RES project investors, facing higher costs, call for tariff increases

RES project investors are calling for an upward revision of fixed tariffs secured at previous auctions as a result of higher costs impacting their business plans.

Costlier prices for equipment and building materials, such as steel, as well as higher lending rates, have exceeded initial budget estimates of investors, making development of their projects extremely difficult, and, in some cases, impossible.

The call by investors for higher RES tariffs has yet to be officially expressed by any RES association.

According to sources, the energy ministry is well aware of the issue and considers the call by investors for higher tariffs a fair request. Officials at the ministry are believed to be working on a formula that would resolve the problem.

RES tariffs were recently increased in France and Portugal after officials determined their respective national green energy targets were in danger under the current market conditions.

Small-scale PV, energy community tariff levels given one-year extension

Non-auction privately owned solar energy units of up to 500 KW and energy communities with capacities of up to 1 MW have been given one-year tariff level  extensions, until August 31, 2023, which partially compensates for the failure, for the time being at least, of tariff increases requested by sector officials.

The one-year tariff extension means current tariffs of 65.74 euros per MWh for private owners of solar units of up to 500 KW will be maintained for an additional year instead of being reduced to 63 euros per MWh from September 1, as had been planned by authorities.

Correspondingly, current tariffs for energy communities of up to 1 MW will remain at 68.87 euros per MWh for an extra year instead of dropping to 65 euros per MWh as of September 1.

Even so, investor representatives contend the maintenance of tariffs at present levels does not suffice for sharp development cost increases of solar energy units.

Ministry preparing non-auction tariff deadline extension for investors

Investors behind solar and wind energy projects planning to secure non-auction tariffs for their projects will be given extensions beyond an upcoming February 28 deadline, based on a legislative revision being prepared by the energy ministry for ratification, energypress sources have informed.

Energy minister Kostas Skrekas has decided to extended the non-auction tariff deadline for investors in acknowledgment of major project development delays prompted by supply chain disruptions on a worldwide scale, as well as construction issues that were faced by investors following problems caused by a recent extreme weather system that severely affected the country’s ability to operate.

However, the deadline extension to be granted to investors through the upcoming revision is not expected to be extensive. The energy ministry has been contemplating granting a one-month extension, but a greater time period is now considered highly likely.


Ministry bill for small-scale PVs without competition procedure

The energy ministry has submitted legislative revisions to Parliament facilitating the installation of small-scale PVs, up to 500 KW, without competitive procedures as long as interested parties do not already own two such units that have also been installed without competitive procedures.

The draft bill also includes a revision designed to rectify unfair terms of the past for small-scale PVs on non-interconnected islands by offering 10 percent tariff increases for their output.

Another article in the bill enables older RES projects with licenses including provisions for the installation of connecting cables to now be developed without cable links if the hosting island has been interconnected or is in the process of being interconnected.

The bill also transfers distribution network operator DEDDIE’s assets on Crete to power grid operator IPTO, a pending issue that must be resolved for the launch of market activity concerning the island’s small-scale interconnection with the Peloponnese.

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

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

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

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

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

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

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

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

METKA winning bidder for PPC Renewables 200-MW solar farm

PPC Renewables has named METKA as the winning bidder of a tender for the development of a 200-MW solar farm in the country’s north, in the west Macedonia region.

PPC Renewables’ most ambitious project to date, it constitutes the third and largest section of a 230-MW solar energy complex.

Swift development of this third section is expected as PPC Renewables has already secured the project’s financing needs from a group of Greek banks.

Construction of the project, to be equipped with bifacial panels and trackers, is expected to commence in March.

As for the 230-MW solar energy project’s two smaller sections, both 15 MW, one is nearing completion while construction work at the other is in progress.

PPC Renewables, a subsidiary of power utility PPC, is also moving ahead with a tender for a 50-MW solar energy project in Megalopoli, Peloponnese. Bids submitted by five major groups, Greek and foreign, seeking this project’s development contract have been opened.

The Megalopoli solar farm is planned to be Greece’s first RES project that will not participate in RES auctions for tariffs. Instead, PPC Renewables intends to establish two-way contracts through the target model framework.

Over the next 24 months, PPC Renewables plans to begin developing projects with a total capacity of 500 MW, which would put the company on track towards achieving an installed-capacity target of 1.5 GW by 2024.

Parent company PPC’s updated business plan includes investments totaling 3.4 billion euros by 2023, 34 percent of these in the renewable energy sector. PPC is aiming for a fivefold increase in RES output, from 0.3 to 1.6 TWh.

PPC Renewables, possessing the country’s biggest RES portfolio following its latest moves and plans, may utilize some of its RES licenses for joint ventures with Germany’s RWE. Recent meetings between the two sides have increased the likelihood of a partnership.

