Legislative proposals for further streamlining of RES licensing process

By Dimitris Assimakis

Partner, Reed Smith LLP

Overview of the main legislative proposals for the further streamlining of the process for the licensing of renewable energy projects that are under consideration by the Greek Ministry of Environment and Energy: 

  • Establishment of a single point of contact for RES investors and digitalisation of the whole licensing process up to the award of the Operation Licence.
  • Limitation of the requested documentation and data for the granting of the Grid Connection Offer, the conclusion of the Grid Connection Agreement and the award of the Installation Licence and the Operation Licence. Abolition of the non-binding (preliminary) Grid Connection Offer licensing step.
  • Submission of a bank guarantee upon the application for the granting of the Grid Connection Offer and not upon the acceptance of the offer, as it is the case now.
  • Limitation of the cases necessitating the modification of the Grid Connection Offer, the Grid Connection Agreement, the Installation Licence and the Operation Licence.
  • Introduction of a more flexible application framework for the granting of the Gird Connection Offer and a more flexible process for the energisation of the connection of new power plants to the grid.
  • Land titles audit from external lawyers in case the land wherein a project is going to be installed is owned by a private party.
  • Breaking up of the Grid Connection Agreement in two distinct parts i.e. the Main Part and the (project specific technical) Supplement; and partial disassociation of this agreement from the Installation Licence.
  • Introduction of exclusive deadlines for the filing of an application for the award of the Installation Licence as from the time of issuance of the Grid Connection Offer.
  • Possibility to extend the term of the Grid Connection Offer and the period within which the developer has to apply for the award of the Installation Licence against the payment of a relevant fee.
  • Periodic publication of data from the competent grid operators (TSO /DSO) on the status of the applications for the granting of Grid Connection Offers, as well as of the status of the Grid Connection Offers granted and the Grid Connection Agreements signed, together with adequate info relating to the local grid and the development of the grid connection works associated with any such offers and agreements.
  • Introduction of a special framework for the licensing of energy storage units.
  • Addressing various issues relating to forestry legislation and their interface with the RES licensing process (e.g. intervention permit, reforestation process, forestry road network).
  • Introduction of a simple notification scheme for the licensing of micro power generating facilities that are connected to the distribution network.

RES installation permit deadline for producer certificate validity

The energy ministry’s RES licensing committee has proposed an additional deadline, for installation permit applications, as part of a second wave of interventions in the licensing simplification effort for new RES projects.

According to the proposal, if investors miss their installation permit application deadline, then producer certificates obtained for related projects would automatically expire.

Investors would be given a twelve-month period to submit their installation permit applications once connection offers have been accepted for solar energy projects, onshore wind farms and hybrid units, and 18 months for all other RES technologies and combined cooling, heart and power (CCHP) facilities, according to the committee’s proposal.

Prioritization for RES projects with producer certificates proposed

The energy ministry’s RES licensing committee has recommended a four-month prioritization period by power grid operator IPTO in its processing of connection term applications submitted by investors already holding producer certificates. This prioritization would be implemented at the expense of small-scale RES unit applications, which have swamped licensing system and caused problems.

The proposal, presented at a committee meeting yesterday, would effectively push forward, by four months, connection term applications submitted for projects already issued producer certificates.

The main topic of yesterday’s committee meeting concerned a presentation of this body’s proposal for RES licensing simplification procedures, during the latter stages, such as when finalized connection terms are offered and operating licenses are issued.

 

Extra RES measures to simplify installation, operating permits

The energy ministry is preparing to include simplification measures it appears to have settled on for the second stage of RES licensing procedures, concerning installation and operating permits, into the one draft bill to also incorporate EU energy efficiency directives being adopted.

The draft bill is expected to be forwarded for public consultation within the next few weeks, prior to Greek Orthodox Easter, in early May.

Public consultation on the energy efficiency EU directives being adopted has already been completed.

The imminent draft bill is not expected to bring about any fundamental changes to the second stage of the RES licensing procedure, as had been the case with a major first-stage change abolishing production licenses, sources have informed.

