“The main benefits of nanogrids for Cypriot consumers is to provide cheaper and cleaner electricity from renewables, and improved self-consumption from renewable technologies such as solar,” says Georghiou.

He adds that nanogrids offer several other potential benefits.

Georghiou’s remarks underscore why the University of Cyprus pilot project matters for the research community , the PV sector, and smart energy technologies. Nevertheless, its practical applicability in Cyprus is currently limited. The country has only partially liberalized its electricity sector in recent years, primarily for industrial users.

Competition remains absent in the residential market, and there is no ancillary market. Despite government statements promising full liberalization and competitiveness in the electricity market next year, such assertions have been made for several years, leading to skepticism about the government's intentions.

From pv magazine 07-08/23

The data relating to the curtailment of renewable energy in Cyprus during last year and this make for stark reading. The nation’s grid operator curtailed a daily average of 21% of the clean power generated during the first four months of this year, up from a daily average of 3.35% during the same period in 2022.

State-owned utility the Electricity Authority of Cyprus (EAC) has published curtailment data for both years, providing dates, starting and ending times for when curtailment took place, and the total volume of energy generated in the days when excess power was curtailed. pv magazine has used EAC’s data to create the chart below, which depicts the power generation curtailed.

Clean energy curtailment reached 70% on some days between January 1 and the end of April.

Causes of curtailment

Cypriot renewable energy expert Andreas Procopiou confirmed the validity of pv magazine’s figures and attempted to explain the reasons behind the steep year-on-year increase in curtailment.

“The increase in solar photovoltaic installations, from 342 MW of installed solar photovoltaic capacity in April last year to 476 MW of solar capacity in April 2023 is significant for a small, island country like ours,” says Procopiou – who has previously explored how to increase solar generation in the UK and Australia.

“To provide a deeper understanding, I have graphically represented the data obtained from the Cypriot transmission system operator, illustrating the extent to which renewable energy sources have contributed to the island’s electricity demand during each month,” he says, referring to the chart below.

“The graph shows that the contribution of solar power to the electricity needs of the island grew in the first months of 2023 compared to last year. Still, the penetration of renewable energy in the Cypriot power mix remains relatively low and doesn’t justify, alone, the skyrocketing of power curtailment.”

The main reason, says Procopiou, is that the Cypriot grid today is a reflection of the past and lacks investment in modern infrastructure such as new electricity lines and energy storage. “The government is actively promoting the use of liquefied natural gas (LNG) as a mid-term solution to lower electricity costs,” he adds.

“However, the implementation of these plans, whether through domestic LNG resources or imports, is unlikely to occur before 2028, under the most favourable circumstances. By that time, the EU will already be in the process of gradually transitioning away from gas for electrification. Considering these factors, it’s unlikely that there will be a significant drop in costs.”

“The government is also putting faith in the upcoming electricity interconnection between Greece, Cyprus, and Israel, which is, of course, a very positive development and one that will boost the renewable energy penetration in our island. But the, so-called EuroAsia Interconnector is still a few years away and Cyprus needs to also enable local energy management solutions, especially energy storage.”

Time for storage

“Energy storage in particular is crucial for Cyprus and other islands to increase the use of renewable energy,” adds Procopiou. “The lack of interconnections and the unpredictable nature of renewable sources like solar and wind pose challenges to the electricity system, leading to a reliance on stable, fossil fuel-generated electricity. However, energy storage can help mitigate the uncertainties of renewable generation by acting as a buffer. Without energy storage, the full potential of renewable energy in Cyprus will not be realized, and electricity costs will remain high due to the continued dependence on fossil fuels.”

To date, Cyprus does not have any utility scale energy storage installations. In January last year, the government said it was considering running auctions for the installation of systems combining renewable energy and storage.

Furthermore, in 2022 the Cyprus Ministry of Energy, Commerce and Industry reported that it had designed the auctions scheme and had sent it to the EU for approval. In June, Cypriot energy minister Giorgos Papanastasiou revealed the country has secured €40 million ($43.6 million) for the financing of energy storage systems, via the EU’s post-Covid recovery plan. However, no other progress towards auctioning energy storage appears to have been made. The government does not appear to be in a hurry to install storage.

Meanwhile, as the recent data show, the curtailment of renewable electricity is becoming a pressing problem. The EAC says that “according to the transmission and distribution grid code in force, the Cyprus Transmission System Operator and/or the distribution system operator reserve the right to limit (at any time and without restriction) the renewable energy fed into the transmission, or into the distribution system, in order to safeguard the stable and safe operation of the Cyprus electric system.”

The curtailment problem may lessen during the current season, explains Procopiou. Solar power generation increases significantly in the summer months but demand for energy also increases substantially due to the use of air-conditioners. This combination might lead to less renewable power curtailment through September but the problem will become pressing again from the autumn onwards, argues the solar expert. Renewable power investors do not receive financial compensation for curtailed electricity and high curtailment figures make the renewable energy business uneconomic to run.

Impact on installations

The Cypriot transmission and distribution network operators in January jointly wrote to the then energy minister Natasa Pilides asking for the immediate halt of new net-metered installations in households, citing imminent danger to the stability of the electricity grid. Pilides refused, arguing that this was an “unacceptable, unbelievable, and frustrating” proposal by the network operators.

Pilides argued that household net metering installations are a means to fight energy poverty and alleviate high electricity bills. She also suggested a preference for curtailing the power generation of large energy producers. Her argument was that large renewable energy plants sell power at high prices, making substantial profits, which would enable them to shoulder curtailment.

The election in February of new president Nikos Christodoulides led to a new government, including the appointment of Papanastasiou as energy minister. The newly installed minister had previously spent decades in the fossil fuel industry, including 26 years with BP and more than a decade leading a team in Cyprus aiming to construct and operate an oil storage terminal on the island. During his first months at the ministry, Papanastasiou has been a passionate supporter of natural gas.

Renewables industry insider Procopiou insists the island is not short of renewable energy experts across different disciplines. It remains to be seen which arguments will prevail in the island nation: an outdated reliance on fossil fuels or the shift to a modern, smart, green energy system.

Greece’s energy storage program will draw €341 million ($372.3 million) from the European Union’s post-pandemic recovery fund, which was approved last year by the European Commission.

The program’s first and second tenders will focus on standalone energy storage projects connected to the Greek electricity transmission network. The tenders exclude the island network of Crete, which was linked to Greece’s mainland power grid in 2021.

Capex support

Greece's subsidy support for winning energy storage projects in the upcoming tenders is generous.

During the construction phase, all winning projects will receive a one-time payment of €200,000 per MW, which serves as a capital expenditure subsidy. Market sources suggest that this subsidy can cover approximately 40% of the battery project's construction costs at current prices.

In addition, winning projects will be granted contracts for difference (CfDs) that guarantee a certain income for 10 years. The CfD prices will be determined through the tenders. For the first energy storage auction, the regulator has set a capped CfD price of €115,000 per MW per year.

As a result, winning projects must participate in the energy market, such as Greece's wholesale electricity trading and secondary balancing services market. Each year, the government will assess the projects' market earnings. If the earnings are lower than the CfD price, investors will receive a top-up payment to bridge the difference. Conversely, if the earnings exceed the CfD price, the surplus must be returned to the state.

Energy storage projects participating in Greece's program are prohibited from engaging in the energy derivatives market and are unable to enter power purchase agreements (PPAs) with private investors.

Tender rules

To qualify for Greece's energy storage tenders, projects must possess an energy storage license, ensure a minimum 2-hour capacity duration, provide a minimum 1 MW injection capacity, and commence construction after a tender concludes.

The regulator has implemented rules to ensure competitiveness. The tender's subscription rule is set at 100%, meaning that at least 800 MW of energy storage capacity must compete for selection to award 400 MW of capacity. This rule maintains the auction's competitiveness, according to the regulator.

