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.

RES operator to design projection tool, special a/c hit by discrepancies

Posted on January 13, 2021January 13, 2021 by admin

RES market operator DAPEEP plans to develop a reliable projection tool of its own forecasting target model-related output by the country’s renewable energy sector through operating aid contracts with a fixed tariff as well as power purchased agreements. The objective of the operator’s initiative is to eliminate RES special account costs created by discrepancies.

To date, DAPEEP has relied on data provided by power grid operator IPTO, resulting in significant discrepancy costs impacting the RES special account.

Between November 1, when the target model’s new wholesale electricity markets were launched, and January 3, the RES special account’s discrepancy cost has averaged 11 euros per MWh represented by DAPEEP.

By comparison, no such cost was registered for the RES special account between November, 2011 and November, 2020, the final year of the mandatory pool. On the contrary, the RES special account benefited at an average rate of 0.12 euro per MWh during this ten-year period.

DAPEEP wants to develop a new custom-made projection tool from scratch, instead of relying on any ready-made platform. The tool’s design will take into account the details of local wholesale electricity markets, sources informed.

DAPEEP chief executive Yiannis Giarentis acknowledged that projections offered by IPTO were designed for a different purpose, namely energy distribution, whereas the RES operator wants a tool minimizing any penalty costs for the RES special account.

Balancing market costs excessive, further rise feared

Posted on December 22, 2020December 22, 2020 by admin

Balancing market costs have risen to extremely high levels of approximately 12 euros per MWh during the first six weeks of the target model launch, from virtually zero levels under the previous system, consequently burdening the RES special account through feed-in tariff obligations as well as operating aid contracts with fixed tariffs. The cost, for the RES special account, is expected to rise further through HCHP aggregation-related projects.

Strangely, projects operating through feed-in tariff payments as well as operating aid contracts with fixed tariffs, do not have balancing market commitments, by law, yet, as pointed out by SPEF, the Hellenic Association of Photovoltaic Energy Producers, in a letter to RAE, the Regulatory Authority for Energy, the RES special account is burdened by these costs.

If the country’s biggest RES portfolio – handled by DAPEEP, the RES market operator – representing 75 percent of the total RES capacity in operation, is ending up with a balancing cost of approximately 12 euros per MWh in the target model’s new markets, then what should other smaller producers expect, producers have questioned.

Energy minister Costis Hatzidakis has described the various target model issues being confronted as growing pains that are not here to stay.

December cycle of RES license applications exceeds 15 GW

Posted on December 21, 2020 by admin

Over 1,500 RES license applications representing a total capacity of more than 15 GW have so far been lodged by investors with RAE, the Regulatory Authority for Energy, for its December cycle of RES licenses, the first to be held under a new framework, whose deadline expires later today.

These figures, expected to rise further by closing time, suggest that the RES sector has remained unperturbed by a recent 6 percent surcharge imposed by the energy ministry on RES producers, including for existing contracts, to ensure the sustainability of the RES special account.

Also, investment plan reconsiderations by strategic investors do not appear to have affected the sector’s overall investment mood.

Though the Greek RES market appears to have remained a strong attraction for investors despite some sense of investment insecurity generated by the measures, some pundits have remained cautious.

They contend that the large incoming wave of RES license applications is not a safe measure of the country’s level of RES investment attractiveness as these applications are just a preliminary step, without obligations, of a longer process. Actual investment decisions are made further down the line, pundits have stressed.

Many market officials have attributed the large number of applications to RAE’s extended freeze of new application procedures over the past year or so.

Approximately 80 percent of this cycle’s applications submitted to RAE represent solar power projects, while wind energy projects make up the majority of the remaining 20 percent.

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.

RES special account measures head to Parliament unchanged

Posted on November 23, 2020November 23, 2020 by admin

A package of energy ministry measures aiming to counter the RES special account deficit will be submitted to Parliament unchanged, as presented by energy minister Costis Hatzidakis ten days ago, despite a reaction from market players, energypress sources have informed.

