The parliament has approved a new law introducing renewable energy policies for auction design and small projects with stable feed-in tariffs.
Since 2016, when Greece introduced its competitive auction framework for renewable energy and held its first PV tender, the country has awarded more than 2 GW of solar capacity. Awarded projects typically participate in the energy market and secure variable feed-in premiums on top of market prices. The value of these premiums depends on a number of market variables, such as marginal price, in addition to tariffs set via competitive tenders.
This policy remains in place today, but at the end of April, the Greek parliament voted in a new law that allows the government to hold auctions for asset owners who are willing to accept higher power curtailment rates for their projects than usual, as well as installations that include energy storage systems.
The new policy goes into effect on May 1, but the European Commission will have to approve the new auction scheme before the Greek government can hold the first tenders.
The new law does not define the percentage of electricity curtailment for awarded projects in future auctions. Instead, the new law allows Ministry of the Environment and Energy to separately set the percentage of electricity curtailment for awarded projects for each new auction. Similarly, the requirements for energy storage systems in future auctions will also be defined by the ministry ahead of each procurement exercise.
This new approach to auctions is designed to help Greece manage the issue of electricity curtailment. In the first quarter of 2024, the country curtailed about 4% of domestic green electricity production. However, there are concerns that curtailment could increase sharply in the future, given the current pace of development and the country’s ambitious renewable energy targets.
The new law has also put an end to feed-in tariffs for solar projects up to 500 kW in size. Developers of such installations with the necessary licenses can sign contracts with Greece’s Renewable Energy Sources Operator and sell the generated electricity in the electricity market at a feed-in tariff of €65.73/MWh. Projects up to 1 MW in size for energy communities or farmers will get a feed-in tariff of €68.87/MWh.