Each tender must include a minimum of four independent participants with no business ties. Additionally, a participant cannot bid for more than 25% of the energy storage capacity offered in the auction. In Greece's energy storage program, a participant is limited to a maximum of 100 MW in the combined first and second tenders.

Tender participants face strict financial requirements, limiting bids to major players. Qualified participants must provide the regulator with three letters of guarantee from banks and financial institutions, demonstrating financial robustness: participation letter of guarantee (€35,000/MW), letter of guarantee for timely business performance (€250,000/MW), and letter of guarantee for quality operation (€200,000/MW). An application fee of €2,500 per submission to the regulator is also applicable.

Germany’s RWE and Greek state-owned utility PPC are currently building five solar farms totaling 210 MW at a former lignite mine in Greece’s Macedonia region. The plants will be operational by the end of the first quarter of 2024.

The PPAs mark a new beginning for the Greek energy market, given they are to be developed subsidy-free. This segment of the Greek solar market is still in its infancy. In the initial years of renewable energy development, renewable power plants were remunerated based on feed-in tariffs. Greece later moved to renewable energy remuneration via premium tariffs, set competitively via auctions. But the RWE-PPC joint venture is Greece’s boldest and most mature move towards subsidy-free energy to date.

By the end of 2020, Lebanon fell short of its national target of 100 MW for solar capacity, reaching a cumulative total of 89.84 MW. This shortfall reflected the bleak state of the solar sector, mirroring the overall economic downturn.

By February this year, the Lebanese currency had lost more than 98% of its pre-crisis value. In May, the World Bank said “the systemic failure of Lebanon’s banking system and the collapse of the currency have induced a pervasive dollarized cash economy estimated at almost half of GDP in 2022.” The growing dollarized economy – at about $9.9 billion in 2022, almost half the size of the Lebanese economy – is a major impediment to economic recovery, it added.

Having said that, about a year ago Lebanon’s Banque De L’Habitat started rolling out a new scheme to provide loans to help Lebanese households buy and install solar systems. The scheme is running with technical assistance by the LCEC. Ayoub said there are currently discussions initiated by international financing institutions such as the World Bank, the European Bank for Reconstruction and Development and the European Union, to channel new financing to the rooftop PV sector, but these “are yet to materialize due to the accompanying risks the macroeconomic context of the country currently entails.”

The Lebanese rooftop PV boom is a sign that people want to maintain basic living standards and keep their households and businesses running. The country is in dire need of political reform, which also includes the energy sector.

Lebanon’s Ministry of Energy and Water has signed PPAs for 165 MW of solar it selected in a PV tender that was launched several years ago. The process to tender 180 MW of PV capacity spread across 12 projects started several years ago, and initially attracted 42 applications.

In 2019, the ministry published a shortlist of 28 applicants. Last year, the government issued licenses to 11 successful projects, spread across four main regions: Bekaa (including the provinces of Bekaa and Baalbek-Hermel), Mount Lebanon, South (the provinces of South Lebanon and Nabatiyeh), and North (including North Lebanon and Akkar).

The tender design allowed the government to negotiate different tariffs for each of the four tender regions. For Bekaa specifically, which is the sunniest of the four regions, one investor bid $0.057/kWh, so all three 15 MW farms had to accept that tariff. Projects in the other three regions will receive a tariff of $0.0627/kWh, valid for 25 years from their commercial operation dates.

These prices have been known since 2021, “but may be changed down the road,” Gabriel De Lastours, the regional head of the European Bank for Reconstruction and Development (EBRD), told pv magazine.

The lengthy tender process is mainly attributed to Lebanon's severe and persistent financial and political crisis, raising doubts about the bankability of the 11 recently signed power purchase agreements (PPAs) and the ability of investors to achieve financial closure.

“The availability of international debt financing will depend on the implementation of structural reforms,” commented De Lastours, adding that “we [the EBRD] believe that the sovereign risk will remain a challenge.”

De Lastours mentioned that the bank is collaborating with the government and stakeholders from all sectors to create an innovative framework that tackles the heightened sovereign risk associated with the power purchase agreements (PPAs). Despite this, he emphasized that the recent signing of the 11 PPAs is a significant achievement, as it builds upon successful regional examples and the extensive efforts of the Ministry of Energy, supported by international experts and financial institutions like the EBRD, during the 2017-2020 period for wind projects.

Building upon the 20-year PPAs signed in 2018 for three wind farms in Akkar with a combined capacity of 226 MW, De Lastours expressed the EBRD's commitment to collaborating with the Lebanese government in enhancing the bankability of the PPAs.

Lebanon aims to source 30% of its electricity and heat from renewable sources by 2030, and the recent signing of the 11 solar PPAs marks the country's initial foray into utility-scale solar development.

PPC Renewables, the green energy unit of PPC, has won a tender to build a 3.5 MW solar project and a 5 MW/10 MWh battery system in Astypalaia, Greece.

Astypalaia, an island in the Aegean Sea, has attracted attention in recent years because Volkswagen has selected it as a testbed for its smart mobility pilots. The German automaker and the Greek government launched a pilot project in 2021 to offer smart mobility services such as ride-sharing and car-sharing, based on electric vehicles. The smart mobility pilot will run for at least six years.

Critics have said that the island, which is home to about 1,500 permanent residents, still draws most of its electricity from diesel generators. However, that is now set to change.

PPC Renewables Chief Executive Konstantinos Mavros told pv magazine that construction of the solar-plus-storage plant is expected to start in about six months. The system will be fully operational in about 20 months and will cover half of Astypalaia’s electricity needs. Existing diesel generators will remain in place to power the rest of the island.

Mavros said that PPC Renewables is committed to expanding the hybrid project in about three to four years, to cover more than 80% of the island’s electricity needs. However, Astypalaia is not the only Greek island that is transitioning to a green and smart energy future. pv magazine recently presented a list of smart projects currently operating on the Greek isles of Naxos, Halki and Tilos, for example.

In 2021, the Greek government launched the “Gr-Eco Islands Initiative,” which aims to deploy green tech in the Aegean Sea archipelago. The initiative includes a broad map of intended sustainable actions and a €100 million ($99 million) investment pot, but the government has not published a policy framework yet that actually translates this initiative into a concrete set of policies and schemes. 

Transitioning to renewable energy, especially on small islands that are not linked to Greece’s mainland grid, is a key priority. But it is not just for environmental reasons, as generating electricity via diesel generators cost Greece millions of euros every year. All Greek electricity consumers pay for this via subsidies that could easily be phased out or significantly be eliminated via systems of renewable energy.

From April, Greek households and farmers will be able to apply for public pandemic recovery funds to cover the purchase and installation of small PV arrays and energy storage systems, according to a recent statement by Greek Energy Minister Kostas Skrekas. Households will be able to obtain up to €16,000 each, while farmers can request up to €10,000 to cover such costs, said Skrekas, noting that the incentives will vary according to considerations such as capacity and the income levels of applicants.

Households and farming operations can install up to 10.8 kW of PV capacity and 10.8 kWh of battery storage. For residential users, battery installations will be considered mandatory, and must not have less capacity less than the photovoltaic arrays. However, farmers applying for subsidies will be free to decide on their own whether they wish to install batteries.

Rooftop and ground-mounted systems will be eligible for the subsidies. The program will also cover summer homes, but each applicant can claim funds for just one residential installation.

Greece’s new solar-plus-storage scheme has a €200 million budget, which stems from the country’s post-pandemic recovery plan. Of this, €35 million of funds are for vulnerable households facing energy poverty. About €85 million will be allocated to families with annual incomes up to €40,000 and single-person households with annual incomes up to €20,000. Families with annual incomes higher than €40,000, or individuals with incomes higher than €20,000 will claim funds from a €50 million subsidy pot. In addition, the government has established a separate €30 million subsidy pot for farmers.

