only factor in equipment supply and construction costs without taking into account the connection costs entailed.

SEF, the Hellenic Association of Photovoltaic Companies, rejected RAE’s capital expenditure estimate for domestic roof-mounted solar panel installations, presumed to be €550,000/MW, noting this figure is extremely low and does not reflect actual market conditions.

The association also noted that RAE’s €400,000/MW CAPEX estimate for commercial PVs is also too low, contending this cost ranges between €500,000-€550,000/MW.

The capital expenditure figure for offshore wind farms is far greater than RAE’s estimate of 3.1 million euros per MW, contended ELETAEN, the Greek Wind Energy Association.

“Given the lack of relevant experience in Greece, depth of the seas, and the still-undeveloped supply chain, the €3.1m/MW estimate is probably very optimistic,” ELETAEN stated.

Energy investment activity rising, focus on RES projects, energy transition

Investment activity in the domestic energy sector is rising with major deals being negotiated, the main focus being on renewables and the energy transition, participants at yesterday’s Delphi Economic Forum made clear.

This activity promises significant growth for all RES technologies, even the more innovative, such as offshore wind farms and energy storage units.

Major energy players are moving to capitalize on opportunities that are emerging as the country pushes ahead with its decarbonization effort. Also, investor talks concerning domestic and international partnerships, the latter promising to secure expertise in sectors such as offshore wind farms, are in progress.

Power utility PPC, moving ahead with RES investments, aims to have launched projects with a total capacity of 1.5 GW by 2023. The utility’s redevelopment plan for the country’s two lignite-dependent regions, Ptolemaida, in the north, and Megalopoli, in the Peloponnese, is in progress.

PPC plans to invest 3.4 billion euros on RES project development in these regions, and an upgrade of their distribution networks, Konstantinos Mavros, chief executive of PPC Renewables, a PPC subsidiary, told the forum.

PPC is also expected to establish partnerships facilitating its entry into the offshore wind market. In addition, the company also aims to have formed a joint venture with German power company RWE by the end of summer for development of RES projects totaling 2 GW.

Elsewhere, energy company Mytilineos is also preparing a strategic alliance with a major international group for its entry into the offshore wind farm sector.

Mytilineos is also close to completing, this year, a major post-lignite investment in natural gas-fueled electricity generation. In addition, the company plans to develop 300 MW in wind farms and 1.5 GW in solar farms over the next two years.

Furthermore, Mytilineos plans to develop 20 energy storage projects, each with 50 MW capacity, by utilizing its immense knowhow gained in this field through involvement in such projects abroad.

Hellenic Petroleum (ELPE) is preparing RES and digital transition projects and will concurrently focus efforts to reduce carbon emissions and develop more eco-friendly products, including biofuels and hydrogen.

The Copelouzos group is nearing an investment decision on the development of a natural gas-fueled power station in Alexandroupoli, northeastern Greece. A decision is expected this summer. The group is currently engaged in talks with neighboring North Macedonia’s power utility for its possible entry into this project as a minority partner.

As for networks, power grid operator IPTO has planned numerous projects as part of a ten-year investment plan worth five billion euros. The operator anticipates new RES project penetration of 17 GW, a forecast exceeding the National Energy and Climate Plan’s goals.

DEDDIE/HEDNO, the distribution network operator, has put together a 3 billion-euro investment plan for the two next regulatory periods, each four years long. Projects include network undergrounding, service upgrades and improvement, new technologies, as well as grid digitalization projects.

Unlocking Greece’s offshore wind potential – Challenges, opportunities

Greece’s attempts to develop its untapped offshore wind potential have stalled in the past, but renewed investor interest and government commitment to set up a sound regulatory framework has strengthened its prospects.

By Dimitris Assimakis, Partner, and Minas Kitsilis, Senior Associate, Reed Smith.”

