Renewables

Day of reckoning coming for Greek renewables market – demand unable to keep up with production

Day of reckoning is coming for Greek renewables market - Demand unable to keep up with production

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Published

March 8, 2024

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Published:

March 8, 2024

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Worrying signs have appeared in the vibrant Greek renewables market, threatening its future growth.

According to the local associations and grid operators, every year around 2 GW of new renewables are added in the country. However, electricity demand remains stable, therefore the extra production cannot be absorbed.

It leads to the need for ever-increasing curtailments. This kind of curtailment occurs not as a result of grid congestion, but because of low demand.

According to Vice-chairman of Independent Power Transmission Operator (IPTO) Ioannis Margaris, at noon there is typically around 5 GW to 6 GW of renewables in the medium voltage segment that can’t be curtailed. On top of that, there is also a number of gigawatts from conventional plants needed to balance the grid, but demand only reaches some 8 GW.

As a result, IPTO must curtail facilities connected to high voltage. In 2023 it affected 1% of total power production or 228 GWh.

Curtailments could reach 70%

Stelios Loumakis, chairman of the Hellenic Association of Photovoltaic Energy Producers (SPEF), argued the situation would only get worse with curtailments reaching up to 70%.

“As long as interest in investing remains this high, there is no way to avoid them. We cannot increase demand through hydrogen or regional interconnections in the medium term,” he said during a conference in Thessaloniki.

There is still too little energy storage capacity to make a difference. Greece has carried out tenders for 600 MW in batteries so far. The first installations have begun, but it is far from enough for the 30 GW in renewables currently in operation or with connection terms.

Government trying to adjust renewables uptake

Based on the above, the Greek renewables market is a victim of its own success.

The government is expected to publish a new decree soon increasing curtailment requirements to between 40% and 45% and demanding batteries for renewable electricity projects that would participate in future auctions.

Another significant development is expected by summer, as the work group in the Ministry of Environment and Energy is expected to publish its findings concerning curtailments.

Its study is aimed at contributing to the development of rules on projects that will face curtailments, any compensation and who is going to pay for it.

Margaris said IPTO should not be the one to shoulder the cost. The Hellenic Wind Energy Association (ELETAEN) said solar power projects with no obligation to curtail production must pay to wind farms that are subject to it.

It is obviously a difficult decision for the ministry, as associations are lobbying hard to protect their interests.

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