Supreme Court avoids ruling on new-deal RES tariff reduction

The Council of State, Greece’s Supreme Administrative Court, has decided, following a three-year procedure, it does not have jurisdiction to rule on a case filed by RES investors in reaction to a significant reduction of their contracted tariffs for solar energy production at existing units, prompted by a so-called new deal in March, 2014, energypress sources have informed.

The court’s decision has not yet been officially announced.

By taking a step back on the tariff-reduction matter, the court will also avoid ruling on the constitutionality of the new deal and its compatibility with European law.

Though the court decision does not vindicate the RES investors, it leaves open the possibility of compensation claims against the State, an option that will be exercised by at least some of the investors who offered comments to energypress.


PV investor tariffs depend on legislative agenda order

The ability of PV investors to secure tariffs by November 26, when reference prices are due to change, will depend on whether related legislation can previously be submitted to Parliament and ratified.

The energy ministry has completed revisions enabling RES project investors to secure tariffs once their projects have been declared as ready for electrification, not based on their specified electrification dates, as is the case at present.

However, these revisions still need to be ratified in Parliament to come into effect. They are expected to be attached to a draft bill concerning spatial regulations for RES projects, whose consultation period expires tomorrow after having been granted an extension.

Tariff opportunities for projects that have been declared as ready for electrification will be missed if the draft bill is not legislated by the November date.

The energy ministry revisions cannot be attached to draft bills prepared by other ministries, meaning the ability of PV investors to secure tariffs before reference prices change will depend on the order of the government’s legislative agenda.


Solar, wind project tariffs at time of project readiness

The energy ministry is preparing a legislative revision to secure tariff levels for solar and wind energy projects at the time of their certified readiness – by distribution network operator DEDDIE/HEDNO – not electrification, as is the case at present.

Energy ministry officials are convinced of this revision’s necessity as, in many cases, RES investors have completed the development of their projects but DEDDIE/HEDNO, for various reasons, cannot promptly offer grid connections for these projects, meaning tariff-related opportunities can be missed.

DEDDIE/HEDNO has expressed its support for the energy ministry’s planned revision. As part of the new procedure, the operator will conduct on-site inspections to confirm whether projects are ready for electrification before providing related certificates.

The overall revisions are expected to take two months to complete and be ready for implementation ahead of reference price changes scheduled for November 26. The energy ministry is expected to submit a legislative revision to Parliament within September.

Tariff clarity for private PVs, energy communities up to 1MW

Tariff levels at which photovoltaic energy producers not participating in auctions sell output will, as of May 1 next year, be fixed and not adjusted in accordance with average prices of preceding auctions, as has been the case until now, as a result of a number of legislative acts and related ministerial decisions.

This new system concerns private owners of photovoltaics with capacities up to 500 KW and photovoltaic energy communities with total capacities up to 1 MW.

However, until May 1, 2021, numerous photovoltaic projects will have secured tariffs determined by the results of a recent RES auction on July 27.

Tariff prices until November 26, 2020 will be 70.3 euros per MWh for private owners of photovoltaics up to 500 KW and 73.64 euros per MWh for energy communities up to 1 MW.

Between November 27 and a four-month period following a RES auction announced by the energy ministry for December – in other words, until April, 2021 – private owners of photovoltaics up to 500 KW will be able to sell output for 65.73 euros per MWh and energy communities up to 1 MW for 68.86 euros per MWh.

Further ahead, between May 1, 2021 and April 30, 2022, private owners of photovoltaics up to 500 KW will be able to sell output for 63 euros per MWh and energy communities up to 1 MW for 65 euros per MWh

Barring unexpected changes, tariff levels have been set all the way to  April 30, 2022, offering investors clarity for their business plans.

RES project completion, without connection, to suffice for tariffs

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

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

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

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

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

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



Reference prices for auction-free RES categories lowered

The energy ministry is set to sign a decision adjusting downwards reference prices for renewable energy stations not obliged to participate in competitive procedures.

This category includes small-scale hydropower stations, biomass, biogas and geothermal stations, wind energy facilities under 3 MW (6 MW for energy communities), as well as yet-to-be-launched wind energy facilities over 3 MW for which agreements were signed in 2016.

The new reference prices will apply for projects scheduled for launch and actual price settings following January 1, 2022.

Existing reference prices are based on legislation passed in 2016 and have not been adjusted since, except for wind energy facilities, which were subject to a price reduction following a related decision last year.

The forthcoming ministerial decision will seek to rationalize RES prices compensating the aforementioned RES categories, which, as a result of unique factors, are not required to participate in competitive procedures, as is the case for bigger wind energy projects as well as solar energy projects.