Introduction

Since 2006, Greece has taken several different approaches to the development of offshore wind projects. So far, these policy measures have had few concrete results. Given the present ambitious national energy and climate plan for the period up to 2030, dictating at least a twofold increase of the existing renewable energy capacity, the immediate necessity for new capacity due to the government’s decision to cease the operation of all existing lignite-fired power plants by 2023, as well as the existence of certain impediments to the further development of onshore wind farms, such as the availability of land, the pressure from other activities, such as tourism, and the necessity for the considerable expansion or reinforcement of the grid, offshore wind is expected to start playing an important role in the country’s pursuit of cost-effective and efficient renewable energy prospects.

For several years now other EU coastal countries with significant sea fronts have developed offshore wind projects and so this could certainly be a successful approach for the country with the most extensive coastline among all Mediterranean countries and one of the highest offshore wind potential in the region.

Therefore, aside from certain technical challenges (e.g. steep sea-bed drop-off around mainland Greece and around most of the Greek islands) and foreign affairs policy issues (e.g. territorial disputes in the Aegean Sea), a clear national regulatory framework, which adequately addresses spatial planning, licensing, grid interconnection and economic support issues, is also required in order for offshore wind technology to deliver its significant potentials in the country’s power generation mix.

Ongoing structured public discussions with interested investors and stakeholders as well as recent policy statements from the Greek Ministry of Environment and Energy are expected to result in an offshore wind-specific framework within this year that will enable the exploitation of this valuable renewable energy source also in Greece. Already, major international market players such as Ocean Winds (EDPR and Engie) in cooperation with Terna Energy, the largest renewable power producer in Greece, Iberdrola, Copenhagen Infrastructure Partners and Equinor are actively involved in these discussions, while reportedly other international investors such as Blue Float Energy and Innogy are closely following the developments in the sector. Moreover, local market players such as PPC Renewables, the renewables arm of Public Power Corporation (Greece’s largest power producer and supplier), Copelouzos group and RF Energy are actively engaged in this process. These deliberations are conducted within a very positive momentum for the offshore wind sector, following the recent release of the EU Strategy on Offshore Renewable Energy and the great technological developments in the sector, especially with respect to the imminent commercialisation of large-scale floating wind projects, which seem to be the most proper offshore wind technology for Greece given the depth of its territorial waters.

Past approaches stalled

Until mid-2010 the generally applicable licensing scheme at the initiative of interested investors was also applicable for offshore wind projects’ development, licensing, spatial planning and economic support against transparent and objective criteria and a regulated feed-in tariff through a standardised long term (20 years) power purchase agreement with the energy market operator as offtaker and dispatch priority for the power produced. In this context a large number of licence applications for offshore wind projects were filed with the competent Regulatory Authority for Energy in Greece (RAE).

However, only two fixed-bottom offshore projects were licensed by RAE in 2012, one of an approximately 500 MW capacity offshore the island of Lemnos in the north Aegean Sea and another one of 216 MW capacity offshore the port of  Alexandroupolis in the Thracian Sea. On the other hand, most of the licence applications filed within the period are still pending assessment from RAE with unclear further development options in anticipation of the new offshore wind-specific framework.

Subsequently, in mid-2010 Greece introduced a special centralised planning scheme for offshore wind projects to be rolled out at the initiative of the jointly competent Ministers of finance and economy, maritime affairs, foreign affairs, national defence, culture, tourism, environment and energy by virtue of a new provision introduced into the Renewables Law 3468/2006 (i.e. Article 6A), which rendered the previous open licensing scheme inapplicable for offshore wind projects.

That rather unclear approach entailed the strategic environmental assessment (SEA) of potential offshore project sites before the respective projects were licensed by the Minister of Environment and Energy, instead of RAE, and before they were auctioned off for construction through an open public tender process (public works procurement process) against economic exploitation by the successful bidder during the concession period; presumably through some long term power purchase agreement with the energy market operator as offtaker against an agreed feed-in tariff and dispatch priority. Environmental impact assessment (EIA) and further site planning, installation and construction works licensing until the operation period (inclusive) would follow the generally applicable legislation for renewables, except for some special provisions of law for the concession of sea areas in favour of renewable energy projects that would be anyways addressed as above.

This framework also entailed a number of implementing ministerial decisions and presidential decrees that were never adopted as this approach was never actually pursued in spite of a SEA study commissioned to this end by the Centre for Renewable Energy Sources in Greece (CRES) and presented in September 2015.