The new scheme can cover between 20% to 65% of PV system costs, depending on the subsidy pot. For batteries, the first two subsidy pots will cover 100% of battery purchases and installation. The third and fourth subsidy pots will cover 90% of the battery costs. There is also a 10% subsidy bonus for disabled Greeks, single-parent families, and families with many children.

The subsidy levels show that the government is very keen on battery installations. One of the main reasons for this is the grid’s struggle to accommodate new renewable power capacity.

Greece’s distribution grid operator, Hedno, has stopped accepting new requests to connect plants to its network since last year, and this is not set to change any time soon. The only exceptions to this are net-metering installations, for which Hedno has freed up about 2 GW of grid space. The 2 GW of grid space is available for small PV systems up to 10 kW in size, and will be offered on a first-come, first-served basis. About 40& of this will be offered to residential net-metering systems, while 30% of it will be given to small commercial PV systems. The remaining 30% will be allocated to agricultural PV projects.

Another reason for the scheme’s lavish support for batteries is the government’s aim to maximize the self-consumption element of net-metered systems. Solar-plus-battery systems will only be able to inject power to the grid when both the site consumption and the charging of the battery are met. Similarly, the government says if a solar system does not generate enough power to cover a site’s needs, the user will only be able to buy power from the grid when the battery is empty. All solar-plus-storage systems supported by the new subsidy scheme will be obliged to operate under this business model for the first five years.

According to preliminary figures made available to pv magazine by the Hellenic Association of Photovoltaic Companies (Helapco), Greece connected 1. 36 GW of new PV capacity to the grid in 2022. Of this, 341.5 MW was connected to Greece’s transmission grid and about 1020 MW was connected to Greece’s distribution grids. 

These figures are preliminary because Greece is yet to officially announce the number of its new PV deployments for 2022. The nation's renewable energy sources operator, Dapeep, has only published data covering the period until the end of September 2022. Dapeep’s data show that Greece installed 932 MW of new photovoltaic capacity in the first three quarters of last year, but does not include installations under net metering, which are announced separately by the country’s distribution grid operator Hedno.

Helapco's more complete statistical look at the PV market shows that net-metered systems comprise only a small fraction of the 1.36 GW of newly installed solar. 

Indeed, according to Helapco, Greece’s mainland grid connected 109.4 MW of net-metered PV, while Greece’s small isles, which operate stand-alone networks, added a further 1.4 MW of net-metered PV capacity. Interestingly, 5.4 MW of the net-metering capacity installed in 2022 on the mainland grid comprises virtual net metering systems.

Given the fact that commercial net-metered system installations more than doubled that of residential systems, the Greek government wants to boost the residential segment by introducing a new generous rebate scheme aiming specifically at residential solar-plus-storage. The government said the new scheme will be published shortly, possibly before the end of March, 2023.

Fixed tariffs continue driving growth

The newly installed PV capacity for 2022 is at least three times more than the 422 MW of new photovoltaics added in 2021. It comprises systems awarded premium tariffs via competitive tenders, small solar farms up to 500 kW that are entitled to feed-in tariffs, and net metered systems.

Helapco said that of the new systems connected to the grid, 200 or about 20 MW are connected to low voltage, 1,602 systems or about 890 MW are connected to medium voltage. and about 341.5 MW are linked to high voltage.  

]]> https://www.pv-magazine.com/2023/03/13/greece-deployed-1-36-gw-of-new-solar-in-2022/feed/ 3 207477 https://www.pv-magazine.com/2023/03/01/greece-struggling-to-connect-1-gw-of-installed-pv-to-grid/ https://www.pv-magazine.com/2023/03/01/greece-struggling-to-connect-1-gw-of-installed-pv-to-grid/#comments Wed, 01 Mar 2023 08:30:18 +0000 https://www.pv-magazine.com/?p=205839 Pospief, the association of solar producers in Greece, says that about 1 GW of installed PV projects are still waiting to connect to the grid. The Greek distribution system is unable to accommodate new, small-scale PV capacity, aside from net-metering projects.

Greece’s licensing policies are theoretically robust, with set deadlines to be respected by state institutions and renewable energy investors. New legislation (Law 4951/2022) is designed to expedite the licensing process for renewables even more, so green projects can be fully licensed within about a year.

A clear process applies to small-scale solar farms that need to connect to the grid. Investors start by applying for a grid-connection license from Greece’s distribution grid operator, HEDNO. The application must include guarantee letters from financial institutions.

If a grid-connection request is fully documented, HEDNO issues a preliminary license within four months, detailing all terms and conditions of the contract. Investors then have two months to accept or reject these terms and conditions. If the investor agrees, HEDNO will sign a final grid-connection agreement within four months, allowing the project to connect to the grid.

However, Pospief General Secretary Petros Tsikouras told pv magazine that these time scales have never been respected by HEDNO. He noted that it often takes up to 12 months to process grid-connection requests, even though it is supposed to do so within four months, for example.

Tsikouras said the situation becomes even worse toward the end of the process, after investors have accepted the terms and conditions of the license, when a project is fully built and the grid connection is still pending. HEDNO is usually slow, so investors are left with various financial burdens, such as bank loans, for several months. Meanwhile, their completed solar projects remain offline, generating no income.

Tsikouras said these final delays in particular could be easily be resolved if the Greek government stopped protecting HEDNO’s role in the grid-connection process for new projects. Given HEDNO’s failure to comply with the set time frames, Pospief is calling for investors to be allowed to build their own grid-connection lines. However, the Greek government confirmed HEDNO's complete monopoly on issues related to grid connections in 2020.

“HEDNO typically subcontracts construction companies who connect our solar farms to the grid,” said Tsikouras. “But they are unable to do so in a timely manner while this monopoly runs contrary to the free economy credentials that the government says it promotes.”

Built projects below 500 kW in size that wait to connect to the grid are often in danger of losing the stable feed-in tariff (FIT) rates that Greece provides, as pv magazine has previously reported. Tsikouras said that small PV plants were able to secure stable FITs by Dec. 31, 2022, as long as they were connected to the grid within set deadlines. However, HEDNO was often unable to connect such projects to the grid in a timely manner, so the government came to the rescue by allowing offline projects to retain their FIT rates if they could prove they were built on time, added Tsikouras.

Apart from net-metered arrays and community energy projects, the small-scale PV segment in Greece is about to die, said Tsikouras. The current government and the previous administration did nothing to expand grid infrastructure for renewable energy. There is little available grid capacity now for additional small-scale plants, other than ones that were already licensed and awaiting grid connection.

HEDNO does not even accept new requests to connect plants to the grid and this is not set to change any time soon. The only exceptions to this are net-metering installations and community energy projects, for which HEDNO has freed up about 2.5 GW of grid space. The transmission system operator has also set aside grid space to connect large utility-scale projects.

However, Tsikouras said that developers and investors have been calling for the expansion of the grid for years, yet the government has never listened. Unless grid operators expand their grid infrastructure soon, renewable energy will not expand in any meaningful way in Greece. Energy storage technologies could provide alternative solutions, but the government’s plan to run energy storage tenders in 2021 failed. The country is not expected to launch new storage tenders before the end of this year, either.

It’s a rainy day in Athens with regular thunderstorms. Yet, Germany’s RWE and Greece’s PPC electric utilities have made their first step towards the development of a 2 GW photovoltaic pipeline that aims to tap into Greece’s rich solar resources.

The EIB has revealed plans to provide €28.5 million of financing to Greek state-owned utility PPC. The EIB said the funds will reach a maximum of €35 million in the months ahead, which PPC Renewables, the renewables unit of the PPC, will spend on the construction of three solar farms, totaling 230 MW.

The EIB financing comprises “part of a €102.4 million project finance debt package comprising of €95.1 million long term facilities and €7.3 million medium term construction VAT financing,” the bank said in a press release. Specifically, the EIB, which is the European Union’s financing entity, worked together with Greece’s Eurobank and National Bank of Greece, which together provided 70% of the long-term facilities and 100% of the medium-term VAT financing.