Instead, a series of revisions will be introduced to remove various obstacles encountered by investors in the maturity process of their projects, the objective being to significantly reduce the time needed for project maturity.

The second-stage RES licensing simplification plan promises to lessen both the number of steps and supporting documents needed for RES installation and operating permits.

The energy ministry also intends to revisit the first stage to implement further improvements, needed to counter the flood of producer certificate applications being submitted to RAE, the Regulatory Authority for Energy.

The government has declared its objective is to reduce the overall RES licensing procedure in Greece to two years, the EU average.

IPTO preparing new formula for grid capacity availability

Power grid operator IPTO is preparing revisions to a framework for incoming RES project applications, including, as the first major change, a new formula calculating available grid capacity, the operator’s deputy director Giannis Margaris (photo) has noted during an online update.

This new formula will factor in all offers made by the operator in the market as well as new RES projects, both in development and at the planning stage, Margaris pointed out.

IPTO expects to have finalized the formula within April, before presenting it to the energy ministry and then the market.

The operator is also preparing a tracking system that will enable investors to be updated, at any given moment, on the progress of their connection term applications, the IPTO deputy informed.

These upcoming changes come in the wake of a flood of group applications for small-scale RES projects, seeking direct links to the grid, as well as complaints by ABO Wind over IPTO’s delay in examining the company’s connection term applications.

Such objections serve as an opportunity for a reexamination of the grid entry framework, Margaris noted.

The problems that need to addressed concern the licensing and grid entry frameworks, not grid capacity, neither now nor until 2030, the IPTO deputy stressed.

Over 30% of RES project bids show territorial overlap issues

Nearly one in three RES project plans submitted to December’s licensing round are problematic as they display territorial overlaps concerning envisaged project sites, energypress sources have informed.

More than 30 percent of 1,864 producer certification applications submitted to the December round claim overlapping territory for RES project development, especially in the solar energy sector.

This latest concern comes as yet another sign of an overheated market and this condition’s possible repercussions.

The territorial overlap problem makes clear that a significant number of project plan licensing applications were lodged in a haphazard fashion without any organized registration work for land claims, placing in doubt the feasibility of these project plans.

Licensing application numbers were also sizeable for an ensuing round last month. A total of 477 applications representing 8.8 GW were submitted, increasing the likelihood of the implementation of filters, currently being examined by the energy ministry, to block baseless applications from licensing procedures.

Ministry measures to block unrealistic RES license bids

The energy minister appears determined to cool off what it sees as an overheated renewable energy market, fearing the relentless, often unrealistic, drive by prospective investors for producer certificates during recent licensing cycles, peaking with last December’s 1,864 applications representing 45.55 GW, will inevitably lead to side effects for the sector.

The ministry is now looking to introduce filters that would limit the processing of applications to those linked with investors possessing the financial means to carry out project plans, and to RES applications that have secured legal possession of required property.

Applicants may need to attach letters of guarantee or other documents proving their financial capability to their producer certificate applications. Such a measure, it is believed, will block the mass inflow of applications submitted by applicants who stand no chance of actualizing their project plans.

A second filter being considered at the ministry would immediately reject applications that do not possess the required land. This measure could be introduced in the form of a preliminary concession agreement concerning property use.

As part of this measure, procedures enabling property owners to block RES license applications submitted by investors who have not been given consent for land they intend to use will most likely be simplified. Under current rules, land owners seeking to reclaim their property need to apply for RES licenses themselves.

New round for RES producer certificates to open December 1

The energy ministry is expected to introduce, within the next few days, a new regulation enabling the issuance of electricity producer certificates for RES and CCHP (Combined Cool Heat and Power) projects, in accordance with recent legislation that has eliminated production licenses as part of an effort to simplify the RES licensing procedure.

The new rule will come into effect on time to enable a new round of RES license applications staged by RAE, the Regulatory Authority for Energy, to proceed as planned between December 1 and 10, energy ministry officials have informed.

