RES investors keen to talk PPAs with suppliers, industry

Posted on June 4, 2021June 4, 2021 by admin

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.

Brussels strategic reserve conditions discussed by RAE, IPTO, ministry

Posted on May 24, 2021 by admin

A new adequacy report and a new market reform plan, two conditions set by the European Commission for Greece’s adoption of a strategic reserve mechanism, have been discussed during an online meeting between RAE, the Regulatory Authority for Energy, power grid operator IPTO, and the energy ministry.

The European Commission’s Vice-President Margrethe Vestager, also Brussel’s Commissioner for Competition, during a preceding meeting, earlier last week, with energy minister Kostas Skrekas, called for a new adequacy report, in other words, an updated study proving the country’s need for a strategic reserve mechanism to cover actual grid needs.

The Brussels official also requested a new market reform plan detailing reforms designed to intensify competition in the wholesale electricity market.

Pantelis Kapros, Professor of Energy Economics at the National Technical University of Athens, has been asked to contribute to this new market reform plan, sources informed.

Besides the strategic reserve mechanism, RAE, IPTO and energy ministry officials also discussed details on prospective power purchase agreements (PPAs) between industrial enterprises and RES producers.

Vestager, at her meeting with Skrekas, the energy minister, recommended that Greece follow the examples of PPA models adopted by other EU member states, such as Spain.

PPC lignite electricity packages through futures market

Posted on May 14, 2021May 17, 2021 by admin

State-controlled power utility PPC will soon begin offering rival suppliers lignite-generated electricity packages through the target model’s futures market, energy minister Kostas Skrekas and the European Commission’s Vice-President Margrethe Vestager, also Brussel’s Commissioner for Competition, have agreed at a meeting yesterday.

Vestager, during the session, also made clear that the balancing cost of a mechanism concerning power purchase agreements (PPAs) between industrial producers and RES producers cannot be subsidized, but, instead, will need to be aligned with terms that apply for other EU member states.

Athens expects to submit its PPA plan to Brussels in June for approval.

Also next month, the government plans to submit its support framework proposal for energy storage units.

As for the country’s Strategic Reserve Mechanism, the European Commission’s deputy requested a new proposal from Athens, in line with new EU directives.

Under the Strategic Reserve Mechanism, PPC and all other electricity producers opting to withdraw units from the market for back-up services, would be remunerated for sidelining these units for periods determined by IPTO, the power grid operator.

Vestager stressed that the country’s Strategic Reserve Mechanism cannot coincide with the wider Capacity Remuneration Mechanism (CRM).

The Brussels deputy also pointed out that a compensation request made by Greece for PPC’s redevelopment of lignite areas, part of the decarbonization effort, is legally baseless and cannot be pursued further.

Mechanisms, competition on Vestager agenda, here May 13

Posted on April 19, 2021April 19, 2021 by admin

Energy minister Kostas Skrekas intends to present his case for the introduction of five support mechanisms encouraging energy-sector investments in Greece’s ongoing transition towards carbon neutrality to the European Commission’s Vice-President Margrethe Vestager, also Brussel’s Commissioner for Competition, on the occasion of the official’s upcoming visit to Athens, scheduled for May 13.

Vestager will be in the Greek capital with an agenda featuring two pending competition issues concerning state-controlled power utility PPC.

Greece has faced charges for PPC’s monopoly of the country’s lignite sources but an agreement was reached to end the case by introducing a mechanism offering the power utility’s rivals access to lignite-generated electricity.

A market test for this mechanism was completed some time ago but failed to attract any real interest from rival suppliers.

The percentage of lignite-based electricity made available by PPC, initially set at 50 percent of total lignite-fired output and then lowered to 40 percent, is viewed, by third parties, as too small for any real gains.

The second PPC-related matter to be discussed during Vestager’s visit concerns a recently initiated investigation by Brussels seeking to determine whether the power utility has engaged in activities impeding market competition.

Private-sector investors are pushing for a capacity remuneration mechanism (CRM) in order to go ahead with the development of natural gas-fueled power stations, needed as Greece heads towards a post-lignite era. Skrekas, the energy minister, has repeatedly said a CRM will be launched in June.

The minister also supports a strategic reserve mechanism to compensate PPC’s lignite-fired power stations, still needed for back-up services but nowadays loss-incurring as a result of higher CO2 emission right costs.

In addition, the government is seeking compensation for the premature closure of PPC’s lignite-fired power stations and related mines, being phased out until 2023.

The minister also supports a support framework for hybrid units on non-interconnected islands combining RES electricity generation and energy storage.

Skrekas is also striving to establish a mechanism that would subsidize RES producers for power purchase agreements (PPAs) with energy-intensive industrial enterprises as well as suppliers selling to major-scale consumers.

