RES auctions

Standalone batteries auction sooner; RRF time constraints

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An inaugural auction offering capacities for standalone batteries will take place by early July, at the very latest, leaving investors with about half the time they had anticipated to prepare.

The first auction, according to a ministerial decision published in the government gazette, is scheduled to take place between three to four weeks after RAAEY, the Regulatory Authority for Waste, Energy and Water, officially announces the session, far sooner than a period of six to eight weeks originally stated in a draft of the plan. RAAEY’s announcement is expected early in June.

This halved preparatory period for participants resulted from Recovery and Resilience Facility (RRF) time constraints. This facility will offer successful bidders a sum of 200 million euros in subsidy support for their standalone battery installations.

According to the RRF deadlines, the first wave of RES projects with standalone batteries ought to have secured their tariffs by the end of June, which puts the overall procedure slightly behind schedule with no time to waste.

Two mixed, two technology-specific RES auctions this year

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The energy ministry is laying the groundwork to stage four RES auctions during the remainder of 2023, offering a total capacity of 1,600 MW. Two of these sessions will be mixed RES auctions while the other two will be technology-specific.

The ministry is preparing to sign a ministerial decision that will enable these auctions to be staged. They will be open to both small and large-scale solar and wind energy facilities.

The same ministerial decision will also launch a pilot auction for green-energy facilities combining batteries into their operations. A total of 200 MW will be offered to investors through this auction.

All the aforementioned competitive procedures are foreseen in a new support scheme that was given the green light by the European Commission in late November, 2021. One mixed RES auction has already been held within this plan’s framework.

Two mixed RES auctions offering a total capacity of 1,200 MW will be staged for large-scale wind energy facilities with capacities exceeding 6 MW and solar energy parks with capacities over 1 MW. According to sources, auction starting prices will be set at 63 euros per MWh for wind energy units and 54 euros per MWh for solar farms.

The imminent ministerial decision will also enable the staging of two technology-specific RES auctions in 2023, both for small-scale projects. One will concern solar energy units with capacities of less than 1 MW and offer a total of 100 MW at a starting price of 70 euros per MWh.

The second of these two technology-specific RES auctions will concern wind energy facilities with capacities of less than 6 MW, at a starting price of 83 euros per MWh.

 

Starting price for next RES auction ahead of May 21 vote

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The energy ministry is pushing to deliver, ahead of the May 21 legislative election, a ministerial decision setting a starting price for the next RES auction.

If issued prior to the legislative election, the ministerial decision will pave the way for RAAEY, the Regulatory Authority for Waste, Energy and Water, to stage a second auction offering remuneration to major-scale green energy power stations regardless of the outcome of the upcoming election.

The government is now taking initiatives to settle a variety of energy-sector matters prior to the May 21 election as a second round of voting, if needed, will be held between one and one-and-half months later, stagnating concerns during the inter-election period.

The energy ministry recently announced a two-month package of electricity subsidies for consumers covering May and June, instead of continuing its support on a month-by-month basis.

The second auction offering remuneration to major-scale green energy power stations will, once again, be open to investors behind solar energy facilities of over 1 MW and wind energy facilities of more than 6 MW.

The total capacity to be auctioned off is expected to exceed 1 GW. A left-over capacity of approximately 475 MW from the first auction will be made available to investors in the second auction.

 

RES, energy storage auctions most likely after election

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A preparatory period of at least two-and-a-half months is still estimated to be needed for auctions offering tariffs to new RES projects and a first wave of standalone batteries concerning energy storage totaling between 900 and 1,000 MW, the latter to also receive investment support funds worth 200 million euros from the Recovery and Resilience Facility (RRF) if tightening deadlines are met.

Given the hefty time period still required for preparations, the auctions for both new RES projects and energy storage units will most likely not make it for before the country’s next national election, to take place in spring, some time between April and May.

As for the RES auctions, the next session will concern a second round catering to large-scale solar and wind energy units expected to represent more than 1 GW. In addition, a RES auction for small PVs with capacities of between 10 KW and 1 MW is still pending.

According to RRF terms, standalone battery projects to qualify for investment support will need to be completed by the end of 2025.

