|Gus J Papamichalopoulos|
On November 30 2011, the Regulatory Authority for Energy (RAE) announced the measures that were decided to be taken for the support and finance of the renewable energy sources in Greece. Specifically, RAE's measures intend to reinforce the budget of the electricity market operator (EMO), including an increase in the special renewable energy sources duty and application of the duty to ERT SA, the state radio and television company.
Both these duties are imposed on consumers through their bills from the Public Power Corporation. For the period from October 2011 to December 2012, the RAE's main goal is the gradual reduction of the deficit of the renewable energy sources special account, resulting in the elimination of the deficit by the end of 2012. This will be achieved by:
- accelerating the auction of the remaining unallocated carbon dioxide emission rights from the New Entrants Reserve for 2008–2012;
- auctioning of additional unallocated carbon dioxide emission rights;
- refunding the value added tax due to the EMO;
- activating the option to attribute a percentage or the total of the contribution paid to ERT SA amounting to €30 million ($38.6 million);
- establishing an extraordinary duty of €2/MWh on the lignite power production which would contribute another €55 million to the RES Special Account; and
- reasonably increasing the special renewable energy sources duty amounting to an average of €5.43/MWh.
Additional resources can be raised through the following measures. As of January 1 2013, a grant will be made of 50% of the total revenues accrued from the auctioning of national carbon dioxide emission rights. There is also a lot of discussion whether a duty on the transfer of renewable energy sources licences could be imposed to the producers.
The wholesale energy market will be restructured in order to apply the Target Model gradually by 2014–2015 and in order to correlate, by mid-2013 at the latest, wholesale and retail prices. The current renewable energy sources development model (guaranteed prices, priority in entering the system) must be adapted to this new model, which will include the development of four basic transaction levels (day ahead, intraday, balancing and forward) and bilateral contracts governing physical delivery between producers and suppliers.
Most of the measures concern the revenue segment of the renewable energy sources special account. There must, however, be a concurrent and immediate examination of the expenditure segment of the account (the system of compensating the renewable energy sources at guaranteed prices) so that a solution that is viable in the long term is achieved.
The value of such guaranteed prices must be reviewed so that they reflect the constantly decreasing installation cost of the related technologies but also the increasing cost of money and borrowing, so that ultimately such investments become sustainable and financially advantageous for the producers and the country.
Gus J Papamichalopoulos
© 2021 Euromoney Institutional Investor PLC. For help please see our FAQs.