The development of Renewable Energy Sources has been among the major energy policy lines of Greece for the last 10 years. It is seen as an important contribution to the improvement of the Greek environmental indicators and, in particular, to the abatement of CO2 emissions. Legal and financial incentives are the tools of the government’s strategy to support renewable energy technology (RET) investments.
A new law for the promotion of RES, Law 3468/2006, Production of Electricity from Renewable Energy Sources and High-Efficiency Cogeneration of Electricity and Heat and Miscellaneous Provisions (Official Gazette A' 129/2006) was put in force (as from the 6 th of June of 2006), in order to speed up the licensing procedures and to reform the electric energy production from renewable energy sources. The new law sets a new reality and a landmark in the production of electric energy from geothermal sources, wind farms, photovoltaic systems, hydroelectric stations, solar systems, biomass, cogeneration and marine energy.
The new bill simplifies the licensing procedures and sets new financial and administrative incentives for the promotion of RES. Among others the 3468/2006 L aw specifies that:
the guaranteed market price is increased up to five-fold (for the PV systems),
the market time expands to 20 years
the licensing deadlines are being reduced
the special levy for the local administration organizations hosting such investments is raised to 3%
(with the exception of PV producers).
The bill favours the formation of energy producing consortiums through a combination of subsidies and tax breaks. Especially in the case of energy produced from photovoltaic systems, the price of electricity from installed plants with a power up to 100 kilowatts increases from the current price of 75 euros per MWh that stands for the rest of RES, to 452 €/MWh and to 502 €/MWh for islands not connected to the mainland's interconnected System.
For PV systems with a capacity exceeding 100 kW, the producer's price of electricity rises to 402 euros per MWh (452 €/MWh for the non-interconnected islands).
The legislative framework for the licensing procedure, the methodology and the guidelines for obtaining grid connection for RES projects has been further clarified and described in a number of ministerial decisions that followed the law 3468/06 (i.e. Δ6/Φ1/21691, Δ6/Φ1/5757, Δ5/Φ1/25968, Δ5/Φ1/13303), while recently (April 2007) the Greek PV roadmap that sets clear PV targets and timetable for all Greek Prefectures has been approved by the Ministry of Development (Regulatory Authority of Energy, decision 75/2007).
Moreover, a major financial-support instrument providing substantial public subsidies to RES investment projects is also active. The “ National Development Law ” (Law 3299/04), which was amended by the law 3522 /06 , Article 37, is the current investment incentives Law , that is applicable to enterprises, covering all sectors of economic activity in the regions of the country. Regions with high unemployment rates and low income per capita receive the highest investment subsidies from the State.
More specifically, for the purpose of investment incentives, Greece is divided into 3 different zones for public subsidy levels.
Investments in RES installations (both electricity- and heat-producing ones) keep their favoured status under this Law such as investments in high technology, environmental protection, tourism, etc. The funding concerns a subsidy for the total investment cost and can be 20%-60% depending on the region and the size of the company.
The following categories in the energy sector are eligible for incentives under the Development Law:
- Power generation, in the form of warm water, steam.
- Production of solid fuels from biomass.
- Cogeneration of electricity and heat.
- Energy production from renewables, and especially wind and solar, hydroelectric, geothermal energy and biomass.
- Environmental protection and waste disposal projects.
Within the law 3522/06 there is also an article that refers to a 20% tax deduction for a series of equipment including off-grid RES systems, thermal solar heating & natural gas systems, thermal insulation retrofits with a maximum absolute deduction of 700€, mainly targeting to private individuals for the installation of such systems in the household sector.
The Greek government has also included RES technologies in the relevant actions of the Greek Operational Programme for Competitiveness (OPC) of the Third Community Support Framework (CSF III; 2000-2006) for Greece , set out in 2000 in order to facilitate the Greek economic growth. OPC is scheduled to continue for the 2007-2013 period with the approved Operational Programme “Competitiveness and Entrepreneurship”.
Finally, the national special spatial plan for RES from the Ministry of Environment, Physical Planning and Public Works is the last main legislative action that is still pending (the phase of the public consultation ended the summer of 2007).It is aiming to delinate the priority of RES over other land uses and to set specific parameters on the eligibility of RES projects all over Greece.