Greece’s incumbent utility, the Public Power Corporation
(PPC) has announced a target for new solar PV projects. The move, while
justified, may come too late to save the PPC, which is trying to reduce its
reliance on lignite and avoid bankruptcy.
Things do change after all. In the case of Greece’s PPC
utility, which owns 13 GW of electricity generation facilities (about 64% of
Greece’s installed capacity), the majority of which are coal plants, the recent
change in investment strategy has arrived rather late, and is widely viewed as
the result of tectonic policy changes that are currently taking place within
Greece’s electricity sector.
The PPC established in 2006 the PPC Renewables, a
wholly-owned subsidiary, aiming renewable power investments. To date, PPC
Renewables owns a mere 153 MW of installed renewable energy capacity, of which
1.32 MW comes from solar PV plants. Private investors, in contrast, have
installed 2.6 GW of PV capacity in Greece.
To the target
PPC Renewables’ CEO Ilias Monacholias told pv magazinethat the company now
targets large-scale PV plants in Greece in cooperation with other investors but
also using vendor funding. “The total capacity of the PV plants we have
under development is more than 550 MW,” Monacholias said.
PPC’s CEO Manolis Panagiotakis told the company’s
shareholders in the beginning of July that the PPC is making a “dynamic shift
towards the development of renewable energies by overcoming the unacceptable
delays of the past.” Panagiotakis referred to the PPC pursuing the development
of a 200 MW PV plant within the Ptolemaida-Florina coal mine, which is located
in Greece’s West Macedonia region. Should this solar farm be developed, it
will be Greece’s largest operational PV plant.
The problem with this project is that, currently, it is more
of PPC’s wishful thinking than a concrete business plan. The Ptolemaida project
was a few years ago given the so-called ‘fast track’ status, meaning the Greek
government afforded it priority status that allowed it fast licencing and some
tax benefits. However, the PPC has since ignored the project, leading to its
‘fast track’ status being lost.
Meanwhile, Greece’s renewable energy law has changed and
the new
policy requires all renewable energy projects to be tendered. PPC
Renewable’s CEO told the Greek press separately that the utility is asking
Greece’s energy ministry to grant the 200 MW PV plant special status and allow
it to materialize without been tendered. In that case, the ministry and the PPC
would have to set a tariff.
The PPC wishes to develop more PV projects that were
previously granted the ‘fast track’ status. Much will depend on what happens with the 200 MW
flagship project in Ptolemaida. Even if the Greek government agrees to bypass
its own laws, it is not certain that the European Union will accept this plan.
The final days of PPC as we know it
There are many reasons to believe the PPC’s embrace of renewables is genuine
and potentially long-lasting rather than the product of a sudden love affair
with renewable technologies.
Greece has committed to open its retail electricity market
to competition. Currently, 91.9% of the market is dominated by the PPC, but
there is agreement to reduce this percentage to just below 50% by the end of
2019. As part of this effort, PPC is planning to privatize a number of its
lignite power plants and mines.
Furthermore, the PPC has accumulated huge debts. Its CEO
said on July 7 that “until today, about 500,000 of our customers have
already settled debts of approximately €800 million.” It remains dubious
whether the PPC can recoup all or most of this debt.
Potentially painful for the utility is the threat that
electricity customers may flock to the PPC’s competitors that are offering
better deals. Bad customers, bizarrely protected by the Greek state, will
remain with the PPC, which is fast approaching bankruptcy.
Following Donald Trump’s decision in June to withdraw from
the Paris Agreement, the PPC’s trade union called climate change a “Chinese
conspiracy” and a “well-engineered machine” in favor of certain business
interests. Surprisingly for them, it is the renewable
technologies that can save their jobs that most of them have won due
to political connections.
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