The EIB’s loan stems from the InvestEU program, which brings all EU financial instruments together under one roof, to improve the financing of green projects in a timely, efficient manner. As such, the loan is backed by an EU budget guarantee of €26.2 billion.

In 2021, the EIB had also signed an agreement with the Greek finance ministry to help manage up to €5 billion as part of Greece’s implementation of the national recovery and resilience plan, which is the EU’s post-pandemic recovery plan. The bank has said the loan is supporting three solar farms totaling 230 MW. pv magazine understands this is a cluster featuring a 200 MW solar park alongside two smaller solar farms, each with 15 MW of capacity, in Ptolemaida, a mining region.

The three projects are referred to separately because they have won separate contracts in Greece’s previous rounds of renewable energy tenders. Thus, the 200 MW project won a tariff of €0.04911/kWh in a tender held in 2020 and the two smaller projects were also awarded contracts in separate tenders.

PPC Renewables Chief Executive Konstantinos Mavros told pv magazine that the two smaller projects totaling 30 MW were connected to the grid in March, while the larger 200 MW project will be connected to the grid within the next 60 to 90 days.

Israel introduced a new electricity pricing policy from Jan. 1 that stops fixed prices for large electricity consumers, which means higher evening prices for Israeli companies. Residential consumers, meanwhile, have been given the option of choosing between a fixed single tariff or a variable tariff based on the time of electricity use; thus far, very few have chosen the variable tariff.

Eitan Parnass, the founder and director of the Green Energy Association of Israel, told pv magazine that the new regulation “will push storage economics.” It will encourage commercial consumers to store self-generated solar power at noon, when electricity tariffs are low, and use it or even trade it in the evening, when retail prices are higher.

This will more naturally concern net-metering users. Feed-in tariff (FIT) contracts in Israel have a duration of 25 years, offering long-term financial stability for rooftop FIT systems. However, net-metered users will see their income plunge in the new year unless they manage to combine their projects with behind-the-meter storage units, to shift the time of use of their self-generated power.

The Israeli government recently scrapped the net-metering scheme for new systems, so the owners of about 380 MW of installed net-metered solar capacity will have to explore new options. In fact, this is already happening with a number of shopping malls, factories, and electric vehicle stations, as big consumers have started looking into arbitrage storage system solutions.

Market liberalization

On Jan. 1, a new regulation was enacted to allow the establishment of new electric utilities without their own generation assets, as long as they buy electricity from fossil fuel generators. However, new utilities will also be able to purchase green electricity from Jan. 1, 2024.

Opening the market to retailers without their own generation assets is the result of Israel's 2018 electricity market reforms, said Parnass. The reforms aim to liberalize the electricity sector and facilitate competition between electricity generators and electricity retailers.

As part of those reforms, about half of the generation assets of state-owned Israel Electric Corp. (IEC) were sold to private investors. Until the end of last year, Israeli consumers could buy electricity from the IEC or other independent power generators (mainly gas generators). But the government hopes the new policy changes introduced in 2023 and 2024 will encourage new utilities to enter the market, regardless of whether they own generation assets.

It is clear that Israel’s electricity market is belatedly undergoing structural changes, and one of these changes relates to the fuel mix. According to the 2018 reforms, coal production will cease at the end of 2025, so it can be replaced by natural gas and renewable energy. Israel has plenty of domestic gas and solar resources. On this basis, the government aims to generate 70% of its electricity from gas by 2030 and the remaining 30% from green sources such as photovoltaics, supported by 10 GWh of energy storage.

It is under these strategic parameters that Israel’s Electricity Authority launched competitive tenders in 2020 for the procurement of new solar-plus-storage capacity. It awarded about 777 MW of PV capacity alongside four-hour battery systems. Shai Baharav, co-founder of the Israeli storage supplier and developer BLEnergy, told pv magazine in November that about 400 MWh of battery storage will be installed in the next few months at these sites, along with 2.5 GWh in the next two to three years.

The key priority for Israel is to establish a clear energy storage policy framework that allows front-of-the-meter and behind-the-meter storage projects. However, the market for grid ancillary services is non-existent, for example.

From pv magazine 12/2022

Israel’s solar sector started in earnest in 2008 with the introduction of a feed-in tariff (FIT). Since then the country has embarked on several policy changes concerning the allocation and remuneration of PV. The nation runs regular tenders for utility scale solar and the rooftop segment is also catching the eye.

Israel is a small nation with land-shortage issues, but developers seeking ground-mounted project opportunities are also handicapped by the fact that most of the population is concentrated in a central belt, where prices are very high. While the government is investing in ambitious plans for agrivoltaics, agricultural and commercial activity further restricts the number of solar sites available.

Despite the lack of space, Israel has a goal of generating 30% of its electricity from renewables by 2030. And given that wind power is limited, that largely means solar. With policymakers, industry associations, and business agreeing on the need for dual-use deployment, rooftop solar offers a neat solution as part of the puzzle.

A good FIT

Whereas other nations have phased out fixed payments for solar, Israel’s rooftop FIT remains. The FIT payments have a duration of 25 years and are currently the main force supporting Israel’s rooftop PV segment. Last year, rooftop arrays with a generation capacity of up to 200 kW (AC) qualified for FITs. This year that rule changed to permit only systems up to 100 kW to bank the €0.12 ($0.12)/kWh payment, although owners of systems up to 300 kW can still receive a reduced tariff. Those sky-high property prices in the central belt also prompted a recent move to offer an additional, top-up payment of €0.014/kWh for sub-100 kW systems in such locations.

The current embrace of FITs was not always the case. In fact, the government had previously halted the FIT scheme, replacing it with a net metering program that ran from 2013 to 2018. But the government has now scrapped the net-metering program, re-introducing FITs. During its rollout, the net-metering program drove around 380 MW of largely rooftop generation capacity – although floating solar plants and at least one big ground-mounted system operated under the payment regime.

Nir Zohar, sales director at Israeli solar module cleaning company RST CleanTech, says the net metering system was attractive for factories and energy users with similar consumption profiles and high bills. For everyone else, Zohar says, FITs are better.

With the nation undergoing electricity sector reform since 2018, the popular net metering scheme fell out of favor because it was seen as distorting the market, explains Eitan Parnass, founder and director of Israel’s Green Energy Association. As part of the reforms, large electricity users will cease to pay a fixed price for power from Jan. 1, with big consumers paying higher evening prices when there is no solar energy generation.

Variable pricing will hit owners of net-metered sites who will receive lower tariffs when they are generating and have to pay more for power at other times. That could reduce income by up to 40% for such investors, says Parnass, who indicated the government is considering a compensation mechanism.

Local opportunity

The lack of net-metering, though, has failed to stem rooftop installations, as RST CleanTech CEO Roy Sade explains. He previously worked for an Israeli PV developer and says municipalities were, and continue to be, big installers of rooftop solar, thanks to the FIT. Tel Aviv municipal government’s solar rooftops, for example, earn the city around $300,000 per month, says Sade.

It was working with municipalities that gave Sade the idea to start his panel cleaning company, after an enquiry from a high school where a student had slipped on water pooling in the yard – and claimed for injury – the result of an array being cleaned with a hose. The school asked about automated cleaning systems.

With panel makers stipulating warranty requirements, modules should not be cleaned during the day when they are hot and generating power, and with high-pressure cleaning is also prohibited, Sade came up with an automated cleaning system installed on the panels.

RST CleanTech began in 2011, with a pilot system on Sade’s roof. The technology was launched in 2013 and the business now cleans more than 2.5 million panels – 2 GW of generation capacity – worldwide. Cleantech has subsidiaries in Spain, Morocco, Brazil, Chile, and California, with plans for a presence in India.

