Greece Energy Situation

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Greece

Capital:

Athens

Region:

Coordinates:

37.58° N, 23.43° E

Total Area (km²): It includes a country's total area, including areas under inland bodies of water and some coastal waterways.

131,960

Population: It is based on the de facto definition of population, which counts all residents regardless of legal status or citizenship--except for refugees not permanently settled in the country of asylum, who are generally considered part of the population of their country of origin.

10,426,919 (2022)

Rural Population (% of total population): It refers to people living in rural areas as defined by national statistical offices. It is calculated as the difference between total population and urban population.

20 (2022)

GDP (current US$): It is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources.

217,581,324,512 (2022)

GDP Per Capita (current US$): It is gross domestic product divided by midyear population

20,867.27 (2022)

Access to Electricity (% of population): It is the percentage of population with access to electricity.

100.00 (2021)

Energy Imports Net (% of energy use): It is estimated as energy use less production, both measured in oil equivalents. A negative value indicates that the country is a net exporter. Energy use refers to use of primary energy before transformation to other end-use fuels, which is equal to indigenous production plus imports and stock changes, minus exports and fuels supplied to ships and aircraft engaged in international transport.

64.18 (2015)

Fossil Fuel Energy Consumption (% of total): It comprises coal, oil, petroleum, and natural gas products.

82.57 (2015)

Source: World Bank

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Introduction

The Greek energy sector is still largely dependent on fossil fuels, most of which are imported. About 54% of its energy requirements are covered by petroleum products alone, compared to an average of 33.4% at the EU level. These petroleum products are not only used in the transport sector, but they are also converted in relevant amounts into electricity. In particular, the non-interconnected Greek islands obtain their electricity primarily from inefficient and expensive diesel generators. In total, the extra cost that had to be recovered in 2016 through a public service obligation is estimated at 720 m€ to subsidise the electricity tariffs in those areas. Natural gas, which also has to be imported at a significant cost, plays a growing role in meeting energy requirements.

Domestic energy sources include lignite which accounts for around 50% of electricity generation as well as renewable energy sources (RES) such as hydro-power, wind, solar energy and biomass. Almost 61% of Greece’s primary energy needs are fulfilled through imports with the remaining 39% being covered through domestic energy sources, mainly lignite (77%) and RES (22%). Imported energy sources are mainly petroleum products that account for 44% of total energy consumption and natural gas with a share of around 17%.

A national target of a 20% RES share in gross final energy consumption by 2020 has been defined under Law 3851/2010, exceeding the national target of 18% according to the EU Directive 2009/28/EC. The specific trajectory for achieving this target is presented in the National Renewable Energy Action Plan (NREAP) of 2010. Specific targets for RES electricity share (40%), RES heating and cooling share (20%), and RES transport share (10%) have been defined in order to achieve the national RES target until 2020. The overall target is therefore supposed to be achieved through a combination of measures for energy efficiency and the large-scale penetration of RES technologies in electricity production, heat supply and transport sector.

The penetration of RES for heating already stood at 25.9% in 2015 surpassing even the corresponding indicative target of 20% until 2020, as defined by the NREAP. The utilization of RES for heating purposes increased by 15% between 2012 and 2015. Nevertheless, the 10% target for RES in transport is still far from being achieved considering the 1.4% RES share of 2015. Regarding the penetration of RES in gross final electricity consumption, a significant increase has undoubtedly been observed (34% between 2012 and 2014).  Although the total installed capacity surpassed the installed capacity projected in NREAP in 2013, a deceleration was observed in 2014, while the RES electricity mix differed significantly from the NREAP projections with the main share in the RES installed capacity being attained by photovoltaic stations instead of wind farms. In 2015, a total RES share of 15.44% was achieved. The contribution of RES to the gross final electricity consumption accounted for 22.09% in 2015 and the respective share in 2016 is estimated at around 24.5%, compared to a projection of 29.7% in the NREAP.

The variables and assumptions which have been used for the elaboration of the NREAP are currently being revised in the context of the national energy planning, taking into consideration the lower than expected levels of energy consumption due to the economic crisis and the adjusted macroeconomic values, as well as the differences between the NREAP projections and the actual development and share of the different RES technologies in terms of installed capacities and electricity generation.

A number of significant reforms aiming at a further liberalization of the electricity and gas sector, the reform of the various energy markets, as well as with a number of strategic grid infrastructure works are currently being implemented. In addition, the Greek support scheme for electricity production from RES is currently undergoing a major transition in order to improve the cost-efficiency of the support scheme, to facilitate the integration of RES in electricity market and to ensure conformity with requirements under EU state aid regulations.
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Energy Supply

Primary Energy

Around 61% of Greece’s energy needs are covered through imports with the remaining 39% being covered through national energy sources, mainly lignite (77%) and RES (22%). Imported energy sources are mainly petroleum products that account for 44% of total energy consumption and natural gas with a share of around 13%.

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Electricity Generation

According to the Greek Electricity Market Operator (LAGIE), the total installed capacity in the Greek interconnected system at the end of 2016 accounted for almost 16,615 MW, including 3,912 MW lignite, 4,658 MW natural gas, 3,173 MW large hydro-power and 4,873 MW RES. The total electricity generation in the Greek interconnected system for the whole year 2016 amounted to almost 41.6 TWh. Lignite accounted for 23.55% of the installed capacity in the interconnected system, natural gas for 28.4%, hydro-power for 19.10% and RES for 29.33%.

