On November 13, 2020, the Ministry of Environment and Energy, through a statement by the competent minister, Mr. Kostis Hatzidakis, announced a package of measures entitled «Government reform intervention for RES,» which provoked a flurry of reactions from RES market players. Unfortunately, the leadership of the Ministry of Environment and Energy has not yet published the amendment and the relevant provisions in order to facilitate a structured discussion on the final content of the Ministry's proposals.
According to the Ministry of Environment and Energy, the interventions are being made to address the now significant deficit in the Special Account for Renewable Energy Sources (ELAPE) and to create the terms and conditions for the smooth functioning of the market within the framework of the Target Model. Essentially, they are divided into two axes:
- Financial measures
- Structural measures
Therefore, the two key questions regarding these interventions are as follows:
- Do these measures contribute to achieving the targets for renewable energy sources, especially with a view to 2030?;
- Do these measures contribute to the long-term sustainability of ELAPE?;
The answer to both questions is no. The measures are piecemeal and shift the burden mainly to producers (especially small and medium-sized ones) and consumers, leaving suppliers virtually untouched (zero contribution in 2020). At the same time, they undermine the credibility of the RES market due to the emergency regulations, with all that this may mean for the achievement of the national energy targets for 2030. It is worth noting that the RESK will need to be further upgraded over the next three years following the imminent strengthening of the European climate target for 2030, as is expected to be decided at the European Council on December 11 and 12.
The deficit in the special account for renewable energy sources (ELAPE) is partly due to the September 2019 decision to reduce the ETMEAR while increasing electricity bills, but also to the impact of the pandemic.
We note that some provisions for energy communities are problematic as they are unjustifiably placed in a less favorable position than private individuals (project completion in June 2021 for EKOIN, December 2021 for private individuals).
We emphasize that, pending the final amendments by the Ministry, any retroactive abolition or change in the status of EKINs will hinder their sustainable development, further undermine citizens' participation in the energy transition process, and damage the State's credibility in their eyes.
A. On the issues of energy communities:
The two organisations agree in principle with the Ministry's intention to set a minimum threshold for membership of EKIN in order to guarantee the price of RES projects. Such a measure could protect genuine EKINs from self-serving private initiatives and serve as an incentive to promote cooperation in local communities. However, some important questions reasonably arise:
- What methodology was used to arrive at the minimum participation threshold of at least 60 members (of whom 50 must be natural persons)? To date, no adequate documentation has been provided to justify the imposition of this horizontal restriction (e.g., why not 50 or 40 members instead of 60?). It should be noted that the upper limit of 60 members first appeared in the relevant Ministerial Decision of March (No. YPEN/DAPEEK/28857/1083) and concerned the priority of EKIN in the examination of applications by HEDNO, however, without any relevant documentation.
- Why are EKINs subject to a less favorable regime than private producers with regard to the deadline for completing RES projects with a guaranteed price? (June 2021 for EKINs versus December 2021 for other private individuals). At the very least, equal treatment is required. At the same time, these deadlines are suffocating, taking into account the pandemic and the understaffing of the relevant services of the operators.
- Why has the ministry not yet announced financial measures to support EKINs (with the exception of some cases in lignite-producing areas)? Non-profit EKINs in particular, for which the costs of establishment and operation are a significant burden, should already have been included in some kind of support plan.
Proposals by WWF Greece and Greenpeace 1. In order to further strengthen the Energy Communities institution, it is proposed to introduce a progressive scale of participation for EKOIN members in relation to competitive procedures, in order to reward the increased participation of citizens and natural persons (at 55% compared to 51% in Law 4513/2018)*. This gives smaller EKINs a very small margin for projects outside of tenders (e.g., 3 MW), while providing an incentive to increase membership. An indicative approach is as follows for EKIN (in which local authorities do not participate): | ||||||||||||||||||||
* It should be noted that, under the current framework, 15 members and a majority (51%) of natural persons are required. 2. With regard to the contract expiry date with DAPEEP, the same regime proposed for private individuals shall apply to those EKINs that do not fall under proposal 1 above. |
B. Regarding ELAPE issues
In the past, ELAPE has served as a cushion for energy suppliers« excessive profits, as is the case today. Despite the fact that RES reduce the wholesale market price – with energy suppliers being the main beneficiaries – they are once again being asked to bear a »one-off" fee to reduce the ELAPE deficit. This once again undermines the investment environment for RES and, more generally, the country's investment credibility.
The assignment of a project for the long-term sustainability of ELAPE by RAE raises doubts as to whether these measures will be the last or whether the documented sustainability problem of ELAPE will be resolved. On the contrary, ELAPE should have a stable and reliable operation that supports RES and inspires confidence in its ability to finance RES producers without burdening consumers.Furthermore, questions arise as to how measures and regulations that have not yet been studied in terms of their impact on the RES market will be voted on, as the President of RAE informed the stakeholders at the hearing (30/11, hearing of stakeholders in Parliament) referring to RAE's work on the long-term sustainability of ELAPE, which will also include the impact of the new regulations.
Finally, the reduction in SGI should bring reciprocal benefits to consumers, through a reduction in bills, even if only symbolic, but mainly through subsidies for energy saving programs and social policy programs to tackle energy poverty. It is neither fair nor good practice for the reduction in system costs resulting from interconnections not to translate into real benefits for consumers. It should also be noted that in the first half of 2020, households saw an average increase of 8.6% in their bills compared to the previous six months (second half of 2019), with the average price per kilowatt-hour (excluding taxes and fees) standing at €0.129. Greece is now more expensive than a number of countries such as France (€0.1247 per kilowatt-hour), Finland and Spain (€0.1178), Portugal (€0.1139) and Sweden (€0.1130).
Proposals by WWF Greece and Greenpeace
- Pending the final conclusions of the Regulatory Authority for Energy (RAE), the fairest distribution of the burden to cover the ELAPE deficit should significantly increase the contribution of energy suppliers (from the proposed €2/MWh) and reduce – if not eliminated – the contribution of RES.
- The development of Guarantees of Origin for RES, which will also generate new revenue for ELAPE through DAPEEP.
C. Further points for consideration/investigation:
- When will the «light» tenders (for PV systems under 500kW) start? Will there be a specific plan and, if so, when will it be made public? If so, has the additional burden (financial, administrative) for very small, small, and medium-sized investors been calculated?;
- Regarding the tender clause, is the Ministry of Environment and Energy considering holding separate tenders for each technology? If not, how does it plan to ensure diversification of the mix through the clause? What is the limit? It is proposed that the establishment of specific tenders be examined in the plan, in the context of ensuring diversification of the mix.
- Given the economic crisis caused by the pandemic and the suspension or termination of operations of many businesses (which therefore have no turnover or will not open), how does the Ministry of Environment and Energy assess the collectability of the retroactive amount of the ETMEAR (€180 million)?;
- Is there a study indicating the impact of the pandemic on ELAPE? If so, what is that impact? Furthermore, the absorption of funds from the Recovery Fund for ELAPE must be limited to the exact amount of the impact, otherwise the absorption for the overall recovery of the economy will be smaller, as the amount could be allocated to productive investments.
Is there a minimum power threshold for exemption from tenders (e.g., 100 kW), or does it include all photovoltaic systems below 500 kW?;
Contact:
Dimitris Tsekkeris, Energy Policy Officer, WWF Greece, +30 694 8420842, d.tsekeris@wwf.gr
Takis Grigoriou, Energy & Climate Change Officer, Greenpeace Greece, 6984617027, takis.grigoriou@greenpeace.org
