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EC approves Greek support scheme for renewable electricity and cogeneration

The European Commission has announced that it has found the new Greek support scheme for renewable electricity and high-efficiency cogeneration to be in line with EU state aid rules. The scheme will help Greece to reduce carbon dioxide (CO2) emissions, in line with EU energy and climate goals, without unduly distorting competition.

In July 2016 Greece notified plans to support electricity from renewable energy sources and high-efficiency cogeneration. The Commission found that the Greek scheme promotes the integration of such electricity into the market, in line with the Commission’s 2014 Guidelines on State Aid for Environmental Protection and Energy.

The Commission concluded that the scheme was likely to increase the proportion of green electricity and reduce pollution while limiting distortions of competition due to state support. The scheme will help Greece to meet its 2020 target of producing 18 percent of its energy needs from renewable sources.

The scheme includes state support either through a feed-in tariff or through a price premium in line with the Guidelines. Support with a feed-in tariff will be limited to small installations and installations on non-interconnected islands.

Installations with a capacity above 500 kilowatt (kW) will, over a period of 20 to 25 years, receive a premium on top of the market price of electricity. Greece has demonstrated that the aid is limited in line with the Guidelines. This will minimize potential distortions of competition created by the public funding.

Today’s decision approves aid to larger installations (above 1 MW) for the year 2016. Under the Guidelines, as of January 1, 2017, aid to larger installations has to be granted through competitive tenders to ensure that energy is produced at minimal cost for taxpayers.

Greece will organize a pilot tender for photovoltaic energy and has committed to using competitive bidding processes for all aid granted to large installations as of 2017. The Greek scheme will be financed through the renewables support levy currently in place in Greece.

In order to avoid any discrimination against foreign renewable energy producers resulting from the financing mechanism, as of 2017, Greece will partially open up the renewables support scheme to foreign producers.

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