The upcoming round for new RES license applications, via an online platform developed by RAE, will be the first in over a year following a freeze imposed by the authority so that it can process a backlog of older applications.

RAE has now worked through the older applications and issued production certificates to eligible applicants.

Processing of the new applications will be based on the new rules, designed to improve and simplify licensing procedures and help the country attain its renewable energy objectives.

RAE will present its new online application system today through a virtual event. The system, described as user-friendly, is expected to boost transparency and drastically reduce previous bureaucracy.

Environmental terms for RES licenses ‘still tough’, investors note

Contrary to popular opinion, recently ratified environmental impact licensing rules remain strict for renewable energy investors despite upper-limit capacity increases for wind and solar energy installations, sector officials have pointed out in comments to energypress.

Last August, the energy ministry increased the upper-limit capacity for Category B wind energy installations from 5 MW to 10 MW and Category B solar energy installations from 2 MW to 10 MW.

Investors behind Category B projects do not need to provide environmental impact studies but must meet predetermined environmental terms and all related terms included in a ministerial decision implemented back in January, 2013.

“It is not true that investors merely submit statements declaring that their projects do not have environmental impact, as has been generally said,” a sector official explained. “Investors must observe specific environmental terms and submit studies and data required by the ministerial decision from 2013,” the official added.

Special Ecological Assessments must be conducted for projects planned for protected Natura areas. Also, bird fauna studies must be included in investment applications for Special Protection Zones.

Furthermore, the ministry has advised licensing authorities to be particularly careful when examining project applications slicing big RES projects into a series of smaller projects as a means of simplifying licensing procedures. Such practices need to be stopped, the ministry has stressed.

RAE nearly done with processing for backlog of RES license applications

RAE, the Regulatory Authority for Energy, is close to completing its processing effort for a backlog of some 1,400 RES license applications representing approximately 24 GW in wind and, primarily, solar projects.

RAE’s processing of a backlog of applications submitted during four cycles from September, 2018 to June, 2019 has been completed, while the authority’s examination of applications submitted in September, 2019 is expected to be completed within the next few days, sources informed.

Once RAE officials complete their processing of last September’s applications, they will begin work on applications submitted last December, which should result in the completion of processing work for the entire backlog by the end of this month, officials have estimated.

A small fraction of the RES license applications submitted during the four cycles between September, 2018 to June, 2019 were rejected. More specifically, of 811 applications examined by the energy authority, 246 were granted production licenses for 1.522 GW in wind energy projects and 430 investment plans were given licenses for 6.2 GW in solar projects.

Meanwhile, public consultation staged by RAE for new rules concerning producer certificates in the RES and combined heat and power (CHP) domains has been completed.

A new platform being developed by RAE for producer certificates will be simple, safe and transparent, and also linked to platforms operated by other entities, including DAPEEP, the RES market operator, so that applications may be swiftly processed, authority officials have informed.

RAE facing backlog of RES license bids as new round nears

RAE, the Regulatory Authority for Energy, is battling against time to process a backlog of RES production license applications ahead of a new round of applications, to be staged as a revised system offering producer certificates. This new framework is legislated to commence in October.

The authority is concurrently examining older applications submitted until June, 2018, applications lodged between October, 2018 and December, 2019, and also preparing new terms for the forthcoming applications scheduled to begin in October.

An overwhelming majority of investors has responded to a recent RAE request calling for reconfirmations and updates of older applications.

Older applications submitted until June, 2018 are being processed with support from software designed specifically for this purpose. These applications, numbering approximately 300, will also need to be examined, one by one, by the RAE board.

Similar software is also being used for the processing and examination of applications submitted between October, 2018 and December, 2019. Though this process is simpler, the numbers are bigger, tallying some 1,400.

RAE still has plenty of work to do to finalize a detailed proposal for producer certificate terms. Once ready, it will need to be forwarded to the energy ministry, which, in turn, must sign a ministerial decision to bring the plan into effect.