These measures will be attached – at a latter date, possibly next week – to a draft bill concerning renewable energy spatial matters, which could be submitted to Parliament today. This is the swiftest available legislation route for the ministry’s RES account measures.

The energy ministry regards the RES special account measures as a balanced package and does not appear willing to consider revisions, as requested by market players, some of whom want structural changes, including for payment deadlines.

It remains to be seen if any revisions will be made once the package has been submitted to Parliament.

The measures, worth an average annual amount of 350 million euros, have caused unrest in the sector, including among RES producers, to be subject to an extraordinary 6 percent tax on revenues for 2020.

The ministry believes RES producers must contribute to the solution, calling for help from across the board.

The overall market reaction against the measures is expected to regain momentum as of next week but the ministry sees its actions as a necessary remedy for the RES special account deficit. Otherwise, the influx of many new RES units anticipated within the next few years would exacerbate the account’s deficit, ministry officials fear.

RES special account deficit measures prepared for Parliament

Posted on November 19, 2020November 19, 2020 by admin

The energy ministry is preparing legal texts concerning a series of structural and collection measures it announced last Friday to protect the sustainability of the RES special account, currently in deficit territory.

Many of these measures require legislative revisions in order to be implemented while others can be adopted as ministerial decisions.

Energy minister Costis Hatzidakis expects the legal texts for measures requiring legislative action to soon be in Parliament.

Two options are available for these texts. They could be attached to a draft bill on spatial matters concerning the RES sector, set to be submitted to Parliament by the energy ministry within the next few days.

However, the RES special account measures will most likely not be ready on time for attachment to this draft bill when it enters Parliament, but they could be still attached with some delay, during special committee and parliamentary discussions. If so, the RES special account measures should be ratified by early December.

A second option entails attaching these RES account measures to a separate energy draft bill that would be submitted to Parliament once the bill concerning spatial matters has been ratified. Though such a course cannot be ruled out, it is an unlikely prospect as the energy minister is determined to make swift progress on the measures aiming to rescue the RES special account.

The measures have caused widespread unrest in the sector. RES producers, who, according to the terms, would be subject to an extraordinary 6 percent tax imposed on electricity producer total revenues for 2020, have called for revisions.

Also, foreign RES investors are believed to be reexamining investment plans with their local subsidiaries.

Foreign RES investors, troubled by measures, reconsider plans

Posted on November 17, 2020November 17, 2020 by admin

Major foreign firms active in Greece’s RES market are reexamining their investment plans, officials of local subsidiaries have informed following measures announced by energy minister Costis Hatzidakis to counter the RES special account deficit.

The new measures, which include an extraordinary 6 percent tax on electricity producer total revenues for 2020, have generated a new climate of uncertainty following new-deal tariff cuts in 2014, foreign RES investors have stressed, noting the strong investment interest maintained until recently could fade.

The energy ministry’s measures have yet to be finalized. Once they are fine-tuned and implemented, parent companies and their local subsidiaries are expected to look carefully at their Greek RES investment plans and make revisions if necessary.

Some multinational company officials already believe investment plan revisions will be made, adding that local partners will soon be informed.

“The projects we have in progress will be completed but our future investment program will be discussed with our head officials,” one company official informed.

Certain RES investors remain hopeful that the energy ministry could end up delivering a more balanced solution to combat the RES special account deficit.

The new-deal tariff cuts in 2014 stunned RES market investors and led to an extended period of stagnancy.

Foreign embassy officials are expected to contribute to the efforts of multinational investors for revisions to the energy ministry plan.

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.

Retroactive RES tariff cuts deemed lawful by ECJ member

Posted on November 5, 2020 by admin

Retroactive feed-in tariff revisions for renewable energy producers do not conflict with European law, according to an opinion delivered by an advocate general at the European Court of Justice, PV-Magazine has reported.