New approach required │ key issues

Licensing framework – recent developments & challenges ahead

The recent review of the Environmental Licensing Law 4014/2011 in May 2020 (i.e. by virtue of Law 4685/2020) raised certain hopes at it was aimed at simplifying and expediting the environmental licensing of projects of any type, including renewable energy projects, as well as at simplifying the first licensing milestone for renewable energy projects before RAE. Offshore wind projects are qualified as ‘special renewable energy projects’ and may benefit from the above simplified licensing framework as soon as an offshore wind-specific framework is adopted. In effect, this licensing framework reinstates the previous licensing scheme at the initiative of interested investors but ultimately, fails to provide any coherent legal certainty as it does not explicitly repeal the rather problematic provision of Article 6A of Renewables Law 3468/2006 mentioned above.

So although the general environmental licensing and the RES specific licensing framework were improved through the adoption of Law 4685/2020, there was not actually any real value for the offshore wind sector from this legislative process, since two parallel and apparently, inconsistent licensing regimes are currently in place although neither in full force and effect until Greece finally decides whether it will go on with a centralised or a develop-led planning system. Moreover, the licensing framework in place does not really address what will happen with the existing two electricity production licences granted as well as the various licence applications that are still pending assessment under the past licensing scheme.

Apparently, the envisaged new framework should provide for a consistent, coherent and well-structured licensing regime enabling as well the performance of any early development actions from the investors, in the sense that they should be allowed, on the basis of an exclusive right, to enter into a specific sea area in order to perform wind measurement campaigns and preliminary field surveys.

Spatial planning issues

The Special Spatial Planning Framework for Renewables of December 2008 provides for wind power in general and onshore and offshore wind power in particular. Such provisions include generally applicable criteria, limitations and exclusion zones for wind energy and special ones for onshore and offshore wind projects. However, it is commonly admitted that the said framework needs to be reviewed to account for technological developments and acquired experience in spatial planning and deployment of renewables not only in Greece but also in the EU, including current best practices.

The Ministry of Environment and Energy is already working on updating the framework but it will take some time to achieve concrete results due to the technical and SEA studies involved. In addition, it must also be compatible with the regional and other special frameworks for spatial planning that are also under review pursuant to Part A of Law 4417/2016 and most importantly, with the still pending maritime spatial planning for marine areas in Greece according to Part A of Law 4546/2018 (as per the relevant EU Directive 2014/89) for the avoidance of conflicts. An interim solution may have to be sought in this connection as otherwise neither central nor individual planning will be feasible and legally sound against a reasonable time schedule and certain target capacity for offshore wind development by 2030 and beyond.

Sovereign rights and public international law

Greece has reserved the right to exercise all its sovereign rights under Article 3 of the 1982 United Nations Convention on the Law of the Sea (UNCLOS) to expand its territorial sea beyond six (6) nautical miles, which is the current breadth thereof, up to twelve (12) nautical miles measured from baselines determined in accordance with the UNCLOS. Greece has signed and ratified the UNCLOS by virtue of Law 2321/1995. Recently, by virtue of Law 4767/2021, Greece has expanded its territorial sea to twelve (12) nautical miles in the whole of the Ionian Sea area up to the Cape Tainaron in south Peloponnese, while it is reiterated therein Greece’s sovereign rights to do the same with all other sea areas, including the Aegean Sea, being the area with the highest offshore wind potential.

However, given the historical tension between Greece and Turkey concerning the Aegean Sea, it is rather questionable whether Greece will finally decide to exercise such sovereign rights and expand its territorial sea to twelve (12) nautical miles also in the Aegean Sea, according to the UNCLOS, in the years to come. In this respect, it is reasonably expected that any development of offshore wind projects in the Aegean Sea will need to be limited within the six (6) nautical miles zone. Further, the establishment and delimitation of the Greek exclusive economic zone by means of valid and legally binding agreements with neighbouring states pursuant to the UNCLOS is still pending too, save for the recent agreements with Italy in the Ionian Sea and Egypt in part of the Mediterranean Sea south-east of the island of Crete.