Two previous rounds that had been scheduled for March and June this year were not staged as a result of the upcoming new rules and change of licensing framework. Judging by current RES investor indications, the next round is expected to attract a record number of applications.

This forecast adds to RAE’s concerns about the backlog of applications that need to be cleared.

 

 

 

Authority issues new wave of RES licenses for 27 projects, 491 MW

RAE, the Regulatory Authority for Energy, has just issued 27 RES producer certificates for as many projects, taking the tally of this new certificate, part of the government’s RES licensing simplification process, to 33.

The authority issued a first wave of new producer certificates towards the end of last month.

The 27 new producer certificates, issued by RAE yesterday, concern eight wind energy parks offering a total capacity of 171.15 MW, 17 solar energy projects with a total capacity of 318.48 MW, and two small-scale hydropower projects offering 2.1 MW, their overall capacity being 491.73 MW.

Four photovoltaic facilities planned by Consortium Solar Power in central Greece’s Fthiotida and Larissa areas, totaling 284 MW, are standout projects in terms of scale.

Enel Green Power was also well presented in this licensing round with a total of six projects, all solar, three of these in Xanthi, northeastern Greece, totaling 7.07 MW, and one each in Rodopi (2.72 MW), Kozani (3.6 MW) and Ioannina (1.99 MW).

As for the two small-scale hydropower projects just issued licenses, one, offering a capacity of 1.54 MW, belongs to the Koryfi K2 Energiaki company, the other, 0.6 MW, to Hydroilektriki.

RES project completion, without connection, to suffice for tariffs

The energy ministry is working to revise a rule that determines when development of RES projects is considered complete, which enables them to secure their tariff prices for output, either through competitive procedures or not.

Under the current rules, RES projects are considered ready once they have been connected to networks, not when their development has been completed.

This has proven to be a major problem for investors behind wind and solar energy projects completed on time but unable to secure tariff prices as a result of the inability of power grid IPTO or distribution network operator DEDDIE/HEDNO to offer connections when needed.

The matter is being worked on, the energy ministry’s secretary-general Alexandra Sdoukou noted during a virtual conference staged by the Hellenic-French Chamber of Commerce and Industry.

Final decisions have not been reached but the plan is to have authorities inspect and certify the completion of RES projects regardless of whether they have been connected, in order to secure tariff levels available at the time, sources informed.

The energy ministry is also striving to further simplify RES licensing procedures by merging or even eliminating certain steps or permits currently required, according to Sdoukou.

 

 

RAE close to launching first stage of RES online registry

RAE, the Regulatory Authority for Energy, is nearing the launch of the first stage of an online system appraising RES production license applications lodged up to June, 2018.

This step represents the first of three stages towards the establishment of a fully developed online platform for license application appraisals.

Applications grouped into the first category (dated up to June, 2018) will be appraised on the basis of an older regulation awarding production licenses, not producer certificates as foreseen by a new law ratified to help simplify RES licensing procedures.

This dividing line has been drawn to keep conditions fair for all as applicants as appraisals of license applications lodged up to June, 2018 had already commenced prior to the new law’s introduction.

The online tool’s imminent first step will offer a basic version of a system that will be upgraded into a more sophisticated tool for appraisals of a second group of applications submitted between September, 2018 and December, 2019.

Applications grouped into this second category will be appraised in accordance with  new and simpler rules offering producer certificates via an instant – if all requirements are met – online process.

Overall, the task of examining all older RES license applications (first and second category) is challenging as 1,750 applications with a total capacity of 29 GW will need to be appraised by September, when a new round of applications is set to commence under the new system.

A third stage of the online tool will be developed at a latter date for a fully developed online RES registry offering automatic processing of newer applications and issuance of producer certificates.

 

First stage of RES licensing simplification done, rest on way

A day after Greek Parliament’s ratification of a bill radically simplifying the first stage of the RES licensing procedure by granting project developers production licenses online and instantly if all requirements are met, authorities have begun work to simplify the rest of the licensing procedure, all the way to the issuance of RES unit operating licenses, energypress sources have informed.

