Greece’s renewables tender awards 372 MW of PV at average of €47.98/MWh
15 September 2022![Greece’s renewables tender awards 372 MW of PV at average of €47.98/MWh](https://static.goalfore.cn/uploads/third/20220914/0702/xE4HLR7CjG8N96Se0pOhbZwIDga1KyrA.jpg)
Greece will hold a series of new renewable energy tenders leading up to 2024. The first of these planned auctions was a joint PV and wind power tender on Sept. 5. Greece’s energy regulator, RAE, aimed to award 1 GW of solar and wind capacity, but in the end it only handed out 538.4 MW of capacity.
The joint tender awarded 14 solar farms, or 372 MW of capacity, and about about 166 MW of wind. The average awarded price for PV projects came in at €47.98 ($48.83)/MWh, while wind power projects were also awarded various tariffs, with an average price of €57.66/MWh.
Greece’s state-owned utility, Public Power Corp. (PPC), was awarded 251 MW of PV. That capacity is spread across 80 MW, 75 MW, 16 MW and 80 MW installations. Heliothema Energy, France’s EDF renewables energy unit in Greece, won an additional 33 MW of capacity, also spread among four projects.
The tender also awarded three energy community PV projects of 10 MW, 37.5 MW and 10 MW in size, at €46/MWh (he tender’s lowest tariff), €46.37/MWh and €49.35/MWh, respectively. Most of the smaller PV projects, including the energy community ones, are managed by Geoapodosi, a company based in the city of Kavala, northern Greece.
The 251 MW that PPC won is a stunning result for the state utility, building upon its recent efforts to clean up its energy mix. It has secured contracts in Greece’s renewable tenders before, and it is also building subsidy-free solar farms. In addition, it has joined up with Germany’s RWE to build 2 GW of coal-mine solar capacity.
The PPC is leading Greece’s effort to phase coal out of the national energy mix. Before the war in Ukraine, Greece had rather ambitious plans to phase out coal, but these have been dampened to allow for lignite-fired power plants to replace gas flows.
Greece’s prime minister, Kyriakos Mitsotakis, said this week that Greece remains focused on its plans to phase coal out of its energy system. However, given the high prices of natural gas at present, lignite mined at the PPC’s coal mines will be needed for Greece in the next one or two years, he noted. It remains to be seen whether his estimated timeline is a realistic one, or the energy crisis continues for much longer.
Renewables shift
Lignite generated about 10% of Greece’s electricity last year. But given the current energy crisis, this could more than double in 2022 and 2023. Greece therefore aims to boost domestic production of renewable energy.
Specifically, the government aims to capitalize on its policies to modernize the renewables licensing process, which started about two years ago. One of these policies was to digitize the licensing process for green energy and establish strict deadliness for it. The idea is that renewable power projects should be able to acquire the necessary licenses and be ready to build within just 14 months.
However, such time scales remain unrealistic at present. The failure of last week’s tender to award 1 GW of renewable capacity demonstrates this. Put simply, there were not enough projects that had gathered all of the necessary licenses (generation licenses, environmental permits, and grid connection agreements) that are needed to participate in the tenders.
Local business stakeholders have told pv magazine that the Greek regional authorities responsible for the issuance of environmental permits often delay the process, despite the deadlines set by the policy. Grid space is also scarce, although the energy ministry has recently prioritized projects that should be allowed to connect to the grid soon. On this front, too, a lot of investors argue that the ministry has failed to explain why it promotes specific projects for grid connection and excludes others. Finally, the much-advertised central IT platform that would link all licensing authorities under the same electronic portal has yet to be launched.
Stelios Psomas, policy adviser for the Hellenic Association of Photovoltaic Companies (HELAPCO), said that he agrees that the licensing of PV plants should be further improved.
However, he also told that there might be an additional reason why last week’s tender was undersubscribed – the tender’s high starting price for bids. Bidding was set to start at €54/MWh for photovoltaic systems and many developers might struggle to build their projects with so low tariffs. Given inflation and the increase in the costs of solar equipment, added Psomas, some investors were very possibly discouraged to bid in the tender.
According to the energy ministry, the remaining 1 GW of capacity that was not awarded last week will be rolled over to upcoming tenders.
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