Operator ups RES special a/c surplus forecast to €172m

Posted on June 1, 2021June 1, 2021 by admin

RES market operator DAPEEP has projected a considerably wider RES special account surplus of 172.23 million euros for the end of 2021 in a latest monthly report factoring in market data up to March.

The operator’s previous report, covering data up until the end of February, had forecast a RES special account surplus of 117.49 million euros.

The increased RES special account surplus now forecast by the operator has been attributed to projections for even higher CO2 emission right prices during the year as well as higher day-ahead market clearing prices.

The latest DAPEEP forecast for the RES special account bases its calculations on a CO2 emissions right price average of 45 euros per ton, up from 42 euros per ton a month earlier.

The day-ahead market clearing price was also increased to 58 euros per MWh from the previous month’s 56 euros per MWh, by the operator for its latest RES special account forecast.

Taking into account a 70 million-euro safety reserve amount deducted for security against extraordinary circumstances, the RES special account’s net surplus at the end of 2021 is forecast to reach 102.23 million euros.

The 172.23 million-euro gross surplus includes 25 million euros anticipated from RES producer certificate surcharge revenue as well as 92 million euros from a green surcharge imposed on auto diesel.

Older solar park upgrades to be stopped, burdening RES special a/c

Posted on May 19, 2021May 19, 2021 by admin

The energy ministry appears set to introduce measures discouraging upgrades of existing RES facilities operated by early-bird investors, who enjoy elevated tariffs for their output through older contracts with 20-year durations, their objective being to further boost production and earnings through the upgrades.

Some early-bird RES investors are making the most of a sharp price drop for new-technology solar panels offering far greater production potential, to fully upgrade their solar parks, energy ministry officials have observed.

Investors, in other words, are willing to purchase RES facilities for a second time and enjoy greater output for the remainder of their 20-year contracts signed with DAPEEP, the RES market operator.

The development is burdening the RES special account, from which producers are remunerated, as far greater energy quantities produced by revamped solar energy parks are being rewarded unrealistic tariffs, given the current market conditions shaping new tariff levels.

According to sources, energy minister Kostas Skrekas has warmly received recommendations by subordinates on the introduction of grid absorption limits for electricity amounts drawn from solar energy parks.

The plan entails implementing limits based on market data concerning solar parks prior to their technological upgrades.

Related measures could be imminent given the minister’s positive stance to the recommendations.

CO2 emission right price hits new record high of €47.11/ton

Posted on April 27, 2021April 28, 2021 by admin

CO2 emission right prices, continuing their surge to reach a new record level of 47.11 euros per ton in trading yesterday, are prompting new conditions in the wholesale electricity market that further increase the operating cost of power utility PPC’s lignite-fired power stations, while, on the other hand, boost the revenue potential for the RES special account, used to remunerate RES producers.

Analysts have forecast even higher CO2 emission right prices, which, they believe, will stabilize at a level of no less than 45 to 50 euros per ton in the short term.

At the current CO2 emission right price level, the purchasing cost for every MWh of lignite-fired generation produced by PPC exceeds 70 euros.

On the other hand, besides boosting the revenue potential for the RES special account, this CO2 emission right price rise also promises to widen its surplus.

A 78 percent total of earnings hailing from CO2 emission right auctions is injected into the RES special account.

RES market operator DAPEEP plans to auction off a total of 20.86 million CO2 emission right units in 2021.

The operator has based the year’s RES special account revenue calculations on a CO2 emission right price of 37.45 euros per ton, a level that would rake in some 609 million euros for the account.

The latest CO2 emission right price rise, to 47.11 euros per ton, would provide 765 million euros for the RES special account this year, an additional 156 million euros.

RES special a/c surplus over €100m, boosted by higher CO2 prices

Posted on April 13, 2021April 13, 2021 by admin

The RES special account is expected to reach a surplus of more than 100 million euros this year as a result of an increase in the price of CO2 emission rights, now exceeding 44 euros per ton.

A 78 percent share of revenue generated through CO2 emission rights purchases by various industrial producers is injected into the RES special account. A legislative revision still needs to be ratified for this percentage figure to also apply in 2021.

DAPEEP, the RES market operator, plans to auction a total of 20.86 million units this year, the country’s share.

The operator’s most recent RES special account forecast sees an end-of-year surplus of 11.07 million euros, based on a CO2 emission price of 37.45 euros per ton, well under the current trading price level of 44.5 euros per ton.

Given the latest price level, the CO2 emission rights to be auctioned would generate total revenue of 928 million euros, of which 723 million euros, or 78 percent, will be injected into the RES special account.