The energy ministry’s secretary-general Alexandra Sdoukou, heading a special committee tasked with this project, has asked agencies representing various green energy technologies to forward updated proposals by Monday.

Then, days later, on Friday week, the committee, comprised of energy ministry officials, licensing authorities and market representatives, will stage a teleconference to discuss a number of issues, simplification of all other RES licensing procedures – beyond the first step now ratified – being at the top of the agenda.

Energy ministry officials are expected to table a groundbreaking proposal that would abolish installation licenses but maintain operating licenses. This proposal will be examined by the committee and implemented if deemed feasible.

The committee will shoot for the delivery of an initial plan before summer. Once ready, it will be forwarded for consultation. Any revisions during this process will make up the content of a draft bill finalizing the RES licensing simplifications.

Greece is striving to align with an EU directive requiring a RES licensing procedure time limit of two years for most projects and three years for special projects by June next year, deputy energy minister Gerassimos Thomas told parliament.

RES revisions supporting installations head to parliament

Large and small-scale solar and wind energy projects stand to benefit from a series of revisions included in a draft bill on RES and environmental matters set to be discussed by parliamentary committees ahead of ratification.

Besides introducing a simpler RES licensing procedure that replaces production licenses with producer certificates obtained instantly online as long as all criteria are met, the environmental draft bill also includes a series of other favorable measures.

Projects not required to participate in RES auctions, such as solar energy projects of up to 500 KW, will be given four-month extensions – from the most recent RES auction – for tariff prices determined through a previous formula offering, as the tariff price, the average level of three preceding auctions. Therefore, if the next RES auction were to be staged in July, for example, current tariffs for projects not required to participate in RES auctions would remain valid until November.

The draft bill also features a revision broadening a “special projects” category to include wind energy projects of over 150 MW as well as RES projects with underwater cable interconnections. Projects in this category will have six years for completion.

Also, a withholding tax concerning licenses issued in 2017, 2018 and 2019 will be reduced to one third of the current level, this being 1,000 euros per megawatt, annually.

The revisions also offer landowners protection from investors seeking to utilize property for RES projects without providing property titles or land lease agreements to authorities. This matter has caused confusion.

 

Withholding tax cut for RES licenses bigger than planned

The energy ministry has responded favorably to a call by renewable energy producers, primarily wind energy farmers, for a reduction of withholding taxes concerning licenses issued in 2017, 2018 and 2019.

This tax cost will be reduced to one third of its regular amount – 1,000 euros per megawatt, annually – for licenses issued during the three-year period and will be payable over two installments, energypress sources have informed.

An amendment facilitating the tax revision will be attached to a draft bill covering various environmental matters, expected to be submitted to parliament either today or tomorrow, the sources added.

The revision promises an even greater tax reduction for RES licenses compared to a previous plan that had envisioned a 50 percent cut.

The government plans to abolish this withholding tax for RES licenses issued as of 2020 as part of a series of key changes aiming for investor-friendly simplification of the RES licensing procedure.

RAE aims for swifter processing of RES production license bids

RAE, the Regulatory Authority for Energy, faces the challenging task of processing the majority of more than 1,800 renewable energy production license applications currently accumulated at the authority by June, when a new and more efficient online application platform is set to be launched.

The unprocessed applications submitted by investors, all on paper and dating as far back as 2018, represent a total capacity in excess of 29 GW.

Under the new online system, prospective RES investors will no longer require to gain production licenses. Instead, they will apply for electricity producer certificates to be issued virtually automatically – if all requirements are met – through the online procedure.

New terms introduced for the upcoming online procedure will be used to appraise the old unprocessed applications, which include bids submitted during RAE’s December cycle.

RAE and the energy ministry are making a coordinated effort for the adoption, by the authority, of a fast-track procedure promising partial automation for the old applications through an online tool. But they will still need to be looked at one by one.

Authorities will manually check if basic requirements have been met, including payment of related fees – the amount is smaller for old applications – and spatial issues, a crucial factor.