RENEWABLES: GREECE AMENDS PHOTOVOLTAIC LAW BUT

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SUBJECT: RENEWABLES: GREECE AMENDS PHOTOVOLTAIC LAW BUT
STILL LACKS CAPACITY

REF: A. ATHENS 1481

B. ATHENS 1538


1. (SBU) Summary: Ministry of Development and its Renewable
Energy Sources (RES) division contacts told EconOff January
20 they were close to wrapping up legislation designed to
improve the environment for investing and implementing
photo-voltaic (PV) projects. The new law was approved on
January 22 by the Hellenic Parliament and amends legislation
originally approved in 2006 to regulate and incentivize the
photovoltaic industry. A representative from the Regulatory
Authority on Energy (RAE) described the strong resistance of
Greek communities to the placement of these photo-voltaic
projects, attributing the issue to a lack of awareness of the
Greek public. Although the legislative framework is now in
place, the Greek Government officials were not able to
describe just how the GoG will build capacity, as well as
review and decide upon a substantial backlog of projects by
the end of 2009. End Summary.

Finalizing PV Legislation
--------------


2. (SBU) Ministry of Development Advisors to Secretary
General Mousouroulis and the Director for Renewable Energy
Sources (RES) Charalampos Pippos reported to EconOff on
January 20 that the PV legislation was close to being
approved by the Hellenic Parliament. (Note: They had
originally reported that it would be in place by year-end.
(reftel a) End Note.) The advisors - Viky Georgakopoulou and
Antony Marinos - said that even under new Minister of
Development Costis Hatzidakis, SecGen Mousouroulis would
continue to have purview on renewables for all energy
matters. Georgakopoulou and Marinos affirmed that the new
law develops a separate program for rooftop PV with a
different feed-in-tariffs (FIT) scheme than the one
originated in the 2006 legislative framework, and that the
FITs would be guaranteed for 20 years.


3. (SBU) In addition, Georgakopoulou said the new PV law set
a deadline to review its backlog of photo-voltaic projects by
the end of 2009. In the 2007 window for PV projects,
investors oversubscribed the bid for projects by five times
the available KW. (Note: Greece has a set amont of
electricity that it is able to take into the grid. End
Note.) Those applications remain in a hold file at the
Regulatory Authority on Energy (RAE). According to the new
legislative framework, these projects on hold must be
reviewed and decided upon by the end of 2009; however, none
of the interlocutors at the Ministry of Development could
explain how this would be done. There were no plans for
building capacity for RAE nor the RES arm of the Ministry of
Development. Instead, they said they would resort to
technical outsourcing and even scour for candidates from
within the Ministry of Development to assist the initiative.
Nevertheless, they had made the request for additional staff
from the Ministry of Economy and Finance, but did not expect
assistance in these lean budget times.

Looking for Help
--------------


4. (SBU) Marinos said that they hoped the revised legislation
would continue to attract investment from the private sector.
He added that this was necessary as the GoG did not receive
any financial support from the EU for ramping up this sector,
especially not in the way of operational costs. However, the
EU did support studies and small amounts of technical
assistance to private investors. Georgakopoulou and Marinos
said they had traveled to Denmark, Germany, Spain, Sweden,
and the UK to look at their projects and discuss their policy
approaches. One key problem that they were all facing was
how to increase transmission capacity into the electricity
grid. It was particularly problematic when they considered
the more remote islands, noted Marinos.


5. (SBU) Pippos commented that, now that the legislative
framework is in place, they were looking for best practices
in licensing and administration and at technical issues such
as the implementation of storage facilities for the
electricity fed back into the grid. They said the Public
Power Corporation (PPC),the Greek monopoly provider of
electricity, was subject to the rules of the Ministry of
Development and had to coordinate and "obey" the directives
outlined.


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Relationship with RAE
--------------


6. (SBU) Marinos said Regulatory Authority on Energy is a
very independent authority, which mostly provides opinions on
the energy sector, comprised of electricity and natural gas.
(Background Note: RAE's duties are as follows: monitors the
operations of all sectors of the energy market, collects and
processes information on energy in Greece, grants and
monitors photo-voltaic licenses, issues a report every two
years on the security of energy supply, and arbitrates
complaints and disputes on transmission and distribution.
End Background Note.)


7. (SBU) Georgakopoulou said that lack of staff at RAE
prevents it from playing a pivotal role in the energy market.
She added that most projects were outsourced to the Center
for Renewable Energy Sources (CRES) or Hellenic Petroleum.
Right now, the Ministry of Development was in discussion with
RAE about how to pass on fees for renewables projects to the
consumers. Greek consumers of electricity currently pay a
small amount of euro cents in their electricity bill, which
could potentially be increased to a few euros to pay for this
new program. The advisors explained that Greek officials
were reluctant to increase the additional cost for fear of
political repercussions, but these conversations would
continue until a viable solution is found.

NIMBY! RAE faces political and legal hurdles
--------------


8. (SBU) Regulatory Authority on Energy (RAE) RES Unit
Coordinator Georgia Glinou told EconOff on January 28 that it
was not just a matter of building capacity to increase
Greece's chances of meeting renewables' targets. She
stressed that there were several on-the-ground factors that
hindered these projects from moving forward. Glinou
described how each renewables project was required to submit
a feasibility study and that this had to correlate with the
use of land specified in the registry. The Ministry of
Environment and Public Planning had embarked on a project to
create a database on land uses and ownership, but this was
far from complete, as public land ownership remains a
complicated and contentious issue.


9. (SBU) In addition to disputes over land-ownership,
regional associations, municipalities, and even individuals
frequently complained to the courts if the transmission grid
passed through their property. Glinou said that judges put
an injunction to stop the project from moving forward and
that this could delay projects for three to five years. In
general, Glinou said the Greek public did not grasp the
benefits from the use of RES and were often resistant to the
implementation of the projects.


10. (SBU) As a result, RAE was looking more closely at
providing incentives to municipalities. Glinou said that all
municipalities had reaped about 5 million euros from a
legally-mandated 3 percent of profits from wind projects that
was designed to give back to the community. She explained
that when the photo-voltaics law had been initiated in 2006,
this 3 percent was not included in order to provide
incentives for the investors. As a result, she said they
would have to come up with other incentives to convince
municipalities and regional associations to agree to the
implementation of RES projects.

Comment
--------------


11. (SBU) As earlier reported, Greece is serious about
getting its act together on photo-voltaics. By laying the
legislative framework to improve the investment and business
climate in this sector, Greece is sending a strong signal
that this is a priority, and not only to meet its EU
directives on renewables. Keeping SecGen Mousouroulis as
lead on this issue lends continuity to this initiative, but
there does not appear to be an articulated plan for ramping
up the GoG's capacity to review and implement an enormous
backlog of projects within a year. The GoG also faces
hurdles in changing public opinion on RES projects and are
looking at ways to incentivize municipalities. Post
continues to engage with the GoG on renewables and is
identifying opportunities to share our best practices with
the GoG, particularly in areas of licensing and
administration. End Comment.

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