This results in an additional amount of 114 million euros for the RES special account, based on the current CO2 emission price level. The extra revenue for the account could end up being as much as 150 million euros if projections by the vast majority of analysts, seeing a further rise in the CO2 emission price, are proven true.

The RES special account struggled in 2020 as a result of plunging CO2 emission right prices during the pandemic, down to as low as 17 euros per ton.

DAPEEP now anticipates greater cash inflow for the RES special account, noted Yiannis Giarentis, the operator’s head official. The price surge should create a considerable safety net for the account, he added.

Ministry, eyeing RRF support, proposes RES account split

Posted on April 5, 2021April 5, 2021 by admin

A new energy ministry proposal seeking 202 million euros in financial support for the RES special account through the EU’s Recovery and Resilience Facility entails the establishment of two such accounts, one covering existing projects connected up until the end of 2020, the other, new projects linked as of 2021.

The existing RES account, facing deficit pressure, would continue remunerating projects connected up until the end of last year, sparing it of the responsibility of financially supporting new projects, while the new RES account would be the exclusive beneficiary of the 202 million-euro RRF injection, according to the plan.

All existing RES account support tools, such as the ETMEAR surcharge included in electricity bills, would continue being injected into the old RES special account, the plan envisages.

The ministry’s split plan appears to stem from the fact that RRF support for the sake of merely covering the existing RES special account’s deficit would not be permitted by the European Commission, whereas, on the contrary, resorting to the RRF to facilitate the RES sector’s further penetration of the energy mx is seen as feasible.

Besides the 202 million-euro RRF injection, the new RES special account for new projects would also benefit from funds generated by the day-ahead market, according to the plan. The introduction of a new surcharge for this account cannot be ruled out.

Renewable energy market players have expressed unease about the plan’s ability to keep both RES special accounts balanced, crucial for the sustainability of old and new investments.

Special terms for RES special account’s recovery fund support

Posted on March 30, 2021March 30, 2021 by admin

An energy ministry request for European Commission Recovery and Resilience Facility support worth 200 million euros for the country’s RES special account, facing deficit territory, has been included in the national RRF plan, but special terms will need to apply as Brussels has not accepted a Greek argument citing the pandemic as the main cause of the account’s deficit issues.

Despite Brussels’ initial objections to Greece’s RRF inclusion of support for the RES special account, the case remains open and is being discussed by the two sides.

The likelihood of Brussels accepting Greece’s bid is believed to be improving as these talks progress.

Officials are currently seeking to determine the extent of the RES special account and impact of new renewable energy projects to be connected to the grid this year before a support sum is set, sources informed.

It remains unclear if a proposal, already tabled, to split the RES special account into two, one covering up to 2021 and the other beyond, can be adopted, the sources added.

RES-supporting surcharge cut for hotels, airports, ports

Posted on March 29, 2021March 29, 2021 by admin

Hotels, ports and airports have been exempted from a higher RES-supporting ETMEAR surcharge to be imposed on medium and high-voltage enterprises, except for energy-intensive producers, retroactively as of January 1, 2019.

Instead, hotels, ports and airports will be subjected to a reduced ETMEAR surcharge offering a 53 percent discount between 2019 and 2021.

The discount will result in a reduction of the ETMEAR surcharge imposed on hotels, ports and airports to 9.01 euros per MWh over the three-year period.

ETMEAR surcharges, supporting RES special account inflow, were reduced through a ministerial decision signed in August, 2019, resulting in a 17-euro per MWh charge for households as a means of offsetting a hike in power utility PPC tariffs.

In its latest report, RES market operator DAPEEP appears to have factored in the impact of the ETMEAR reduction for hotels, ports and airports on RES special account cash inflow for 2019 and 2020. The operator has revised downwards its anticipated inflow for the account during this two-year period by a total of 50 million euros.

DAPEEP’s anticipated RES special account cash inflow, from ETMEAR surcharges, for 2019 and 2020 were revised to 65 and 60 million euros, respectively, in a report published in December, 2020, down from 95 and 80 million euros for the two years in a report released a month earlier.

PPAs not on RRF list, disclosed today, networks included

Posted on March 29, 2021March 29, 2021 by admin

An energy ministry proposal seeking funding support for power purchase agreements (PPAs) between industrial enterprises and RES producers through the European Commission’s Recovery and Resilience Facility has been excluded from the government’s RRF plan to soon be forwarded to Brussels, energypress sources have informed.