Big auction capacity boost planned for RES projects with energy storage

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The energy ministry plans to greatly boost capacities offered at auctions for RES projects with energy storage systems from 200 MW to 1 GW as part of its effort to strengthen the role played by RES units with behind-the-meter storage in mitigating local grid-congestion problems.

This revision will require approval from the Directorate-General for Competition. In preparation, the energy ministry is already engaged in related talks with the Brussels authority.

These talks are believed to have progressed but work still needs to be done before the Greek side can send a formal request to Brussels.

The energy ministry is confident that renewable energy systems with storage units can significantly contribute to optimal use of available electrical capacity and, as a result, increase green energy’s share of the energy mix.

Island hybrid RES, energy storage project auctions in first quarter of ’23

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The energy ministry is striving to stage two auctions, one for hybrid RES facilities on non-interconnected islands, and another for a first wave of energy storage units to be linked to the grid, in the first quarter of 2023.

The energy ministry plans to soon decide on a cluster of islands to be included in the auction for hybrid RES facilities on non-interconnected islands.

The ministry intends to take into account bidding levels submitted for an existing hybrid system on the Greek island Astypalaia, the westernmost of the Dodecanese islands, when it decides on the starting price for the auction concerning hybrid RES facilities on non-interconnected islands.

As for the auction concerning energy storage units supporting the grid, the energy ministry is striving for a swift process as project development deadlines set by the Recovery and Resilience Facility (RRF), to fund these auctions, are extremely tight.

According to the RRF deadlines, contracts for the winning bidders need to be awarded before the end of 2023, and the storage facilities must be completed by the end of 2025.

 

Wind farms not earning windfall profits, association notes

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Wind farms are not earning windfall profits as they are remunerated based on long-term fixed tariff agreements not influenced by wholesale electricity prices, which have skyrocketed as a result of soaring natural gas prices, ELETAEN, the Greek Wind Energy Association, has clarified.

A 90 percent windfall profits tax imposed on electricity producers essentially does not apply to wind farm producers as they have always been returning any amounts exceeding their long-term fixed tariffs for output they have agreed to, ELETAEN noted.

Wind farm investors have secured fixed tariffs for the output of their facilities through long-term contracts with DAPEEP, the RES market operator, the association noted.

Older wind farm investors have agreed to tariff prices, through administrative procedures, based on the cost of their projects at the time of their development, while newer wind farms have secured fixed tariffs through RES auctions staged by RAE, the Regulatory Authority for Energy, ELETAEN reminded.

As a result, wind farms are not benefiting from elevated energy market prices and are not earning windfall profits, ELETAEN underlined, adding remuneration prices in the sector are low.

The average price paid for wind energy production in Greece is approximately 94 euros per MWh, just 22 percent of the average price of electricity last month, the association pointed out.

 

 

 

 

Investor participation limited for first RES auction in 1½ yrs

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Participation at an upcoming RES auction, the country’s first in one-and-a-half years, will be limited, despite the growing interest in green energy investments, a provisional list of auction participants just released by RAE, the Regulatory Authority for Energy, has shown.

RES investors behind 34 projects with a total capacity of approximately 944.5 MW will seek to secure tariffs at the auction, scheduled for September 6. One application was rejected after failing to meet a guarantee payment deadline.

Given the auction’s rules, RES projects representing a total of 525 MW will secure tariffs at this September auction.

Its participation level is down approximately 50 percent compared to the previous RES auction, held in May, 2021, a session that was dominated by solar energy units.

Sector officials have named low starting bid levels set for solar and wind energy units as one of the factors behind the upcoming auction’s limited turnout, noting these levels do not reflect increased project costs, driven considerably higher by steep equipment price increases.

A starting bid level of 54 euros per MWh has been set for solar energy units, while the starting bid level for wind energy units is 63 euros per MWh. PV investors underlined investments cannot be sustainable at such levels.

 

Next RES auction in early September, for 1,000 MW

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The next RES auction, to feature a new remuneration framework for investors, is set to be held early September, following the signing of a related ministerial decision, which paves the way for the session’s official announcement by RAE, the Regulatory Authority for Energy.

The authority will officially announce the auction imminently, giving participants time to prepare for the session from early July onwards, according to energypress sources.

The signing of the ministerial decision, one of two signed, enabling the procedure to go ahead, was announced yesterday by the energy ministry’s secretary-general Alexandra Sdoukou during a speech at a conference, Green Deal Greece 2022.