According to the Hellenic Electricity Distribution Network Operator (HEDNO), on the non-interconnected islands (NIIs), the diesel-driven generators’ production was 3,604 GWh by December 2016.The renewable energy share in the electricity mix of the NII was 21.8% by the end of 2016, corresponding to a production of 1,003 GWh and an installed capacity of 482.3 MW.

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Energy Consumption

Electricity

Gross national electricity consumption in 2016 was roughly 50.1 TWh, including transmission and distribution losses of about 2.9%. The annual peak load in the interconnected system currently stands at around 9,082 MW.

The average cost of RES electricity production accounted for 159.2 €/MWh in 2016 and down from 200 €/MWh in 2014. This has been mainly due to the adjustment of feed-in tariffs (FIT) in April 2014 that have been implemented in the context of Law 4254/2014. The RES cost compares to an average electricity system marginal price (SMP) of 42.83 €/MWh in 2016. As reported by Eurostat, electricity tariffs by the second half of 2016 for final consumers in Greece were on average 172 €/MWh for medium-size households (including taxes and levies) and 112 €/MWh for medium-size industrial companies (including levies but excluding taxes).

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Market Situation for Renewable Energies

Solar Energy

Solar energy is playing an increasingly important part in the energy mix of Greece. The country has high levels of solar irradiation with an average global horizontal irradiation level of more than 1,500 kWh/m² . With around 4.1 million m² (2.9 GW_th) of solar thermal systems installed, Greece has the second largest total capacity in Europe after Germany. It also has the third largest per capita ratio of installed collector surface after Cyprus and Austria. Around 243 000 m² (170.1 MW_th) of solar thermal systems have been installed in 2012. The Greek market mostly consists of individual solar water heaters of the thermosiphon type. There is still a significant potential for larger solar thermal systems in the tertiary sector and in industry.

There has only been a marginal increase of 1 MW in the installed solar PV capacity in 2016 compared to the figures at the end of 2015. The total installed solar PV capacity by the end of 2016 accounted for 2,605 MWp, out of which 375 MW of small PV systems below 10 kWp have been installed under the Special Photovoltaic Rooftop Programme. Only 6.1% of the total PV capacity is installed on the non-interconnected islands (NIIs).  During the year 2016, a total of 3,417 GWh was produced by solar PV which thus became the third most important RES in terms of generation (after large hydro-power and wind power), producing 25.4% of RES electricity and 6% of total electricity in Greece. A total of 512 GWh was produced by PV systems on rooftops which have been installed under the Special Photovoltaic Rooftop Programme.
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Wind Energy

Greece has some of the most attractive sites for the use of wind energy in Europe, with average capacity factors of around 25% for the mainland and 30% for the islands. The economic wind energy potential in Greece is estimated at 10,000-12,000 MW.

The national capacity target for wind energy is 7,500 MW until 2020, including 300 MW of offshore wind energy. The installed capacity for wind energy has increased by 279 MW or almost 13.3% in 2016 compared to the figures at the end of 2015, making 2016 the second best year for the Greek wind energy sector in terms of new installations. In particular, a total capacity of 2,370 MW of wind parks was installed in Greece by December 2016 compared to 2,091 MW installed by the end of 2015. Of this, a total capacity of 323 MW of wind turbines has been installed on the NIIs, out of which almost 62% on Crete. The electricity generation from wind energy during 2016 was of 5,145 GWh, compared to 4,621 GWh by December 2015. In 2016, wind energy took the second place among RES in terms of total electricity generation, accounting for 38.3% of RES electricity and 9% of total electricity generation in Greece.

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Small hydro-power

By December 2016, there has been an installed capacity of 223 MW of small hydro-power (SHP) plants in Greece. By definition, these are hydro-power stations with a capacity less than 15 MW. As all SHP plants are of the run-of-river type, most of their generation takes place during the wet season (winter and spring). There are 105 SHP projects in operation, mostly located in Epirus, Macedonia and Peloponnese. Only one SHP plant with a capacity of 300 kW is installed on the non-interconnected islands. SHP plants produced a total of 721 GWh in 2016 and generated around 5.4% of RES electricity and 1.3% of total electricity in Greece during this year.

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Biomass

There are only few biomass energy projects that have been developed in Greece, mainly for the utilization of municipal wastes. The total installed capacity of biomass energy currently stands at 58 MW for a total of 12 individual projects. During 2016, biomass capacities of 6 MW have been added. There are no biomass projects installed on the non-interconnected islands. Throughout 2016, a total of 252 GWh of electricity was produced by biomass energy plants.

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Other renewable energy sources

Other RES technologies for electricity generation have not been extensively developed so far. There is a significant potential for the utilization of geothermal energy for electricity generation, especially on some of the Aegean islands (e.g. Milos, Lesvos, Kimolos) and the North-Eastern part of the mainland. The national target for geothermal electricity is 120 MW until 2020.

For the case of concentrated solar power, the national target for 2020 is 250 MW and there are some sites with yearly direct irradiation levels over 2,000 kWh/m² observed on the Southern Greek islands that could be interesting for CSP installations. Several projects with a combined capacity of 424 MW are currently under development at different stages of the licensing process but not a single one is expected to be put into operation in the near future, while two of them have been approved for support under the NER300 programme.

