Renewable energy in Greece

In response to energy crises triggered by the Russian invasion of Ukraine, Greece has taken several steps to ensure energy security including: reducing its reliance on Russia by importing energy from other countries, increasing domestic renewable energy production and improving efficiency to reduce demand. The country has a target of net zero greenhouse gas emissions by 2050; to ensure this target is achieved and that there is a clear route to this end goal the National Climate Law was adopted in May 2022 which sets targets to reduce total greenhouse gas (GHG) emissions, excluding land use, land use change & forestry, by 55% by 2030 and 80% by 2040 as compared to 2005.  

To facilitate the net zero aim Greece has increased renewables in electricity generation, increased biofuels in transport and improved electrification and energy efficiency in road transport. Regarding renewables, Greece’s main focus is on increasing renewable energy generation linked to widespread electrification of energy demand especially for buildings and road transport, deploying solar PV & onshore wind and deploying their first offshore wind farms. Greece has a target of 35% renewables in gross final energy consumption by 2030 to support the EU-wide target of 35%, due to increase to 45%, and is exceeding its contribution to the EU-wide target with its own target. 

To try and increase the rate of deployment and secure low energy prices, several changes have been made to its support scheme for renewable electricity generation. Subsidies are now awarded through competitive auctions that seeks to reflect market prices. In October 2022 renewables covered 100% of Greece’s electricity demand for 5 hours; this is the first time this milestone has been achieved anywhere.

In May 2020, legislative changes to expedite the licensing and permitting process were passed to overcome the time consuming processes which were previously an issue for renewable energy projects. Law 4685/2020 removed generation licenses and their lengthy application process and instead replaced them with generation certificates which are easier to apply for through an online platform and require less documentation, are granted in 20 days if the criteria is met and last for 25 years. There were previously issues for renewable project developers in securing bids in renewable energy auctions due to the limited number of bids accepted and speculators placing a number of bids to resell to project developers. In November 2021 there was an increase in the required cost to participate in the renewable energy auction system to 35000 EUR per MW to prevent application hoarding. 

Law 4951/2022 was passed in July 2022 which reduces the length of the licensing process to 14 months and ensures licenses will be granted to 12GW of renewable energy projects by 2030. Now, a final grid connection offer can be applied for directly as the previous requirement for a provisional grid connection which has been disposed of. This final grid connection offer must be approved or rejected within 2 months, which a developer then has 2 months to either accept or request an alternative option. If they accept, the developer must then apply for an installation license within a timeframe which varies depending on the type of technology being developed. The installation license, which is valid for 3 years and can be extended for 12 months for a fee, must be issued within 20 days of the application being issued if the project qualifies.   

Due to a lack of grid capacity, renewable projects have also faced delays in being connected to the grid. For example in 2021 of the 792 MW solar PV projects installed only 422 MW were connected to the grid. To address this issue, the Transmission System Operator (TSO) is planning to increase the transmission system capacity by 2027 with a minimum investment of 150m EUR. The Distribution System Operator (DSO) has similar plans to double the amount of investment.  

The July 2022 law allows for private electricity grids up to a medium voltage to be constructed by renewable energy project developers to connect to projects and consumers without a grid connection offer. However, they must still be registered with the DSO & TSO and it is the project developer’s responsibility to maintain these grids. The legislation also tries to address grid connection issues more generally by allowing the TSO to stop accepting new grid connection applications in areas where there is insufficient grid capacity for new connections for up to 6 months (provided a period of notice is given beforehand).  

Greece’s National Energy and Climate Plan sets out a target of expanding renewable capacity to 19 GW by 2030 with an estimated increase in capacity of 3.2 GW for solar PV & 2.9 GW for wind by this date. The largest solar PV plant in the country with a capacity of 0.2 GW, which cost 130m EUR to construct, was connected to the grid in April 2022. One of the main ways in which wind and solar PV projects were supported, along with other types of renewable energy technologies, was through a feed-in tariff (FiT). Through the FiT a subsidy for electricity generated which is delivered to the grid, measured in EUR/MWh, is provided to generators. However, eligibility for the FiT has been restricted over time to the point where it now predominantly supports smaller or innovative projects. 

There has been a transition to support for renewable energy projects being facilitated through competitive auctions which awards subsidies through two-way Contracts for Difference (CfDs). The aim for this system, which has a budget of 2.27bn EUR, is to support 4.2 GW of solar PV and wind projects between 2022-2025. The government has announced that from 2023 to 2025, it will hold auctions for the following categories: wind projects from 60 kW to 6 MW, wind projects over 6 MW, solar PV projects up to 1 MW, solar PV projects over 1 MW, wind projects over 10 MW with storage of at least 20% of the maximum hourly generation and solar PV projects over 10 MW with storage of at least 20% of the maximum hourly produced energy. 

Greece currently does not have any offshore wind generation but the government has a target of 2 GW of offshore wind capacity by 2030. To support this goal, in Aug 2022 the Greek Parliament approved the first Offshore Wind Law, chapter H (articles 65 to 80) of Law 4964/2022, which appoints the state owned company Hellenic Hydrocarbon Resources & Energy Resources Management to lead site investigation, allocation and concession development for offshore wind generation. The law also makes providing the grid infrastructure to support these projects the responsibility of the TSO. Resource assessments and seabed surveys can be conducted by project developers who obtain research permits for wider offshore wind developments; these permit holders will be the only ones able to participate in offshore wind auctions for the rights to construct and operate such projects in the coming years. The window for these permit application will be open between in 2023-2024. Law 4951/2022 also facilitates the development of 10 floating offshore solar PV projects with a capacity of 0.5-1 MW each which will be license and permit exempt.

In 2021, renewables in heating and cooling were comprised of: biomass (51.4%), heat pumps (27.1%), solar thermal (18.8%) and biogas (2.1%). For investments in heating and cooling systems using these renewables, there is an income tax deduction available of 10% of qualifying project costs up to a maximum of 3000 EUR. There are threshold minimal project costs to qualify, however depending on the enterprise size and project type 30-65% of the investment costs can be covered. The Greek government has also expressed interest in injecting biomethane along with hydrogen from renewable sources into the gas grid to increase renewable heating.   

Regarding transport, biodiesel was the largest source of renewables in transport accounting for 64% in 2021 of total renewables in the sector. Behind this was biogasoline at 33% and electricity at 2%.  

All road transport fuel producers and distributors must have a specified proportion of biofuels in their annual fuel sales according to a mandate in Greece. The proportion is set by the government each year and is currently at 7% of volume which has been the case since 2017. There was an extension of the mandate in 2019 which specified the required level of bioethanol in gasoline, with reference to energy content. The level has been at 3.3% since 2020, but the government is considering increasing this proportion.  

Supporting the use of electric vehicles is another way in which the Greek government is attempting to increase the use of renewable electricity in transport. In its National Energy and Climate Plan, Greece set out the aim to have a minimum of 8.7% by 2024 and 30% by 2023 of new car registrations to be electric vehicles.  Support policies in place to try and increase uptake of electric vehicles include direct subsidies, reduced taxes and reduced registration fees. Furthermore, as part of its National Recovery and Resilience plan dubbed “Greece 2.0”, the Greek government plan on supporting the installation and operation of 8000 electric vehicle charging points in key urban and suburban locations. They also plan to replace older buses with electric ones and provide incentives for the use of battery electric vehicles as taxis as part of the plan.