Sdoukou reiterated that the RES auction will be a mixed session for solar and wind energy facilities and will offer tariffs for projects with a total capacity of 1,000 MW.

Bidders will be able to submit multiple bids, the formula also used for the previous auction, the energy ministry official noted.

Ministry aiming for new RES auction before August

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The energy ministry is striving to stage a first RES auction featuring a new support framework before August, the most likely period being late July, and, as a result, is currently preparing a second ministerial decision needed for the procedure to be staged, energypress sources have informed.

This second ministerial decision will include details on total capacity to be auctioned annually, number of auctions per year, their scheduling, starting prices, minimal levels of bidding competition required, as well as the level of maturity projects must have achieved to be considered eligible for auction participation.

RAE, the Regulatory Authority for Energy, has been informed of all the related details and is working on the first auction’s official announcement. As a result, Once the ministerial decision is published, RAE should be ready to immediately announce the first RES auction.

The inaugural auction will offer RES investors behind new projects tariffs for 1,000 MW.

The old bidding system will continue to apply, meaning bidders will not face restrictions on the number of bids they can submit for tariffs, energypress sources informed. However, thoughts for a one-bid system will be reexamined at a latter stage, the sources added.

Energy minister Kostas Skrekas has noted the ministry intends to stage an additional RES auction, under the new support framework, in 2022, also for a total capacity of 1,000 MW. However, it remains unclear if there will be enough time for the extra session before the year is out.

 

 

Unlimited bidding system to also apply for next RES auction

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A continual bidding system offering RES auction participants an unlimited number of bids, used for previous sessions, will continue to apply for the next auction, the first to be held under a revised support framework for the sector’s wind and solar energy projects.

Prior to this decision, energy ministry officials had considered limiting bids, for project tariffs, to one per session for investors, from the next RES auction onwards. This one-off bidding system will now be reexamined at a latter date.

Other changes will be introduced as of the next RES auction, including different starting prices for wind and solar energy projects as installation costs for the two RES technologies nowadays differ.

Energy minister Kostas Skrekas recently informed that tariffs for a total capacity of 1,000 MW would be offered at the next RES auction. The ministry, he added, intends to stage one further RES auction within 2022, also for 1,000 MW.

RES auctions for hybrid units on non-interconnected islands in 2022

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Details for RES auctions concerning hybrid power stations at the country’s 47 non-interconnected islands are expected to be finalized within the first few weeks of the new year by sector officials.

The European Commission has approved support for hybrid power stations producing and storing electricity through wind energy facilities and solar parks.

Following Brussels’ approval, the energy ministry’s secretary-general Alexandra Sdoukou, RAE, the Regulatory Authority for Energy, and DEDDIE/HEDNO, the distribution network operator, will now finalize auction terms for such facilities, as well as the capacities of projects eligible for these tariffs.

The intention, at present, is to launch this category of RES auctions in 2022 to help the 47 non-interconnected islands using high-cost, high-polluting diesel-run generators achieve energy self-sufficiency through eco-friendly means.

Ministerial plan for new RES auctions framework this week

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The publication of a first ministerial decision, expected this week, for RES auctions under a new support framework, recently approved by the European Commission, will specify, amongst other things, individual competition procedures for prospective PV and wind farms, determined by their respective capacities.

The ministerial decision will also ensure that other RES technologies can continue securing non-auction tariffs, and, in addition, specify respective capacities for each of these sectors, which, if achieved, will lead to auctioned tariffs for these technologies.

According to information obtained by energypress, the new RES framework will provide special auctions for small-scale PV and wind energy units, as well as joint auctions for wind and PV facilities equipped with energy storage systems.

As for large-scale PV and wind energy units – over 1 MW and 6 MW respectively – mixed auctions with different starting prices are planned.

A second ministerial decision, anticipated in the new year and to pave the way for RES auctions under the new framework, will specify the total capacity to be auctioned each year, the number of auctions in a year, as well as their timetable.

 

Brussels close to approving hybrid RES support system for islands

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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.

 

Minister calls for swifter Brussels support on new RES auctions plan

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Energy minister Kostas Skrekas has requested swifter support from the European Commission, in the form of a comfort letter, on a plan concerning Greece’s new RES auctions, as well as auctions for the installation of hybrid stations on islands.

