Greek investors rail at latest retroactive proposals

PV investors in Greece are drawing up the legal battle lines again after the austerity-hit nation’s politicians held a short-lived public consultation over a draft law proposing further retroactive cuts to the country’s FIT payment regime.

The draft of the long-awaited, so-called ‘New Deal’ for renewable energy producers went out for consultation for just seven days – from March 8 until last Friday – and proposed two measures investors claim will cripple the country’s renewable energy sector further and flout the Greek constitution and EU law.

According to a press release issued by the Athens-based Metaxas & Associates law firm – which has successfully represented renewables investors against the Greek government in the past – the draft law proposes two retroactive measures.

The first proposal is for a retroactive discount on the amount the government’s Market Operator has to pay in FITs for renewable energy that has already been generated.

The second measure would retroactively alter renewables generation contract terms to reduce payments for future generation.

Proposals would breach Greek constitution

Renewables companies and investors, and their advocates, are questioning how such retroactive measures can be squared with the country’s constitution.

Metaxas & Associates, in the release issued to pv magazine, also referred to European Commission communication COM (2013) 7243 – ‘delivering the internal electricity market and making the most of public intervention’ which, the firm says, stated: "To achieve their objectives, public interventions need to represent stable, long-term, transparent, predictable, and credible commitments to investors and consumers."

The law firm goes on to add the EC communication continued: "A need to make changes in regulatory conditions in response to developments in the market does not justify applying such changes retroactively to investments already made in situations where the need arises because of failures on the part of the public authorities to correctly predict or adapt to such developments in a timely manner.

"Applying retroactive changes in such situations will seriously undermine investor confidence and should, to the extent possible, be avoided."