The company cleans around half of Israel’s rooftop panels, it claims its cleaning solution increases the panels’ energy generation by up to 30% and also has a thriving floating-solar cleaning operation at reservoir sites.

Wastewater channeled into reservoirs met around two-thirds of the water needs of Israel’s agriculture last year and having panels over the bodies of water reduces evaporation. RST’s system often uses reservoir water to clean panels – at low pressure and at night – before returning the liquid back to the reservoir.

Apart from presenting a strong business case, floating PV on Israel’s water reservoirs is also thriving due to the country’s highly congested electricity grid. Reservoirs use electricity to pump water but most often there are no other electricity users near the reservoirs, hence the availability of grid space to connect floating solar, explains Sade.

Energy storage

While Israeli cleantech companies have enjoyed success in foreign markets, the nation is about 10 years behind Western peers when it comes to energy storage deployment, according to Tal Mund, CEO of Israeli storage supplier and developer BLEnergy.

That is chiefly down to weak regulation, says Mund, as well as sluggish liberalization of the electricity sector, which only started in 2018. Private investors own almost half of the nation’s generation capacity and the electric transmission system operator is state-owned, even if its management operates separately from its national parent utility.

Opening up power generation took about 15 years, says Mund, delaying the diffusion of new ideas and technology onto the market.

Mund appears hopeful, though, that change is imminent and he backs up the idea by referring to a new development plan published a few weeks ago by Noga, Israel’s transmission system operator. This strategy calls for Israel to install 10 GWh of energy storage capacity in order to reach that 2030 goal of generating 30% of electricity from renewables.

Israel’s grid is highly congested and the only way for the country to reach its target is through the widespread deployment of energy storage systems that support the grid, according to Mund. The country, however, does not have a robust energy storage framework that would enable such investment at present and the market for grid ancillary services is non-existent.

“We would like to see competitive tenders in Israel for energy storage projects located in front of the meter that would offer grid services and receive payment for the times they are available to serve the grid,” Mund tells pv magazine. He appears optimistic that such tenders are imminent and, returning to the plans announced by Noga, believes Israel could see the first tender for front-of-meter storage systems within the next six months.

Meanwhile, Israel has already tendered new solar capacity to be installed alongside four-hour, behind-the-meter battery systems. Shai Baharav, co-founder at BLEnergy, says that from these solar-plus-storage tenders, Israel is expected to install around 400 MWh of battery storage capacity in the next few months, and a total of 2.5 GWh in the next two to three years. “The implementation of these projects has been slow because there was not enough grid space to connect the PV capacity,” he says. “And perhaps some of this delay is also due to the high costs of the batteries.”

BLEnergy has signed a deal to supply the components for 200 MWh of battery storage as part of the solar-plus-storage tender and it also works on around 100 MWh of other behind-the-meter storage projects, for various types of customer such as shopping malls, factories and electric vehicle (EV) charging stations. The use of these 100 MWh worth of systems varies according to the needs of the customer but they are mostly based on the arbitrage business model of purchasing off-peak power and storing it for release at peak times for a higher return.

Blilious Group is BLEnergy’s parent company and it has entered Israel’s public transportation business. It also has a hand in the EV market and is developing a battery project to support a charging station for 60 electric buses that belong to its parent, and which received a grid connection only a few months ago.

Kibbutzim innovation

The central principle of Israel’s kibbutzim – co-operative, self-sufficient agricultural communities centered on common work and profit-sharing – fits well with the idea of “prosumer” electricity generation and consumption. Kibbutzim function as an ecosystem for Israeli innovation and, having grown in scale since their origins, many now operate their own mini-grids and generate their own electricity to be traded within their small, internal electricity markets. Many kibbutzim are RST Cleantech clients, indeed Noga’s recent development plan refers specifically to the storage systems of such communities, and BLEnergy supplied the components for Israel’s first battery system, which is installed in a kibbutz. The storage company is now working together with many kibbutzim to install more behind-the-meter battery systems.

The kibbutzim mini-grids are becoming sophisticated because their communities are eager adopters of PV and often cannot install as many solar systems as they would like because their networks are congested. As a result, they are interested in adopting energy storage solutions. “Kibbutzim also have – or try to acquire – the knowledge to run the battery systems alone,” says BLEnergy’s Baharav. “Often, they train members of their communities to do this while some choose to let firms outside their communities manage these systems separately or together with them. A few kibbutzim also unite to form common electricity entities that they run together. Our work with them is a main component of our business today.”

A decade ago Israel’s electricity market was entirely centralized and dominated by a single utility, which is to say, a monopoly. But as Baharav explains, “in the last two or three years, everybody talks about the movement from a centralized to a decentralized energy system and we are just starting to see this change materializing.”

The author traveled to Israel as a guest of RST CleanTech.

Amazon Web Services has launched a pilot “smart island” project on the Greek island of Naxos. It aims to offer digital services on the island in cooperation with 20 domestic and foreign companies and the support of the Greek government.

In a press release, Amazon Web Services said that “existing infrastructure such as the local marina, the energy grid, and water management systems will be upgraded through internet of things (IoT) solutions and smart infrastructure management systems.” Naxos has about 22,000 permanent residents, but it hosts more than 130,000 tourists during the summer.

However, “sustainable energy” is missing from the current list of actions on the island. At present, the project mainly aims to change the transport of goods. The only exception to this is a number of electric-vehicle chargers installed on the island in collaboration with Greece's Eunice Energy Group.

Pilot project

Volkswagen, meanwhile, has launched a smart mobility pilot project on the Greek island of Astypalaia. The German automotive giant is using the island as a testbed for its mobility business model. It has replaced public vehicles with EVs, and in cooperation with the Greek government, is helping inhabitants to replace their private cars with electric models. It is also running a car-sharing service based on a fully electric fleet powered by renewables. 

Volkswagen and the Greek government first agreed to cooperate in November 2020. They launched the pilot the following year, with plans to run it for at least six years. In June, Volkswagen said it had started operating a ride-sharing service and a vehicle-sharing service using electric vehicles. It also started running a second solar system to power EVs.

In 2026, Astypalaia will switch to smart, sustainable mobility and a modern energy system. At the moment, the island – which home to about 1,500 permanent residents – gets most of its electricity from diesel generators.

Separately, the Greek government launched the Halki project in 2021. It features a 1 MW solar array, electric vehicles, and a 5G telecoms network on the island of Halki, which has about 500 permanent residents. The 1 MW solar array is the first operational green energy community project in the Greek islands. It operates under the country’s virtual net metering scheme.

What was striking about this project is that all hardware – the solar panels, the EV fleet, the chargers, 5G network, for example – was donated to the local community by Greek and foreign companies. The energy community, which is the owner of the project, is therefore receiving free electricity and various smart services.

Innovative initiative

However, the small island of Tilos is running Greece’s most innovative electricity project to date. The Tilos energy storage project features a smart microgrid, a 160 kW solar array, an 800 kW wind turbine, and two 1.44 MWh/400 kW battery systems. The island is connected via a subsea cable to the nearby island of Kos. Together with other neighboring islands – Kalymnos, Nisyros and Leros – they form a standalone electricity network, independent of the mainland Greek grid.

The Tilos microgrid and smart platform, which is owned by Eunice Energy Group, calculates the output of its generation units, as well as the stored energy and individual end-consumer loads at all times. It deploys demand-side management techniques at the local, end-user, and aggregator levels, facilitating higher renewables penetration, better operations, and grid-supporting services.

Therefore, using a number of smart devices, software and strategies, Tilos – which is home to about 800 people – is able to eliminate power blackouts, while also supporting the local independent grid. The Greek government released a comprehensive energy storage policy framework for the first time in the summer, but Tilos has proven successful since 2018.

These are all important projects. The Aegean Sea has hundreds of islands and the national energy policy aims to connect the bigger ones to the mainland electricity network, while developing smart energy solutions for smaller, more remote islands that have independent grids. 