Proper support scheme for offshore wind

The new support scheme for renewables in Greece introduced by virtue of Law 4414/2016 in line with the European Commission’s Guidelines on State aid for environmental protection and energy for the period 2014 – 2020 provides for operating aid to renewables through a technology-specific sliding feed-in premium (FiP) scheme for the vast majority of new projects which is added as a premium to wholesale market revenues and thus tops up their market revenues in order for the operating aid to reach an acceptable level of support measured against a technology-specific reference tariff (RT).

Aside from small scale and experimental projects, since 2017 the RTs are set through competitive bidding processes (auctions) on project basis for the two mature technologies (i.e. onshore wind and solar photovoltaic) in technology-specific and technology-neutral auctions run by RAE. In the event that the wholesale market price of a renewable technology exceeds the applicable RT, the excess is rebated to a special account for renewables kept by the RES operator and aggregator of last resort (DAPEEP) and hence the operating aid contract is a standardised two-way contract for differences (CfD) between the applicable RT (as strike price) and the producer’s revenues from the wholesale electricity market.

The auctions scheme is expected to extend beyond 2020, likely up to 2024 and for a certain overall capacity threshold not in excess of 2.1 GW, in accordance with the relevant statements made by the Minister of Environment and Energy in mid-November 2020.  However, technology-specific auctions for offshore wind or technology-neutral auctions including offshore wind are not likely to be feasible for Greece in this time schedule. In the meantime, previous auctions for renewable electricity have resulted in applicable RTs for onshore wind and solar photovoltaic projects below wholesale market prices for certain time periods. Therefore, alternative revenue structures involving corporate renewable power purchase agreements (PPA) cannot be excluded for onshore wind and solar photovoltaic or offshore wind projects in Greece in common with other countries where such alternatives are already pursued for some years now in the onshore wind and solar photovoltaic sectors, and recently also in the offshore wind sector. However, such structures are hardly suitable or bankable during the early days of a new sector development like offshore wind.

Optionally, individual aid without an auction process is also possible for renewable energy projects (including offshore wind) exceeding 250 MW or clusters of projects exceeding 250 MW and sharing common interconnection with the transmission system according to the said guidelines on State aid and Article 4 para 12 of Law 4414/2016. Individual aid requires prior notification to and approval from the European Commission. An implementing ministerial decision is still pending (para 12 was added to Article 4 of Law 4414/2016 in end-2019) for all renewable energy projects or clusters of such scale and importance for national and EU renewable energy targets, but it is reasonably expected soon. This option is reasonably considered more suitable, especially for floating offshore wind projects, and certainly more bankable at the early stages of any new renewable technology.

Moreover, Greece could consider when developing its national recovery and resilience plan in the context of the EU Recovery and Resilience Facility possible priority actions in order to facilitate the development of offshore wind projects in the country.

Grid connection

However, unlocking the great wind potential of the Greek seas and islands depends on the development of some critical interconnections, some of which are expected in the short to medium term. The anticipated completion of the interconnection of the island of Crete with the high-voltage system in the Athens metropolitan area by 2023 and of all Cycladic islands by 2024 will enable the significant development of new wind power capacity on these islands but also in the sea areas around them covering a significant part of the south Aegean Sea.

Moreover, ADMIE, the Greek TSO, has included in its current ten-year development plan the progressive interconnection of all other major islands in the south-eastern and north Aegean Sea, such as the islands of Rhodes, Kos, Karpathos Lemnos, Lesvos, Samos and Chios by 2029,  covering therefore though such plan the remaining of the Aegean Sea.

ADMIE is actively participating in the discussions held for the formulation of the offshore-wind specific framework and clearly, one of the key issues which need to be addressed therein is the interlink of any offshore wind investment projects with ADMIE’s development plan and its role in the design, construction and financing of the necessary grid expansion and reinforcement works.