Other technologies with an interesting technical potential (e.g. ocean energy) have not been developed yet due to their high investment and electricity generation costs as well as the absence of comprehensive resource potential studies.

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Policy Framework, Laws and Regulations

General Energy Policy, Energy Strategy

The priority and top objective of Greek energy policy is to safeguard and manage energy resources in a manner which secures the smooth, uninterrupted and reliable supply of the nation’s energy needs and access for all users to affordable, secure energy. The second objective is to secure energy stocks, through alliances and alternatives energy sources and routes in order to ensure the supply of the domestic market and protect consumers in the case of emergencies. The third objective is the viable and sustainable development of the energy sector from the stage of production to the end-use while protecting nature and safeguarding the environment.

The strategy to ensure supply needs and address energy issues in Greece is shaped by the regulatory and legal framework which focuses today on the following general axis:

• Access to a wide variety of energy sources
• Construction of oil and natural gas pipelines within international networks
• Increased use of domestic energy sources and stocks
• Reduced dependence on certain high risk energy sources
• Development of RES installations with the granting of incentives
• Use and diffusion of clean and efficient environment friendly technologies
• Liberalization of the market, increased competitiveness and putting an end to monopolies in the electricity and natural gas sectors.
• Establishment of a healthy investment climate for businesses in the energy sector
• Energy savings for industry, transport, buildings and homes
• Establishment of national targets for the increased penetration of energy generated from RES, the reduction of greenhouse gas emissions and energy saving.

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Important Laws and Regulations

Renewable Energy Laws

The support mechanism for electricity generation from RES in Greece until the end of 2015 has been based mainly on Law 3468/2006 and Law 3851/2010. According to these laws, priority is given for the injection of electricity from RES into the electricity grid. The electricity produced has been remunerated by a technology-specific feed-in tariff (FIT). These FIT were further differentiated according to the size of the RES installation with smaller systems benefitting from higher FIT. Payment of the FIT was guaranteed for a period of 20 years (25 years for small PV systems and solar thermal power plants) in the context of a sales contract (Power Purchase Agreement – PPA). Regular descending rates are only applied to FIT for  photovoltaic energy systems of the special programme for rooftops, while the rest of photovoltaic installations are been supported by a type of a fixed coefficient on the basis of last year’s average SMP.

Apart from photovoltaic energy, the FIT for new RES projects until the end of 2015 have been defined by Law 4254/2014. The FITs were fixed at the time of commissioning and differentiated between projects supported under the investment law (or any other support programme) and projects without any kind of additional support. Moreover, Law 4254/2014 provided for an annual cap of 200 MW for new photovoltaic projects and cumulative caps until 2020 for biomass (40 MW), biogas (50 MW), concentrated solar power plants (100 MW) and low enthalpy geothermal projects (50 MW).

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Reform of the RES support scheme

With increasing shares of RES in the electricity mix, the transition to a support scheme that facilitates the integration of RES into the national electricity market becomes necessary. Also, the new EC Guidelines on State aid for environmental protection and energy for the period from 2014-2020 (EEAG) that have entered into force on 1 July 2014 have defined new criteria and timelines for national RES support schemes in order to be eligible for approval by the EC. As of 1^st January 2016, RES electricity has to be sold directly on the electricity market and RES support granted under a feed-in premium (FIP) or a certificate scheme. As of 1^st January 2017, RES support shall be granted in a competitive bidding process, i.e. by means of tenders. In parallel, further requirements for the market integration of RES (e.g. balancing responsibilities) are to be met. According to the “Supplemental Memorandum of Understanding” of June 2015, Greece was supposed to “legislate the new framework for the support of renewable energies, while ensuring financial sustainability and guarantee the respect of State-aid guidelines (EEAG)” by June 2016.

Until June 2017, significant progress towards the establishment of a sustainable support scheme for RES electricity was made. The Law 4414/2016 on the “New Support Scheme for Renewable Energy Power Plants and High Efficiency Combined Heat and Power Plants” was adopted by the Hellenic Parliament on the 4th of August 2016 and entered into force on the 9^th of August 2016. This law introduces a new RES support scheme in Greece based on feed-in premiums (FIP) for larger RES projects along with the obligation to participate in the electricity market and applies only to projects entering into commercial or trial operation in the interconnected electricity system after the 1^st of January 2016. In effect, this remuneration will take place on the basis of a contract for difference (CfD) against the applicable reference tariffs (RTs) as per published list by technology (section 2.4.1) or as auctioned after taking into account the market value of renewable electricity per technology.

However, small scale (<3 MW wind, <500 kW other RES) and demonstration projects are exempt from the new scheme in which case a standard PPA with FIT is concluded in line with Law 4414/2016. The same applies to RES projects that have signed a PPA until the end of December 2015 under the condition that these plants are commissioned until the 31^st of March 2019 for wind parks, small hydro-power plants as well as biomass and biogas plants and until the 31^st of December 2017 for other RES and HECHP power plants. There is also the possibility for RES plants with PPA for FIT with a capacity above 5 MW to voluntarily shift to the new RES support scheme. Projects entering into commercial or trial operation in the NIIs after the 1^st of January 2016 will continue to access a FIT-based scheme (through PPA) as long as these islands are either not interconnected with the mainland of Greece or do not have a fully operational daily electricity market.