Plan for subsidized lower-cost RES power to industry explored

Posted on April 14, 2021April 14, 2021 by admin

The energy ministry is working on a transitional state-support mechanism that would offer industrial consumers lower-cost electricity stemming from renewable energy sources.

The European Commission offers conditional approval to state aid resulting in green-energy access for energy intensive consumers.

The energy ministry’s effort to establish such a mechanism comes following the exclusion, from a government list of proposals for EU recovery fund support, of a plan envisaging power purchase agreements (PPAs) between industrial enterprises and RES producers.

The ministry’s new effort is expected to be a variation of the plan not included in the government’s list of proposals seeking support through the European Commission’s Recovery and Resilience Facility.

The ministry acknowledges that, under present conditions, direct and mutually beneficial agreements between energy-intensive industrial consumers and RES producers cannot be achieved, unless such deals concern companies belonging to vertically integrated groups.

The plan being explored would ensure RES producers remuneration for a percentage of their output absorbed, through the state-support mechanism, at fixed tariffs and extended periods.

Ministry aims for industrial energy at less than €40/MWh through RES PPAs

Posted on February 15, 2021 by admin

Power purchase agreements (PPAs) between industrial enterprises and RES producers can drop to competitive levels of less than 40 euros per MWh, as low as 35 euros per MWh, through a new support mechanism being worked on by the energy ministry as a solution for industrial energy costs.

Such price levels, combined with the mechanism’s benefits, should ensure solid profit figures for RES producers and competitive terms, through eco-friendly sources, for the energy needs of energy-intensive industries.

These PPAs will be made available to new RES projects currently not possessing buy-and-sell agreements with DAPEEP, the RES market operator.

This support mechanism, which needs to be endorsed by the European Directorate for Competition, is intended to subsidize electricity absorbed by energy-intensive industries and other enterprises from renewable energy stations. The ministry aims to incorporate the mechanism’s cost into the recovery fund.

RES producers signing PPAs for their new RES projects will be able to use these agreements to secure subsidies through the support mechanism on the grounds of having ensured long-term agreements for the sale of their output.

These PPAs will not burden the RES special account with additional cost as RES producers will be directly paid by industrial producers with whom they have established supply agreements.

According to the plan, the support mechanism will be made available to energy consumers whose energy cost exceeds 20 percent of operating costs.

Besides industrial producers, the mechanism’s availability could be expanded to also cover hotels in the tourism sector, retail food chains and other enterprises operating on a mass scale.

The measure could also serve as a catalyst helping domestic industrial enterprises achieve a swifter transition to RES energy.

RES producers fear payment delays, operator seeking loan

Posted on January 14, 2021January 14, 2021 by admin

Renewable energy producers fear existing payment delays for their output will deteriorate, identifying the negative impact on the RES special account’s finances caused by increased balancing market costs since the November launch of the target model’s new markets as a key factor.

Though the RES market operator DAPEEP, managing the RES special account, has begun making payments for renewable energy production invoiced in October, producers believe the operator’s payment ability has weakened.

In recent times, DAPEEP has come close to vanishing any payment delays to RES producers.

As reported yesterday by energypress, the RES special account has been hit by discrepancy costs averaging 11 euros per MWh represented by DAPEEP between November 1, when the target model’s new wholesale electricity markets were launched, and January 3.

Adding further strain to the RES special account’s financial standing, the energy exchange is not staging auctions this month for the sale of CO2 emission rights as a result of platform maintenance work. Consequently, the RES special account will be deprived of approximately 40 million euros in January, the level of monthly cash inflow usually generated by these auctions.

The amount owed to DAPEEP’s RES special account by power utility PPC, a key barometer of the account’s condition, is currently at 240 million euros.

Despite the unfavorable conditions, DAPEEP’s administration appears determined to prevent any widening of its payment delays to RES producers. The operator is currently engaged in negotiations with Greek banks for a loan agreement that would improve its cash flow and facilitate payments to producers.

It remains uncertain if Brussels will approve an energy ministry request for RES special account emergency support through the EU recovery fund, designed to counter the pandemic’s economic impact.

Balancing market costs a disaster for RES producers

Posted on December 14, 2020 by admin

RES market operator DAPEEP, managing, through the target model framework, the majority of the country’s RES portfolio – specifically 76.73 percent according to energy exchange data, or wind and solar energy facilities receiving fixed tariffs – is facing serious issues as a result of the sharp rise in balancing market costs since the target model’s launch over a month ago.

Essentially, the RES special account, into which day-ahead and intraday earnings are injected, along with any balancing market burdens caused by grid projection discrepancies, is under pressure.

Balancing costs reached hardly negligible levels of approximately 4 euros per MWh during the first four weeks of the target model’s new markets before skyrocketing to unimaginable levels.

