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.