The FIP will be calculated on a monthly basis as the difference between technology- and capacity-specific RTs and technology-specific reference market prices. RES generators that participate in the electricity market will be subject to a gradual transfer of balancing responsibilities. The law foresees a management premium in order to cover the additional market participation costs for RES generators especially in the context of the transitory mechanism for accurate forecasting. This premium will amount initially to 3 €/MWh for wind parks with an installed capacity up to 10 MW and to 2 €/MWh for all other renewable energy projects (including wind parks with an installed capacity above 10 MW) and will be reviewed annually. The law also provides the basis for the establishment of RES aggregators as new market participants.

On the 16^th of November 2016, the new RES support scheme has been officially approved by the DG COMP of the EC under the Decision C (2016)7272. Following this approval, a number of Ministerial Decisions (MDs) have been adopted in December 2016 under which the detailed provisions of the new RES support scheme are defined. The Ministerial Decision ΑΠΕΗΛ/Α/Φ1/οικ.187480 that was adopted on the 7^th of December 2016 defines the methodology for the calculation of the reference market prices, the criteria and restrictions for the payment of the management premium as well as the procedures for the adjustment of operating aid in the case of RES projects that have been granted investment aid.

The six Ministerial Decisions ΑΠΕΗΛ/Α/Φ1/οικ.187701-187706 that were adopted on the 12^th of December 2016 establish the new model contracts for the support of new RES and CHP installations, both in the interconnected system as well as on the non-interconnected islands. The term of the new FIP and FIT contracts and therefore of the associated operating aid will be 20 years for all renewable energy projects, other than solar thermal power plants which will enjoy a 25 year term. On this basis, LAGIE and DEDDIE have started in December 2016 to sign the first contracts under the new RES support scheme.

Law 4414/2016 also foresees a shift towards a general RES tendering scheme from the 1^st of January 2017, including a partial opening for RES projects from other European Economic Area (EEA) countries. The details of this tendering scheme will be defined by a dedicated Ministerial Decision that is expected to be published by the end of 2017, following an approval from DG COMP. For new PV projects above 500 kW, it is already foreseen by the law that they will only be supported if they successfully participate in a tender. In this context, a pilot tender for capacity of 40 MW of new PV installations has been organised by RAE on the 12^th of December 2016. The tender was competitive in the sense that the volume of bids submitted exceed the tender volume by more than 40%.

The tender consisted of two lots for PV projects with an installed capacity below and above 1 MW (i.e. with and without exemption from the obtainment of a production license) and has been conducted through an electronic continuous bidding process among the participants. Under the first tender lot, 9 PV projects with a total capacity of around 4.8 MW were selected (mean capacity per project of around 530kW) at an average weigthed reference tariff of 98.99 €/MWh (compared with a price ceiling of 104 €/MWh). Under the second tender lot, 7 PV projects with a total capacity of around 35.1 MW (mean capacity per project of around 5 MW) were selected at an average weigthed reference tariff of 83.3 €/MWh (compared with a price ceiling of 94 €/MWh). As of the 1^st of January 2017, RES projects of a capacity higher than 1 MW or 6 MW for wind parks, will not be allowed to conclude CfDs, following the provisions of law 4447/2016 that entered in force on the 23^rd of December, until the publication of the relevant MD that will define the specific parameters and thresholds per technologies for the participation in the national RES tendering scheme.

Law 4414/2016 also foresees the establishment of a monitoring mechanism in order to monitor the support provided for RES generation, to assess the levelised cost of electricity (LCOE) of the new RES plants, while also providing projections on the sustainability of the RES special account. The establishment of this monitoring mechanism is considered as a positive development which can assist in public authorities in taking proactive measures in case of new developments and to ensure the future sustainability of the Greek RES support scheme. The MD for the establishment of this monitoring mechanism is still pending.

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Reference Tariffs for the compensation of RES electricity generation plants

The new RES support scheme has been outlined in Law 4414/2016 and its provisions aim at reforming the support scheme of electricity production from RES and CHP power plants in order to achieve the progressive integration and participation of these generation units into the electricity market in an optimal and cost-effective way.

FIP provide an incentive for RES generators to respond to price signals of the electricity market, i.e. to produce electricity when demand is high and/or production from other energy sources is low. They also encourage RES investors to consider expected load patterns in the engineering and operation of the RES project (e.g. choice of site and turbine type for wind parks, orientation of PV modules), if this is linked with a properly formed technology-specific Reference Market Price. FIP therefore contribute to an increased integration of RES into the electricity market, resulting in a more efficient combination of supply with demand.

Reference tariffs (or “strike prices”) reflect the overall average remuneration which is required by RES generators. The same reference tariff is applied throughout the entire duration of the period during which a given RES project is entitled for support (e.g. 20 years). The reference tariffs are determined by capacity categories for the different RES technologies. RES projects are entitled to the reference tariff that is active at the time of commissioning of the project. For RES projects that fall under the FIT scheme, the reference tariff is equal to the FIT. For RES projects under the FIP, an average monthly market reference price is deducted from the reference tariff in order to arrive at the FIP that is being paid to RES generators. The reference tariff levels under the new RES support scheme in Greece are defined per plant category and technology and are illustrated in the following table.