Advocate general Henrik Saugmandsgaard Øe announced that Italy’s decision to amend terms of signed 20-year PV contracts in 2014 does not represent a breach of EU law, the PV-Magazine article noted.

The announcement has raised questions as to how it could impact proceedings in the Greek RES market.

Greece’s energy minister Costis Hatzidakis recently indicated tariff cuts may be needed to help counter the RES special account deficit. Industry players, including foreign investors, have reacted.

The ECJ opinion, drawn up by Øe, one of the court’s 11 advocates general, will now be considered by the court’s 27 judges before a final ruling is delivered.

EU member states are free to adapt, alter or withdraw support schemes provided renewable energy targets are met, the advocate general noted.

“I don’t consider that the operators of photovoltaic installations can rely on a legitimate expectation that there would be no change in the benefit of those incentives for the entire duration of the contracts,” Øe noted.

His opinion is expected to be welcomed by the governments of Greece, the Czech Republic, Germany and Spain, the PV-Magazine article reported.

Energy market to feel lockdown pressure on number of fronts

Posted on November 5, 2020 by admin

Greece’s energy market is once again entering uncharted waters as the government prepares to announce a second nationwide lockdown.

A widespread ban on transportation expected to be announced by Prime Minister Kyriakos today as part of the lockdown measures comes as a blow for the petroleum products market.

The fuel refining, trading and retail sectors will be the first to suffer lockdown-related consequences. Lower sales in the year’s first nine-month period are now expected to sink further.

Business concerns are also evident in the electricity and natural gas markets, where payments of energy bills were slow prior to the latest lockdown and are expected to worsen.

Retailers warn that any savings used by many consumers to service energy bills during the first lockdown will have dwindled.

There is much concern over the impact on power utility PPC, the electricity market’s dominant player whose scale promises to cause wider repercussions in the sector amid adverse conditions.

PPC has made preparatory moves to bolster its position, initiatives including securitization of unpaid receivables, an effort expected to bring in some 500 million euros, and an intensified hunt for payments from consumers regarded as able but unwilling to service electricity bill arrears. However, given its scale, PPC will inevitably feel pressure during the lockdown as an increased number of consumers will struggle to service energy bills.

These delays will have wider energy-sector ramifications, including on the RES special account, already in deficit territory and projected, prior to the latest lockdown, to end the year at 284 million euros.

The public service compensation (YKO) account, subsidizing high-cost electricity generation on Greece’s non-interconnected islands and offering lower-cost electricity for underprivileged households, will also be pressured as cash inflow from electricity bill surcharges drops.

Turbine producers also worried about RES account measures

Posted on November 4, 2020November 4, 2020 by admin

Taking their cue from major international RES investors, wind energy equipment makers active in the Greek market, including VESTAS, holding just under a 50 percent share of wind turbines installed, have urged the government to take cautious steps with its sustainability measures intended to counter the RES special account deficit.

Local representatives of wind turbine multinationals have forwarded a joint letter to energy minister Costis Hatzidakis, as well as to the prime minister’s office, expressing their concerns of market destabilization.

The foreign investors have warned that tariff cuts for output – on existing contracts – as hinted just weeks ago by Hatzidakis, the energy minister, would breed market insecurity and force a reexamination of investment plans.

Tariff cuts imposed on existing RES contracts in Greece back in 2014 had stunned the sector to a standstill. It has only just begun recovering.

Multinational wind turbine makers rely on advice from local subsidiaries when selecting investment projects. Yield rates and country risk are two pivotal factors behind these decisions. Retroactive tariff cuts greatly increase the country risk factor for RES investments.

The energy minister and his team are currently examining possible moves to eliminate the RES special account deficit. It is a tricky equation as all options come with some drawback.

The ministry intends to soon hold talks with RES investor representatives for a set of proposals it will deem as fair and balanced.

