Case Studies and First National meeting

1
Case Studies andFirst National meeting

• REACT
• Lisbon meeting 1-2 April 2004

2
Installation of Wind turbines through the use of
fixed ten years PPAs and feed-in tariffs.
3
Installation of Wind turbines through the use of
fixed ten years PPAs and feed-in tariffs.

• Law 2244/94 has set the rules for fixed ten years
  Power Purchase Agreements between the Public
  Power Corporation and the RES electricity
  producers
• The law has also set fixed feed-in tariffs for
  RES electricity, defined as a percentage of the
  consumer tariff (70 of the middle voltage
  consumer tariff for the interconnected system and
  90 in the non-interconnected islands).
• It has helped considerably the increase in
  installed capacity of wind turbines in
  combination with an investment subsidy scheme
  under the Operational Programme for Energy
  (1996-2000) and the favourable wind conditions in
  Greece.

4
Installation of Wind turbines through the use of
fixed ten years PPAs and feed-in tariffs.

• The legislation changed in 1999 due to the
  liberalisation of the electricity market. Law
  2773/99 has set the rules for the liberalised
  market and kept all the favourable conditions for
  RES electricity (PPAs and feed in tariffs),
  adding the advantage of priority dispatching
• The increase of the installed capacity of wind
  turbines from 26MW in 1995 to 420MW at the end of
  2003 shows that the market has received a
  significant boost, part of which is due to the
  PPAs and feed-in tariffs applied.

5
Installation of Wind turbines through the use of
fixed ten years PPAs and feed-in tariffs.

• Evaluation Main elements of success and
  problems
• The main success element of the combination of
  PPAs and feed in tariffs was the establishment of
  a stable investment environment.

6
Installation of Wind turbines through the use of
fixed ten years PPAs and feed-in tariffs.

• Objectives for further development
• The main problem in the market is the delay in
  the deployment of new projects due to the very
  slow procedures for licensing of RES projects.
  The target that is set by the Greek state is
  1300MW installed capacity of wind turbines by
  2010.
• Conclusions
• The main lesson learned form the use of PPAs and
  feed in tariffs in combination is the fact that
  it is important to establish a long term stable
  environment for investment in RES projects.

7
Domestic Solar Water Heaters

• Greece has managed to reach the first place
  in installed area of solar water heaters until
  2001. An important role in this development was
  played by the tax exception scheme for domestic
  solar water heaters.

8
Domestic Solar Water Heaters

• The scheme was introduced in the 1980s. The
  way it worked was rather straight forward and
  probably this simplicity has contributed to its
  success
• Results
• Volume growth in installed surface was from
  1.7 million sq. meters in 1990 to 3 million
  square meters of collectors in 2001. This means
  that 25 of all Greek households own a hot water
  solar system. The estimated energy production is
  4.32 PJ of heat.

9
Domestic Solar Water Heaters

• Evaluation Main elements of success and problems
• The main element of success in this promotion
  scheme was its simplicity, combined with the
  reliable technology and installation since there
  werent any bad examples, and of course the large
  solar potential.
• An important side effect of the market
  development was the emergence of a local network
  of solar water heater manufacturers. At the
  moment the local companies produce annually about
  250000 m2 almost half of which is exported.

10
Domestic Solar Water Heaters

• At the moment the market of domestic solar water
  heaters in Greece is self sustainable, at least
  until now. The measure of tax exemption was
  abolished in 2003, and the effect of this will be
  visible this year. It is expected however that
  the effect will be negative.
• Conclusions
• The tax exemption scheme corresponded to an
  indirect subsidy of the initial investment for
  solar water heaters. The simplicity of the scheme
  was important for its success, as well as the
  lack of negative stories due to equipment failure
  or installation problems.

