Given Greece’s recent economic performance, it’s hard to argue with any effort to increase business competitiveness. As they approach a sixth year of deep hardship, Greece is tabling all options to kick start the country’s economy and get on a path to recovery. However, a recent move to shift the financial burden of energy consumption to producers has drawn a quick response from renewable energy producers who are asking why Athens insists on kicking them when they’re down.
The new plan was introduced to the Greek parliament with the goal of reducing electricity cost of “energy intensive industries by up to 18%” by getting them to agree to reduce or cut their electricity use during peak periods of the day. In exchange, the industries will receive discounts in their electric bills, raising the question of just who is going to pay for all of this?
According to a PV Magazine report, the burden will fall on energy producers, through the application of a new fee calculated according to how much they produce and what role they play in ensuring the country’s energy security. The exact details of the fee have yet to be determined.
Mirroring a similar recent effort in Spain, the policy puts the weight of the new regulations on energy producers rather than consumers – a result of a prolonged economic crisis that has made the idea of raising consumer rates almost impossible or at least political suicide.
Again, like Spain, the policy is earning scorn from renewable energy providers who argue that while traditional energy producers can pass the cost onto to consumers themselves, they are still stuck with the country’s feed-in tariff (FIT) program. As long as they are dependent on such funding schemes, they say, any additional fees will be an unavoidable loss.
Making matters worse for renewable producers, the new policy comes after earlier cuts to that very FIT system. Like many in the region, Greece rushed to support renewable growth through generous and ultimately unsustainable FIT programs, accumulating substantial deficits in the process. Earlier this year, that deficit reached $583 million spurring a round of FIT cuts, resulting in an immediate reduction in Photovoltaic installations across the country. From a renewable producer point of view, Athens’ response to the wider crisis has been to increase the industry’s financial burden while reducing the funds needed to survive. Unsurprisingly, the country’s renewable market does not appear to be thriving.
Once again, like Spain, the FIT cuts have not actually led to the expected deficit reduction. Instead, the renewable energy funding deficit is expected to rise to $833.5 million by the end of the year, $2.16 billion by the end of 2014 and $1.93 billion by the middle of 2015. As seen in other countries grappling with renewable energy funding, Athens’ response has been a promise for still further FIT cuts, making the outlook for solar and wind particularly dismal in the months ahead.