Greece has launched a series of renewable energy tenders to procure new solar PV and wind power capacity in separate auctions and joint tenders. Earlier this week, it held its second-ever joint renewable energy tender with a single pot for both technologies. It ended up awarding 502.94 MW of capacity, including 350 MW of solar.
The tender resulted in a record-breaking tariff of €0.04911/kWh for a 200 MW solar project that will be built in Ptolemaida, a mining region in Greece’s Macedonia region.
State-owned utility Public Power Corp. (PPC) is backing the project. The installation will serve as the starting point of a broader plan to develop an additional 3 GW of PV capacity in the country’s mining regions.
Tender breakdown
EMV, which is backed by France’s EDF, offered a rate of €0.05068/kWh – the tender’s second-lowest tariff – for a 70 MW solar project in the municipality of Evrotas, on the Peloponnese Peninsula.
Heliothema Energy also won a contract to build a 42 MW solar park for €0.05087/kWh in Thiva, central Greece. The tender’s fourth-lowest bid, at €0.05464/kWh, applies to a 153 MW wind farm that will be built in northern Greece.
Greece’s Panagakos Group, meanwhile, offered the round’s highest successful tariff, at €0.05482/kWh, for a string of PV parks that will be developed by two companies, Spes Solaris 3 and Spes Solaris Solar Concept.
The projects are particularly interesting, as Panagakos has decided to participate in the auction by bidding for a cluster of nine solar installations located in several different geographic regions. This practice, which was in line with the rules of the joint auctions, was also followed by other bidders, but they were not successful.
Thus, Panagakos bid for all nine PV parks with a single tariff. All nine PV projects, totaling 75.88 MW of capacity, will be compensated at €0.05482/kWh. The biggest of the nine installations is a 38 MW project.
This practice is the opposite of what other stakeholders did in previous auctions. In Greece’s first joint solar and wind auction last year, for example, Germany’s Juwi won three different contracts (139.24 MW, 27.68 MW and 37.37 MW) to build a single 204 PV park in Kozani. It employed a bidding strategy in which it split the 204 MW project into three separate segments, with separate proposed tariff rates for each segment.
Successful regime
Greece’s tender regime has driven a steady reduction in tariffs, which will benefit Greek electricity consumers and the national economy. More importantly, it has also cultivated a competitive environment for domestic companies, as they now need to set competitive strategies to beat international players in the Greek market. This was something that was unthinkable just a few years ago.
Under Greece’s renewable energy law, all wining tender projects receive a premium tariff.
The Greek government is now focusing on the country’s licensing regime. A common complaint among domestic and international investors is that they usually struggle to find enough licenses to be able to participate in the tenders. The government is therefore preparing to introduce a new policy that simplifies the licensing regime, in order to make it easier for investors to gather all the necessary documents.
Sustainable growth
The Hellenic Association of Photovoltaic Companies (HELAPCO) published a report this week covering the performance of the Greek PV market in 2019. The country installed 160 MW of solar capacity last year, with ground-mounted PV parks accounting for the bulk of the annual additions, supported by premium tariffs and the tender regime.
Net metering installations, meanwhile, only accounted for 9.57 MW of additions last year. That capacity was dispersed across 362 PV systems. Greece’s cumulative PV installations hit 2.8 GW at the end of December, accounting for about 7% of the country’s total electricity needs, HELAPCO said.
Greece’s most recent energy and climate policy plan, published in December, includes an installation goal of 5 GW of solar PV by 2030. The government has also vowed to phase out coal by 2028 at the latest.
Coronavirus concerns
The ongoing Covid-19 pandemic is a concern for the Greek economy and its energy sector. However, Greece is doing exceptionally well on this front. The country introduced strict measures very early on in the crisis, allowing it to control the spread of the virus. It has only suffered minimum casualties thus far, compared to other nations.
The Greek government and its people can offer Covid-19 crisis management lessons to much wealthier and institutionally stronger states. It now appears poised to exit the current crisis with minimal human losses.
Energy companies have offered significant help in this regard. PPC, for example, has offered €5 million to purchase medical equipment, while Hellenic Petroleum has donated €8 million to the Greek government to support the country’s pandemic response.