Small-scale PV units face tariff cuts, tougher RES auction limits

Posted on October 30, 2020October 30, 2020 by admin

The energy ministry is considering to impose a series of limits on small-scale PV units of up to 500 KW – currently exempted from RES auctions and securing fixed tariffs through administrative decisions – as part of a wider effort to eliminate the RES special account deficit and ensure its sustainability.

Firstly, officials at the ministry are looking to set an upper limit on the total capacity of small-scale PV units that can receive tariffs administratively without participating in RES auctions.

Officials are also considering a steeper de-escalation of tariff prices for small-scale PV units. Under current terms, private investors installing units of up to 500 KW are entitled to a tariff of 70.3 euros per MWh until November 26; 65.73 euros per MWh until April 30, 2021; and 63 euros per MWh between May 1, 2021 and April 30, 2022.

Energy communities of up to 1 MW are currently entitled to 73.64 euros per MWh until November 26; 68.86 euros per MWh until April 30, 2021; and 65 euros per MWh between May 1, 2021 and April 30, 2022.

The aforementioned tariffs beyond November 26 are likely to be cut for both small-scale PV units and energy communities.

The energy ministry also intends to lower the upper limit of small-scale PV units not required to participate in RES auctions for their tariffs to 200 KW from 500 KW at present.

RES auction in December unlikely, facing cancellation

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

A RES auction that was expected to be staged in December to offer a remaining 340-MW capacity for solar energy units appears increasingly unlikely to go ahead given the insufficient time left between now and the end of the year.

Normally, RAE, the Regulatory Authority for Energy staging these auctions, requires a period of approximately two and a half months to conduct RES auction preparations in proper fashion.

The RAE board has not taken a decision to stage a RES auction in December as the energy ministry has not given the green light.

The ministry, troubled by the deficit of the RES special account, used to remunerate producers for output, may want to limit the level of fixed tariffs offered to producers through RES auctions.

The year’s wind energy capacity offered to investors was fully exhausted at the most recent RES auction in July, offering both wind and PV capacities.

Authorities could announce a RES auction for 2021 before the end of this year. Or the year’s remaining 340-MW capacity for solar energy could be incorporated into new terms from January onwards.

It should be pointed out that the energy ministry has yet to decide on whether to submit an application to Brussels for an extension of the right to stage RES auctions beyond 2020.

Some market officials, including power utility PPC’s chief executive Giorgos Stassis, believe RES projects should participate in imminent target model markets, not RES auctions, for tariffs as of 2021.

RES market officials, fearing that an abrupt end of the RES auctions could create funding issues for new RES projects until the market’s new framework is fully implemented, prefer a transitory period.

Energy ministry decisions on the RES auctions will be combined with solutions aiming for the RES special account’s sustainability. Surprises cannot be ruled out.

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.

Ministry working on RES special account deficit solution

Posted on October 27, 2020October 30, 2020 by admin

Energy ministry officials are working on two plans aiming to eliminate the RES special account deficit without any need to increase the RES-supporting ETMEAR surcharge covered by consumers through electricity bills.

The first plan is based on a combination of measures including the imposition of an extraordinary charge, pandemic-related recovery fund support, and an increase in the share of emission right revenues for the RES special account. These measures are based on proposals forwarded by RES sector officials.

A second plan being looked at simultaneously, purely focused on structural measures, is assessing possible tariff cuts for existing projects whose investment costs have been covered, as well as certain categories deemed to have benefited from excessively high tariffs, offering relatively higher IRR yields, since the new deal in 2014, when many investors had their tariffs cut.

Small-scale PV units of up to 500 KW – not participating in RES auctions and given tariffs through administrative decisions – have been included in the calculations.

It remains unclear to what extent the energy ministry will take into account the concerns and proposals of RES market officials for its finalized decision.

The energy ministry knows that a delayed decision will be detrimental for RES sector and its growth prospects as the country aims to decarbonize.

Last Friday, representatives of multinationals operating in Greece’s RES market expressed their concerns to the prime minister’s office following talk of an extraordinary charge on producers. Government officials assured that investors would not be stunned by any rash decisions concerning the RES special account deficit.