RES technology/capacity category	RT (€/MWh)
Wind installations in the interconnected system	98
Wind installations on the non-interconnected islands	98
Small Hydro ≤ 3 ΜW	100
3 ΜW < Small Hydro ≤ 15 ΜW	97
Solid Biomass (or bio-liquids) exploited through thermal processes except gasification, from stations with installed capacity ≤1MW (excluding the biodegradable fraction of municipal waste)	184
Solid Biomass (or bio-liquids) exploited via gasification process from stations with installed capacity ≤1MW (excluding the biodegradable fraction of municipal waste)	193
Solid Biomass (or bio-liquids) exploited through thermal processes from stations with installed capacity 1ΜW 5ΜW (excluding the biodegradable fraction of municipal waste)	140
Gas from landfills and biological sewage treatment plants and biogas from anaerobic digestion of biodegradable material  of wastewater and sewage sludge ≤ 2 MW	129
Gas from landfills and biological sewage treatment plants and biogas from anaerobic digestion of biodegradable material  of wastewater and sewage sludge > 2 MW	106
Biogas from anaerobic digestion of biomass≤ 3 MW	225
Biogas from anaerobic digestion of biomass> 3 MW	204
Solar thermal stations without storage	257
Solar thermal stations with storage (min 2 hours)	278
Geothermal stations ≤ 5 MW	139
Geothermal stations > 5 MW	108
Other RES (including energy recovery plants utilizing the fraction of the biodegradable municipal waste falling outside another category of the table that meet the requirements of the current European legislation)	90

Since the beginning of 2015, FIT for photovoltaic systems other than rooftop installations with a capacity below 10 kWp are calculated on the basis of the System Marginal Price (SMP) of the previous year, multiplied by a factor of 1.2 for PV systems with a capacity of 100 kWp and below, and a factor of 1.1 for PV systems with a capacity above 100 kWp.

Type of photovoltaic system	Feed-in tariff (2016)	Feed-in tariff (2017)
P<10 kWp (Special PV Roofs Programme)	110 €/MWh	100-105 €/MWh
P<=100 kWp (Interconnected system)	62.33 €/MWh	51.4 €/MWh
P=100-500 kWp (Interconnected system)	57.13 €/MWh	47.11 €/MWh
Non-interconnected system	57.13 €/MWh	47.11 €/MWh

Under the new RES support scheme, the remuneration levels for all photovoltaic projects above 500 kW will be defined in the context of tenders. Photovoltaic installations with a capacity below 10 kWp that are included in the Special Roof-top Photovoltaic Programme will continue to be remunerated in line with the provisions of this programme. Other photovoltaic installations with a capacity below 500 kWp will be remunerated in line with the provisions of Law 3734/2009 as applicable, with the exception of installations that (voluntarily) participate in tenders.

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Installation of photovoltaic plants by auto-producers under the net-metering and virtual net-metering schemes

In parallel to the FIT scheme, a national net-metering scheme for self-produced electricity from photovoltaic energy has been adopted by Ministerial Decree ΑΠΕΗΛ/Α/Φ1/οικ. 24461 on the 31^st of December 2014. Under the net-metering scheme, electricity consumers have the possibility to produce their own electricity with photovoltaic systems concerning both, rooftop and ground-mounted systems, to inject any surplus electricity production into the electricity grid and to offset this surplus electricity with future electricity consumption, in this way reducing their electricity bill. HEDNO commenced accepting net-metering applications for photovoltaic systems to connect to the low voltage grid in May 2015 and a second round of applications for PV systems to connect directly to the medium voltage grid started in October 2015 Externer Link im neuen Fenster.

Law 4414/2016 provides for the extension of the national net-metering scheme to other technologies (PV, small wind, biomass/biogas/bioliquid, small hydro-power, CHP) as well as the establishment of the possibility of virtual net-metering for solar PV and small wind projects installed by legal persons pursuing welfare objectives or other purposes in the public interest as well as farmers and agricultural holdings. The details of the extended net-metering scheme, including the specific provisions for virtual net-metering, are outlined in the Ministerial Decision virtual metering/YA_ΑΠΕΗΛ_Α_Φ1_οικ175067-ΦΕΚ 1547Β_5.5.2017.pdf AΠΕΗΛ/Α/Φ1/οικ. 175067 (ΦΕΚ Β΄1547/5.5.2017).

According to the aforementioned Ministerial Decree, photovoltaic systems of up to 20 kWp (up to 10 kWp for the NIIs and 20 kWp for Crete) or up to 50% of the agreed power consumption (100% for public-benefit organisations) with a maximum of 500 kWp (50 kWp for Crete and 20 kWp for the other NIIs) are eligible for the scheme. There is a special exemption for photovoltaic systems installed in the NIIs by legal persons pursuing welfare objectives or other purposes in the public interest, where the installed capacity cannot exceed 100 kWp or 300 kW in the case of Crete.

Under standard net-metering, the RES plant has to be installed in the same or adjacent area to a consumer installation of the auto-producer and has to be connected to the network only through the power supply of this consumer installation. Virtual net-metering is defined under Article 2 of Law 3468/2006 as the offsetting of electricity generated by a RES auto-producer and consumed by installations of the auto-producer, at least one of which is not located in the same or adjacent area as the RES plant or uses a different power supply.

Critical parameters that were also clarified in this MD include the provisions for the accounting of the regulated charges, the correlation of the number of consumption points (i.e. meters) with the number of production points (important especially for the virtual net-metering), the possibility for offsetting the injected energy over a different time period and other data validation procedures for the virtual net metering installations. For instance, in the standard net-metering, each photovoltaic installation has to be assigned to a single consumption point whereas more than one consumption meters can be assigned to a PV system under the virtual net-metering scheme. In any case, the offsetting of the electricity generated and consumed by the RES auto-producer’s installations can only be realized at the same voltage level.