Strategic investments programme and offshore wind

Since 2011, Greece has had in place an investments facilitation programme whereby productive investments (private or public ones, foreign or domestic) which generate quantitative and qualitative results of major significance for the national economy (including other criteria on investment budget, employment creation, innovation and sustainability) are qualified by an inter-ministerial committee as ‘strategic investments’ and are entitled to one-stop-shop and fast-track licensing and development procedures, including environmental and spatial planning ones as well as land expropriation related ones and dispute resolution provisions.

Part B of Law 4608/2019 on attracting strategic investments aims at modernising, improving and enhancing the scope of application and the fast-track licensing and development procedures in favour of strategic investments. These new provisions include: special spatial plans on project basis; tax benefits (as individual State aid subject to applicable EU regulations); one-stop-shop and fast-track licensing within 45 calendar days per licence, permit, opinion or approval (subject to special EU law provisions and procedures, e.g. public awareness on environmental matters), and overall within three (3) years from the MoU between the strategic investor and the Minister of Finance and Development on the time schedules and mutual obligations; cash grants for research and development (R&D) projects, and a UNCITRAL arbitration clause for disputes relating to the said MoU. On the other hand, applications for qualification under the new programme can be filed until the end of 2023.

Greece’s strategic investments programme has facilitated to some extent the spatial planning and licensing of a number of investments, mainly in tourism and other commercial sectors including some solar photovoltaic and solar thermal projects of scale and clusters of onshore wind projects. However, it has been limited to licensing aspects thereof and it does not address operating aid or other economic support aspects. Furthermore, it captures urban or onshore (including seashore) spatial planning, but it does not capture offshore aspects and maritime spatial planning that is still pending as described above. Therefore, account taken of the end-2023 current deadline for applications under the new programme, it is yet to be considered in more detail how the new programme for strategic investments in Greece could facilitate offshore wind. A recent positive development though is the special benefit conferred now under the programme to innovative renewable projects, amongst which offshore wind projects, in relation to their priority for grid connection over other projects using more typical renewable energy technologies, such as onshore wind and solar photovoltaic projects.

The way forward    

Experience from other jurisdictions has shown that formulating a comprehensive and appropriate legal framework for offshore wind in any given country is a challenging multi-disciplinary exercise. Structured public discussions with interested investors and stakeholders are ongoing in Greece during and have been for the last couple of years. Specific proposals are also being put forward for public consultation by stakeholders like the Hellenic Wind Energy Association but also from major global offshore wind developers. The Ministry of Environment and Energy has also announced that it will present a legislative proposal for offshore wind by mid-2021 taking into account the particularities of the Aegean Sea and international experience in offshore wind industry and technologies. We are confident that the ongoing process will result in a comprehensive legislative proposal for an offshore wind-specific framework. However, time and planning are of the essence for long lead capital intensive infrastructure investments like offshore wind to materialise within a certain time schedule, e.g. by 2030, on legally sound and commercially sensible and therefore bankable conditions in order to pursue successfully the national and EU energy, climate and environmental policies.

 

Grant Thornton Hellas developing Greek offshore wind farm framework

Business adviser Grant Thornton Hellas, commissioned and funded by the European Bank for Reconstruction and Development, has taken on the development of an institutional, legal and regulatory framework for offshore wind farms in Greece, in support of an overall effort being made by the energy ministry, energypress sources have informed.

Grant Thornton Hellas has already received an assortment of proposals, including on spatial and licensing matters, from interested parties, among them ELETAEN (Greek Wind Energy Association), ESIAPE (Greek Association of Renewable Energy Source Electricity Producers), EDEY (Greek Hydrocarbon Management Company), and IPTO (power grid operator).

Grant Thornton Hellas intends to also examine frameworks developed by other countries for their offshore wind farm sectors.

The energy ministry is striving to finalize the Greek framework’s key sections by June, as has been announced by ministry officials, or, at the very latest, within the summer, ahead of legislative procedures by the government.

A high-level plan, the framework’s nucleus, is planned to be completed within May so that legislative procedures can take place in June, sources said.

To serve as a road map, the high-level plan will need to provide details on: the selection criteria to be applied when choosing offshore areas to host initial projects; licensing steps for investors; the agency to be given responsibility of the licensing and project maturity processes; and the timing of auctions for tariffs.