RES multinationals to reiterate tariff cut concerns at prime minister’s office

Posted on October 23, 2020October 23, 2020 by admin

Multinationals operating in Greece’s renewable energy market intend to reiterate their views on the reasons behind the RES special account’s deficit and proposals for its elimination at the prime minister’s office following initial talks on the matter yesterday with energy minister Costis Hatzidakis.

Representatives of multinationals will underline that any tariff cuts – on existing contracts – for producers, as an extraordinary measure to help reduce the RES special account deficit, would harm the country’s image abroad as an investment destination.

The multinational representatives will also reiterate their proposal for EU funding as a solution to the RES special account deficit, given the pandemic’s impact on the account.

RES producers were alarmed and angered by recent comments from the minister suggesting that a tariff cut could be imposed.

During yesterday’s meeting at the ministry, involving the participation of Enel, EDF and Iberdrola representatives, Hatzidakis assured he would not stun producers with any rash decisions.

Multinationals active in Greece’s RES sector have warned that any tariff cut, seen as an act instilling market instability, would ultimately prompt investors to reexamine their investment plans.

The local representatives of multinationals, completing a first round of meetings on the matter this week, are awaiting the ministry’s next views and moves, as well as related studies by RAE, the Regulatory Authority for Energy, and RES market operator DAPEEP.

The energy ministry is expected to reach decisions within the next ten days. In the lead-up, multinational representatives will keep pushing their cause, while certain foreign embassies are also expected to intervene by contacting the government on the issue.

RES producers propose special account measures worth €320m

Posted on October 23, 2020October 23, 2020 by admin

Two renewable energy industry associations representing producers have proposed measures estimated to be worth a total of 320 million euros as a means of tackling the deficit of the RES special account, remunerating producers for their output.

The association heads of ESIAPE, the Greek Association of Renewable Energy Source Electricity Producers, and ELETAEN, the Greek Wind Energy Association, agreed to participate in an energy ministry meeting yesterday to discuss the RES special account deficit after keeping a distance prompted by energy minister Costis Hatzidakis’ recent talk of possible producer tariff cuts.

ESIAPE chief Giorgos Peristeris and ELETAEN co-heads Panagiotis Ladakakos and Panagiotis Papastamatiou were joined by officials from three multinationals, Enel, Iberdrola and EDF, all members of the two associations, for yesterday’s meeting.

In recent days, all three companies have indicated that any extraordinary charge on RES producers could spark investor insecurity and force reexaminations of investment plans for the Greek market.

The two sides have agreed to pursue further talks in search of ways to eliminate the RES special account, at 284 million euros.

The meeting’s participants are believed to have pressured Hatzidakis, the energy minister, to acknowledge that the deficit resulted from two factors, last year’s reduction, by the minister, of a RES-supporting ETMEAR surcharge covered by consumers through electricity bills, and the pandemic-induced reduction of the System Marginal Price, or wholesale electricity prices.

ESIAPE estimates the impact of the pandemic on the RES special account to be worth around 100 million euros.

At yesterday’s meeting, the association called for an increase in the percentage of carbon emission rights channeled into the RES special account to 85 percent from 65 percent. Such a revision would inject an additional 100 million euros, annually, into the RES special account.

ESIAPE also requested that an offsetting surcharge covered by suppliers be maintained once the target model is introduced. This measure is estimated to be worth 120 million euros annually.

Public Service Compensation account deficit at €90m

Posted on October 20, 2020October 20, 2020 by admin

The Public Service Compensation (YKO) account, funded by electricity bill surcharges used to subsidize high-cost electricity generation on Greece’s non-interconnected islands and offer lower-cost electricity for underprivileged households, is in deficit territory, at 90 million euros, according to most recently available data.

RAE, the Regulatory Authority for Energy, has until the end of the year to inform the energy ministry if an YKO surcharge adjustment will be needed.