During this period, RES special account inflow has been greatly exceeded by outflow for balancing costs. In other words, the RES special account has not only not been remunerated for electricity supply to the system but also ended up covering additional amounts.

DAPEEP projections on RES output are crucial for the RES special account’s financial standing. The operator submits, on a daily basis, next-day projections of RES output to be offered to the system by units in its portfolio. The operator also participates in the intraday market, where it may make corrections.

Even so, DAPEEP has never been equipped with any projection system of its own, relying, instead, even prior to the target model, on forecasts offered by power grid operator IPTO. However, the cost of any discrepancies was minimal prior to the target model. It has now grown.

SPEF, the Hellenic Association of Photovoltaic Energy Producers, has called on DAPEEP, to take control of grid projections concerning the RES portfolio it manages, while reminding that RES producers pay for the operator’s operating and investment costs through DAPEEP surcharges.

Ministry likely to skip a sixth RES-supporting proposal

Posted on December 7, 2020December 7, 2020 by admin

The energy ministry is having second thoughts about implementing one of its six RES-supporting measures, a mechanism that would enable savings resulting from electricity grid interconnections of the islands with the mainland grid to be channeled to RES producers through an increase of a RES-supporting ETMEAR surcharge included in electricity bills.

The ministry’s proposed mechanism, which now appears to be in doubt as studies indicate it would be superfluous, would decrease the public service compensation (YKO) covered by consumers to support production on non-interconnected islands and increase the ETMEAR surcharge by a corresponding amount.

Five other measures legislated to ensure the sustainability of the RES special account, currently in deficit territory, appear sufficient, the energy ministry believes.

Commenting on the sixth measure during a Parliamentary session, energy minister Costis Hatzidakis suggested it may not be implemented as related studies indicate the measure is unnecessary.

The series of measures already introduced are strong enough to weather any further deterioration of the crisis, the minister added.

Last Friday, Thanassis Dagoumas, the chief official at RAE, the Regulatory Authority for Energy, noted that an ETMEAR surcharge increase for 2021 will not be needed, meaning this charge should remain unchanged. The authority must deliver a decision on the matter by the end of this month.

Enel rethinking local plans as result of RES a/c measures

Posted on November 25, 2020November 26, 2020 by admin

Italian multinational energy group Enel intends to reexamine its investment plans for the Greek market as a result measures announced by the energy ministry to counter the RES special account deficit, including an extraordinary contribution from RES producers, the group’s chief executive officer Francesco Starace informed yesterday during on online event through which the group presented its annual strategic plan.

Major banks, funds, investment groups and hundreds of journalists from all over the world were tuned in for Enel’s presentation.

Starace strongly opposed the Greek government measures, describing them as moves that frighten investors and undermine the investor community’s confidence in Greece.

The Enel group’s chief financial officer Alberto De Paoli reiterated these remarks, noting they increase the country risk factor.

Yesterday’s words of warning by the Enel officials come as no surprise. Over the past month or so, ever since the government announced it would impose an extraordinary charge on RES producers as part of the package of RES account measures, Enel and three other multinationals active in Greece’s RES market all expressed strong objections, warning their local subsidiaries would reconsider investment plans.

It remains to be seen what Starace’s latest remarks will mean in practice, once the government begins implementing its package of measures, valued at 350 million euros annually.

The Greek administration has described these measures as a necessity in order to avoid a further widening of the RES special account deficit to inconceivable proportions.

Supplier surcharge ‘more than offset by end of variable cost mechanism’

Posted on November 16, 2020November 16, 2020 by admin

State-controlled power utility PPC’s decision to absorb an extraordinary supplier surcharge of 2 euros per MWh, just announced by the government for a one-year period to help the recovery of the RES special account, back in deficit territory, was a pre-calculated move, otherwise this measure would have had major repercussions – both corporate, for the utility, and political.

The Greek State holds a 51 percent stake in PPC, currently benefitting from a recent plunge in wholesale electricity prices that has drastically reduced the utility’s costs and widened its profit margin, as has also been the case for all electricity suppliers.

RES producers, facing an extraordinary 6 percent tax on total revenues for 2020 – also part of the RES special account rescue effort – have hit out against electricity suppliers by contending that they will ultimately benefit from their extraordinary one-year surcharge, expected to cost them a total of 110 million euros for 2021, as a result of the cancellation of a variable cost mechanism, to be abolished as of January 1, 2021.

The cost of the extraordinary surcharge imposed on suppliers for one year will be more than offset by the variable cost mechanism’s cancelation, RES producers contend.

The variable cost mechanism covered by suppliers, worth 130 million euros, annually, will be replaced by the supplier surcharge, to cost 110 million euros, for one year, SPEF, the Hellenic Association of Photovoltaic Energy Producers, noted.

