Greece to take 10% of wind project profits

UK: Greece has voted through a new set of retroactive renewable energy systems (RES) measures, including a retroactive feed-in tariff (FIT) cut, affecting project profitability.

A Vestas turbine at a project in Greece
A Vestas turbine at a project in Greece

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According to the new measures under the so-called new deal for the renewable energies, all RES producers are asked to contribute a share of their 2013 income to the country's renewable energy fund.

Wind investors specifically need to contribute 10% of last year's income.

Parliament also voted through the retroactive FIT reduction for all operating RES plants, cutting the average wind energy FIT by around 5.5%.

Finally, the new bill extends the power purchase agreements of renewable power producers by seven years, reaching a 27-year duration. Thus, all RES plants that this January had been operating for less than 12 years are given two options: to sell the generated power to the energy market according to the market rules; or to sell the energy they produce to the grid at a set price of EUR 90/MWh.

However, plants selecting the second option are subject to an annual cap of energy production they are allowed to sell to the electricity grid, dependant on the installed capacity and the efficiency of the plant.

The new measures aim to plug a EUR 700 million deficit in the country's RES fund used to pay renewable energy producers in Greece. The country has promised its international lenders — the European Union, the European Central Bank and the International Monetary Fund — that it will completely eliminate the deficit by the end of 2014.

Furthermore, the energy ministry said the new measures intend to rationalise Greek RES plants' internal rates of return (IRR) to approximately 12% to 15% for each plant, which is closer the the European average but still higher than in most of Europe.

Local RES lobby groups, including the Hellenic Wind Energy Association (HWEA), have opposed the rationale of the new measures, saying the RES fund deficit is the result of the energy market distortions such as the privileges enjoyed by the natural gas sector.

HWEA has said the "new deal" is again a patchwork policy. It said the government should publish the study on which its figures are based.

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