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European Commission approves Greek auction scheme for renewable electricity

The European Commission (EC) has announced that it has found a Greek auction scheme for the production of electricity from renewable sources and high-efficiency cogeneration to be in line with EU State aid rules. The scheme will further EU energy and climate goals whilst preserving competition.

The decision follows the Commission’s decision in November 2016 which approved a support scheme for the production of electricity from renewable energy sources and high-efficiency cogeneration in Greece.

Greece will bring down costs for renewable energy with competitive auctions to support renewable electricity generation. This is very good and the scheme will facilitate Greece’s efforts to reach its 2020 climate goals, said Commissioner Margrethe Vestager, in charge of competition policy

Under the scheme Greece will organize regular, competitive auctions to grant support to renewable energy sources (RES) as per the following:

  • In 2018, Greece will organize separate auctions for wind and solar installations in order to determine their market potential;
  • As of 2019, joint auctions for both wind and solar installations will be held to increase competition and reduce the cost for consumers of renewable energy in Greece;
  • State support for other renewable energy technologies will be subject to auctions as soon as they become more mature in the Greek electricity market, i.e. when they reach a predefined level of market penetration;
  • Moreover, Greece will evaluate the bidding processes in 2020, before designing bidding processes for the period 2021-2025.

The Commission has assessed the scheme under EU State aid rules, in particular the 2014 Guidelines on State Aid for Environmental Protection and Energy. The Guidelines require competitive auctions for renewables support since 2017, so as to ensure that the use of public funds is limited to the minimum and there is no overcompensation.

On this basis, the Commission concluded that the Greek auctioning scheme will boost the share of electricity produced from renewable energy sources, in line with EU environmental objectives, while any distortion of competition caused by the state support is minimized.

Under the Renewable Energy Directive (RED), Greece has a target to reach 18 percent of domestic energy supplies produced from renewable sources by 2020.

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