 

Offshore wind farm framework, transitional plan push for June

The energy ministry, believed to be on the final stretch in its effort to establish an institutional framework for offshore wind farms, is aiming to finalize key sections and other crucial details of this framework by June, or, at the very latest, during summer, enabling the plan’s legislation soon after.

Keen to prevent any further delays to the overall effort, the energy ministry is currently also welcoming proposals by market players for a possible transitional plan that could facilitate the launch of two to three pilot projects for a period of two to three years as a precursor to the delivery of the full framework, a complex task due to the sector’s nature.

The energy ministry appears willing to adopt many of the incoming proposals in an effort to have prepared a finalized framework by June.

According to sources, the ministry aims to have prepared a high-level plan, or the nucleus of the framework, this month.

To serve as a road map, the high-level plan will need to provide details on: the selection criteria to be applied when choosing offshore areas to host initial projects; licensing steps for investors; the agency to be given responsibility of the licensing and project maturity processes; and the timing of auctions for tariffs.

The energy ministry’s secretary-general Alexandra Sdoukou has, on numerous occasions, noted in public remarks that a high-level plan of the framework for offshore wind farms and a related draft bill will be ready by summer.

The offshore wind farm industry is expected to experience a growth surge over the next few years. According to a recent Global Wind Energy Council report, last year’s 6.1 GW in new offshore wind farm installations is forecast to grow by 292 percent until 2025, reaching 23.9 GW.

Legislative priority for energy storage, offshore wind farms

Legislative action will soon be taken by the energy ministry for the RES sector and energy storage systems, as well as offshore wind farm development, the key pillars of the country’s energy transition plan, energy minister Kostas Skrekas has told an online event staged by research and policy institute diaNEOsis on “The Energy Sector in Greece and the Climate Crisis”.

“We are preparing an institutional framework for energy storage. RES units cannot operate without storage,” the minister told the event, referring, once again, to a plan for power purchase agreements (PPAs) between industrial enterprises and RES producers.

An institutional framework for offshore wind farms, the energy transition’s second main component, is also being prepared to cover spatial matters and utilization of sea areas as an energy source, Skrekas noted.

Energy efficiency project support programs worth between 4 and 4.5 billion euros are planned to be offered over the next few years for building upgrades, the minister also told the event.

Commenting on electromobility, Skrekas praised the success of recent incentives offered for electric vehicle purchases, noting that 10 percent of new vehicle registrations in 2021 concern electric and hybrid models.

Three key factors pivotal for offshore wind farm development

Spatial planning-licensing, grid connectivity and the remuneration formula for investors are three key factors pivotal to the development of the country’s offshore wind farm industry, investors and authorities agree.

Speaking at an event staged yesterday by ELETAEN, the Greek Wind Energy Association, the energy ministry’s secretary-general Alexandra Sdoukou stressed that the right formula for the sector’s development needs to be based on these three factors.

This industry’s course abroad, so far, has shown that a variety of options can be adopted for each of these factors. Fellow European countries have followed a range of paths, often contradictory. Greece’s energy ministry will need to seek solutions that best suit local conditions.

The spatial planning-licensing options range from a liberal model adopted by the UK, offering offshore wind farm investors maximum freedom to develop their investment plans, as they deem best, including in choice of appropriate location for maximum commercial potential, and, at the other end, a state-regulated model, as practiced in countries such as Denmark and the Netherlands. In this latter case, state regulatory authorities are responsible for determining installation locations and capacities, through studies of their own, before staging auctions.

ELETAEN’s proposal favors a mixed approach, through which the state would initiate the process by allotting wider areas for offshore wind farm development.

The wind energy association also favors a mixed approach for network connectivity that would require power grid operator IPTO to develop main lines in areas designated by the state for offshore wind farm installations.

Local authorities and players still appear to disagree on whether non-auction fixed tariffs will need to be offered to investors as a catalyst for this industry during its early stage of development.

Sdoukou, the energy ministry’s secretary-general, did not rule out such an approach at yesterday’s ELETAEN event. But, regardless of whether a preliminary stage of non-auction fixed tariffs will be offered, all sides seem to agree that tariffs, later on, will be exclusively made available to offshore wind farm investors through auctions.

