GREECE: An Introduction to Energy

Introduction 

Greece’s energy sector is undergoing significant changes as the country aims to double its investments and achieve ambitious goals set by the updated National Energy and Climate Plan (NECP). The NECP includes targets for hydrogen, energy efficiency, and decoupling from fossil fuel imports. To facilitate this, the Greek government has introduced a simplified licensing framework for Renewable Energy Sources (RES) and Combined Cooling, Heat and Power (CCHP) projects, as well as a new subsidy scheme for households, businesses, and municipalities to install photovoltaic systems. Additionally, in September 2022 the European Commission approved a Greek scheme under the Recovery and Resilience Facility to support the development of electricity storage facilities, and in June 2022, Greece got approval to receive EUR1.38 billion in grants from the EU’s Just Transition Fund. These developments, along with the National Climate Law, which sets out rules and objectives for Greece’s transition to carbon neutrality and addressing the energy crisis, are important for businesses to be aware of as they navigate the new legislative framework.

Major Legislative Developments 

Updated National Energy and Climate Plan (NECP) 

Greece is currently in the process of preparing an updated NECP, which includes highly ambitious aims, summarised by a doubling of the investments expected to achieve the plan by 2030. According to the predictions of the new NECP, hydrogen will start to participate in the energy mix in 2030, while particularly high targets are set for energy efficiency in both the industry and the residential sector. With a view to decoupling the country from fossil fuel imports and improving the quality of citizens’ life, the final form of the new NECP will play an important role for Greece’s green transition goals.

New licensing framework 

Greece’s new RES licensing framework was recently supplemented with Law 4951/2022 (the “New Law”). The New Law completely overhauled the second licensing phase of RES and CCHP projects, by simplifying and significantly accelerating the steps required for grid connection, installation and operation of RES and CCHP projects. The New Law also introduced: (a) a brand new regulatory framework for standalone/collocated energy storage; (b) novel provisions bolstering the energy market against increasing wholesale and retail energy prices; (c) an early-stage framework for the development of pilot marine-floating PV plants; and (d) specific provisions on energy and environmental protection.

Grid connection terms priority 

In mid-August 2022 the Hellenic Ministry of Environment and Energy (the “Ministry”) issued a Ministerial Decision setting out the priority framework in the granting of final grid connection terms offers. The Decision lays down six main priority groups, completely altering the grid connection landscape (which, up until the issuance of the Decision, was almost exclusively based on a “first come, first served” basis).

The Ministry is expected to bring forward further modifications to the Decision in late January 2023. These will reportedly include increasing the maximum capacity limit of connection offers for priority group 2 (projects with corporate power purchase agreements) from 1500 MW to 4000 MW and accelerating the examination of grid connection terms applications for standalone battery storage projects.

New subsidies scheme 

The Ministry is currently working on three subsidy schemes for households, businesses and municipalities to install photovoltaic systems. The Greek Ministry of Rural Development and Food is also working on a separate scheme for agricultural holdings (expected in 2023). The new subsidy scheme will finance up to 30% of the supply and installation of simple photovoltaic systems and up to 60% for battery-operated photovoltaic systems.

National Climate Law (NCL) 

For the first time, Greece adopted a NCL, containing rules vis-à-vis its transition to carbon neutrality, the need to tackle climate change, environmental protection and addressing the ongoing energy crisis. The NCL aims to: (a) improve Greece’s adaptive capacity and climate resilience, reducing emissions and increasing removals; and (b) ensure the country’s gradual transition, by 2050, to climate neutrality in the most environmentally sustainable, socially just and cost-effective way. Interim objectives are set to reduce net anthropogenic greenhouse gas emissions, compared to 1990 levels, by 55% by 2030, and 80% by 2040.

The NCL significantly changes the business landscape, particularly in terms of the challenges and actions that businesses need to take in order to respond to the requirements of the new legislative framework.

RES Platform for Corporate Power Purchase Agreements (PPAs)

In an attempt to strengthen domestic electricity markets and in line with international sustainability goals the Greek Regulatory Authority for Energy is looking at ways to develop a platform to increase the conclusion of RES PPAs in Greece (“RES PPAs Platform”). The RES PPAs Platform has two main goals: (a) to support the development of new RES projects by providing market terms that ensure their feasibility and financing, primarily through private means rather than government support; and (b) to enhance the options available to smaller participants in the market, both on the seller and off-taker side.

REPowerEU 

The EU’s REPowerEU Plan is a response to the major global energy market disruption caused by Russia’s invasion of Ukraine in February 2022. REPowerEU aims to reduce dependence on Russian fossil fuels well before 2030 and rapidly drive forward the green transition. It brings about significant changes in the Fit-for-55 package proposed only a year before. The measures included in REPowerEU can respond to this ambition, through energy savings, diversification of energy supplies, and an accelerated roll-out of renewable energy to replace fossil fuels in homes, industry, and power generation. REPowerEU is backed by financial and legal measures to build the new energy infrastructure and system that Europe needs.

As part of REPowerEU, the Commission proposed a series of targeted amendments of existing legislation in the energy field, namely the Renewable Energy Directive, the Energy Performance of Buildings Directive (EPBD), and the Energy Efficiency Directive (EED).

Level of activity in this sector 

The energy crisis and ensuing developments in the global energy sector have further boosted the surge in interest in renewable energy projects in Greece. In line with previous years, Greece has solidified its position as one of the most attractive countries in the world for green investments, mainly due to its unique geomorphological characteristics and strong legislative initiative. Recent investor activity in the sector includes:

• The start of commercial operation of a 204.3 MWp photovoltaic park in Kozani, the biggest operational park of its kind in the country and one of the biggest in Europe, owned by Helleniq Energy.

• The development of a 550 MW photovoltaic park, with a total value of EUR280 million, by PPC Renewables at the PPC mine in Ptolemaida (Western Macedonia) (expected in 2024). The construction of the park and the interconnection works will be carried out by GEK TERNA.

• The company “Mediterranean Gas S.A.” has received a permit for a new Floating Storage Regasification Unit (FSRU) in Volos. This is an offshore Liquified Natural Gas (LNG) terminal, with the aim to transform the port of Volos into an international hub for energy supply, including LNG, natural gas, Compressed Natural Gas (CNG), small-scale LNG, LNG trucks, bunkering and power generation solutions for islands.

• The Greek natural gas transmission system operator (DESFA) inaugurated the new LNG truck loading infrastructure in Revithoussa, enabling urban areas and industries to have access to this fuel.

• The hydro pumped storage complex in Amfilochia was developed by GEK Terna, with an investment value of over EUR500 million (currently at the installation licence phase).