“In effect, then, they [suppliers] are not only returning any of their excessive profits, at the cost of the RES special account, but increasing them as a result of the variable cost mechanism’s cancellation,” SPEF announced.

Echoing these thoughts, ELETAEN, the Greek Wind Energy Association, noted suppliers are being relieved of costs and, as a result, there should be no talk of any additional cost being absorbed. “This cost relief is unfair, wrong and will impact the RES special account,” ELETAEN stated.

Consumers to also carry weight of RES special account rescue

Posted on November 16, 2020November 16, 2020 by admin

Electricity consumers will end up being among the losers, mostly indirectly, as a result of the energy ministry’s measures aiming to protect the RES special account’s sustainability.

Consumers will not get to see any electricity-bill cost benefits to result from reduced public service compensation surcharges (YKO), anticipated following the completion of subsea grid interconnection projects that will enable the closure of power utility PPC’s high-cost, diesel-fueled power stations operating on non-interconnected islands.

Though YKO surcharge reductions will be offered for island grid interconnection project completions, the benefits for consumers will be offset by an increased RES-supporting ETMEAR surcharge included in electricity bills. The ETMEAR surcharge hike is needed to keep afloat the deficit-struck RES special account, paying RES producers for their output.

For decades, electricity supply customers have subsidized the high-cost electricity generated on non-interconnected islands by paying hefty YKO surcharge amounts imposed on electricity bills.

This surcharge has enabled islanders to enjoy electricity supply at price levels equivalent to those offered in Athens, Thessaloniki and, generally, the entire mainland. If island-generated electricity were not subsidized by consumers, nationwide, then the cost of electricity for islanders would have been many times over levels paid on the mainland.

The plan, before the RES account plunged into deficit territory, was to offer electricity consumers YKO surcharge reductions every time an island grid interconnection project was completed.

Officials estimate the Crete-Peloponnese grid interconnection’s launch, expected in 2021, will offer electricity consumers annual public service compensation surcharge savings of 50 million euros. A bigger-scale grid interconnection to link Crete with Athens, scheduled for delivery in 2024, should offer consumers annual YKO savings of 200 million euros. However, as things stand, these savings will be offset by higher ETMEAR surcharges.

In addition, consumers also face network transmission surcharges, to support the development of major-scale subsea grid interconnections.

RES producers unsettled by new charge, fear more ahead

Posted on November 16, 2020November 16, 2020 by admin

Government measures announced on Friday to tackle the RES special account deficit for sustainability will affect the country’s investment climate and confidence of investors, both domestic and international, renewable energy producers have warned.

The introduction of an extraordinary 6 percent tax on electricity producer total revenues for 2020 represents a breach of an agreement between the Greek State and investors, promised fixed network connection terms, RES sector officials told energypress.

Electricity producers with facilities in operation prior to December 31, 2015 stand to lose a total amount of 110 million euros as a result of the measures, the officials noted.

Wind and solar energy producers, feeling unsettled, reminded of extraordinary measures introduced back in November, 2012 which ultimately failed to reduce the RES special account and led to new-deal tariff cuts in 2014 for existing projects.

Sector officials described the new measures as a repeat of the past, or an eight-year regression, and, as a result, cannot be regarded as new or extraordinary.

Friday’s announcement raises serious issues concerning the country’s credibility and policies, undermining investment security, ELETAEN, the Greek Wind Energy Association, announced in a statement.

The measures do not represent a permanent remedy for the RES special account but will merely counter the consequences of a decision made by energy minister Costis Hatzidakis last year to reduce a RES-supporting ETMEAR surcharge covered by consumers through their electricity bills, other RES officials protested.

Pandemic’s bigger second wave haunting energy market

Posted on October 29, 2020October 29, 2020 by admin

The pandemic’s second wave, now gaining momentum, is once again spooking the energy market and serving as a strong reminder of problems encountered in the sector during the first wave’s difficult three-month period between March and May.

During the first wave, fuel and electricity consumption fell drastically, the ability of consumers to service their bills was impacted, and the RES special account deficit widened. Its deficit is estimated to be 290 million euros.

The pandemic’s second wave, already considerably bigger, could inflict even greater damage on the energy market.

Energy suppliers, including power utility PPC and independent firms, operators, RES producers and the energy ministry are all concerned about bleak times ahead.

The problems for renewable energy producers had begun prior to the pandemic when authorities reduced a RES-supporting ETMEAR surcharge covered by consumers through electricity bills. This led to a reduction of RES special account inflow, an unfavorable development that was then exacerbated by the pandemic.

Distribution network operator DEDDIE/HEDNO, managing the public service compensation (YKO) account, is seeing this account’s deficit widen by the month.