 

Offshore wind farm framework within first half, auction in ‘22

A legal framework for offshore wind farms will be ready within the next few months, no later than the end of the year’s first half, enabling investments in this sector to begin in Greece, the energy ministry has assured.

The energy ministry’s leadership is expected to reiterate this stance, without offering further scheduling details, at an event to be staged today by ELETAEN, the Greek Wind Energy Association. Energy minister Kostas Skrekas and the ministry’s secretary-general Alexandra Sdoukou will be participating.

Norway, a country with extensive offshore wind farm knowhow, will be strongly represented at the ELETAEN event. The Norwegian Ambassador to Greece, Frode Overland Andersen, and Daniel Willoch, a representative of NORWEA, the Norwegian Wind Energy Association, will take part.

So, too, will Giles Dickson, CEO at Brussels-based WindEurope, promoting the use of wind power in Europe.

If all goes as planned with efforts being made by the energy ministry, as well as ELETAEN, a first auction for offshore wind farms in Greece could be staged within the first half of 2022.

Considerable progress has been made in recent months, but pending issues on important details concerning spatial and licensing matters, connectivity with power grid operator IPTO’s network, as well as a remuneration formula for investors, all still need to be settled. The overall effort is complex and involves a number of ministries.

Investor interest in offshore wind farms is high as studies project electricity costs concerning floating units in Greece will experience a 40 percent decline by 2050. This cost, according to an older European Commission study, was estimated to drop from 76 euros per MWh in 2030 to 46 euros per MWh in 2050.

The same study estimated Greece’s offshore wind farm capacity would reach 263 GW, a prospect promising investors sustainability for the development of such projects.

Norway’s Equinor has already expressed the strongest interest for offshore wind energy development in Greece. Denmark’s Copenhagen Offshore Partners, also a major global player, has also shown some signs of interest.

As for Greek companies, TERNA Energy, the Copelouzos Group, and RF Energy have, in the past, submitted applications for offshore wind energy parks to RAE, the Regulatory Authority for Energy.

 

New minister, just appointed, has issues to resolve in 2021

Kostas Skrekas, just appointed new energy minister as part of the government’s cabinet reshuffle, in place of Costis Hatzidakis, who has headed the ministry for a constructive year and a half, faces a series of pending energy-sector matters that remained unresolved in 2020. They need to be addressed as soon as possible. Developments and conditions this year will be pivotal for these matters.

Skrekas was previously deputy minister for agricultural development and food.

Also in 2021, a year during which takeovers and mergers are seen occurring in the retail electricity and gas markets, rivals will continue battling for market share gains. The target model’s launch two months ago has brought about new conditions, strengthening the positions of vertically integrated suppliers.

The need for a normalization of the target model’s new markets stands as the energy ministry’s most pressing task at present. A sharp rise in wholesale electricity prices as a result of soaring balancing market costs has deeply unsettled the market, impacting the standings of non-vertically integrated suppliers, as well as industrial enterprises and consumers, who face rising bills.

Market coupling with Bulgaria’s day-ahead market, scheduled to take place within the first three months of the new year, is the next step of the target model, a procedure designed to harmonize EU energy markets and promote competition.

New energy-intensive industrial tariffs also need to be set soon. Though essentially a matter concerning state-controlled power utility PPC and Greece’s industrial players, the cost of industrial energy is crucial for Greek industry, carrying particular political and economic weight.

Also, Greece has little time left in its negotiations with Brussels for a framework to offer third parties access to PPC’s lignite-based generation. This issue is no longer as crucial as it once was because the country’s lignite output has been drastically reduced. Even so, it remains important for independent suppliers.

A number of energy-sector privatizations could be completed this year. Gas utility DEPA’s two new entities, DEPA Infrastructure and DEPA Commercial, electricity distribution network operator DEDDIE/HEDNO, and a tender for a tender for the development of an underground natural gas storage facility (UGS) in the almost depleted natural gas field of “South Kavala” in northern Greece are all on this year’s privatization list.

