It’s getting hot in Greece. The country’s energy regulator, RAE, is preparing to hold a new joint power tender on Sept. 5 for PV and wind power.
It aims to contract 1 GW of solar capacity, with a focus on systems larger than 1 MW, as well as wind projects above 60 kW in size. Energy communities will also be able to participate in the auction, said the regulator.
Stakeholders need to submit their electronic applications by Aug. 8 and hard copies of their applications by Aug. 10. By Aug. 25, the applicants will be told whether they comply with the auction criteria and are eligible to participate in the tender.
RAE has set the tender’s subscription rule at 80%. This is applicable to each technology separately, which means that for the tender to award 100 MW of PV capacity, 180 MW of solar capacity should compete for selection, for example. The 80% subscription rule ensures the competitiveness of the auction, according to RAE.
The regulator said that each technology needs to secure at least 30% of the awarded capacity. This is a new rule that probably stems from the fact that Greece’s last joint tender in May 2021 was swept by solar projects, leaving wind investors empty-handed.
Bidding will start at €54 ($55)/MWh and €63/MWh for PV and wind power systems, respectively. Winning solar projects need to link to the grid within 30 months after the auction date, while winning wind farms will need to be finished within 36 months.
Perhaps most crucially, project developers eligible to compete in the tender should have generation licenses, grid-connection agreementsm and a number of guarantee letters from Greek or foreign financial institutions, to ensure creditworthiness. Typically, such guarantee letters are issued to the RAE, but also to the grid operators when applying to connect projects. Participation in the tenders requires proof of such guarantee letters.
More tenders
Meanwhile, Greece’s Ministry of Environment and Energy (Ypen) has published a list of auctions that RAE should hold by 2024. The auctions are in line with Ypen’s previous policy mandates, as reported by pv magazine.
Apart from the upcoming tender in September, Greece also plans to hold another four competitive tenders in the last quarter of this year. They will focus on both solar and wind systems of various sizes, as well as energy storage facilities. Given that Greece’s tenders do not come with any local content requirements, the auctions will be a great investment opportunity for foreign investors active in all segments of the PV supply chain.
Ypen has listed the following tenders for the fourth quarter of this year:
- A joint tender for 600 MW of PV and wind power
- A 200 MW PV and wind tender for projects with storage
- A 100 MW solar tender for small projects below 1 MW in size
- An unspecified amount of solar and wind capacity to be installed in neighboring European Economic Area (EEA) countries
In 2023, Greece will hold two joint solar and wind power tenders for 600 MW of capacity each, as well as two 100 MW tenders for small PV and wind power systems. In addition, the government will hold a tender for EEA projects for which the capacity amounts have yet to be specified. In 2024, there will be tenders for at least 500 MW of PV and wind capacity, but details about the 2024 auction will become clearer next year.
New law
The Greek parliament recently approved a new law, marking the second attempt by the government of Greek Prime Minister Kyriakos Mitsotakis to revamp the renewable energy sector. The first attempt, two years ago, involved Greece's first attempt to speed up the licensing process for renewables. This time, the government claims its new law goes further by reducing the average time needed to license large-scale renewable energy projects, from about five years down to just 14 months.
This is possible due to a number of new requirements. One of them is that the new law requires investors who apply for network connections to submit guarantee letters together with the application. In addition, developers must build their projects within three years of signing connection agreements. In practice, this means that the new law makes it impossible for undecided investors to hold onto connection agreements and other licenses forever, which blocks other projects and investors who are ready to move ahead.
The same rationale applies throughout the new law, which sets specific deadlines for the implementation of projects. It focuses on every stage of the licencing process and project development. Investors who do not comply with the set deadlines will be given hefty penalties or they will be eliminated from the process altogether.
Ypen has also introduced a new digital portal that brings all licenses together under a so-called “one-stop shop” that electronically links Ypen and investors to all Greek institutions. Greece’s new law is a complete revamp of the energy sector, including a new framework for the licensing of energy storage facilities and a special provision allowing the development of 10 floating PV pilots under a fast-track licensing process that excludes floating projects from participating in competitive tenders.
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