This task is particularly delicate for RAE this time around as the Public Service Compensation account is managed by the privatization-bound distribution network operator DEDDIE/HEDNO, a power utility PPC subsidiary.

The energy ministry, it is believed, wants to avoid burdening consumers further with any YKO surcharge hike. However, RAE will need to find a way of eliminating the YKO account deficit before prospective buyers are given access to an DEDDIE/HEDNO data room ahead of the operator’s privatization.

Energy sector authorities also need to deal with a deficit of the RES special account, paying renewable energy producers for their output.

The Public Service Compensation account has been stuck in deficit territory in recent years, forcing authorities to keep imposing an YKO surcharge on consumers.

The account ended with deficits of 36 million euros in 2017, 63 million euros in 2018 and 127 million euros in 2019.

State budget support has often been needed to avoid further YKO surcharge hikes for consumers, the most recent cash injection from the budget provided last July.

Four multinationals to react against RES producers charge

Posted on October 19, 2020October 19, 2020 by admin

Four multinationals active in Greece’s renewable energy market are set to express their concerns to the government over its plan to impose an extraordinary charge on RES producers in order to help eliminate the RES special account deficit.

Preparing a joint letter to be forwarded this week, the four multinationals, ENEL, Iberdrola, EDF and Total Eren, see any extraordinary charge on RES producers as a move that could breed investor insecurity and force reexaminations of investment plans for the Greek market.

The companies are reacting to recent comments by energy minister Costis Hatzidakis, who announced an extraordinary charger for RES producers is being considered to counter the RES special account deficit.

Older RES producers have already persevered a significant reduction in contracted tariffs for solar energy production at existing units, prompted by a so-called new deal nearly seven years ago.

That setback, plus other extraordinary charges, tightened up investments in Greece’s RES sector, only just beginning to recover.

Industry associations representing local RES enterprises have already spoken out against the plan for an extraordinary charge on producers.

Also, MPs representing various constituencies around the country face pressure by smaller solar energy producers to intervene and question the political leadership over its targeting of RES producers. Some 15,000 families around the country were affected by the new-deal tariff cut in 2014.

Hatzidakis, the energy minister, insists the government is committed to supporting the RES sector, as described in the National Energy and Climate Plan, adding, however, that the RES special account’s inflow has been reduced by the pandemic and its resulting energy consumption decrease.

“An unprecedented crisis exists and is impacting all sectors and all countries…we need to position ourselves with social responsibility,” Hatzidakis noted in an interview published yesterday by Greek daily Kathimerini.

Property owners have been forced to reduce rent levels by 30 percent to help keep Greek businesses afloat, the minister added, implying that RES producers must also contribute to help confront a widespread problem affecting all.

“Industry is under pressure; ordinary consumers are under pressure; and RES producers – I won’t say illegally or legally – are collecting revenue at an average price of 144 euros [per MWh] against a wholesale price averaging about 40 euros,” the minister noted.

Wind energy producers receive around 90 euros per MWh and solar energy producers approximately around 280 euros per MWh, Hatzidakis specified.

The government, like all governments, is right in leaving consumers out of the RES special account deficit equation, Hatzidakis said, as it is taking measures with social awareness intact.

‘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.

‘Surcharge cut, not pandemic, behind RES account deficit’

Posted on October 12, 2020October 12, 2020 by admin

The RES special account’s deficit forecast for the end of 2020 is not the result of the global pandemic’s impact on markets but the government’s reduction, last year, of the RES-supporting ERMEAR surcharge covered by consumers, SPEF, the Hellenic Association of Photovoltaic Energy Producers contends, backing the claim with its own related study.

The RES special account deficit at the end of this year would have existed even without the consequences of the pandemic, the association noted, adding the account would have ended the year with a narrow deficit had the ETMEAR surcharge not been reduced.

SPEF hit out in response to a government call for widespread RES account support from all social groups, including RES producers. The energy ministry noted this general call-up has been made necessary by the pandemic’s effects.