Diesel dependence

Greece’s small islands are predominantly powered by diesel generators. Their electrification costs are at least 20 times higher than in mainland Greece. The financial and environmental burden of powering the islands with diesel is shared by all Greek consumers. 

A year ago, the Greek government launched the “Gr-Eco Islands Initiative,” which aims to green the Aegean Sea archipelago. The initiative included a broad map of intended sustainable actions and a €100 million ($99 million) investment pot. The government promised to follow up with a list of small, remote islands that would follow the example of Halki’s energy community. 

Greece needs a series of competitive tenders for small island smart energy systems, in order to build on the example of Tilos. There are plenty of Greek and international companies that could bid in such tenders, offering sustainable and smart solutions. The government could tender clusters of islands or perhaps provide some sort of financial backing.

Most often, it is the synergy of the private and the public sectors that leads to optimal results, while tendering the projects is the most transparent solution. The pilot projects offer politicians the attention they seek, but they are far from the paradigm shift that the country and the islands actually need.

Greece’s Inter-ministerial Committee, chaired by the Minister of Development and Investments and attended by several other ministers across the cabinet, agreed on Thursday to grant a new hydrogen project the so-called status of a “strategic investment” for the country.

Specifically, the committee comprising eight ministers and vice-ministers, labeled a 200 MW photovoltaic project, set to be developed together with a cluster of lithium-ion batteries totaling 100 MW and a 50 MW electrolyzer capable of producing 16 tons of hydrogen per day, as strategic. The MWh of the battery component was not released.

The project represents a €226.4 million ($224.4 million) investment and is expected to generate 442 new jobs during the construction phase and 24 jobs while in operation, said the government press release. Bluesky300 IKE, the Greek subsidiary firm of UK solar developer Hive Energy, is backing it.

This is not the only green power project Hive Energy is looking to build in Greece. pv magazine learned that the company has at least 250 MW of additional PV capacity under its portfolio in the country that has been labeled as a strategic investment by the same government committee in the past. These projects are not yet built, however.

Strategic investments 

The so-called strategic investment projects are not new. Investors who believe their projects may be of strategic importance to the country may contact Enterprise Greece, a state agency promoting itself as “the official investment and trade promotion agency of the Greek State, operating under the auspices of the Ministry of Foreign Affairs.”

The agency then processes the investor’s application. Should the project fulfill the strategic investment criteria, it will be brought to the Inter-ministerial committee for approval. This process requires investors to pay a fee to Enterprise Greece for administering an application.

Such a fee tends to be worthwhile because approved strategic projects may be eligible for state funding, although this is not always granted. More importantly, strategic projects may take advantage of faster licensing processes across all stages of the project’s development.

Prior Greek governments have argued that strategic investment projects are necessary for the country to take advantage of investment of capital in key areas of the local economy. However, no government has thus far fully defined what specific factors make a project strategic. For instance, the Inter-ministerial committee has often approved photovoltaic projects that do not combine any innovative elements like hydrogen.

Strategic investments do not only concern energy projects. Last week, the same Inter-ministerial committee labeled the development of a hotel resort facility in Mykonos, one of Greece’s most well-known tourist destinations, as strategic.

* This article was amended on September 22, 2022 at 13.20 CEST. A previous version of the article wrote that strategic investments enjoy priority access to the grid. This is correct only for power projects labelled as strategic by 12 August 2022.

The 251 MW that PPC won is a stunning result for the state utility, building upon its recent efforts to clean up its energy mix. It has secured contracts in Greece’s renewable tenders before, and it is also building subsidy-free solar farms. In addition, it has joined up with Germany’s RWE to build 2 GW of coal-mine solar capacity.

The PPC is leading Greece’s effort to phase coal out of the national energy mix. Before the war in Ukraine, Greece had rather ambitious plans to phase out coal, but these have been dampened to allow for lignite-fired power plants to replace gas flows.

Greece’s prime minister, Kyriakos Mitsotakis, said this week that Greece remains focused on its plans to phase coal out of its energy system. However, given the high prices of natural gas at present, lignite mined at the PPC’s coal mines will be needed for Greece in the next one or two years, he noted. It remains to be seen whether his estimated timeline is a realistic one, or the energy crisis continues for much longer.

Total Cypriot state funding to support the self-generation of electricity and energy-efficiency measures in households now stands at €70 million for the 2022-23 period.

The cabinet has also approved a proposal to broaden the definition of “vulnerable citizens” who can apply for such subsidies. Energy Minister Natasa Pilides said this means that another 30,000 vulnerable households will be able to apply for state funding, bringing the total number of vulnerable households that can request assistance to 80,000.

Under the government’s program, Cypriot households will be able to apply for funds to help them to install PV systems that operate through the net-metering program and the virtual net-metering scheme. Households that apply for PV net metering only will receive €375/kW, but for vulnerable households this increases to €1,000/kW. However, the maximum subsidy is capped at €1,500/kW and €5,000/kW for non-vulnerable and vulnerable households, respectively.

The ministry of energy said Cyprus has also introduced or plans to introduce €160 million of additional programs for self-generated electricity and energy-efficiency measures in households, businesses, and municipal buildings by the end of this year. Earlier this year, the country launched a new €1.5 million scheme to support installations of PV and battery systems, specifically targeting the owners of electric and hybrid vehicles.

The nation's net-metering and net-billing segments of the solar market have added about 100 MW of capacity to date. The country’s cumulative installed PV capacity stands at about 335 MW.

Renewable power currently accounts for a mere 16% of the nation’s electricity generation. But even more disappointing is that the Cypriot target for 2030 aims for just a “26% share of renewables in gross final electricity consumption.”

pv magazine ran a detailed analysis of the Cypriot solar market in July. It found that the government's sluggish electricity market reforms, as well as its outdated view of solar power, have cost electricity consumers significant amounts of money.

The 550 MW solar plant will be built in Kozani, in Greece’s Macedonia region, which was the nation's lignite hub for decades. PPC Renewables estimates the cost of the 550 MW plant to be around €216 million ($221.4 million), excluding the cost of PV modules. However, bids for the tender can exceed that sum, said PPC. 

The winning engineering, procurement and construction contractor will need to complete the licensing of the plant, with only some license updates still deemed necessary at this point. Aside from the PV project, the winning contractor will also need to build two substations and upgrade the local electricity transmission line. However, the contractor will not have to buy and transport the solar panels, as PPC will arrange this separately.  

Eligible bidders should be legal entities in the European Union or the European Economic Area and meet specific business and financial criteria, with established PV portfolios. Their offers should be submitted digitally by Sept. 30 at the latest. The project’s construction phase should not exceed 22 months, said PPC Renewables, although the EPC contract will have a duration of 48 months in total. 

The new 550 MW plant is part of PPC’s master plan to install 3 GW of PV capacity on the Peloponnese Peninsula in southern Greece and in the former mining region of Kozani in the north.

Subsidy-free PV 

PPC Renewables’ chief executive, Konstantinos Mavros, told pv magazine that the new 550 MW plant won’t participate in Greece’s renewable power tenders scheme. Instead, the new project in Kozani will operate subsidy-free, based on a power purchase agreement (PPA) signed between PPC Renewables and its parent, Greece’s dominant electricity supplier.

Mavros said the 550 MW plant in Kozani is the company’s second subsidy-free, PPA-based solar project. It already has a 50 MW solar array under construction in Megalopolis, a mining town on the Peloponnese Peninsula. The EPC contract for that project was won by Greece's Terna Energy in the summer of 2021.

In October, PPC Renewables signed a deal with Germany’s RWE to develop 2 GW of coal-mine solar capacity. Mavros has since visiting RWE’s headquarters in Germany in July. However, he noted that the 550 MW plant in Kozani and the 50 MW park in Megalopolis are not part of the company's partnership with RWE.