In renewable energy, the ministry needs to take decisions within the first few months to clarify terms regulating the sector. RES investment interest is currently high. Steps still need to be taken in an ongoing effort to simplify RES licensing procedures, while a legal framework must be established for energy storage, offshore wind farms and hydrogen use.

 

Hydrocarbon framework helping shape offshore wind farm rules

The energy ministry is utilizing the existing legal framework for offshore hydrocarbon licensing as a guide for the establishment of a respective set of rules for offshore wind farms, energypress sources have informed.

The energy ministry’s secretary-general Alexandra Sdoukou is heading a team assembled for this task, to include carving out offshore blocks in the Aegean and Ionian Seas that are deemed appropriate for offshore wind farm development.

Once defined, these blocks, which must neither trespass Natura environmental protection areas nor interfere with shipping and fishing zones, will be offered to investors through tenders.

An open-door procedure, or staging of tenders following official expressions of interest by investors for specific areas, as is the case with the hydrocarbon sector, may also be adopted for offshore wind farms.

The team led by Sdoukou is also examining equivalent legal frameworks used by other European countries.

Offshore block positioning and licensing; interconnections with the grid; and the remuneration formula for investments are three key aspects to be covered by the offshore farm sector regulations, Sdoukou recently told an ELETAEN (Greek Wind Energy Association) conference.

A related draft bill is expected to be ready towards the end of the year.

Floating wind turbine installations are most suitable for Greece as a result of the country’s deep waters and lack of obstacles for the development of this type of technology in international waters, studies have shown.

 

Greece keen to utilize American RES technology; funds eyeing market

The government wants to utilize latest American technology for more recent RES and RES-related domains such as offshore wind farms and energy storage, the energy ministry’s secretary-general Alexandra Sdoukou noted yesterday during a meeting with US Secretary of State Mike Pompeo and other US officials in Thessaloniki.

For quite some time now, American renewable energy producers, institutional investors and funds have been scanning the Greek market for RES market opportunities.

A complete framework for offshore wind farms in Greece will be presented early in 2021, Sdoukou pointed out during yesterday’s meeting.

Major offshore wind farm development has been achieved off the American west coast, featuring, like the Mediterranean, waters of sudden depth, ideal conditions for the development of offshore wind farms.

US firms such as Invenergy, one of North America’s biggest wind energy producers; 547 Energy, a RES platform for Quantum Energy Partners; National Energy; and wind energy equipment manufacturer General Electric, have displayed a rising interest in the Greek market.

Besides RES and RES-related companies, a number of American funds are seeking investment opportunities in Greece.

At least ten US funds appear to be keeping a close watch on power utility PPC as a result of the corporation’s strategic turn to renewable energy.

They include Bell Rock Capital, Sephora Investment Advisors, Waterwill Capital Management, Cleargate Capital, Golden Tree Asset Management, Helm Investment Partners, Knighthead Capital Management, Craftsman Management, Colt Capital Partners and Kirkoswald Αsset Μanagement.

 

 

 

 

 

IPTO moves to develop links for private RES projects on islands

Power grid operator IPTO has submitted a request to RAE, the Regulatory Authority for Energy, for a grid management rule revision that would enable the operator to take on the planning and development of new subsea interconnections for private RES projects whose licenses include cable installations.

The operator’s proposal includes a formula through which IPTO would assume the entire cost of subsea cable installations for private projects and recover these costs via network surcharges.

This formula mainly concerns bigger projects, over 250 MW, while the cable interconnections could, according to the operator’s proposal, remain independent or serve as capacity boosts for projects already included in IPTO’s ten-year development plan. They include the fourth stage of the Cyclades interconnection and links in the northern Aegean and the Dodecanese.

This is, after all, one of the advantages possessed by the operator, able to offer a complete plan, ensure equal treatment of investment plans, and utilize projects in a uniform way to achieve economies of scale and ultimately provide benefits for the electricity market as a whole.

In addition, IPTO, like other European operators, is seeking a key role in the development of offshore energy transmission infrastructure, promising  links for offshore wind farms, either floating or fixed.