Auction procedures for RES project

13 September, 2022

After one year and a half (the last tender procedure was conducted on May 2021) , Regulatory Authority of Energy (RAE), on the 6th September 2022, succesfully conducted the first auction procedure under the provisions setted by the Ministerial Decsision no 66576/5877 (Goverment Gazette Β’ 3522/07.07.2022). The above legislative text reflects the deal made between the Greek Goverment and the European Comission about the 3 year time extention of the auction procedure shceme in order to RES stations to lock a reference price for selling their produced energy. 

According to the provisions of the above Ministerial decision the bellow RES projects have the obligation to participate in order to sign an electricity sale contract and lock a reference price : 

  • Wind farm stations with total installed capacity over 6MW 
  • P/v stations with total installed capacity over 1MW 
  • Windfarm stations with total instal capacity over 60 Kw and lower than 6Mw wich do not fall under the criteria of par. 3a article 7 law 4414/2016 as ammended in force 

For a better comprehension of the above provision an investor shall be aware that  according to the provisions of article 7 law 4414/2016, as ammended and in force, any natural or legal person that participates directly or inderectly in the management or as a shareholder or partner at the operatio of a RES station, nwith any percentage of participation t, is prohibitted from entering into an operation aid contract without participating in an auction procedure. This provision stands and for projects operated by energy communities 

The above legislative provision apply when the bellow conditions stand cumulatively 

  1. The above natural person or legal entity owns two projects of the shame tecnology wich have already received price outside of competitive procedures and  
  1. The technologies of the projects fall under the provisions of   the Minsterial Decision no 66576/5877 (Goverment Gazette Β΄3522/07.07.2022) 

On the conducted tender 34 RES project (the auction was common for tecnologies p/v and windframs) participated in order to lock a reference price for their stations .Τhe total auctioned capacity was set  to 944.5 Mw, approximately 50% reduced from the provisions of the ministerial decision. The lowest  reference price at the auction was closed at 46€/Mw for P/v stations and at 55,82€/Mw for wind farms stations. 

Despite the long period of time that elapsed since the previous tender, the participation was kept at relatively low levels which reflects the long delays in the licensing maturity of the projects. The participation was affected by the lack of projects with final grid connection offers ( it is well known that the holdout on receiving  final grid offers of connection terms exceeds one year, due to the long delays of the competent IPTO and the limited available electrical space). 

The results of the auction have not been announced as they are expected to be ratified by Rae, after the  publication of the results, the final conclusions on the level of competition can be drawn during the auction process. 

Finally, according to the provisions of the Ministerial Decision, RAE has the obligation to conduct two more tender procedures (common for p/v and windfarm projects) by the end of the year, and their implementation is expected with great interest by the market, as in August the Minsterial decision on the priority in granting grid connection terms was published and several projects that were waiting will finally receive their connection terms. 

In conclusion, the stakeholders seems to have a wait-and-see attitude with an eye on the possibly more favorable prices that renewable energy projects could receive by signing bilateral (green ppa’s) with energy-intensive consumers. 

Attorney at Law Nefeli Giannaki