The Greek Renewable Energy Sector (“RES”) has experienced substantial growth in recent years as a result of the country’s commitment to comply with its national 2020 targets for renewables under the Renewables Directive. The shift in national energy policy from over dependence on lignite to renewables is demonstrated by significant RES tariff changes, ongoing public consultations with stakeholders on proposed amendments to the RES support framework and the market entry of international players who benefit from opportunities of both wind and solar projects. In February, the Greek Government submitted an extremely promising, long-term Energy and Climate Plan which favors renewables, placing them up to a targeted 32% of final consumption while including an estimate of upcoming RES investments up to EUR35 billion. It also provides for a target of energy savings which should amount to one-third of current consumption by 2030. At the same time, a new draft bill aiming at strengthening the geothermal sub- sector and attracting investments by eliminating bureaucratic procedures and introducing more amplified geothermal field assessment procedures through concise and clear terms and conditions was submitted to the Greek Parliament on March 1. The Ministry expects this sub-sector to play an important role in the country’s energy mixture in the near future. Below we capture a number of recent developments that should be taken into consideration by domestic and international investors when considering investing in the Greek renewables market.

Regulatory changes

Tariffs

The Greek Regulatory Authority for Energy (“RAE”) has been submitting during the past months a number of proposals to the Ministry of Energy introducing suggested regulatory changes at the applicable pricing levels: • A new tariff for (i) wind energy facilities of less than 3 MW (6 MW for Energy Communities); (ii) wind energy projects of over 3 MW supported by public and private sector partnership agreements signed in 2016 but not expected to be operating until the end of 2020 and (iii) PV investments of up to 100 KW. • A tariff of 79.77 euros per MWh compared to the existing one of 98 euros per MWh for wind energy facilities of up to 3 MW (6 MW for Energy Communities). • A total starting price of 71.91 euros per MWh for solar energy RES auctions of 500 MW - 20 MW. A Ministerial Decision was published on April 15, 2019, providing for two auctions to take place in 2019: one for wind power and one for PV for capacities of 400 and 430 MW respectively. Another joint auction for 500 MW capacity and one for wind power of 300 MW will be taking place in 2020.

Power purchase agreements

Power Purchase Agreements (“PPAs”) in Greece can be signed between an electricity producer and the Energy Market Operator in the Interconnected System of Greece or the Distribution Network Operator in the non‑interconnected islands of Greece. The PPA is valid for a period of 20 or 25 years starting from the date on which the power plant’s operation license was granted. A transitional period for projects with PPAs followed the implementation of Law 4414/2016 which introduced new remuneration mechanisms for RES power plants in Greece. Projects undergoing development or already operating under a standard PPA with the Energy Market Operator or the Distribution Network Operator in the NIIs, before January 1, 2016 shall continue receiving operation support under the previous FiT support scheme provided that they were under commercial or trial operation before June 30, 2018 (applicable to wind, small hydro, biomass or biogas projects) or before December 31, 2017 (for all other renewable energy and highly efficiency cogeneration projects). In July 2018, Greece carried out its first renewable energy auction, awarding about 277 MW of capacity. In December 2018, wind projects of 159.65 MW capacity and small solar power of 61.94 MW capacity were awarded following another auction. RAE launched two new bidding process on April 22 with Decision 441/2019 and is looking at awarding total capacity of 600 MW through wind and solar projects. Minimum capacities to be awarded for solar and wind projects are 20 MW and 50 MW respectively.

Market status

• Greece received 1.9 billion EUR from the European Investment Bank for major energy projects during the past year (in particular: 1.57 billion EUR from the European Investment Bank and 328 million EUR from new commitments of the European Investment Fund). • US major key players in the Energy Sector such as Tesla that submitted a micro-grid proposal recently are reportedly interested in the prospect of investing in the Greek Renewable Energy Market given the ongoing legislative efforts to circumvent administrative hurdles and facilitate investment in the sector. • Existing and new major Greek players are trying to strengthen their market positioning. For example, Hellenic Petroleum (ELPE) – currently under privatization negotiations- has made public its intention to proceed with investments worth approximately 200 - 250 million EUR in the Greek RES over the next five years aiming at increasing its current portfolio by 300 MW.

Conclusion

The Greek Renewables sector presents multiple opportunities for domestic and foreign investors. Both the Greek Ministry and RAE have been very active on the regulatory front in an effort to increase capacity from renewable sources. This should also be viewed from the perspective of the broader energy market liberalization that the EU has been striving to achieve in Greece, most recently with the lignite divestment which is being attempted. The timing is now perfect for renewables industry market entrants who wish to play a role in a rapidly transforming market.