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Overview of the Greek clean energy market

Sustainable development, and clean energy opportunities for Israel and Greek markets March 18-20, Athens. Overview of the Greek clean energy market. Main policy aspects concerning the ghg abatement.

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Overview of the Greek clean energy market

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  1. Sustainable development, and clean energy opportunities for Israel and Greek marketsMarch 18-20, Athens Overview of the Greek clean energy market

  2. Main policy aspects concerning the ghg abatement • Although per capita emissions in Greece are lower than the EU average, emissions per unit of total primary energy supply (TPES) are the highest in Europe. • Greece's greenhouse emissions are closely related to an energy mix mainly composed of lignite and oil. Lignite in Greece produces about half of the CO2 emissions. • The main policy aspects is the decarbonization of the Greek energy system by introducing low carbon (natural gas) or non-carbon (renewable) energy sources and energy efficiency

  3. 35,000 30,000 25,000 /Hydro Wind Biomass 20,000 Geothermal ktoe Solar 15,000 Natural Gas Solid fuels Petroleum products 10,000 5,000 0 1986 1993 1994 1998 2000 2001 2005 1985 1987 1988 1989 1990 1991 1992 1995 1996 1997 1999 2002 2003 2004 Primary energy supply in Greece Source: Ministry of Development (MoD) Centre for Renewable Energy Sources (CRES)

  4. Sweden Findland France United Kingdom Germany Belgium Netherl. Denm. Austria Italy Spain Greece Portugal Ireland Luxemburg Average EU 0% 10% 20% 30% 40% 50% 60% 70% Oil dependency in the EU Share of oil in Primary Energy Supply Source: Eurostat

  5. Installed capacity of the Greek electricity system, 2006 MW Source: Public Power Corporation (PPC) Regulatory Authority of Energy (RAE)

  6. Synthesis of the installed capacity of the Greek electricity system, 2006

  7. Lignite Petroleum Natural Gas Hydro Wind Biomass 60000 50000 40000 30000 GWh 20000 10000 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Electricity generation by fuel, Greece Source: MoD - CRES

  8. Electricity generation by RES (big hydros are not included) MW Source: CRES- RAE

  9. Share of RES in gross electricity consumption, in Greece GWh Source: MoD - CRES

  10. 2005 1990 PETROLEUM PR 72,0% PETROLEUM PR 68,5% ELECTRICITY. ELECTRICITY 21.1% 15,3% RES RES 5,2% N.G NATURAL GAS 5,9% COAL 2,8% 0,1% 2,2% COAL 6,7% Final energy consumption by energy form, Greece Source:CRES

  11. 2005 1990 Transports Industry Industry 38,9% Transports 20% 25,1% 44,8% Tertiary 9,5% Tertiary 4,2% Agriculture. Agriculture 5,4% 6,5% Domestic Domestic 26,1% 19,4% Final energy consumption by sector in Greece Source:CRES

  12. 105 1990=100 100 95 90 85 80 75 70 1990 1991 1992 1993 1994 1997 1995 1996 1997 1998 1998 1999 2000 1999 2001 2002 2003 2004 Final Cons. Transports Households Industry Energy Efficiency Index ODEX for Greece (source ENERDATA)

  13. Transports 21.2% Agriculture, Domestic Industry Tertiary 9.2% Mining of Solid Fuels 13.2% 0.1% Refineries 3.5% Electricity and Heat Generation 52.8% Contribution in CO2emissions of the different activities related to the use of fossil fuels Source:CRES

  14. Liberalisation of Greek energy market • The liberalisation of energy market in Greece started at 19.2.2001, with Law 2773/99 that harmonised Greek legislation with Directive 96/92/EC • Regarding the liberalisation of electricity and natural gas markets significant legislative modifications took place in order to integrate EU Directives 2003/54/EC and 2003/55 EC in national legislation

  15. National targets regarding greenhouse gas emissions • 1997: Hellenic Action Plan for the Abatement of CO2 and other Greenhouse Gas Emissions (follow up of the United Nations Framework Convention on Climate Change) • 1998: in the context of EU policy on climate change agreed upon by the European Council of Ministers Greece’s target is that greenhouse gas emissions by 2008 - 2012 should not exceed an increase of 25% compared to 1990 levels • EU’s global target for 2008 - 2012 is to decrease greenhouse gas emissions by 8% compared to 1990 levels

  16. National measures adopted include: Increasing the use of natural gas in energy supply and demand sectors. Improvement of efficiency of lignite fired power plants Increase of Combined Heat and Power (CHP) plants capacity (high efficiency) Aggressive investment policy concerning direct support for renewables Intensive energy efficiency plan for the demand sector

  17. Target for RES • The national strategic target for Greece, regarding the share of RES in total gross electricity consumption, is specified in Law No 3468/2006 (art. 27/par. 9): up to 2010 this share should reach the level of 20,1% and up to 2020, the level of 29% (currently approx. 13%) • Relevant EU Directive 2001/77/EC • Ambitious but not unattainable target

  18. Legislative tools for RES • Electricity generation through RES was substantially started with Law 2244/94 and was continued with Law 2773/99that sets the rules for the liberalization of the electricity market • It previews that the Hellenic Transmission System Operator (HTSO) is obliged to give priority in purchasingelectrical energy produced by RES. The previously mentioned legal framework covers also the go-generation of heat and power (CHP). • In 2006, the new Law 3468/2006 affecting RES and high-efficiency CHP was introduced. The new law is very important because it simplifies and accelerates the procedures for the issuing of RES and CHP installation licenses. It provides also guaranteed feed-in tariffs for the electricity produced by those technologies.

