Greece began reorganising its renewable energy system state aid scheme in 2016 by enacting Law 4414/2016. 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. The first regular competitive procedures were initiated in April 2018, following the Regulatory Energy Agency's launch of three tenders. The tenders will be implemented in two phases.
Parliament recently passed a law regulating the procedure for the divestment of approximately 40% of Public Power Corporation's (PPC) lignite-fired production units and lignite exploitation rights. The aim of the law is to increase competition in the Greek electricity market. Currently, over 60% of the electricity produced in Greece is generated through the combustion of locally extracted lignite, while PPC accounts for 98% of all lignite production in the country.
The Greek energy sector is expected to expand over the next few years as a result of, among other things, the optimisation of the energy mix – which consists of a reduction in fossil fuel-generated electricity and an increase in energy from renewable energy sources (RES) – and the liberalisation of the electricity and natural gas markets. Greece is also expected to create energy investment opportunities due to the availability of RES potential in the country and ongoing substantial infrastructure projects.
During 2017, a group of experts worked on the modelling and organisation of the Energy Exchange with the intention that it would be established and begin operating in the first half of 2018. As such, the Ministry of Energy and Environment recently presented, through a public consultation, the draft Energy Exchange Law, which would amend the Target Model Law and the Energy Law.
In 2016 Law 4389/2016 introduced the sale by auction of electricity forward products with physical delivery by the Greek vertically integrated Public Power Corporation (PPC) to eligible electricity suppliers. The purpose of these auctions is to reduce the PPC's retail market share in the interconnected system, enhance competition and provide better quality products and lower prices to consumers.
Two international tenders granting exploration and exploitation rights for the block areas of Southwest and West Crete, as well as the Ionian Sea, were recently published in the Official Gazette. This publication follows the expressions of interest by the consortium Total-ExxonMobil-Hellenic Petroleum for Southwest and West Crete and Energean Oil and Gas for the Ionian Sea. The expected announcement by the Official Journal of the European Union will also allow other interested stakeholders to submit offers.
Decision 51 of the Government Council for Economic Policy was recently published, approving the process for a new international tender for the acquisition of a 66% stake in the national natural gas transmission system operator. The new tender was launched by the Hellenic Republic Asset Development Fund on June 26 2017 and will remain open to receive respective expressions of interest until August 7 2017.
The Ministry of Environment and Energy recently launched a public consultation on the draft Law on Energy Communities. Given the large range of activities and numerous incentives that the draft law proposes for energy communities, these communities may become an important vehicle for developing business activities and increasing energy efficiency in local communities.
After several years of preparation and analysis of different solutions for the reform of the electricity wholesale market and its harmonisation with the European Union, a new law has been enacted to implement the agreement on fiscal goals and corrective reform. Before the law was enacted, studies of the Greek electricity market were carried out while the Regulatory Energy Agency conducted public consultations on the implementation of the target model.
Unlike in most other EU countries, natural gas became part of the Greek market only recently following the launch of organised commercial import of natural gas at the end of 1996. Until then, gas was mainly used for electricity generation. Although the Greek supply and transmission of natural gas has not yet reached maturity, there have been significant attempts to liberalise the market in the past decade, particularly in the past couple of years.
Law 4414/2016, which reforms the renewable resources (RES) and co-generated heat and power (CHP) support scheme, was recently published in the Government Gazette. The law aims to bring the existing support mechanism for RES electricity and CHP into line with EU guidelines and address the insufficient funds in the RES account. Further, it aims to integrate RES electricity and CHP with the interconnected system and develop a sustainable investment environment for the future.
Parliament recently approved a law that introduces significant changes to the Greek electricity market. The law aims to reduce the share of the Power Public Corporation (PPC) in the electricity supply market, unbundle the transmission system operator from the PPC (while partially privatising it) and regulate the temporary capacity mechanism.