11
Local tax on the wind electricity production

• After the initial development of a number of
  wind turbine sites, some local reaction appeared
  against the development of new sites. In order to
  give motives to the local communities, law
  2773/99 for the electricity market liberalisation
  introduced the concept of a tax for the local
  authorities in the areas where the wind parks
  were installed

12
Local tax on the wind electricity production

• The concept of the tax is rather clear. A total
  of 2 of the annual revenue from electricity
  sales will be given to the local authorities as a
  compensation tax. Although this was not met
  with a lot of enthusiasm by the investors, it
  seems that it is a measure that has helped to
  increase the acceptability of wind turbine
  installations.
• Evaluation Main elements of success and problems
• The main element for success is the participation
  of local municipalities to the earnings that come
  from wind energy installations.

13
Local tax on the wind electricity production

• Conclusions
• It seems that the local opposition to wind
  turbines installations could be reduced once the
  local players have a direct benefit from the
  installation.

14
Operational Programme for Competitiveness

• The Operational Programme for Competitiveness
  (2000-2006) is a direct subsidy scheme funded
  through the European Structural Funds
• The approach of the programme is to offer direct
  financial incentives in order to improve the
  competitiveness of the economy as a whole. For
  the energy sector in particular the approach is
  to offer an initial investment subsidy ranging
  from 35 up to 50 depending on the technology
  that is to be implemented. So a 50 subsidy is
  offered for the installation of photovoltaic
  while a 35 subsidy is offered for wind energy
  plants and other RES technologies.

15
Operational Programme for Competitiveness

• The first calls for energy project proposals were
  launched in 2001 with a total budget of 0.51
  billion of which 0.17 billion were EU Community
  Support Framework grants. The programme received
  310 proposals from the private sector for
  renewables, cogeneration and energy efficiency.
  The total investments that will be funded by the
  programme will be 1 billion, with a subsidy of
  0.35 billion.

16
Operational Programme for Competitiveness

• Evaluation Main elements of success and problems
• The main element of success of the programme is
  of course the direct subsidies that are offered,
  which makes installations in high potential
  regions very attractive. This is helped by the
  existence of a stable investment environment in
  RES electricity generation and results in the
  majority of the projects being electricity
  generation projects and not so many renewable
  heat projects.

17
Operational Programme for Competitiveness

• Conclusions
• The investment subsidies are obviously a very
  attractive option for the investors, especially
  when combine with high RES potential, but the
  continuation of market development needs measures
  that can secure the investment environment, like
  the PPAs and feed-in tariffs that are applied at
  the moment only for RES electricity.

18
First National meeting

• Participants
• I. Stefanakis, N. Stavridis, Renewable Energy
  Division, Public Power Corporation
• M. Safos, Greenpeace
• G. Spyrou, Hellenic Association of RES
  Electricity Producers
• G. Mentzos, RES Section, Energy Division,
  Ministry for Development

19
First National meeting

• The presentations of the participants were
  focused on the problems and
• Main points
• Hellenic Association of RES Electricity Producers
• Non existing land planning, land-use, cadastre
  this leads to time consuming and bearaucratic
  procedures and uncertainty
• Problems with the grid
• Reduction of initial investment subsidies
• Small hydro problems with the use of water for
  irrigation

20
First National meeting

• Main points
• Public Power Corporation
• RES is not among the immediate priorities of the
  PPC.
• PPC is responsible for the upgrade of the grid
  and there is a lot of pressure on this direction.
  
• There is a contribution for RES that is included
  in all the electricity bills and is collected by
  the PPC and then forwarded to the Hellenic
  Transmission System Operator.

21
First National meeting

• Main points
• GREENPEACE
• Incentives should be enhanced instead of reduced
  (i.e. solar water heaters VAT reduction etc)
• Main focus on solar systems
• Geothermal energy should also be exploited and
  promoted.

22
First National meeting

• Main points
• Ministry for Development
• Problem electricity market liberalization is
  really far behind. So the PPC is almost the only
  actor.
• Licenses time consuming procedures has lead
  to a market for licenses!