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02 July 2018
Greece began reorganising its renewable energy system (RES) state aid scheme in 2016 by enacting the New Aid Scheme for Power Plants Using RES and Co-generation of Electricity and High-Efficiency Heat – Provisions on Legal and Operational Unbundling in the Supply and Distribution of Natural Gas and Other Provisions (Law 4414/2016, OJ B'149/09.08.2018). The law provides that from January 2016, RES state aid will be granted in the form of operating aid, either as:
FiPs will be calculated as the difference between the special market price and the applicable reference price, which is determined either by law or on a per-project basis based on a competitive bidding procedure.
RES generators will profit by selling the electricity on the market. However, if the special market price is below the reference price, RES generators will also receive a premium to cover the difference. If the special market price is above the respective reference price, the excess will be refunded by the generator to the special account kept by the market operator, LAGIE. Small-scale projects will continue to be paid by FiTs. The same applies to the non-interconnected islands, due to the fact that no wholesale markets exist on most of these islands.
The minister of environment and energy has provided the legal framework for implementing the law and organising the competitive procedures to determine the reference prices for certain projects receiving operating aid.
According to Decision APEEK/A/F1/oik 184573, OJ B4488/19.12.2017, as amended by Decision APEEK/A/F1/oik 172858, OJ Β'1263/10.04.2018, the following RES projects may receive operating aid, in amounts which will be determined in the competitive procedures:
Notably, competitive procedures for determining FiTs are not compulsory for the following projects if they are held by 'energy communities', as defined by the Law on Energy Communities (4513/2018 (OJ A'9/23.01.2018)):
Other RES and high-efficiency co-generated heat and power technologies will for now, be included in the operating aid in the form of FiPs.
There are two types of competitive procedure:
The minister further sets the maximum capacity for the projects which may receive operating aid (20 years from the start of their operation). The reference price will be determined in competitive procedures which will be organised in 2018, 2019 and 2020 (Decision APEEK/A/F1/oik172859, OJ Β'1267/10.04.2018) as follows:
Any remaining capacity not sold in such procedures will be added to the quantities to be auctioned in the next year in the relevant category.
The maximum reference price in the first competition procedure in 2018 will be:
The first regular competitive procedures were initiated in April 2018, following the Regulatory Energy Agency's (RAE's) launch of three tenders (Decision 321/2018, OJ B'1466/27.04.2018). The maximum capacity of any aid that may be received is as follows:
The competitive procedures will be implemented in two phases. During the first phase, the RAE will assess participation applications. In the second phase, the reference price will be determined in the auctions.
Mature projects may participate in the above competition procedures only if they have obtained a production licence and:
The deadline to submit participation applications was 5 June 2018. On 25 June 2018 the RAE issued the final list of the approved participants (Decision 613/2018). The auctions are planned for 2 July 2018, with the RAE scheduled to issue the final list of successful bidders not later than 4 July 2018.
As the minimum competition level for all three procedures is 75%, the total capacity for which aid will be awarded may not exceed 75% of the capacities participating in the competition. Thus, the amount of capacity for which the aid may be awarded will be calculated after the amount of participating capacities is determined.
The capacities for which the participation applications were submitted were below the maximum provided. Specifically, on 7 June 2018 the RAE announced that the total submitted applications for:
In regard to wind plants, the RAE approved all of the applications; however, due to the minimum competition level rule, the finally awarded aid may not exceed projects with a total capacity of 176.39 MW, which means that, due to the fact that a total of 300 MW is planned for 2018, the remaining capacities will likely be scheduled for additional competitive procedures to be organised by the end of 2018.
In regard to the PV projects, a significant number of applications were not approved by the RAE. In regard to the small PV project category, 93.66 MW (155 plants) has been approved. Therefore, aid may be awarded only to projects with total capacity of 53.52 MW. In the large PV projects category, only the projects with a total capacity of 93,44 MW (13 plants) have been approved, which means that the aid may be awarded for only 53.40 MW. Again, new competitive procedures will likely be scheduled for the remaining capacities by the end of 2018.
The reactions of the photovoltaic producer associations in Greece have focused on:
Despite this, the first regular RES competition procedures have captured the interest of national and foreign investors, thus also attracting new market players.
For further information on this topic please contact Mira Todorovic Symeonides at Rokas Law Firm by telephone (+30 210 361 6816) or email (firstname.lastname@example.org). The Rokas Law Firm website can be accessed at www.rokas.com.
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