Greece's solar PV industry, once a global leader in adding new installations, is coming back, this time on a more sustainable and rational basis.
The country's new tender-based policy scheme for the support of renewable energies (RE) follows the European Union's (EU) state-aid guidelines, which asks member-states to award large-scale RE projects based on competitive tenders.
In line with the EU guidelines, Greece has abandoned its feed-in tariff (FIT) scheme and is now entering the mature phase of its new remuneration policy scheme.
Therefore, on July 2, Greece's energy regulator (RAE) will tender 300 MW of new solar PV and 300 MW of new wind energy projects.
Specifically, Greece will run three auctions: an auction comprising PV projects ranging between 500 KW and 1 MW; an auction for solar PV projects larger than 1 MW and up to 20 MW; and a wind power tender concerning projects larger than 3 MW and up to 50 MW.
The second tender category, concerning PV projects larger than 1 MW, is slightly different from what RAE was considering earlier in the year, when it suggested it would include PV projects up to 10 MW. It has now expanded the upper limit of this category up to 20 MW per project.
According to Greece's regulator, the first tender category in July 2018 will award new PV capacity up to 70 MW, the second tender will award new capacity up to a total of 230 MW, while awarded wind power projects will not exceed 300 MW of capacity. Investors need to submit their interest by June 5.
For PV projects less than 500 KW, the EU guidelines leave it up to the member states to decide the remuneration method, and Greece applies a generous net metering scheme.
Tender details
The forthcoming PV tender will follow the details pv magazine published earlier in the year.
Firstly, for a tender to materialise it needs to be adequately subscribed. Specifically, the tender needs to attract at least 75% of PV capacity on top of the capacity being awarded. For example, if the first tender category, set to tender up to 70 MW of PV projects, attracts only 50 MW of tender submissions, then Greece will award only 29 MW of PV capacity.
Secondly, the bidding price cap per tender category is set at €85 per MWh, €80 per MWh and €90 per MWh respectively.
Finally, awarded PV projects in each category will need to be completed and connected to the grid within a specified timeframe, following the tender results. The timeframe is 12 months for projects up to 1 MW; 15 months for projects up to 5 MW; and 18 months for PV projects larger than 5 MW.
The only exception to these timeframes is when a project larger than 1 MW needs to build a new substation, in which case awarded projects can use an additional six months.
All in all, the tender mechanism is excellent news for Greece, which experienced large volumes of PV installations a few years ago under a flawed FIT scheme. Greece's FITs scheme remunerated projects with unsustainably high tariffs, leading to scandalous internal rates of return (IRR) for projects. Eventually the country had to drastically cut its FITs retroactively.
Greece's renewable energy subsidies are financed via a levy applied to retail electricity prices.
RAE will run a number of seminars across the country aimed at informing investors of the tender scheme and how this is working. The Athens-based meeting will take place in the OTE Academy amphitheatre (in Marousi) on May 10, at 9.30 am local time.
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