Funded by electricity bill surcharges to subsidize high-cost electricity generation on Greece’s non-interconnected islands and offer lower-cost electricity for underprivileged households, the public service compensation has a deficit of 90 million euros, latest data has shown.

DEDDIE/HEDNO is well aware of the fact that this deficit will need to be eliminated before possible buyers of the operator, headed for privatization, imminently, can enter a virtual data room to assess the sale and consider bids.

A new drop in consumption levels, one of two basic market fears at present, would exacerbate the deficit issues faced by the RES special account and the public service compensation account. The financial standing of consumers is the other major concern.

If the magnitude and duration of the pandemic’s second wave are both extensive, the country’s energy market could face zero growth, even contraction, in 2021.

‘Surcharge cut, unnecessary for PPC, has sunk RES account’

Posted on October 14, 2020October 15, 2020 by admin

A reduction last year of an ETMEAR surcharge used to fund the RES special account paying renewable energy producers for their output has sunk this account into deficit territory, SPEF, the Hellenic Association of Photovoltaic Energy Producers, has protested, basing its observations on the findings of a second study focused on whether the surcharge cut was not necessary to help power utility PPC’s financial recovery.

The energy ministry reduced the ETMEAR surcharge on August 31, 2019 – effective retroactively from January 1, 2019 – to help offset an electricity tariff increase made by state-controlled PPC in the summer of 2019.

The ministry’s move has deprived the RES special account of approximately 200 million euros, annually, or a sum that is anticipated to reach 400 million euros by the end of this year, the SPEF study observed.

The RES special account remunerates thousands of renewable energy producers, some of which happen to be PPC competitors, it noted.

PPC’s electricity purchases from third parties cost the utility 260.2 million euros less in the first half of 2020, compared to the equivalent period a year earlier, as a result of greater RES penetration that has lowered the cost of wholesale electricity, SPEF noted in one of many observations.

The power utility posted an EBITDA figure of 457.3 million euros in the first half of 2020, up from 9.3 million euros in the equivalent period a year earlier, a spectacular rebound making the ETMEAR-related support unnecessary, the study observed.

The country and its energy market, including the RES sector, began to stabilize in 2018 following deep recession over a seven-year period from 2010 to 2017, but the State and current government have damaged their investment-friendly profile, unwavering commitment to green energy and this sector’s growth within the framework of the National Energy and Climate Plan’s objectives as well as in connection with EU directives and constitutional laws, SPEF pointed out.

RES special account deficit deepening, producers eyed

Posted on October 8, 2020October 8, 2020 by admin

The RES special account deficit is continuing to deepen, prompting the energy ministry to consider imposing an emergency charge on RES producers, whose undermining in any way has been regarded a taboo subject ever since their contracts were breached by tariff cuts through what was coined the new deal in 2014.

A further tariff cut for RES producers would certainly not be endorsed by the European Commission, which has energy ministry officials thinking of an extraordinary charge on producers as a solution.

RES market operator DAPEEP’s recent end-of-year forecast of a RES special account deficit of 224.4 million euros, including a 70 million-euro safety reserve, is a mild projection and will be deeper, energypress sources have informed.

Energy minister Costis Hatzidakis has already excluded any prospect of an increase of the RES-supporting ETMEAR surcharge, covered by consumers through electricity bills. This surcharge was reduced last year when the RES special account was in surplus territory.

Rumors that have leaked from the energy ministry suggest that the deficit will be covered through the application of tools used in the past.

Besides the new deal’s tariff cuts, a supplier surcharge is the other tool that has been adopted to date to combat RES special account deficits.

RAE freezes RES producer certificate process, prompting investor unrest

Posted on September 21, 2020September 21, 2020 by admin

RAE, the Regulatory Authority for Energy, without explanation, has stopped issuing RES producer certificates for older applications submitted between October, 2018 and December, 2019, the first round of applications examined through new rules.

The development has prompted strong reaction and unrest among investors, who, according to comments made to energypress, have paid their related fees but not received RES producer certificates, as stipulated by the new law.

This round of applications underwent processing through a new online system adopted by RAE. RES investors were requested, via email, to pay a related fee through the banking system.

Responding to questions on the issue, the IT company handling RAE’s new software said it was ordered by RAE to not proceed to the next stage, offering automated RES producer certificates.

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 a forthcoming round of applications rescheduled for December, instead of October.

Officials to decide on next round of RES applications, RAE overloaded

Posted on September 7, 2020September 7, 2020 by admin

RAE, the Regulatory Authority for Energy, overloaded with a backlog of RES production license applications ahead of a new round, will discuss its pressing situation with the energy ministry’s secretary-general Alexandra Sdoukou at a meeting tomorrow.

The energy ministry will then decide on a date for the new round of applications. Officials have scheduled a next round for October, also stipulated by law. RES investors have expressed heightened interest during the approach.

