The new law 5037/2023 for energy in Greece and the changes it brought in the energy sector.
The new law 5037/2023 for energy in Greece and the changes it brought in the energy sector.
Law 5037/2023 (Government Gazette 78/28.03.2023, Vol. A) was passed by the Greek Parliament on 20.03.2023, in the context of the European policy to achieve the Union’s climate and energy targets for the year 2030 and in the broader context of its substantial long-term goal for a low-carbon economy by the year 2050.
The most important changes in the energy sector are the extension of the competences and the renaming of the “Energy Regulatory Authority”, the forms of energy communities and the limits set on virtual net metering, which can now be carried out by individuals and companies, the owners of electricity generation plants from renewable energy sources. RES (Renewable Energy Sources) and CHP (High Efficiency Cogeneration) that have established a Feed-in Premium contract. Further, changes were also made to the non-tender tariff for “small” photovoltaic and wind farms, while the framework for launching and ensuring the implementation of projects for which there is interest in concluding a Connection Contract with the system was also set, as detailed below.
1. Renaming and expanding the powers of the “Energy Regulatory Authority” (RAE)
The “Energy Regulatory Authority” (RAE) has been renamed as the “Waste, Energy and Water Regulatory Authority” (Waste, Energy and Water Regulatory Authority) and its scope and competences have been broadened to include, in addition to the control, regulation and supervision of the energy market, the control, regulation and supervision of issues related to the provision of water services and urban waste management. It shall remain an independent regulatory authority with legal personality and shall retain the possibility of appearing, in its own right, in legal proceedings concerning acts or omissions or legal relationships involving it.
As a result, the PPA is now competent to bring complaints against the owners and operators of Energy Distribution Systems and Networks, companies carrying out Energy Activities, but also against water service providers and Solid Waste Management Entities for breaches of their obligations. 2. New types of Energy Communities: renewable energy communities (RECs) and Citizens’ Energy Communities (CECs)
From 01.04.2023, the possibility of establishing Energy Communities, which was established by Law 4513/2018, was abolished and in their place were introduced two new types of energy cooperatives, the Renewable Energy Communities (RECs) and the Citizens’ Energy Communities (CECs), which are established by the One-Stop Services and are registered in the G.E.M.I.
The Energy Communities that were established under Law 4513/2018, in accordance with the transitional provision of Article 61, may be transformed into C.E.C. by a decision of 2/3 of their members, provided that the relevant conditions are met, otherwise they may continue to operate under the above law under which they were established.
The legal form of the above two communities is a civil partnership under the Law on Civil Partnership. 1667/1986 (A’ 196), with certain exceptions concerning the numerical limitation for the convening of a general meeting and the minimum quorum for the general meeting, the obligation to establish a three-member control committee, etc. According to Article 49 of this law, the CSEs operate within a region and carry out at least one of the activities related to the production, consumption, storage and sale of energy from renewable sources. At least 50% plus 1 of their members must have proximity to the region where the CSE carries out its activities and develops the Renewable Energy Project. A CSE, will be able to generate electricity from Renewable Energy Plants, store and distribute it to its members or outside the community, and can also participate in all energy markets. As for the NCPs, according to Article 90, they shall operate within one or more regions, and shall be required to carry out at least one of the activities related to the production, own consumption or sale of electricity from renewable sources, storage, distribution and supply of electricity, cumulative representation, provision of flexibility and balancing, as well as the provision of energy efficiency services, electric vehicle charging and other energy services to its members. Its generating stations may be located in any region.
The right was provided for the NCPs to own, establish, purchase or lease electricity distribution networks and to manage them autonomously in the region in which they operate. With these two new tools, the way is paved for the utilization of the institution by household consumers, businesses and local government organizations, noting that agricultural cooperatives will be able to participate in the C.A.E., which is not provided for the E.C.P.
Furthermore, for the first time, the possibility is given for the first time to set up communities exclusively by enterprises. A minimum of 15 small and medium-sized enterprises will be allowed to set up a C.I.C., while for the establishment of a C.I.C., enterprises and companies of any size will be able to participate.
3. What is net metering and virtual – net metering and what changes with this law?
Net metering is the offsetting of the energy produced by the generating station against the energy consumed by the self-generator on his premises. This mechanism is generally used for residential photovoltaic and wind systems and their owners are classified as self-producers. By the term virtual net metering, we refer to the netting of the electricity produced by the self-generator with the total electricity consumed in the self-generator’s installations, without the restriction that the production installation must be in the same place as the consumption installation and be electrically connected to it, as is the case in classical energy netting.
For self-consumers and for self-consumers acting jointly who are natural persons (traders or not) or legal entities under public or private law, the installation of Renewable Energy Sources (RES), High Efficiency Cogeneration (HCH) and storage systems of the energy produced is allowed to cover their own needs, with energy offsetting.