RES market operator DAPEEP recently forecast an end-of-year RES special account deficit of 224.4 million euros, including a 70 million-euro safety reserve. Certain pundits believe this is a mild projection, warning the deficit will be deeper.

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.

EC upbeat on market; RES account, PPC share concerns

Posted on September 24, 2020September 24, 2020 by admin

The European Commission has favorably reviewed Greece’s electricity market in a 7^th post-bailout report on the country’s economy, noting, however, that power utility PPC’s market share needs to drop further.

Power utility PPC’s market share was down to 67.7 percent in June from 73.5 percent a year earlier, but still remains a long way off the 50 percent target by the end of 2020, the report’s authors noted.

Special offers from independent electricity suppliers for consumers have intensified the level of market competition, the Brussels report noted.

The ability of consumers to pay electricity bills has been impacted by the pandemic, subsequently leading to an increase in the number of supply-cut orders, and also prompting PPC to securitize unpaid receivables, the report pointed out.

Wholesale electricity prices in Greece are among the EU’s highest but have dropped in the first half, the report noted.

Its authors anticipate a further wholesale electricity price reduction as the country’s energy mix is transformed by the withdrawal of lignite-fired power stations and entry of other energy-generating fuels, such as natural gas.

Retail electricity prices are among the lowest in the EU, the report added.

It issued a warning on the RES special account deficit, noting this is a concern for the future of the renewable energy market. The report attributed the deficit to the pandemic, which has lowered electricity prices and reduced RES special account cash inflow. The report acknowledged that DAPEEP, the RES market operator, is revising its formula to achieve a balanced account in the short and long terms.

The target model’s implementation, expected November 1, represents a significant step in the completion of the domestic electricity market’s transformation, the report stressed, making note of delays, once again attributed to the pandemic.

The report was particularly favorable on Greece’s decarbonization and electromobility efforts.

Supplier surcharge return seen for RES special account deficit

Posted on September 21, 2020September 22, 2020 by admin

Electricity suppliers will most likely need to contribute to help cover the RES special account deficit expected at the end of 2020 judging by remarks made yesterday by energy minister Costis Hatzidakis, who ruled out any possibility of increased input into this account by consumers through higher RES-supporting ETMEAR surcharge payments.

An energy ministry request for RES special account support through the EU recovery fund has little chance of being approved, sources informed.

The energy ministry needs to reach a decision on any ETMEAR surcharge level revisions by the end of the year. A neutral decision, neither raising nor lowering consumer payments, is now anticipated.

An end-of-year RES special account deficit, considered a certainty, will need to be covered so that payments to RES producers can continue without misadventure.

Ministry sources said tools used to tackle similar conditions in the past will be reapplied.

In the not-too-distant past, local authorities had adopted a supplier surcharge to cover previous RES special account deficits before the tool was eventually rejected by the European Commission – once payments to RES producers were back in order.

According to forecasts by DAPEEP, the RES market operator, the RES special account will end the year with a deficit of 224.4 million euros, including a 70 million-euro safety reserve.

Ministry to seek EU recovery fund support for RES special account

Posted on September 17, 2020 by admin

The energy ministry intends to seek EU recovery fund support for the RES special account, whose financial state is currently strained, as indicated by monthly reports and sustainability projections.

The RES special account deficit is seen reaching 224 million euros by the end of the year, DAPEEP, the RES market operator has projected.

This deficit forecast highlights the negative impact of the pandemic-related economic crisis on the account, the energy ministry’s secretary-general Alexandra Sdoukou stressed.

The RES special account issue is a top priority at the energy ministry, currently examining structural changes to ensure the account’s sustainability, the official noted.

The establishment of a special market for green certificate trading is being considered as one possible structural change, according to Sdoukou.

RAE, the Regulatory Authority for Energy, and DAPEEP have commissioned two separate studies for structural change proposals. They will serve as a base for RES special account revisions, Sdoukou said.

“We will take related initiatives in the coming months,” the official noted.