RAE 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.

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, intended to simplify the RES licensing procedure. Once ready, this proposal will need to be forwarded to the energy ministry, which, in turn, must sign a ministerial decision to bring the plan into effect.

Record-level interest by RES investors has been projected for the next round of applications. Two previous rounds that had been scheduled for March and June were not staged.

New rule soon for RES producer certificates, swifter licensing promised

Posted on August 18, 2020August 18, 2020 by admin

A new rule concerning the introduction of RES producer certificates, to replace electricity production permits – a measure taken to help quicken licensing procedures – is expected to be announced within the next few days.

The replacement of RES electricity production permits with RES producer certificates, to be issued by RAE, represents the first step of a new RES licensing simplification framework presented by the energy ministry last April.

This plan will aim to drastically reduce the duration of RES licensing procedures to two years from the current average of seven years.

Procedures leading to new licensing rules have been slightly delayed by administration changes at RAE, the Regulatory Authority for Energy. The authority was originally scheduled to deliver its plan on August 7 for immediate approval by the energy ministry.

This deadline date was set to offer RAE sufficient time to inform RES investors of the supporting documents required as a result of the new rules ahead of a planned early-October launch for application submissions.

RAE will issue RES producer certificates once applicants have presented proof of payment for related fees.

These fees have been set as follows: 3,000 euros per MW for capacities up to 1 MW; 2,500 euros for capacities between 1 MW and 10 MW; 2,000 euros per MW for 10 MW to 50 MW; 1,500 euros per MW for 50 MW to 100 MW; and 1,000 euros per MW for over 100 MW.

Measures sought for RES special account, under deficit pressure

Posted on June 17, 2020June 17, 2020 by admin

The energy ministry is seeking ways to boost earnings for the RES special account as it is feared that a 110 million-euro deficit projection for the end of 2020, made by DAPEEP, the RES market operator, could be worse, driven down by unfavorable market conditions, including lower System Marginal Prices, or wholesale electricity prices.

DAPEEP’s calculations for its projection are based on a presumed average SMP level of 47 euros per Mwh, well above current levels.

Also, CO2 emission right costs, set at 20 euros for the operator’s calculations, are also believed to be overpriced.

The reduction in electricity demand as a result of the pandemic is another important factor that could prove wrong DAPEEP’s end-of-year deficit projection.

All of these factors heavily influence the RES special account’s earnings.

Deputy energy minister Gerassimos Thomas has requested a study accurately depicting current data and projections for the RES special account. Its outcome will be used to help shape measures in a bid to avoid payment delays to RES producers, a recurring problem that has troubled the sector.

RES investment interest is currently high and the government hopes even greater capital amounts may be injected into renewable energy projects.

“The sustainability of the RES special account is an energy ministry priority and we will take all necessary measures to ensure this is so,” Thomas, the deputy minister, recently noted.

Restored RES special account now facing new pressure

Posted on March 23, 2020March 23, 2020 by admin

The current volatility of many factors determining earnings for the RES special account, the coffer used to remunerate producers supplying green energy to the grid, threatens to once again cause payment delays after a period of hard-earned order.

Possibly for the first time ever, DAPEEP, the RES market operator, has only just managed to bring order to the account, enabling punctual payment to producers.

However, a new round of pressure on the RES special account, primarily induced by the coronavirus crisis and drastic reduction of energy commodity prices, could once again lead to payment delays.

A sharp increase, at present, in the level of unpaid electricity bills could force electricity suppliers to delay relaying RES-supporting ETMEAR surcharges covered by consumers, through their power bills, to DAPEEP.

Even more crucially, the RES special account’s financial standing could also be destabilized by the significant price drop of CO2 emission rights – another support source for the RES special account – along with lower wholesale electricity prices and falling electricity demand prompted by the coronavirus-related restrictive measures.

CO2 emission right prices have fallen from 24 euros per ton to 16 euros per ton since the most recent DAPEEP market update. Such a price drop could deprive the RES special account of 110 to 120 million euros in a year.

During this time, wholesale electricity prices have dropped from 64 euros per MWh to 44 euros per MWh. At a level of 54 euros per MWh, the RES special account would miss out on 120 million euros annually.

Also, the drop in electricity demand, estimated at 10 percent, will lead to further shortfall of approximately 65 million euros, annually, for the RES special account.

RAE aims for swifter processing of RES production license bids

Posted on February 28, 2020 by admin

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.

Support boost for RES special account amid deficit danger

Posted on January 27, 2020January 27, 2020 by admin

The RES special account, facing a prospective deficit of 32.67 million euros – or 102.67 million euros, if a mandatory 70 million-euro safety amount is included – by the end of 2020, according to a projection made by RES market operator DAPEEP, is set to be given a revenue boost.

