Ministerial Decision on the Priority for Grid Connection Offers

19 August, 2022

On August 12, after a longstanding delay, Ministry of Environment and Energy published the ministerial decision on “Definition of a priority framework for the granting of final Grid Connection Offers for RES and CHP stations and storage stations by the Network Operator and the System Operator, including the areas that have characterized as saturated networks in derogation of any other general or special provision, in accordance with article 89 of Law 4951/2022”.

The legislative provisions of the above-mentioned ministerial decision are of the utmost importance for investment projects in the field of renewable energy sources, as they determine the order of priority according to which the pending requests for the granting of final grid connection offers of connection conditions will be examined and therefore, they largely affect the timetable to obtain a compensation price for the mature RES projects.

Telltale sign of the importance of this regulatory text, is that, due to its late release, the IPTO had not issued any final grid connection conditions for requests submitted since 2021.

With the ministerial decision, the requests for granting final grid   connection offers are grouped into priority groups and are assessed based on this categorization.

Specifically, Group A includes RES stations that are located up to 30 km from the country’s borders and relate to individual requests for granting final grid connection offers for projects with a maximum output power of more than 200MW (>200MW).

Next in order (Group A2) are stations that have been characterized as “strategic investments”, with the largest capacity (1250 MW) available in the Regions of Western Macedonia, Thessaly and Sterea, projects in Kozani, Florina and Grevena , in the Megalopolis delignitization zone, in Epirus, Aitoloakarnania , as well as in Eastern Macedonia and Thrace.

Group B has no sub-groups, it concerns only the stations intended for concluding PPAs. The maximum power limit of connection offers is 1,500 Megawatts and the Power Deviation 20% from the RES production certificate is set to 20%.

In this particular case, the producer should either have already concluded PPAs or commit to concluding them, which should cover at least 80% of the energy produced by the RES plant.

The producer must also submit a letter of guarantee to the competent IPTO with an amount of 100,000 euros per Mw. At the same time, if the PPa has not been signed in a period of two months, the station owners shall submit a solemn declaration in which, among other things, they will undertake that within a period of 6 months from the issuance of the Final Grid Connection Offer they will present the signed bilateral electricity purchase contract to the IPTO. Otherwise, the Final Connection Offer automatically ceases to be valid.

Group C includes Energy Communities, a category of projects that should have a high priority, as they serve the goal of energy saving and the development of energy democracy. But the priority is given only to the Energy Communities in which local authorities participate to those participating local authorities and located in  Kozani  Florina, Serres, Eastern Macedonia and Thrace, Epirus, Aitoloakarnania and Fokida.

RES plants with storage systems fall into group D, CHP plants, small hydroelectric plants, geothermal plants, wind and photovoltaic plants in buildings or structures, self-generation plants and offshore wind farms, and group F all projects that do not fall under the aforementioned categories.

An important legislative provision that differentiates the recently published ministerial decision from the previous ones is the ceiling on the power of connection offers per subgroup. The capacity of the network It is not unlimited, a maximum power limit is applied and can be allocated by the competent IPTO. The above constitutes an official admission of the impasse in which the critical sector of the renewable sector has fallen, due to the uncontrolled licensing of RES projects. The licenses are given lavishly, with the consequence that they have exceeded the possibilities of the existing electrical space. For the above mentioned reasons, the competent authorities shall find the right legislative tools so that the investment projects that can be implemented up to their final stage (signing of an electricity sales contract) proceed with licensing. In case that a project  meets the criteria of a group/subgroup and cannot receive a definitive connection offer due to a limited capacity to absorb power in the local electricity network, or due to the maximum power limit of connection offers, the IPTO may grant a final connection offer for reduced installed power up to 40%. In case this is not possible, then the Ipto will inform the producer about the installed capacity with which it is possible to grant a final grid connection offer and the owner of the project will  be able to modify the RES Production Certificate) in order to reduce the electrical capacity of the station and enable the granting of the final connection offer.

Το conclude, it is clear that with the latest legislative initiatives Ministry of Environment and Energy makes a significant effort to regulate issues that were hindering the smooth and fast licensing and operation of RES stations.

The issuance of the ministerial decision on the priority in examining requests for granting final grid connection terms will enable mature projects that have been waiting for connection terms for over a year to lock  a favorable reference price and connect to the grid.