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Risks and Prospects for Renewable Investments in Greece

This report analyzes the risks and prospects for renewable energy investments in Greece, particularly in wind and solar power. It discusses the impact of the financial crisis and changes in government policies on investments, as well as the potential risks and threats to the renewable energy sector. The report also provides recommendations for future market design and investment strategies.

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Risks and Prospects for Renewable Investments in Greece

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  1. Risks and prospects for renewable investments in Greece Panagiotis Papastamatiou

  2. RES investments in Greece, within the period of crisis Apart from the crisis, two main events were the main drivers for RES investments: 2011: Record year for wind energy due to its expected long term stability and competiveness in combination with portfolio maturation 2012-2013: Two record years for PVs due to acceleration of their licensing, high motives and penalties in case of connection delay Investments of more than 7,3bn€ in RES within the years 2008-2014

  3. HWEA Wind Energy Statistics, June 2015 A The HWEA Wind Energy Statistics take into account the wind capacity which is in commercial or test operation in Greece and it is based on sources from the market actors.

  4. HWEA Wind Energy Statistics, June 2015 Positive 2014 effect Portfolios maturation Switch to PVs 10y average 2005-2014

  5. The hysteresis in wind energy growth in Greece, MW

  6. New risks and costs after law 4254/2014, increase LCOE General environment xIncrease of the country risk and the risk premiums due to the political developments xNeed for new recapitalisation of the banking sector. Capital controls xRapid increase of the companies taxation xReturn to recession xNeed for new Memorandum RES sector xFuture RES investments to be implement within a less protective environment due to the abandon of FIT + Unknown future rules for the expected market obligations (see next page) xThreats for new taxation on RES plants xNew barriers to RES development (obligations for BGs, levies for the production licenses) xIncreased risk for high power curtailments (not taken into account be “new deal”) xIncreased CAPEX (“difficult” sites) + lower wind sites (not taken into account be “new deal”) xLocal acceptance issues Electricity market xIncrease of supply’s bad debts due to the recession xA lot of pendencies

  7. Roadmap for RES For existing projects under FiT a central body will resume balance responsibility for them; new projects should be balance responsible once ID market becomes liquid Existing RES projects No balance responsibility ‘New’ RES projects No balance responsibility Balance responsible Greek Market Design: Future Market Design Recommendations

  8. What about bidding tenders? The facts xTargets hysteresis for wind energy. Need for 600-1000 MW per year xLong term average: slightly above 150 MW subject to investment security xLimited number of potential investors xSupply’s bad debts The impact xLimited number of eligible projects xHigh demand – low supply! Danger for strategic bidding xLow realization rate Additional arguments xNew deal has already reduced the prices (and retroactively) xBig companies vs small investors x25%-30% GDR loss within 5 year. Lower risks for investments should be the only option xSpecial issue for wind energy: tenders will promote projects in eastern country only, against geographical distribution, system security and local acceptability

  9. What about bidding tenders? The facts xTargets hysteresis for wind energy. Need for 600-1000 MW per year. xLong term average: slightly above 150 MW subject to investment security xLimited number of potential investor xSupply’s bad debts The impact xLimited number of eligible projects xHigh demand – low supply! Danger for strategic bidding xLow realization rate Additional arguments xNew deal has already reduced the prices (and retroactively) xBig companies vs small investors x25%-30% GDR loss within 5 year. Lower risks for investments in the only path. xSpecial issue for wind energy: tenders will promote projects in eastern country only against geographical distribution, system security and local acceptability The conclusion

  10. Discussion x Anything which is not absolutely obligatory by the EU legislation or the MoU III and increases the risk is more than unacceptable. Bidding tenders for the premiums is an example. x How will secure the bankability of the new RES projects as long as their exact market obligations in the future has not been defined in detail? x The future of wind energy is bright. What about wind companies?

  11. Discussion x Anything which is not absolutely obligatory by the EU legislation or the MoU III and increases the risk is more than unacceptable. Bidding tenders for the premiums is an example. x How will secure the bankability of the new RES projects as long as their exact market obligations in the future has not been defined in detail? x The future of wind energy is bright. What about wind companies? Thank you for your attention!

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