Moreover, the net-metering process follows an annual cycle. Each time the electricity retailer issues an electricity bill, the RES electricity fed into grid and the RES electricity consumed has to be measured. If the difference is positive, meaning that more RES electricity is produced and fed into the grid than self-consumed, this surplus is credited to the next electricity bill. However, any surpluses after the end of one year will not be credited by the electricity retailer to the self-producing electricity consumer and will be cancelled. If the difference is negative, i.e. more electricity was consumed than produced; the installation operator is obliged to pay the difference. The provisions under the new MD extend the amount of time for the transfer of net-metering credits from one year to three years. Overall, the net metering contract with an electricity supplier is valid for 25 years.

Under the current framework for the net-metering scheme in Greece, the network charges (i.e. both for the transmission and the distribution network), in addition to ETMEAR are not imposed on the RES electricity that is instantaneously self-consumed and this is also extended to the virtual net-metering installations that use the same connection point with the PV system. In terms of the financial assessment of such self-consumption schemes, the imposition of the ETMEAR is playing a crucial role as it relates to around 12% to 25% of the applicable electricity tariffs.

At the same time, the excess RES electricity that is injected into the grid (including the electricity assigned to other consumption points under the virtual net-metering) is balanced only at the level of the competitive part of the electricity bill. This means that all other regulated charges, such as network charges and ETMEAR, are not included in this balanced energy. This can be justified as this electricity is not instantaneously self-consumed but actually corresponds to a future consumption of electricity that will need to be provided by the electricity supplier at a later point. On the other hand, the public service levy (YKO) is currently imposed on the total electricity consumption, including self-consumed electricity for both the regular and virtual net-metering schemes.

According to HEDNO, during 2016 almost 287 net-metering applications were approved with a signed connection contract corresponding to a cumulative 11.4 MW of PV capacity for the interconnected system and the NIIs. Until June 2017, a total of 560 net-metering PV systems with a total capacity of around 7.62 MW and 1.6 MW have been installed and are under operation in the interconnected system and NIIs respectively. The time period between application and entry into operation of the systems varies considerably between 1.2 and 18 months with an average of 5 months. The vast majority of these systems in the interconnected system are installed at the low voltage level and only 6 systems with a total capacity of 256 kW are installed at the medium voltage level. In addition, HEDNO started accepting on the 14^th of July 2017 the relevant applications regarding the connection of PV facilities under the virtual net-metering scheme to the low and medium voltage grid.

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Licensing procedures for renewable energy projects

The licensing procedure for RES projects has been significantly simplified with the adoption of Law 3851/2010. Larger RES projects require a production license (issued by RAE), an installation license (issued by YPEN or by local authorities) and an operation license (issued by YPEN or by local authorities). Small and medium sized RES projects (PV and biomass plants ≤ 1 MW, geothermal stations ≤ 500 kW, wind parks ≤ 100 kW) do not require the above licenses. In addition, other licenses (water use, building permit, use of forest land…) as well as an Approval of the Environmental Terms (AET) or Standard Environmental Commitments (SEC) are required according to the size, RES technology and location of the project. All RES projects have to submit applications for non-binding (only for projects that are obliged for a production and installation license) and binding connection offers to the competent network operator, i.e. the Independent Power Transmission Operator (IPTO) or HEDNO. They are also required to sign a connection contract with the competent network operator (IPTO for the transmission network or HEDNO for the distribution network) as well as a CfD or PPA with LAGIE (or HEDNO for the non-interconnected islands). Law 4254/2014 also introduced some specific rules for the duration of PPAs for already operating plants, while the duration of the connection offers as well as of the installation licenses has been extended in the last two years by about 18 months in total (Article 67 of Law 4342/2015 and Article 16 of Law 4414/2016) due to the capital controls applied on bank transactions. Moreover, the last decision of RAE 517/2017 introduced some specific rules for the renewal of production licenses for RES plants. In particular, production licenses issued prior to the entry into force of Law 3468/2006, which were granted for a period of fifteen years, may be extended under certain conditions up to a maximum of ten years in order to harmonize their total duration with the duration of the PPA.

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The sustainability of the RES financing mechanism

The operating aid under the RES support scheme is paid to RES producers through the RES Special Account which is managed by the Electricity Market Operator (LAGIE). The revenues of this account currently include the following:

• Revenues of LAGIE from the sale of RES electricity on the wholesale market at the system marginal price (after May 2013 and under the Law 4152/2013, RES electricity is sold either at SMP or at the average variable cost of thermal power plants, whichever the highest)
• Revenues (or costs) from the settlement of imbalances resulting from RES production
• Payments from the electricity suppliers on the non-interconnected islands to HEDNO for the production of RES based on the average variable costs of conventional units on the islands
• Revenues from the auctioning of greenhouse gas emission allowances
• Special fee of 2 €/MWh for electricity produced by lignite
• Special Fee for the Reduction of Greenhouse Gases Emissions (ETMEAR)
• Revenues from the charge imposed on electricity suppliers

The Special Fee for the Reduction of Greenhouse Gases Emissions (ETMEAR) is a levy imposed on each unit of electricity consumed which is used for the financing of the RES and CHP support scheme in Greece.

