Renewables

Greece passes renewables law targeting 15 GW in new capacity by 2030

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Published

June 30, 2022

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Published:

June 30, 2022

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Greece’s Ministry of Environment and Energy managed to push through a new law in parliament that covers licensing of renewables and other measures related to the energy crisis.

Through the new renewables law, the government aims to:

– Reduce average licensing time for renewables from 5 years to 14 months.

– Develop at least 3.5 GW of energy storage by 2030.

– Increase the power grid’s ability to accommodate renewables and net metering.

The measures are expected to contribute to the country’s 2030 goals, specifically to raise renewables penetration to 35% of the energy mix and 70% of the power mix.

Minister Kostas Skrekas said in parliament that this year renewable installations are expected to reach 2 GW and turn Greece into a leader on a global scale. According to him, renewables are the solution to the energy crisis and high energy costs, since they are the cheaper form of power production. The country aims to attract EUR 10 billion in investment by 2030 in order to achieve the aforementioned goals, which translate to 15 GW in new projects.

A drastic acceleration of licensing processes for renewables

According to the law, the number of licensing stages is reduced from 7 to 5, and the process of amending licenses is also simplified. Investors are now limited by strict milestones in order to actually realize their projects within 12 months. At the same time, a one-stop shop will be set up in the ministry in order to oversee the entirety of the licensing process.

Skrekas: This year renewable energy installations are expected to reach 2 GW, turning Greece into a leader globally

Another intervention concerns grid operators, who are now subject to sanctions in case they are delaying renewables permits. Furthermore, the transmission operator, IPTO, will be able to install energy storage systems under specific conditions. It should be noted that the European framework does not allow grid operators to install them under normal circumstances.

The new law allows IPTO to make these investments if there is a prior decree by the regulator (RAE) or if there is no expressed private interest. In the second case, these plants cannot be used to buy or sell power in the electricity markets.

There is also a significant change concerning the distribution grid and its operator, HEDNO. From now on, the company will calculate available electric space in its various local substations. Wherever a margin is identified, it will be provided for self-consumption or net metering plants of up to 10 kW.

New margins are 30% for households, 30% for farmers, 30% for industry and 10% for independent producers. The ministry believes that 200,000 small PV systems would be constructed with the new measure and that it would translate to 2 GW of renewable electricity capacity.

Another interesting change is about expropriations. From now on, investors will have to secure 80% of a land plot through a contract with its owners and will then be able to secure the rest 20% through expropriation.

Floating PV projects are a new renewables category for Greece. The law allows the construction of 10 such plants. The law specifies conditions and the framework for the pilot projects, which will have a capacity of 0.5-1 MW.

One notable addition to the final law is that small PV producers in Western Macedonia are exempted from the requirement to submit letters of guarantee for final connection terms.

New bills for power consumers and a drastic change in the wholesale market

A major change introduced by the law as an amendment is the elimination of the so-called “readjustment clause,” included until now in every consumer’s power bill. The measure will be active for a period of 11 months beginning in August, which can be altered through a ministerial decree.

From now on, the form of the power bill will change in order to reflect the various charges incurred in a different way. The same amendment gives consumers the right to switch to another power supplier if tariffs are changed, without having to pay a penalty to the previous one.

Many consumers criticized the clause over the past year, since they see it as a way for suppliers to pass on higher production costs in an obscure and opaque way. From now on, there will be a single item in the energy bill describing the various charges, instead of two.

Responding to the new law, power suppliers will come up with new tariffs starting with July and recalculate them every two months. The change has led to major complaints by suppliers, who believe that it will lead to a drastic upheaval in the retail market.

When it comes to the wholesale market, the government aims to absorb 85% of the rise in consumer electricity costs through price ceilings per megawatt for each technology: EUR 112 for hydro, EUR 85 for renewables, EUR 253 for natural gas and EUR 206 for lignite plants. The difference between the levels and the “normal” system marginal price or SMP will be collected and used to subsidize consumers.

According to Skrekas, the Energy Transition Fund for subsidizing consumers will be boosted with EUR 1.6 billion in the following 12 months through the measure.

Emergency measures to address the worsening energy crisis

Given the acute energy crisis experienced across Europe and the Balkans, the Greek government also included related measures in the law. A series of emergency measures aim to align the country’s policy with the European Union’s latest guidelines, specifically the REPowerEU plan.

A series of articles were included that concern the installation of a floating liquefied natural gas (LNG) unit at the Revythoussa terminal to increase its capacity and reduce unloading times while being able to accommodate two LNG ships at once. Furthermore, there is an article arranging the continuation of the operation of thermal power plants in Crete to cover the island’s short-term demand. It also covers the compensation for PPC, Greece’s main power producer and supplier, for the continual operation of diesel power plants in non-interconnected islands.

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