Greece’s energy regulators (RAE) have announced the winners of the country’s first ever renewable energy auction, which took place yesterday, awarding a cumulative capacity of 40 MW to solar PV projects.
As previously reported, the pilot tender was solely aimed at solar PV technology. Specifically, there were two bidding categories, firstly PV projects up to 1 MW each, and secondly projects between 1 MW and 10 MW.
According to Greece’s new policy framework for renewable energies, the winning projects will be given a variable premium, on top of the standard market price for the generated electricity. The amount of the premium will depend on certain market variables (e.g. the system’s marginal price) and the tariff set via the pilot tender yesterday. The feed-in premium will be valid for 20 years.
Successful bids in the first category ranged between EUR 94.97 and EUR 104 per MWh, and have a combined capacity of 4.8 MW. The lion’s share of the PV capacity awarded came in the second category, where winning bids ranged between EUR 79.97 and EUR 88 per MWh for a cumulative capacity of 35.2 MW.
The two largest plants that were awarded in the auction each had a capacity of 9 MW. The one was awarded to Aten and the other to Eren. Greece’s Hellenic Petroleum was also a big winner, after being awarded three contracts totaling 8.6 MW.
Compared to Denmark’s recent tender which awarded nine PV projects of with a combined capacity of 2.4 MW to bids between EUR 4.3 to EUR 4.6 per MWh, and to Germany’s tender that awarded PV projects to bids as low as EUR 62.6 per MWh, Greece’s tender prices are not particularly impressive.
However, this is the price that Greeks pay for the country’s political uncertainty, incompetent economic and energy policies and, of course, the recent retroactive feed-in tariff cuts. Despite the country’s excellent solar resources, Greece remains a risky country to do business in.
Another factor that may have affected the prices entered into the bidding process is that the tender was mainly for old projects that had already received grid connection licenses over the past few years – before Greece suspended the approval process for new PV systems in 2012. Therefore, investors are primarily from Greece, where financing is expensive and scarce.
The level of investor participation in the tender was, however, a positive surprise. For the tender to take place, the number of competing projects for each category needed to be at least 40% higher than the PV capacity that was awarded in the category.
The projects within the first category that were awarded during the tender are obliged to be connected to the grid within 18 months after the completion of the auction, while the projects within the second category have a timeline of 24 months.