Greece’s plan for PPA support through the RRF did not meet the facility’s criteria, leading to its rejection by Brussels, sources informed. Other support options for PPAs are now being sought by the government.

It remains unclear if EU recovery fund support will be offered to the RES special account, in deficit territory. The European Commission has indicated it could offer its approval. Greece is seeking a 200 million-euro injection.

RRF backing is considered certain for power grid operator IPTO’s electricity transmission projects plus a number of projects planned by the distribution network operator DEDDIE/HEDNO, such as smart meter installations and partial undergrounding of networks, as well as initiatives associated with the country’s decarbonization effort and a subsidy program for energy efficiency upgrades of buildings.

Greece’s overall plan for RRF support will be presented at a cabinet meeting today by deputy finance minister Theodoros Skylakakis. Totaling 32 billion euros, its section for energy-sector projects is worth 6 billion euros.

Athens cautiously optimistic on RRF support for RES special account

Posted on March 10, 2021March 10, 2021 by admin

Government officials remain cautiously optimistic on the prospects of EU recovery fund support for the country’s RES special account, impacted by the pandemic and resulting lockdown measures.

The European Commission is seriously considering Greece’s request for EU recovery-fund support for the RES special account, well-informed sources have noted.

Athens is seeking 200 million euros in financial support, as a lump sum, for the RES special account from the European Commission’s Recovery and Resilience Facility (RRF).

A decrease in energy consumption prompted by the lockdown restrictions has pushed the RES special account, remunerating renewable energy producers, to deficit territory as a result of lower consumption-based surcharge contributions across the market.

A pandemic-induced fall in Greek wholesale electricity prices during the first wave of the crisis, early in 2020 – they averaged 28.51 euros per MWh last April – has also affected the RES special account’s cash inflow.

European Commission approval of Greece’s support request for the RES special account would represent a first step in the procedure as the two sides would then need to agree on the extent of the deficit that can be attributed to the pandemic.

Introduced by Brussels last month, the RRF is worth a total of 672.5 billion euros in loans and grants.

A study by Swedish-Finnish consulting giant Afry, commissioned by RAE, Greece’s Regulatory Authority for Energy, estimates Greece’s RES special account can only remain in surplus territory over the next three years with a 200 million-euro injection of support funds.

According to the Afry study, the RES special account would record deficits of 92 and 51 million euros in 2022 and 2023, respectively, without recovery fund support, under the best of conditions, including continuation of the same number of emission rights granted to Greece on an annual basis.

Green aggregator discrepancies ‘costing RES special account’

Posted on March 2, 2021March 2, 2021 by admin

Forecast inaccuracies by green aggregators between November 1 and February 14 cost the RES special account a total of 7.7 million euros, RES market operator DAPEEP’s head official Yiannis Giarentis has alleged in a letter to RAE (Regulatory Authority for Energy) chief executive Thanassis Dagoumas.

This cost arises as green aggregators are not charged for their discrepancies. Instead, amounts they return are limited to sums received through the market at day-ahead market price levels.

Green aggregators are not making any effort to improve their forecasts as, under the current rules, they do not shoulder the cost of discrepancies, the RES market operator head official explained in his letter.

On the contrary, existing balancing market regulations enable green aggregators to maximize profits at the cost of the RES special account, a situation that RAE must investigate, Giarentis pointed out.

The DAPEEP chief, in his letter, has called for an amendment to a related law, ratified in 2016.

Recovery fund help vital for RES special account, Afry report notes

Posted on March 1, 2021March 1, 2021 by admin

The RES special account’s ability to remain in surplus territory in 2023 will depend on the overall impact of measures decided by the energy ministry, including the prospect of a 200 million-euro injection from EU recovery-fund money, according to a related conducted study by Swedish-Finnish consulting giant Afry.

Greece’s energy ministry has just published the study’s findings.

The RES special account’s financial standing will begin improving in 2024, even without the 200 million euros in recovery-fund support, and, year by year, will experience a gradual surplus increase, the Afry study projects.

As for the three-year period between 2021 and 2023, the study has forecast marginal surplus figures, at best, of between 60 and 150 million euros.

The prospects, for this period, will not only depend on the outcome of an application for recovery-fund support for the RES special account but also on the effectiveness of other ministry measures, the Afry study points out.

Besides the possibility of no recovery-fund money for the RES special account, the report also lists the prospect of far fewer carbon emission rights for Greece as another threat.

Other market shocks, such as delayed economic recovery due to coronavirus vaccination program setbacks, as well slower development of the Crete-Athens grid interconnection project, could also result in RES special account deficits, the report warns.

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.

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.