€2.27 Billion For Greek RE & CHP Scheme

• European Commission has cleared €2.27 billion Greek renewables aid scheme
• It will enable the country to support up to 4.2 GW renewable energy and CHP capacity through competitive auctions and state support
• The scheme will remain into effect till 2025 with the state support being utilized by the beneficiaries for 20 years

The European Commission has given its stamp of approval for €2.27 billion ($2.55 billion) Greek aid scheme to support around 4.2 GW of renewable energy and high efficiency combined heat and power (CHP) capacity to help the country achieve its renewable energy targets.

The scheme will be open till 2025 and will be able to support facilities for a maximum of 20 years. As per the commission, the aid scheme is in line with EU state aid rules, do not distort competition in the single market and will enable the European Union (EU) achieve its climate neutrality target by 2050.

Through this scheme, Greece aims to support electricity production from onshore wind, solar PV, wind and PV with storage, biogas, biomass, landfill gas, hydroelectric power, concentrated solar power (CSP) and geothermal power plants, along with CHP facilities.

Greece will launch joint competitive procurement processes, both on the mainland and on the islands, with an intent to drive down prices. It may also launch separate auctions for onshore wind and solar to address technology shortfall in case the joint tenders do not achieve desired results.

"The selection of the beneficiaries through a competitive bidding process for the main supported technologies will ensure the best value for taxpayers' money and will minimize possible distortions of competition," said Executive Vice-President of the commission in charge of competition policy, Margrethe Vestager.

Awarded capacities will be rewarded with a 2-way contracts for difference (CFD) premium, meaning the state will pay the renewable energy producer the difference between actual electricity price and reference price provided latter is lower than what is set under the auction.

In case of electricity price is more than the reference price, then the renewable energy producer pays the difference to the state.

According to the commission, the capacity that is not big enough to be auctioned will also be supported with a similar mechanism.

Back in January 2018, the commission had approved Greece's auction scheme for renewable energy, allowing the country to launch separate auction for solar and wind power in 2018 and a joint technology neutral auction in 2019 (see EU Approves Greek Auction Scheme).

Greece targets to achieve 35% renewables share in its total energy mix by 2030.