Investing in RES sector-Energy Investment Opportunities
(Article by Mira Todorovic Symeonides and Stefania Chatzichristofi, published in the Energy & Natural Resources Newsletter of the ILO on March 12, 2018)
Introduction
The Greek energy sector is expected to expand over the next few years as a result of:
- 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);
- the liberalisation of the electricity and natural gas markets;
- significant infrastructure projects, such as the Trans–Anatolian Natural Gas Pipeline, and
initiatives, such as the interconnection of the Greek islands with the interconnected electricity
grid; and - improvements to energy efficiency in buildings.
Greece is also expected to create energy investment opportunities due to the availability of RES potential in the country, as well as ongoing substantial infrastructure projects.
New law
In August 2016 Law 4414/2016(1) (under the title New Support Scheme for Power Plants Using RES and Co–generation of Electricity and High–Efficiency Heat – Provisions on Legal and Operational Unbundling in the Supply and Distribution of Natural Gas and Other Provisions) was enacted. The law
provides that from January 1 2016, RES producers that enter into trial and commercial operation in the Greek interconnected system must participate in the Greek wholesale electricity market.
Operating aid will be granted as:
- feed–in–premiums (FiPs), which would essentially be contracts for difference; or
- in exceptional cases, feed–in–tariffs (FiTs), to be determined either by law or on a per–project basis based on a competitive bidding procedure.
FiPs will be calculated as the difference between the special market price and the applicable reference price, which is determined either by law or on a per–project basis, based on a competitive bidding procedure. FiPs will be paid based on a FiP operational aid contract signed between the RES producer and the market operator, LAGIE. The RES generators will earn by selling the electricity on the market. However, if the special market price is below the reference price, RES generators will alsoreceive a premium to cover the difference. If the special market price is above the respective reference price, the excess will be refunded by the generator to the special account kept by LAGIE. RES and high–efficiency co–generated heat and power (HECHP) producers that participate in the electricity market will be eligible for an additional management premium during the transitory period, until the establishment of the new electricity market model and a liquid intraday electricity market. Cumulative representation bodies will be organised in order to facilitate the participation of RES producers in the market. Small–scale projects will continue to be paid by FiTs. The same applies for the non–interconnected islands, due to the fact that there are no wholesale markets on most of these islands.
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