This financial support will be primarily provided through an increase in the percentage of CO2 emission right auction revenues allotted to the RES special account.

A decision is expected within the next few days, according to related comments made last Friday by energy minister Costis Hatzidakis and the ministry’s secretary-general Alexandra Sdoukou.

The percentage of CO2 emission right auction revenues to be injected into the RES special account will increase to 72 percent from the present level of 65 percent, according to energypress sources.

The prospect of RES special account deficit figures has alarmed renewable energy producers, who, fearing payment delays, have already warned authorities.

The energy ministry recently decided to reduce a RES-supporting ETMEAR surcharge included in electricity bills. It represents the main source of revenue for the RES special account.

RES special account to ‘end year with €50m surplus, plus safety reserve’

Posted on November 20, 2019November 21, 2019 by admin

The RES special account will end 2019 in surplus territory of 50 million euros, plus a required emergency reserve of 70 million euros, deputy energy minister Gerassimos Thomas assured parliament yesterday, responding to observations and criticism by political rivals on details of a sweeping energy-sector draft bill.

“We believe that once the figures are finalized, not only will we not have a deficit, but, instead a surplus of 50 million, plus the 70 million-euro safety net,” Thomas noted. “RES stations do not face any funding problems,” he added.

The new law permits RAE, the Regulatory Authority for Energy, to impose fines for any target model discrepancies, Thomas noted, reiterating a government pledge to implement the target model by June, 2020.

Commenting on the NOME auctions, recently ended by the government, Thomas said the state-controlled power utility PPC has lost 775,529 consumers as a result of the corporation’s market share contraction. Lower-cost electricity acquired at the NOME auctions by PPC rivals has helped them achieve market share gains.

“Let’s not just focus on the past month. Electricity amounts sold [by PPC] at NOME auctions will be delivered gradually until June, 2020,” Thomas pointed out.

PPC, under financial pressure as a result of hefty unpaid receivables, could have securitized arrears in previous years, the recently appointed deputy minister noted, defending the government’s plan to securitize amounts owned by customers.

Commenting on the forthcoming gas utility DEPA privatization, Thomas said the winning bidder of DEPA Infrastructure, one of two new DEPA entities to be offered through the sale, will be given the opportunity to develop networks.

Private-sector companies have developed very good gas networks in the Thessaloniki and Thessaly areas, in contrast to state-controlled DEDA, Thomas remarked. DEDA is a wholly-owned subsidiary of DEPA.

The Alexandroupoli FSRU project plan for the country’s northeast will be transferred to DEPA Trade, the other new DEPA entity, instead of DEPA Infrastructure, to which the project was initially allocated, because DEPA Trade was deemed to be a better match, as participants of a public consultation process advised, Thomas explained.

Greater RES producer support from CO2 rights, ministry notes

Posted on September 30, 2019September 30, 2019 by admin

Measures that would affect the RES special account’s cash inflow will not be implemented, but, on the contrary, account earnings will be boosted by increased takings from CO2 emission right auction revenues, highly ranked energy ministry officials have told energypress.

The officials offered this reassurance following an outcry by RES producers over a ministry intention to reduce a RES-supporting weighted variable cost for conventional thermal power plants.

The percentage to be withheld from CO2 emission right auction revenues for injection into the RES special account will be increased from the current level of 65 percent to 70 percent, the ministry sources noted.

This five percent increase will suffice to guarantee RES producers their payments for output despite an upcoming decrease of CO2 emission right quantities to be offered at auctions following a European Commission decision within the framework of the Market Stability Reserve, the ministry officials said. Greece stands to lose 4 million tons in CO2 rights.

New surcharge drop will affect payments, RES producers fear

Posted on September 26, 2019September 26, 2019 by admin

RES producers have reacted against news of an energy ministry intention to reduce a weighted variable cost for conventional thermal power plants, a surcharge injected into the RES special account.

This surcharge accumulates an annual sum of approximately 60 million euros, vital for the RES special account and payments to RES producers.

This latest RES-supporting surcharge reduction plan follows a recent reduction of an ETMEAR surcharge paid by consumers through electricity bills, implemented to help offset tariff hikes at PPC, the state-controlled power utility.

The ETMEAR surcharge reduction will deprive the RES special account of roughly 200 million euros, annually, RAE (Regulatory Authority for Energy) official Nektaria Karakatsani has estimated.

The RES special account will also have to do without a further annual amount of roughly 60 million euros following a European Commission decision in July reducing CO2 emission right amounts available for auction. Greece must withdraw 4 million tons of CO2 emission rights.

RES producers fear these developments could prompt a RES special account regression into deficit territory and affect payments made by DAPEEP, the RES market operator, for their output.