On this basis and with the last decision of RAE in December 2016, the ETMEAR has been calculated with a weighted average of 17.91 €/MWh down from 18.13 €/MWh in 2015. Moreover, ETMEAR is differentiated by types of electricity consumers and voltage levels with current levels in June 2017 ranging from 2.51 €/MWh for HV and large MV consumers to 24.77 €/MWh for households and 27.79 €/MWh for other LV consumers. The following table provides the adjusted ETMEAR charges per electricity consumer category as of the 1^st of January 2017.

Current charges of ETMEAR for the various categories of consumers

Consumers category	Nominal charge of ETMEAR (€/MWh)
High voltage	2.51
Medium voltage with consumption >13GWh	2.51
Agricultural use in medium voltage	9.71
Medium voltage with consumption <13GWh	9.76
Agricultural use in low voltage	10.47
Residential use in low voltage	24.77
Others uses in low voltage	27.79

Source: RAE Decision 621/2016 (OG B’83, 20.01.17)

During the first six months of 2017, the deficit of the RES Special Account decreased from 144 m€ at the beginning of the year to 109 m€ by June 2017. The financing of the RES Special Account has also been substantially modified by Law 4414/2016, through the introduction of a new charge for electricity suppliers on the basis of their market shares which is expected to significantly contribute to the elimination of the deficit in the RES Special Account until the end of 2017 (and at the end of every year thereafter), in line with the provisions of Law 4414/2016 and Law 4427/2016. This additional variable charge shall be levied on electricity suppliers based on avoided average cost for electricity purchased through the wholesale electricity market had there not been any renewable electricity available. The specific methodology for the integration of this wholesale market mechanism into the Reference Market Price for the RES projects under the FIP scheme is still pending and has to be integrated in the relevant Power Market Exchange Code. Furthermore, the laws provide the framework for the establishment of a secondary special market for certificates of origin for renewable electricity also in Greece. On this basis and with the last decisions of RAE, namely 149/2017 and 150/2017 in March 2017, the relevant Power Market Exchange Code has been amended with regard to the values of the regulatory parameters for the application of the methodology for calculating the revenues of the Special RES Account.

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Specific Strategies

National Action Plan 20-20-20

According to the EU Directive 2009/28/EC, Greece has to achieve a target of 18% renewable energy sources (RES) in gross final energy consumption by 2020 and this target has been increased to 20% (Law 3851/2010). The overall target is broken down further into sub-targets of 40% RES in gross electricity consumption, 20% RES in final energy consumption for heating and cooling, and 10% RES in final energy consumption for transport until 2020.

According to the third progress report on the promotion and use of energy from renewable sources in Greece which was submitted under Article 22 of Directive 2009/28/EC to the European Commission in April 2016, the latest figures for the share of RES in gross final energy consumption indicate that Greece is on track for reaching its national RES targets for 2020. This is mainly due to the over-achievement of the sub-target related to heating and cooling, resulting mainly from an increasing use of biomass for heating, in particular on the level of the residential sector.

Specifically, in the last five years, a significant increase in the use of biomass has been observed due to the final consumers’ shift to biomass as a cheaper fuel to meet their heating needs and the consequences of the economic recession in the households’ income. Moreover, solar thermal systems have steadily attained an important position in RES applications for domestic hot water production, while the penetration of heat pumps for space heating has exhibited a significant growth rate in the last two years leading to an increase of 65% in 2014 compared with 2012.

The penetration of RES for heating already stood at 25.9% in 2015 surpassing even the corresponding indicative target of 20% until 2020, as defined by the NREAP. The utilization of RES for heating purposes increased by 15% between 2012 and 2015. Nevertheless, the 10% target for RES in transport is still far from being achieved considering the 1.4% RES share of 2015. Regarding the penetration of RES in gross final electricity consumption, a significant increase has undoubtedly been observed (34% between 2012 and 2014). Although the total installed capacity surpassed the installed capacity projected in NREAP in 2013, a deceleration was observed in 2014, while the RES electricity mix differed significantly from the NREAP projections with the main share in the RES installed capacity being attained by photovoltaic stations instead of wind farms. In 2015, a total RES share of 15.44% was achieved. The contribution of RES to the gross final electricity consumption accounted for 22.09% in 2015 and the respective share in 2016 is estimated at around 25%, compared to a projection of 29.7% in the NREAP.

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Institutional set-up in the Energy Sector

Ministry of Environment and Energy (YPEN)

The Ministry of Environment and Energy (YPEN) has the responsibility for the definition and implementation of the national energy policy as well as the coordination of the energy sector, including the promotion of renewable energy sources. YPEN supervises a number of public institutions and companies with activities in the renewable energy sector, including RAE, PPC, IPTO, HEDNO and CRES. The responsible organisational unit within YPEN is the General Secretariat for Energy and Climate Change.

Website: http://www.ypeka.gr

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Regulatory Authority for Energy (RAE)

The Regulatory Authority for Energy (RAE) is an independent administrative authority, with financial and administrative independence under the supervision of YPEN. RAE monitors the operation of the energy markets, including electricity from RES. It issues opinions on electricity retail tariffs as well as access tariffs to electricity transmission and distribution networks. It is responsible for granting production licenses for electricity generation from RES. RAE also acts as a dispute settlement authority with respect to complaints against transmission or distribution system operators in the electricity sector.