The minister made the request to European Commission deputy Margrethe Vestager, also Brussel’s Commissioner for Competition, during an online meeting between the two officials on Friday.

During the session, Vestager is believed to have expressed satisfaction over Athens’ implementation of a plan offering third parties access to state-controlled power utility PPC’s lignite-fired power production, an issue that had remained unresolved for many years.

PPC sold a first electricity package at a discount price on Friday, as part of the government’s agreement with the European Commission.

Greece’s energy minister also urged for efficient cooperation with the Directorate General for Competition on an ongoing effort aiming for the introduction, by the end of the year, of a Strategic Reserve mechanism.

The mechanism is planned to compensate PPC for its maintenance, as grid back-up, of lignite-fired power stations headed for withdrawal. The availability of these units is still needed to ensure grid sufficiency and stability.

 

 

Finalized support framework plan for hybrid RES units on islands in Brussels

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The energy ministry and the European Commission have completed talks for a support framework concerning hybrid RES units on non-interconnected islands. The finalized Greek proposal for the plan, based on the agreement, is expected to be forwarded to Brussels this week, energypress sources have informed.

This development resolves yet another pending issue regarding the support framework for green energy investment. The new framework for new RES auctions has already been announced and forwarded to Brussels by KEMKE, the finance ministry’s Central State Aid Unit.

Brussels set competitive procedures as a condition for its approval of a new hybrid RES support framework. However, some exemptions have been made.

The energy ministry, for example, will be able to avoid competitive procedures for tariffs when mixed auctions are intended for very small islands such as Erikousa, Gavdos, Antikythira or Othonoi, where the requirements of the local grid do nor create appropriate reference-price conditions for prospective projects.

The ministry will also be able to implement an alternative formula for the implementation of pilot projects concerning RES projects that promise high penetration in electrical systems. The island Agios Efstratios (Ai Stratis), southwest of Lemnos in the northern Aegean, is one such example. RES units are expected to cover over 85 percent of the small island’s annual electricity needs.

New RES support framework, featuring changes, imminent

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The energy ministry appears to have taken initiatives intended to increase capacity quantities offered at RES auctions and also retain national control over the determination of these quantities, depending on developments, given the more ambitious National Energy and Climate Plan (NECP) for the installation of a greater number of RES units, reflecting loftier EU goals, energypress sources have informed.

A draft detailing the new RES support framework for Greece has been finalized following talks between the energy ministry officials and European Commission officials and is now in the hands of the finance ministry’s Central State Aid Unit (KEMKE), responsible for the framework’s official implementation, expected in a few days.

Considerable changes have been made to an initial plan announced by former energy minister Kostis Hatzidakis, not only in terms of the number of auctions to be staged and capacities offered, but also in terms of its overall principles, sources noted.

The new framework makes no mention of an initial Greek proposal for six auctions, each offering 350 MW, for a total of 2.1 GW, but it does call for a capacity of at least 3 GW.

It also includes provisions for geographically based auctions covering areas such as Crete, Evia and the Cyclades, as well as special procedures for small-scale PVs.

In addition, the auctions will not need to be held by 2023 but will be extended until 2025, based on EU directives.

Through the new RES support framework, wind and solar farm energy investors will, through competitive procedures, secure feed-in tariffs for twenty-year periods.

 

 

Non-auction PV, wind unit exceptions over at end of ’22

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A recent measure enabling small-scale PV installations of up to 500 KW without competitive procedures for tariffs, under the condition that applicants do not already possess two projects of such technology, has sparked renewed activity in the sector around the country with thousands mobilizing.

However, for a full picture, this development needs to be combined with the fact that the measure represents a temporary window of opportunity for small-scale producers that will slam shut at the end of 2022.

According to official policy, as of January 1, 2023, RES units will only be eligible for operational contracts with DAPEEP, the RES market operator, if they have participated in competitive procedures.

This essentially means that old 500-KW PVs, wind energy turbines of up to 3 MW and equivalent facilities of energy communities, plus new RES units will need to have established contracts with DAPEEP by the end of 2022.

Though this represents ample time from a technical perspective, investors typically face big delays for connection term offers from DEDDIE/HEDNO, the distribution network operator. In most parts of the country, the operator’s examination of applications and eventual response takes several months.

