Greek wind power group calls for urgent subsidy reform

A Greek wind power lobby group has called for adjustments to the country’s renewable energy support scheme, recommending a feed-in premium system using a reference price, according to documents sent to the energy ministry and seen by ICIS.

In a bid to encourage renewable generation the government introduced a generous feed-in-tariff system for green energy units several years ago. But the country’s green energy sector has been exposed to flaws in the system and an inability to fund it since its launch.

Market operator LAGIE has been supporting the renewable market ever since by funding the subsidies via a levy on end-user bills. But this has proved insufficient leading to significant debt.

The government has tried to put the brakes on the renewables support scheme, cutting subsidies a number of times, but this has ultimately proved “too little, too late”, according to some industry sources.

The Hellenic wind energy association (ELETAEN) said in the documents that due to “chronic deficiencies”, Greece is “unprepared” to implement an entirely reformed support mechanism.

But the organisation stressed that the current scheme “must be adjusted but taking all measures that will minimise the negative impact of the new legislation”.

Threshold

The lobby group proposed a feed-in premium with a reference price as well as a protection threshold. The threshold would ensure that installations do not receive less than a set minimum.

ELETAEN said a new mechanism must come as soon as 1 January 2016.

But a radically reformed support scheme will only affect new installations joining the grid. This is because all projects so far have been grandfathered, meaning they have secured the same funding for their whole lifespan.

So far no concrete plan has emerged from the government, despite several public declarations voicing support for the renewables sector (see EDEM 13 March 2015).

A source close to the matter previously said the country does not have many options at the moment given that it has so far operated a feed-in tariff system. The most likely option was a feed-in premium, in line with ELETAEN’s proposal. But the type of the feed-in premium was still unclear, with several options available (see EDEM 20 October 2015).

The lobby group also requested the elimination of aid given to fossil-fuelled power plants. It did not go into further detail regarding which subsidy was it actually referring to.

The Greek energy regulator came under scrutiny in October following a public consultation to bring back the cost recovery mechanism which only lasted three working days. The scheme was previously supported gas-fired power plants for coming in to balance out supply demand.

The market had previously criticised the mechanism which had been abused in the past with most participants welcoming a government decision to abolish it in 2014. sophie.udubasceanu@icis.com