The gifts born by Saudi Arabia’s crown prince Mohammed bin Salman to Athens, Greece, were plentiful yet their value is highly contested since the bearer of the gifts has no green investment background and Saudi Arabia’s green energy transition efforts can thus far be described as limited.

Concretely, during his visit, the two countries launched the so-called “Supreme Strategic Cooperation Council (SCSC)”– a new institution aiming to forge stronger business ties between Greece and Saudi Arabia in various economic areas, including green energies and hydrogen.

And there is no doubt that the most significant agreement signed concerns the East to Med data Corridor (ECM) project, which is a subsea and land data cable system that will connect Europe with Asia through Greece and Saudi Arabia.

The agreement for the eye fabric optic data cable was signed by MENA Hub, owned by Saudi Arabia’s STC, the Greek Public Power Company (PPC), the Greek telecoms and satellite applications company TTSA, and the Cyprus Telecommunications Authority (CYTA). The project has an estimated cost of €800 million and construction is slated to begin by the end of the year, with completion scheduled for 2025.

Cheap green electricity to reach Europe

In line with the launch of the SCSC, bin Salman told Greece’s prime minister Kyriakos Mitsotakis that “we have also historical opportunities … we’re going to finalize a lot of it today, linking the grid of electricity which we can provide Greece and Southwest Europe through Greece with much cheaper renewable energy. And we are going to sign a MoU about that today.”

He continued, “Also we are working about hydrogen and how to turn Greece as a hub for Europe to hydrogen. That’s a game changer for both of us. Also we are working in linking the telecommunication grid. All of these three items, it’s big items that are going to change the position of Greece and Saudi Arabia and are going to support Europe, especially South and West Europe, with much cheaper energy and more efficient energy coming from renewable energy.”

The MOUs

In addition to the above mentioned agreements, the two states also signed several memorandums of understanding (MOUs). Specifically, Greece’s foreign ministry said 16 private agreements had been inked between a total of 100 Greek and about 40 Saudi Arabian enterprises concerning a wide spectrum of business activities, including in the energy, waste management, maritime, and air transport sectors.

Perhaps the most significant MOU in the energy field was the one signed between Greece’s Mytilineos Group and Saudi Arabia’s Ajlan and Bros Holding Group which aims develop energy and hydrogen projects in both countries. However, no further details were provided and  it should be noted that both groups also invest heavily outside of green power.

Little action so far

The Saudi crown prince told the Greek prime minister, “I promise you that when I come to Greece, I will not come empty-handed. We have a lot of stuff that’s going to be game changer for both countries and also for the whole region.”

However, although he appeared to bear gifts, the value of them is highly contested. Indeed, comments were made alluding to the fact he should try to push renewable energy development in his homeland before embarking on an intercontinental mission.

Saudi Arabia is a laggard in renewable energy development and until a decade ago it was actively blocking the world’s green energy transition. Following the global energy paradigm shift, and more specifically the shift of its neighbors (most notable the United Arab Emirates), towards renewables, Saudi Arabia tried to embrace low carbon energies. In 2016, for example, it launched the so-called Vision 2030, aiming to achieve zero emissions by 2060 and generate 50% of its electricity by renewable energies by 2030.

However, the Vision 2030 remains largely dormant and according to data published by the US Energy Information Administration (EIA), the Kingdom fueled nearly all of its electricity generation in 2020 with natural gas (61%) and crude oil (39%). A number of big announcements for new energy master plans and renewable tenders have never materialized and the country has only built a handful projects.

By comparison, Greece has made concrete progress towards its green energy transition over the past few years. In addition to setting ambitious goals, it has also updated its energy laws to make for a faster licensing scheme, it runs regular renewable power tenders, and if it doesn’t get derailed by the current energy crisis and the war in Ukraine, it has a lot of chances to transition to a green energy system. Therefore, Saudi Arabia can learn from Greece.

Bin Salman’s visit to Greece on July 26 and 27 is followed by an official visit to Paris, France.

pv magazine’s report is based on the press statements released by Greece’s and Saudi Arabia’s governments since journalists were not invited to attend the meetings in Athens and there was not a press conference with the opportunity for questions.

It’s getting hot in Greece. The country’s energy regulator, RAE, is preparing to hold a new joint power tender on Sept. 5 for PV and wind power.

It aims to contract 1 GW of solar capacity, with a focus on systems larger than 1 MW, as well as wind projects above 60 kW in size. Energy communities will also be able to participate in the auction, said the regulator.

Stakeholders need to submit their electronic applications by Aug. 8 and hard copies of their applications by Aug. 10. By Aug. 25, the applicants will be told whether they comply with the auction criteria and are eligible to participate in the tender.

RAE has set the tender’s subscription rule at 80%. This is applicable to each technology separately, which means that for the tender to award 100 MW of PV capacity, 180 MW of solar capacity should compete for selection, for example. The 80% subscription rule ensures the competitiveness of the auction, according to RAE.

The regulator said that each technology needs to secure at least 30% of the awarded capacity. This is a new rule that probably stems from the fact that Greece’s last joint tender in May 2021 was swept by solar projects, leaving wind investors empty-handed.

Bidding will start at €54 ($55)/MWh and €63/MWh for PV and wind power systems, respectively. Winning solar projects need to link to the grid within 30 months after the auction date, while winning wind farms will need to be finished within 36 months.

Perhaps most crucially, project developers eligible to compete in the tender should have generation licenses, grid-connection agreementsm and a number of guarantee letters from Greek or foreign financial institutions, to ensure creditworthiness. Typically, such guarantee letters are issued to the RAE, but also to the grid operators when applying to connect projects. Participation in the tenders requires proof of such guarantee letters.

More tenders

Meanwhile, Greece’s Ministry of Environment and Energy (Ypen) has published a list of auctions that RAE should hold by 2024. The auctions are in line with Ypen’s previous policy mandates, as reported by pv magazine.

Apart from the upcoming tender in September, Greece also plans to hold another four competitive tenders in the last quarter of this year. They will focus on both solar and wind systems of various sizes, as well as energy storage facilities. Given that Greece’s tenders do not come with any local content requirements, the auctions will be a great investment opportunity for foreign investors active in all segments of the PV supply chain.

Ypen has listed the following tenders for the fourth quarter of this year:

• A joint tender for 600 MW of PV and wind power
• A 200 MW PV and wind tender for projects with storage
• A 100 MW solar tender for small projects below 1 MW in size
• An unspecified amount of solar and wind capacity to be installed in neighboring European Economic Area (EEA) countries

In 2023, Greece will hold two joint solar and wind power tenders for 600 MW of capacity each, as well as two 100 MW tenders for small PV and wind power systems. In addition, the government will hold a tender for EEA projects for which the capacity amounts have yet to be specified. In 2024, there will be tenders for at least 500 MW of PV and wind capacity, but details about the 2024 auction will become clearer next year.

New law

The Greek parliament recently approved a new law, marking the second attempt by the government of Greek Prime Minister Kyriakos Mitsotakis to revamp the renewable energy sector. The first attempt, two years ago, involved Greece's first attempt to speed up the licensing process for renewables. This time, the government claims its new law goes further by reducing the average time needed to license large-scale renewable energy projects, from about five years down to just 14 months.

This is possible due to a number of new requirements. One of them is that the new law requires investors who apply for network connections to submit guarantee letters together with the application. In addition, developers must build their projects within three years of signing connection agreements. In practice, this means that the new law makes it impossible for undecided investors to hold onto connection agreements and other licenses forever, which blocks other projects and investors who are ready to move ahead.

The same rationale applies throughout the new law, which sets specific deadlines for the implementation of projects. It focuses on every stage of the licencing process and project development. Investors who do not comply with the set deadlines will be given hefty penalties or they will be eliminated from the process altogether.