  19. Main issues of legislation for RES • The Hellenic Transmission System Operator (HTSO) is obliged to grant priority access (priority in load dispatching) to RES electricity-producing installations and High Efficiency CHP plants, except from hydroelectric units where priority is given to small plants up to 15 MWe1. • The HTSO is obliged to enter into a 20-year Power Purchase Agreement (PPA) for the electricity produced by the independent RES-electricity producer. • Each RES-electricity producer is subjected to a special reciprocity charge (annual fee), of 3% of the producer's electricity sales to the grid. This charge is collected by the HTSO and is given to the Local Authority, within the area of which the RES generation unit operate, for the purpose of realising local development projects. • The RES-electricity production of an independent power producer or the surplus electricity production of a RES self-producer, is sold to the HTSO at a predetermined buy-back rate, which is fixed :…… 1This priority is given to all independent producers (independently from installed MW) and auto-producers up to 35 MW for the surplus of electrical energy that they might have and Provide to the TSO under the precondition that this surplus does not exceed 20% of their total el. generation, and up to 50.000 MWh

  20. The above prices concern all independent producers and auto-producers up to 35 MW for the surplus of electrical energy that sell to the TSO that does not exceed 20% of their total el. generation

  21. Flow chart of the RES licensing procedure

  22. Target for Energy Efficiency • Concerning Energy Efficiency the European Directive 2006/32/ΕC sets in countries-members, an indicative target of 9% of energy saving for the next 9 years and also obliges the countries-members to develop Energy Efficiency Action Plans. (in Greece under completion)

  23. Tools (legal, technical) for energy efficiency • In buildings: energy specifications and standards development, use of passive and active solar systems, appliance labeling and fuel diversification through the use of natural gas; Adoption of several EU Directives and issuing of several ministerial decisions concerning energy labeling, the awaited certification in buildings (to be completed very soon) • In industry, fuel substitution by natural gas and increase in cogeneration capacity (action plan for CHP prepared according the guidelines of EU Directive on CHP 2004/8/EC); • In transport: a series of measures has been adopted, with Law 3423/05 for the biofuels, the renewal of the fleet of old private use cars, and the improvement of the infrastructure of roads and public transports

  24. The new EU energy policy • At 8/9 March 2007, during the European Summit the EU Council approved a global energy action plan taking into consideration the proposal of European Commission for an Energy Policy for Europe • At the centre of the new European energy policy are by 2020three 20s and one 10: 20% decrease of ghg emissions compared to 1990 levels, 20% increase of energy efficiency,20% share of RES in energy mix, and 10% share of biofuels in energy mix of transports

  25. Financial instruments and economic incentives for energy investments • During the last decade several financial-support instruments are available for RES projects (with emphasis on renewable electricity production) that provide substantial public subsidies such as incentives for private investments for the Economic Development and the Regional Convergence under the so-called “National Development Law” (Nr. 2601/98 amended and supplemented by Law Nr. 3219/2004 and its amendments Laws No. 3470/2006 and No. 3522/2006)

  26. Development Law provisions For investment plans under the provisions of this Law, the following types of incentives are provided: a) Capital investment subsidy consisting by state grant of up to 40% in certain cases according to the project location and the size of corporation, for the coverage of part of expenses of investment plan b) Subsidy of leasing consisting of the coverage from banking funds part of the leasing instalments that is contracted for the acquisition of new mechanical and other equipment. c) Tax exemption of up to 100% or the total value of the subsided expenses of the investment plan or even the value of the leasing for the new mechanical and other equipment which are acquired. d) Subsidy of the employment cost created by the investment plan consisting by state coverage of the wage cost for two years of the new created posts e) Interest rate subsidy, granted by the Credit Guarantee Fund of Small and Very Small Enterprises (TEMPME) that has created 5 programs regarding short-term and/or medium-long term loans of operating or under establishment enterprises of any legal form (e.g. SA, Ltd, Individual)

  27. Financial instruments and economic incentives for energy investments • Incentives for EE and RES investment from the Structural EU and National Funds (3rd and 4th Community Support Frameworks – Operatinal Programme for Energy, and Operational Programme for Competitiveness). Mainly capital investment subsidies up to 50% of the total capital cost.

  28. Fiscal incentives for RES and energy saving in the domestic sector • According to the article 2 of the Law No. 3296/2004, in the reduction of expenses from the person’s taxable income is included “Percentage 20% of the expense either for the conversion of fuel installation using oil to natural gas or for new installation of natural gas, solar thermal and PV systems”. The sum that is subtracted cannot exceed 700 €.

  29. Thank you for the attention! Markos Damasiotis Head of Department of Development Project Studies Centre for Renewable Energy Sources 19th km Marathonos Ave., GR 19009 Pikermi Tel: +302106603325,300 Fax: +302106603301

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