Website: http://www.rae.gr

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Operator of the Electricity Market (LAGIE)

LAGIE has the responsibility for the operation of the electricity market according to the mandatory pool model. Fossil fuel and large hydro electricity producers submit their offers to LAGIE that organises the day-ahead market based on these offers. For the case of RES, LAGIE concludes power purchase agreements (PPA) with RES producers based on the current feed-in tariffs (FIT). These FIT are paid from the RES Special Account which is also managed by LAGIE. For the non-interconnected islands, the funds are transferred by LAGIE to HEDNO. Apart from the short term wholesale electricity market, LAGIE also has the responsibility for managing the long term capacity market as well as the imbalance settlement mechanism.

Website: http://www.lagie.gr

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Public Power Corporation (PPC/DEI)

The Public Power Corporation (PPC/DEI) Group consists until today of four companies with separate legal and managerial identities: PPC S.A., ADMIE, DEDDIE and PPC Renewables. The PPC Group currently holds assets in lignite mines, power generation, transmission and distribution. PPC S.A. is the biggest power producer and electricity supply company in Greece with approximately 7.4 million customers and a market share of around 98%. PPC’s current power portfolio consists of conventional thermal and hydroelectric power plants accounting for approximately 81% of the total installed capacity in the country. By December 2015, the total installed capacity of PPC generation plants was 10.93 GW. PPC is active in the RES sector through its subsidiary company “PPC Renewables S.A.” (PPCR).

Website: http://www.dei.gr, http://www.lagie.gr

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Independent Power Transmission Operator (IPTO/ADMIE)

The Independent Power Transmission Operator (IPTO/ADMIE) S.A. is a wholly owned subsidiary of PPC S.A. that is however independent from its parent company in terms of its management and operation. There are plans for the full ownership unbundling of IPTO in 2014. IPTO has the role of Transmission System Operator (TSO) for the Hellenic Electricity Transmission System and is responsible for system operation, maintenance and development. IPTO is also managing electricity flows on the system, taking into account exchanges with other interconnected systems. It prepares on an annual basis the Hellenic Electricity Transmission System Ten Year Development Plan. It is also responsible for preparing day-ahead forecasts of the load and the RES electricity production as well as the optimisation of the day-ahead schedule.

Website: http://www.admie.gr

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Hellenic Electricity Distribution Network Operator (HEDNO/DEDDIE)

The Hellenic Electricity Distribution Network Operator S.A. (HEDNO/DEDDIE) is a wholly owned subsidiary of PPC S.A., that is however independent from its parent company in terms of its management and operation. Its responsibilities are the operation, maintenance and development of the electricity distribution network in Greece. This includes the non-interconnected electricity networks as well as the electricity generation facilities on the Greek islands. On the islands, HEDNO is responsible for concluding power purchase agreements (PPA) with RES producers. HEDNO also manages the access of electricity consumers as well as RES electricity producers to the distribution network.

Website: http://www.deddie.gr

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Centre for Renewable Energy Sources and Saving (CRES)

The Centre for Renewable Energy Sources and Saving (CRES) is a national entity for the promotion of renewable energy sources, rational use of energy and energy conservation. It was founded in September 1987 as a public entity which is supervised by YPENA and has financial and administrative independence. CRES provides advisory services to YPEKA for the definition and implementation of the national renewable energy policy, strategy and planning. It conducts applied research on new energy technologies and provides technical support for the penetration and implementation of these technologies. CRES also implements European, national and international projects for the promotion and market penetration of new energy technologies.

Website: http://www.cres.gr

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Renewable energy private sector associations and companies

There are a number of Greek associations representing the private companies that are active in the renewable energy sector. These include the Greek Association of RES Electricity Producers (GAREP), the Hellenic Wind Energy Association (HWEA/ELETAEN), the Hellenic Association of Photovoltaic Companies (HELAPCO), the Hellenic Association of Photovoltaic Energy Producers (SPEF), Greek Solar Industry Association (EBHE), the Hellenic Small Hydro Power Association (HSHA) and the Hellenic Association for the Development of Biomass (HELLABIOM).

Several hundred Greek and international companies are active in the RES sector in Greece. In the photovoltaic sector, a large number of predominantly small and medium companies and individuals (including farmers) operating several projects of different capacity are present. The wind energy sector in Greece is dominated by specialised companies that develop, own and operate a portfolio of wind parks, and in many cases also photovoltaic power stations and small hydro plants. Six companies own and operate wind parks that correspond to almost 70% of the installed capacity.

Greek Association of RES Electricity Producers: http://www.hellascres.gr

Hellenic Wind Energy Association: http://www.eletaen.gr

Hellenic Association of Photovoltaic Companies: http://www.helapco.gr

Hellenic Association of Photovoltaic Energy Producers:http://www.spef.gr

Greek Solar Industry Association: http://www.ebhe.gr

Hellenic Small Hydro Power Association: http://www.microhydropower.gr

Hellenic Association for the Development of Biomass: http://www.hellabiom.gr

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Further Information

• International Energy Agency: Energy Policies of IEA Countries. Greece 2011 Review: http://www.iea.org/publications/freepublications/publication/Greece2011_unsecured.pdf
• Invest in Greece: http://www.investingreece.gov.gr/default.asp?pid=36§orID=38&la=1