Even more crucial for investors seeking to develop RES facilities without going to auction is the fact that the majority of DEDDIE/HEDNO responses are negative as network capacity availability is limited.

Applications for non-auction PVs will be submitted to an online platform planned to be developed by DEDDIE/HEDNO. First-come, first-served qualification criteria will be applied.

 

 

RES capacity boosted, auctions to be extended until 2025

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Greece’s new RES support mechanism, whose details are being finalized in talks between the energy ministry and European Commission officials, is expected to offer producers greater capacities, maintain the current system of 20-year tariffs for output through auctions, which will run until 2025, not 2023, as was originally planned.

The changes reflect the country’s revised and more ambitious National Energy and Climate Plan (NECP), aligned with loftier EU objectives for a greater number of RES installations.

The new auctions will be mixed, enabling the participation of both solar and wind energy producers, but wind energy producers will be entitled to at least 30 percent of capacity offered at each auction.

The country’s original RES auction plan, drafted by former energy minister Costis Hatzidakis, now holding the labor and social affairs portfolio, had proposed 6 RES auctions each offering 350 MW for a total of 2.1 GW, but this total is now expected to be raised to at least 3 GW.

RES tariffs remunerating output have fallen considerably at recent RES auctions, driven lower by the intensified competition.

Also, the plan appears likely to include special geographically based RES auctions covering areas such as Crete, Evia and the Cyclades, as well as provisions for small-scale PV installations.

 

Many RES plans will be shelved as competition intensifies

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A sizeable number of RES plans, especially smaller-scale projects, face dead-end paths as new market conditions now being shaped undoubtedly favor the big players, domestic and foreign.

The limited RES capacity to be offered at ensuing RES auctions, lower tariff prices expected at these sessions as a result of intensified competition, also seen lowering power purchase agreement (PPA) levels for RES producers, are all contributing to this changing market scene.

Only a small fraction of the abundant RES investment plans that have emerged will end up being developed, once they have secured lower-level tariffs, offering narrower profit margins, at the next RES auctions.

RES projects representing a total capacity of approximately 3.1 GW are planned to secure tariffs, for their output, at auctions over the next three years.

Stressing the diminished prospects for most RES investment plans, over 3,000 producer-certificate applications for units representing a total capacity of 71 GW were submitted to local authorities in last December’s cycle alone.

RES auction plan to be unveiled July, solution for saturated spots

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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.

 

PPC hold of industry ending, energy groups entering picture

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The approaching end of a 60-year business association between power utility PPC and Aluminium of Greece, a member of the Mytilineos group, announced yesterday by the group’s chairman and CEO Evangelos Mytilineos, marks the end of an era with wider implications, as all the country’s energy and industrial groups are heading in the same direction.

“In 2023, Aluminium of Greece will no longer depend on PPC. It is moving into a new era as, for the first time since its establishment, the company will be freed from PPC in terms of electricity supply,” Mytilineos announced at a general shareholders’ meeting.

The future belongs to the vertically integrated groups, smaller versions of the power utility, set to enter and cover market needs.

Some enterprises have already prepared and positioned themselves for the new era, in which major-scale electricity consumers will no longer depend on PPC, instead covering needs through PPAs.

Companies that have been slower to incorporate Greece’s energy transition into their strategies must now move fast if they want to remain on the map.

The developments offer a glimpse of the energy sector’s new era. A more efficient PPC will no longer be weighed down by dependencies and compromises, private-sector groups will be structured for greener policies, RES investors will not depend on tariffs at RES auctions, but, instead, establish PPAs with industrial consumers, and competition will intensify through the many changes coming into play, such as the target model markets and the Capacity Remuneration Mechanism (CRM).

Green-energy investments, breaking one record after another, now appear likely to achieve a 2030 objective aiming for eco-friendly energy coverage of the country’s total energy demand at a level of 63 percent.

This essentially means that RES facilities offering a total capacity of 17 GW will be operating by the end of this decade, lessening the need for natural gas-fired power stations, which will become unsustainable, in market terms, as a large proportion of energy exchange transactions will be covered by increasingly competitive RES units.

