Market Status: Greece - New government raises hope of end to red tape

GREECE: Even though installed wind capacity in Greece broke through the 1GW threshold in 2009, it was far from being "the year of renewable energy" trumpeted in the spring by then-new development minister, Costis Hatzidakis.

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Excessive red tape, inconsistent and ill-defined regulations, pockets of local opposition, grid bottlenecks and a lack of political will continued to hinder development - despite Greece having an abundant wind resource, an attractive market structure and low market penetration.

As a result, just 97MW of new capacity started turning in 2009 to reach 1.09GW at the end of the year (table). Meanwhile, many licensed projects are languishing in the courts or in the queue for grid connection, while more than 1,000 applications totalling 7GW of renewable energy capacity are reportedly held up in the permitting process, most of them for wind projects.

Events took a dramatic turn for the better in October, however, with the election of a socialist government that vowed to take its renewables obligations seriously. So far, the signs are promising. The prime minister, George Papandreou, has already set up a dedicated ministry of the environment, energy and climate change, headed by Tina Birbili, and has announced he wants to raise the country's renewable energy targets. The current mandatory European target is for 18% of Greece's total energy consumption to come from renewable sources by 2020. This will require an estimated 35% or more of electricity to be generated from renewables, up from just 2% today. Now Papandreou says Greece should aim for 20% of clean energy and 40% of electricity by that date. To reach this, installed wind capacity will need to reach around 10GW, according to the Hellenic Wind Energy Association (HWEA).

The new targets appear in a draft renewable energy law currently going through parliament. Although the final version has yet to be released, the law aims to enable Greece to meet its targets by slashing red tape, revising the regulatory framework, extending the grid and ensuring projects get built. The proposals include allowing certain authorisations to proceed in parallel, simplifying the initial production licence and ensuring the authorities meet the legal deadlines. These measures will reduce the licensing process from the present three to five years to just 8-10 months, Birbili says.

The law is also expected to amend the controversial 2008 permitting framework for renewables. It seems that wind priority areas and the minimum distance between turbines will be dropped, alongside other restrictions determining where turbines can be built. If all goes to plan, the draft law should be submitted to parliament this spring.

While everyone is waiting for the final draft, the initial proposals have been broadly welcomed. "The text is by far the most progressive issued up to now for the development of renewable energies in Greece," says environmental charity Greenpeace. "With minor modifications and adjustments it will be a very good result," adds Athanasios Tsantilas of Rokas Renewables, one of the country's main owner-operators.

Even if the law meets expectations, it will take time for the measures to feed through. That means the amount of new wind capacity installed over the next few years is likely to continue at around 100MW a year, says Ioannis Tsipouridis of HWEA. "After 2015 we will have to install over 1.2GW a year if we are to reach the target," he adds.

Developers think big

There are certainly some ambitious projects in the works. Among them is a cluster of 39 projects totalling 1GW under development on Crete by the Copelouzos Group, one of the big Greek owner-operators. To bring the power to market, the group also plans to build a private interconnection to the mainland at Attica via the Peloponnese. In the shorter term, Copelouzos is completing the final environmental studies for a cluster of 148MW on south-east Evia. Terna Energy, another major Greek owner-operator, is developing projects totalling 180MW in the same area, and the two companies are considering jointly building a private line with 325MW of capacity to the mainland. In addition, Terna is working on three large joint-venture projects, with undisclosed partners, with a combined capacity of 909MW in the Cyclades, Attica and Peloponnese.

A number of companies are now beginning to look offshore as well. Both Copelouzos and Terna have offshore projects - for 216MW and 600MW respectively - at an early stage of development off the coast of Thrace. Athens-based RF Energy is developing 500MW near the island of Limnos in the north Aegean Sea. RF Energy's subsidiary, City Electric, applied for the necessary licences in December.

Meantime, the government has given the go-ahead to its much-delayed interconnection with South Evia. The line across the island should be finished by the end of the year and the whole line completed by 2012, according to system operator HTSO. It will unlock around 400MW of wind capacity, all of which has already been allocated to licensed projects. The cost, around EUR85 million, will be split roughly 40-60 between public funds and the project owners.

The EUR350 million Cyclades Interconnection Project is also moving ahead. This will link the islands of Syros, Paros, Naxos and Mykonos to the mainland. A tender call for the construction should be launched this spring, with completion scheduled for 2013.

More immediately, at least another 500MW of capacity in Macedonia and Thrace will be released when a 400kV substation on the Greece-Turkey interconnection is completed at the end of this year. The planned upgrade of the 150kV line to the Peloponnese, which would double wind penetration in the region, is less certain, however. It is likely to face strong local opposition, says the HTSO.

A more general problem is Greece's ballooning deficit. In December, the prime minister warned that the country risked "sinking under its debts" unless it introduced spending cuts. It remains to be seen to what extent this will affect government plans for promoting renewable energy.

New wind farms in 2009
Crete Rokas Renewables Siemens 3.6
PPC Renewables Enercon 3.0
Ionia Elliniki Technodomiki Enercon 27.2
Macedonia RF Energy Vestas 10.0
Peloponnese Elliniki Technodomiki Enercon 20.0
Various Enercon 19.7
South Aegean Various Enercon 12.0
Other 1.2
TOTAL 96.7
Source: HWEA

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