A recent SPEF (Hellenic Association of Photovoltaic Energy Producers) study forwarded to deputy energy minister Gerassimos Thomas warns of difficult payment conditions ahead for RES producers as a result of looming RES special account problems.

RAE proposals for RES license simplification this month

Posted on September 4, 2019September 4, 2019 by admin

A comprehensive package of proposals aiming to simplify licensing procedures in the RES sector is being prepared by RAE, the Regulatory Authority for Energy, in association with a legal consultant hired for the task.

These proposals, primarily concerning production licenses, are expected to be forwarded to the energy ministry within September.

The package will include proposals on rule changes, for which a ministerial decision is needed, as well as all the required legislative amendments.

The energy ministry is also working on a new legal framework concerning the installation of RES facilities, including spatial matters, to be delivered at a latter date.

RAE is striving to establish a digital RES production license issuing system that will enable investors to make online applications and track their progress.

Ultimately, the effort will aim for a reduction of the amount of time needed for RES production licenses to be issued – this can currently take as long as two-and-a-half years – as well as objectivity and transparency in the licensing procedure.

RES producers fear payment delays following surcharge cut

Posted on September 2, 2019September 2, 2019 by admin

A ministerial decision resulting in RES-supporting ETMEAR surcharge reductions for various electricity consumer groups, including households and businesses, has unsettled renewable energy producers, especially solar and wind energy investors, the sector’s overwhelming majority.

RES producers fear the RES special account’s current surplus could stumble back into deficit territory, which would prompt payment delays for output, as was the case in the not-too-distant past.

The exact cost of the surcharge reduction for the RES special account remains unclear.

Sector authorities estimate the surcharge redistribution will deprive the RES special account of between 160 and 200 million euros per year.

The ETMEAR surcharge, included in electricity bills, has been reduced by the energy ministry as a means of partially offsetting tariff hikes at state-controlled power utility, under financial pressure and needing greater cash inflow.

The RES special account’s surplus is projected to be 138.33 million euros at the end of 2019, following the deduction of a 70 million-euro amount maintained as a safety reserve, according to latest figures provided by DAPEEP, the renewable energy market operator.

This essentially means that if the ETMEAR surcharge reduction does deprive the RES special account of a sum between 160 and 200 million euros, as officials have warned, then part of the safety reserve amount will need to be used up. RES producers fear such a development could eventually drain the RES special account dry and take it back to deficit territory.

RES producers believe greater payment delays will be inevitable if additional measures are not taken, representatives told energypress, while acknowledging the energy ministry is aware of the looming problem.

Bigger share of CO2 right auction funds for RES account

Posted on August 30, 2019August 30, 2019 by admin

The government plans to increase the share of CO2 emission right auction funds going to the RES special account as a means of protecting payments to renewable energy producers following a decision to reduce a RES-supporting ETMEAR surcharge included on electricity bills.

This surcharge is being reduced to partially offset tariff hikes at power utility PPC, under financial pressure and needing a revenue boost.

The energy ministry intends to increase the share of CO2 emission right auction funds going into the RES special account to 70 percent, through a legislative revision in autumn, sources informed.

Renewable energy sector officials are pushing for a bigger share of 80 percent as the total amount of CO2 rights to be auctioned is being reduced, based on new EU regulations announced in July, meaning the overall funds to be generated at the auctions will be smaller.

Under current law, a 65 percent share of CO2 emission right auction funds would be kept for the RES special account, up from 60 percent in 2018, but lower than a 72 percent level that had been set for 2016 and 2017.

PPC tariff hike over 15%, to be partially offset by surcharge cut

Posted on August 28, 2019August 28, 2019 by admin

Electricity tariffs at power utility PPC, financially pressured and in need of a cash inflow boost, will be increased by over 15 percent and partially offset by a reduction of a RES-supporting ETMEAR surcharge included on electricity bills, the state-controlled corporation’s administration and the energy ministry have decided, reliable sources have informed.

Still a tightly kept secret, the details of PPC’s tricky equation, aiming for a significant increase in revenues while limiting the burden on consumers and also protecting RES production payments, will be presented tomorrow at Greek Parliament’s Committee on Production and Trade.

Besides sizable tariff hikes, PPC’s revised pricing policy is expected to include a clause triggering further tariff increases should CO2 emission right costs escalate in international markets – and vice versa.

In addition, a punctuality discount offered by PPC to customers paying electricity bills on time is expected to be roughly halved from its current level of 10 percent as part of the effort to boost revenues.

Meanwhile, as a means of softening the overall impact on consumers, the RES-supporting ETMEAR surcharge included in electricity bills is expected to be reduced to roughly 17 euros per MWh from the current level of 22.67 euros per MWh, a 25 percent reduction.

Decisions will be made official at a PPC board meeting this Friday and implemented September 1.