 

RES investment interest high in June cycle, attracting 17 GW

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RES investment interest remained high in a latest cycle for  producer certificate applications offered by RAE, the Regulatory Authority for Energy, between June 1 and 10, amassing over 700 applications representing a total capacity of 17.3 GW, energypress sources have informed.

This heightened level of interest has defied the forecasts of certain analysts who expected more subdued figures as a result of lower tariff prices at a recent RES auction.

Solar energy projects represented 12.7 GW of the total, while wind energy applications made up 4.1 GW.

The level of investment interest expressed through this June cycle greatly exceeds figures registered in the preceding cycle, in February, when a total of 477 RES producer certificate applications, representing 8.86 GW, were submitted.

Also taking into account last December’s cycle, when new rules were introduced, the grand total of applications, in all three cycles, exceeds 3,000 for projects representing 71 GW.

At the current rate, a single cycle is attracting more applications than the number submitted over the course of more than a year in the past.

A 20 percent proportion of producer certificate applications submitted in the December cycle was rejected as criteria were not fully met, the most common issue being overlapping properties declared as project sites by investors.

 

Ministry, DG Comp continuing talks on new RES auctions

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The energy ministry and Brussels’ Directorate-General for Competition are continuing negotiations aiming to shape Greece’s new RES auctions from 2021 to 2024, the attention of these talks focused on details of the Greek proposal, not its overall structure.

Ministry officials are hoping the Brussels authority will offer its endorsement of the plan within the summer so that the first session of the new-look RES auctions can be announced in September and staged within 2021.

No changes to the fundamental structure of the Greek plan are expected. The ministry has proposed six mixed RES auctions (wind and solar) by 2024 and 350-MW capacities on offer at each session.

In its effort to ensure a balance in the opportunities for wind and solar projects at these mixed RES auctions, the ministry has proposed that either technology secures no less than 30 percent of the tariff agreements at each session.

Such a term is deemed necessary as protection for wind energy projects, facing far higher equipment costs than solar energy projects, and, as a result, unable to follow PVs along a path of reduced tariff offers. No wind energy projects secured tariffs at the most recent RES auction, last month.

Greece’s proposal for the inclusion of an additional 1 GW capacity into the new RES auction format, as a reserve amount for auctions to concern a series of special RES categories, is one of the aspects being negotiated.

RES investors keen to talk PPAs with suppliers, industry

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RES investors, especially from the solar energy field, but also wind energy, are engaging in talks with electricity supply companies and industrial enterprises to establish power purchase agreements (PPAs) for their future or under-construction projects as they anticipate a reduction in capacities at forthcoming RES auctions and even lower tariff prices than the low levels registered at the most recent auction.

This increased focus on PPAs highlights the major shift taking place in green-energy production as fixed tariffs, at auction, are gradually being phased out and the energy-exchange era is taking over.

RES producers need to establish contracts for the sale of their output in order to develop their projects as banks are not willing to finance such investments if potential earnings, at sufficient levels, have not been secured in advance.

No bilateral PPAs have yet been established, but the negotiations are continual and tenacious.

Potential RES producers have – since the previous RES auction – been willing to accept lower prices, proposing levels of as low as 40 euros per MWh attached with demands for shorter contracts, including five-year periods, sources have informed.

Market officials expect PPAs to start emerging over the next six months, noting that banks will play a decisive role in the price levels to be established as their project financing decisions will depend on profit margins presented by investors.

Licensing procedure priority for RES investors holding PPAs

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RES investors opting to establish bilateral power purchase agreements (PPAs) with industrial consumers will be given licensing priority for the projects over peers planning to secure tariffs the customary way, through RES auctions staged by RAE, the Regulatory Authority for Energy, according to an energy-sector bill expected to be submitted to Parliament in June.

This plan essentially aims to offer investors incentive to stop focusing their efforts on how they will secure fixed tariffs for their RES projects by offering favorable licensing treatment for projects holding bilateral tariff agreements.

Over the next three years, a RES capacity totaling 3.5 GW is expected to be offered by authorities to investors.

It should be pointed out that projects linked to fixed tariffs gained through RES auctions are likely to enjoy more favorable bank treatment for project financing. On the contrary, RES investors holding PPAs will need to have struck handsome deals to convince banks for money.