For C.I.E., E.I.P. and Energy Communities of Law no. 4513/2018, the installation of RES and CHP plants and storage systems to cover their own needs, with the application of virtual energy offsetting, was provided for, to cover the energy needs of members who are exclusively domestic consumers, farmers registered in the Register of Farmers and Agricultural Holdings of Law No. 3874/2010, as well as to cover the energy needs of citizens living below the poverty line and households affected by energy poverty. For the application of virtual energy offsetting by these Communities, the supply of the power plants and the corresponding consumption supplies to be offset may be represented by different suppliers, while the maximum limit of the total capacity of RES and CHP plants, for which Final Connection Offers may be granted by the competent Operators for the application of energy and virtual energy offsetting is set at 2 GW.
Therefore, it follows that virtual energy offsetting (virtual – net metering) is not applicable for residential consumers, unless they become members of the K.A.E., E.K.P. or Energy Communities of Law 4513/2018.
A private individual who will produce electricity from the photovoltaic system installed on his/her roof will be able through energy offsetting (net metering) to offset the energy produced with the energy consumed in his/her home or business, but will not be able to apply virtual energy offsetting (virtual – net metering), i.e. to offset the energy produced with the energy consumed in another installation not connected to his/her photovoltaic system. However, this excludes from self-production citizens who live in apartments in a block of flats and do not own a roof space or an adjacent space in the block of flats where they live, since they will not be able to offset the energy they produce in an installation other than the installation where they consume it.
The surplus energy resulting from the energy offset, after the final settlement at the end of the offset period, will be injected into the grid or the system, without any obligation to compensate the self-consumer.
Furthermore, with Law 5037/2023, the limitation for the maximum capacity of the photovoltaic plant for the application of energy offsetting (net metering) was introduced. In particular, it was stipulated that for domestic uses (households) it cannot exceed 10.8 kW per consumption supply and for legal entities under public or private law it cannot exceed 100 kW per consumption supply. For the application of virtual – net metering, it was stipulated that the maximum capacity of the photovoltaic power plant may not exceed 100 kW per consumption supply. 4. Extensions to the Feed-in Tariffs for “small” photovoltaic and wind farms
Until 31.12.2024, “small” photovoltaics (up to 500 kilowatts) and wind farms (up to 6 megawatts) will be able to continue to operate at non-tender tariffs, while from 01.01.2025, they will have to participate in a competitive bidding process. The current reference prices for photovoltaics will be valid until 31.08.2024.
Note that the Feed-in Tariffs (Feed-in Tariffs) are the mechanism used to limit the risk of the investment, with a fixed price paid to the renewable electricity producer per kWh produced and delivered to the grid.
An exception is provided only for plants under the Special Programme for the Development of Photovoltaic Systems in Buildings, in which case an operating aid contract can be concluded.
With regard to Energy Communities, it is envisaged that after 30.09.2024, they will not be able to conclude more than 2 operational support contracts for photovoltaic plants with a capacity of up to 0.5 MW each, without prior participation in a competitive procedure. An exception is introduced only for communities in which local authorities participate or have more than 60 members, of which at least 50 are individuals. 6. Ensuring project implementation
An important provision is also introduced to ensure the implementation of projects, in Article 132 of the above law. In particular, it is provided that the Certificate or the Certificate of Special Projects as well as the Production License of Article 3 of Law no. 3468/2006 (A’ 129) shall automatically cease to be valid for photovoltaic, onshore wind and hybrid Renewable Energy Sources (RES) stations, for other RES and High Efficiency Cogeneration (HPC) and/or storage technologies and for RES and HPC stations, belonging to the category of Special Projects, within the meaning of Article 10 of Law No. 4685/2020 (A’ 92), and for hybrid power plants that include in their project the construction of a submarine interconnection of 2 or more Non-interconnected Islands, if within the prescribed period of 12, 18 and 24 months respectively, from the expiry of the two-month period of paragraph 1, the project is not completed within the two-month period of 12, 18 and 24 months respectively. 12 of Article 5, have not submitted a complete request for the issuance of an Installation Licence and the conclusion of an Interconnection Contract.
For the Final Offers of Connection (FOTs) that were in force on 04.07.2022, the Certificate or the Certificate of Special Projects or the Production Licence shall automatically cease to be valid, if the holder of the Certificate or the Certificate of Special Projects or the Production Licence does not submit a complete request for the conclusion of a Connection Agreement by 30.06.2023, for projects that have received a Final Offer by 31.12.2020, by 31.8.2023 for projects that have received a Final Offer from 1.1.2021 to 31.12.2021 and by 31.10.2023 for projects that have received a Final Offer from 1.1.2022 to 4.7.2022.
In practice, within the above deadlines, those projects that are ready to submit a complete request for the issuance of an Installation License and enter into the Connection Agreement, otherwise the relevant certificates and licenses will cease to be valid, while those projects that had received a Final Offer of Connection on 04.07.2022 will have to submit a complete request for the conclusion of the Connection Agreement.
It is becoming clear that the legal framework for renewable energy and the energy sector in general is changing and evolving in order to harmonise with European directives and lead us to a greener future. All these reforms are heading in the right direction, since, having already experienced the energy crisis, we should act with the aim of making our country self-sufficient through renewable energy sources. Every domestic consumer and every business interested in participating in this transition is invited to act within the institutional framework to safeguard their interests.