Ypen has also introduced a new digital portal that brings all licenses together under a so-called “one-stop shop” that electronically links Ypen and investors to all Greek institutions. Greece’s new law is a complete revamp of the energy sector, including a new framework for the licensing of energy storage facilities and a special provision allowing the development of 10 floating PV pilots under a fast-track licensing process that excludes floating projects from participating in competitive tenders.

From pv magazine 06/2022

Subsidy-free is not always what it seems. In recent years, Cyprus has seen a wave of new PV parks that are often branded as “subsidy-free,” but in many cases, they do receive temporary subsidies. Specifically, when a project is supported via a power purchase agreement (PPA) signed between a power generator and an offtaker, this is typically subsidy-free. However, the government has also allowed renewable energy projects to receive a variable subsidy, the so-called avoidance cost.

The avoidance cost equals the amount of money national utility the Electricity Authority of Cyprus (EAC) saves by not paying fossil fuel power plants to generate when electricity is supplied by a renewable energy project. Cyprus does not have a competitive electricity market at present, but when the country implements a competitive market design, these projects will no longer be remunerated via the “avoidance cost” and will instead need to participate in the market.

Cyprus has fostered PV via various remuneration schemes. Ground mounted projects typically comprise solar farms supported either by government set feed-in tariffs (FITs) or a tariff set via competitive tender. Rooftop PV in Cyprus is generally installed under either net metering or net billing systems. These schemes are quite similar, although systems installed under net billing, unless energy storage is also included, can only cover a maximum 80% of an investor’s annual energy needs. Net metering systems are also small and usually up to 10 kW per rooftop, but net billing arrays can have capacities of 10 kW to 10 MW. Because of Cyprus’ compact size, a net billing rooftop project can often be larger than a ground-mounted utility solar farm.

Installations

Cyprus Energy Regulatory Authority (CERA) Chairman Andreas Poullikkas said that the country has installed 335 MW of PV capacity. Of this, Poullikkas added, about 100 MW are net metering and net billing systems. Cyprus has installed about 77 MW of PV capacity supported by government set FITs. The country has run only one renewable power auction, awarding 50 MW of capacity in 2013. Of this, only 35 MW has been installed.

The remaining installed solar has been executed via the “subsidy-free” provisions. Specifically, 76 projects totalling 101.5 MW have been supported, for the time being, by the “avoidance cost” mechanism. In 2020 and 2021, 74 of these projects were installed, while another two were connected to the grid in early 2022.

Subsidy-free projects supported by PPAs comprise the most recent wave of solar installations in Cyprus. The government, said Poullikkas, encouraged a number of different renewable energy technologies to be developed under PPAs, however only solar projects were able to get off the ground. The Cyprus Ministry of Energy, Commerce and Industry (MECI) said in a press release in January 2022, that the PPA segment of the market features 132 systems, of which 32 commenced operation in 2021. The remaining 100 systems will be electrified by the end of this year. Overall, the PPA contracts correspond to 250 MW of solar capacity.

This last rush of solar projects, predominantly in the form of “subsidy-free” projects, allowed Cyprus to reach its renewable energy goals for 2020. However, these goals lacked ambition. Thus, Cyprus is currently generating only 16% of its electricity via renewables, while for 2030 the country is aiming “at least [a] 26% share of renewables in gross final electricity consumption.”

Energy storage

Earlier this year MECI announced that the ministry is considering new tenders for systems combining renewable power and energy storage. The tender scheme for such systems is currently under consideration by the European Union (EU) and is pending approval.

Poullikkas said that the regulator hasn’t designed this tender scheme, however, he added that the regulator has established the rules defining how storage units will operate in the electricity market. CERA’s guidelines are technology agnostic.

Regarding behind-the-meter storage, Poullikkas said that over the past three years CERA has licensed solar-plus-storage systems, however they have not yet been installed. These are typically PV arrays around 5 MW in size, coupled to a battery system. Poullikkas believes they will be installed soon as the regulatory framework for such systems is already in place.

There are a small number of pilot energy storage units operating in Cyprus. These include an 84 kWh battery unit, manufactured by German company Autarsys and installed by a local partner in the suburbs of the capital city Nicosia.

In April, MECI published a new $1.6 million subsidy scheme that targets owners of electric vehicles (EVs) and hybrids, encouraging them to install PV and battery systems. The new program allows households that own such vehicles to claim €750 ($796)/kW, capped at €1,500 per vehicle, and a maximum of €2,000 for the installation of battery storage. Combined with a recently rolled out €30 million subsidy scheme for the purchase of EVs, it is possible Cyprus will experience a wave of distributed battery installations in the coming years. However, Andreas Procopiou, a local renewable energy expert who carried out research on the active management of electricity networks with high penetration of PV (the UK and Australia), says that Cyprus still needs more regulations and incentives to see growth in behind-the-meter storage installations.

Net metering and net billing schemes are great, added Procopiou, but those alone are not enough to encourage battery storage. pv magazine has confirmed separately that the regulator has not licensed any storage systems coupled with net metered projects. For batteries to become economically attractive, said Procopiou, Cyprus needs a number of new electricity regulations such as time-based tariffs and demand response, while policies such as tax credits for those installing batteries and solar could also increase the attractiveness of distributed batteries.

Market design

Cyprus’ new electricity market design will play a central role in the evolution of its solar and energy storage markets. The regime is expected to commence before year’s end. The reforms will follow the EU’s so-called target model, aiming to boost competition, sustainability, and energy security through increasing power flows between EU member states.

Given Cyprus does not yet have electricity interconnections with other countries, it was allowed to delay its market reforms and, until recently, the national utility (EAC) enjoyed an absolute monopoly. Increased interconnection is coming, however, in the form of a project aiming to link Cyprus to Greece, Israel and Egypt – a type of regional super-grid. Until the electricity market becomes fully liberalized before the end of the year, the current transitional regime allows independent power suppliers to sell electricity to large consumers. To date there are two such suppliers: Evergy and Bioland Promithia.

Evergy COO Fanos Karantonis explained that it currently has 92 large commercial customers, which it supplies with exlusively PV power. Karantonis is also managing director of the Karantonis group, which either separately or together with Greece’s Mytilineos Group has developed a solar portfolio in Cyprus and sells some electricity to Evergy.

Given this new PPA activity, the question is whether the new market design can fundamentally change Cyprus’ energy mix – which is currently based predominantly on gas and diesel. Karantonis said such a change would depend on a number of factors. These include the implementation of energy storage and the upgrade of the electricity network and its connection with neighbouring countries. Karantonis said Cyprus will need to curtail about 10 GWh of renewable electricity in 2022, corresponding to about 2% of its renewable generation.

Procopiou agrees, adding that some of the fossil fuel generators that the network operator keeps online to guarantee its stability are, according to EU law, operating illegally due to dangerous emissions. Consequently, Cyprus is paying penalty fees.

Lack of vision

Discussion turns inevitably to electricity prices. Cypriot Energy Minister Natasa Pilides told a local conference in March that solar had been prohibitively expensive until 2015, which had stifled an acceleration of its adoption. “If we [the government] had promoted solar more strongly [before 2015], the cost for the consumer would be greater,” added Pilides.

However, all data contradicts Pilides’ argument. Specifically, Cyprus’ PV tender in January 2013 led to an average tender price of €0.0866/kWh. Today, almost a decade later, the EAC avoidance cost which reflects the cost of generating power through conventional power stations, has climbed up to €0.192/kWh.

This so-called “avoidance cost” has recently been increased, reaching unprecedented highs due to the war in Ukraine – particularly given Cyprus’ reliance on natural gas. However, even before 2022, “avoidance costs” were mostly higher than the PV tariffs awarded under tender in 2013. The sun-washed island could become 100% powered by renewables, saving electricity consumers money, but for this to happen cost misconceptions and the vested interests of fossil fuels, must be overcome.