Details, not structure, holding back RES auction plan talks

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Ongoing negotiations between the energy ministry and the European Commission’s Directorate-General for Competition for Greece’s new RES auction system are currently being held back by Brussels concerns over certain details of the Greek proposal, not its overall structure.

The energy ministry is prepared, if needed, to remove aspects causing issues so that negotiations on the new RES auction plan can be completed as swiftly as possible, sources have informed.

The new RES auction plan could be approved within the current summer, according to the more optimistic of forecasts, while the first RES auction under the new framework could be staged towards the end of this year.

At present, local officials are awaiting comments from Brussels following a Greek response to questions prior to Greek Orthodox Easter a couple of weeks ago. Ministry official are hoping Brussels’ comments will be kept to a minimum, which would pave the way for the RES auction plan’s approval.

According to the new RES auction plan, six combined solar and wind energy RES auctions will be staged until 2024, offering a total capacity of 350 MW at every session, for an overall capacity of 2.1 GW.

Competitive procedure for RES units over 250 MW examined

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The energy ministry has begun considering a competitive procedure specified for wind and solar energy parks with capacities of over 250 MW, a move prompted by the European Commission’s clear-cut opposition to individual investor initiatives for RES projects of such scale, sources have informed.

However, it is still too early to tell if the ministry will end up implementing any such plan.

The European Commission, in response to a related enquiry made by the ministry, noted it cannot endorse any reference price formula for individual wind and solar energy project initiatives of such scale, stressing that such plans have not been endorsed by Brussels anywhere in the EU.

A number of investors are believed to have expressed strong interest to the energy ministry for the development, based on individual initiatives, of wind and solar energy parks with capacities exceeding 250 MW.

Producer certificate applications backlog ‘processed by June’

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RAE, the Regulatory Authority for Energy, will have processed all RES project applications for producer certificates by June, its chief executive Thanassis Dagoumas, has informed, describing the authority’s upgraded IT system, enabling swifter processing, as a key step in its digital transformation.

Processing of applications submitted through the February, 2021 cycle will commence once the appraisal of December, 2020 applications has been completed, the objective being to have cleared the entire backlog by this June, when the next cycle is scheduled to commence, Dagoumas noted.

The authority’s IT upgrade has enabled RAE to receive, in a secure and reliable way, 2,341 applications representing a total of 54.36 GW through the two cycles in December 2020 and February, 2021, Dagoumas highlighted.

The authority has managed to process a large percentage of producer certificate applications received through the December, 2020 cycle faster than ever before, the RAE chief informed.

RAE has offered preliminary approval for producer certificate applications representing projects with a total capacity of 34.5 GW, whose investors are expected to soon pay related fees to DAPEEP, the RES market operator, a step prompting automated issuance of producer certificates.

A large number of overlapping RES project plans was detected during processing, which will require RAE to conduct closer examinations of these cases, the RAE chief said.

Dagoumas also pointed out that intensified competition in the RES market is paving the way for a further reduction in tariffs, expected to drop to a level of less than 40 euros per MWh for major-scale solar energy production.

Registrations for a combined (solar and wind energy) RES auction on May 24 have greatly exceeded levels needed for strong bidding competition, as 128 projects representing 1,090 MW will participate, the RAE head informed.

Small-scale PVs, RES projects to be given deadline extensions

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Investors behind small-scale solar energy projects awarded non-auction tariffs and RES projects that have secured their tariffs through auctions will be given more time to complete their projects,  with current tariffs intact, as a result of pandemic-related delays for which investors cannot be held accountable.

Investors have faced delays, both in delivery of equipment as well as project construction.

The energy ministry has prepared a related draft bill that will be submitted to parliament for ratification, ministry sources have informed.

Though it remains unclear when this could be, the ministry sources ascertained the bill would be ratified imminently, prior to an April 30 completion deadline for small-scale PVs.

Solar energy projects awarded non-auction tariffs are expected to be given six-month extensions, while RES projects that have secured tariffs at auction will be given an additional ten months for completion. Completion of projects by the new deadlines will certify the tariffs they currently hold.

A six-month extension for small-scale PVs would give this category until October 30 to begin operating, and, as a result, certify tariffs of 65.74 euros per MWh.

Also, small-scale PVs incorporated into energy communities will certify tariffs of 68.86 euros per MWh if they are completed by the October 30 date.