Updated bailout places RES tariff cut plan on hold

A plan to reduce tariffs for photovoltaic production, and, possibly, other RES systems, as part of a new support framework for Greece’s renewable energy sources (RES) sector, has been put on hold, but not yet withdrawn, as officials contemplate the possible wider repercussions of such an initiative.

Sector officials and RES investors have strongly opposed the prospect of a tariff reduction. Authorities working on the new RES support framework are also taking into account that the level of savings to be gained by more tariff cuts, following reductions in recent years, may not be worth the overall problems they could create.

Among the additional terms included in the updated bailout agreement, which have been agreed to between Greek officials and the international lenders, is a reference calling for “respect of exisiting trading agreements” signed by RES investors and LAGIE, the country’s Electricity Market Operator, energypress has discovered.

According to the latest plan, an amendment to existing legislation concerning the RES-supporting ETMEAR surcharge included on electricity bills will be made with respect for existing trading agreements, and in harmony with EU regulations, to ensure that the RES special account deficit is eliminated over 12-month period, no later than June, 2017.

The current plan notes that retroactive RES tariff cuts should be avoided as they will undermine investor confidence, deter future investment activity, and affect relations between RES investors and the State. Tariff cuts, even if only minor, for exisiting units, would also contravene an energy ministry plan to reinvigorate the largely stagnant photovoltaic sector.