New law clarifies legal framework for electricity storage

(Article by Dr. Maria Ioannou, Senior Associate, published in the Energy & Natural Resources Newsletter of the ILO on October 17, 2022)

Introduction
The provisions on electricity storage set forth in the new law on renewable energy source (RES) licensing procedures(1) aim to provide, for the first time, a clear legal framework for the licensing of energy storage activities, while also transposing the pertinent provisions of EU Directive 2019/944.

More specifically, it is explicitly regulated for the first time that Law 4001/2011 (as amended) will regulate the licensing procedure of electricity storage units that are connected to the grid, while Law 4685/2020 will regulate the licensing of RES units with internal storage. This category has been further subdivided into RES units with internal storage that can store electricity from the electricity system, and RES units with internal storage that cannot (the latter category refers to units that do not absorb electricity from the system unless for their own ancillary use and that may not exceed, during operation, the maximum production capacity stated on their respective certificate).

This article sets out the main points of interest for each category.

For autonomous electricity storage units, a Regulatory Authority for Energy (RAE) licence is required. This is issued according to the provisions of Law 4001/2011 and the delegated Regulation for Storage Licences (which is expected in the future in the form of a decision issued by the Minister of Energy). The law envisages that licences may last for up to 25 years, subject to extension, and sets out provisions on their amendment, revocation and transfer. The application fees cost €60 per megawatt of maximum injected capacity, with an overall cap of €12,000. Fees must also be paid in order to amend a licence.

Moreover, the new law opts for the creation of an electronic register for the processing of the applications, which are to be submitted within the first 10 days of each month.

Licences will be issued exclusively for units that are connected to the interconnected system or network and that comply with certain criteria – for example, a substantiated estimate of the internal rate of return of the project and the technical and financial suitability of the applicant.

Regarding the spatial planning of the storage unit to be licensed, any land overlap is to be resolved through an understanding between the affected parties or else through a comparative assessment made by the RAE based on criteria such as the legitimacy provided by the land titles of each party. This is particularly important because, according to the new law, the restriction against using farmland of high productivity for purposes other than farming and the development of RES units does not apply for storage units.

It is also worth mentioning that, in line with the provisions of EU Directive 2019/944, transmission and distribution operators are only permitted to own and operate electricity storage units under exceptional circumstances (eg, if this is deemed necessary for the safe functioning of the grid and as long as such infrastructure is not used for the sale or purchase of electricity in the electricity markets).

Since many storage projects have already been licensed in Greece according to the regulatory framework previously in place, the transitional provisions of the new law are of particular interest. As a rule, for licences that have been issued by virtue of Ministerial Decision No. Δ5/Φ1/οικ.17951/8 December 2000,(2) as well for pending applications, the new legal provisions on licensing apply (with certain deviations regarding the starting point of certain deadlines). The respective project operators must meet certain deadlines to resubmit documentation regarding the amendment of their licences or the issuance of those for which applications are pending, under penalty of revocation of their licence or rejection of the application, as the case may be.