The RES Licensing Framework under Greek Law

The main statutory instruments of Greek energy law are the following:

  • Law no. 4001/2011, (OJ 179 Α/22.08.2011), as amended and in force, (the Energy Framework Law);
  • Law no. 4425/2016, (OJ A’185/30.09.2016), as amended by the law 4512/2018, (OJ A’5/17.01.2018) regulating the establishment and operations of the Energy Exchange, (the Energy Exchange Law); and
  • Law 4389/2016, (OJ Α’ 94/27.05.2016), regulating the quarterly electricity forward products’ auctions (the NOME Law).

The above laws also apply to Renewable Energy Sources (“RES”).

RES production is regulated by Law 3468/2006 (OJ A 129/27.06.2006, the RES Law) and targeted legislation, such as the RES Licensing Regulation (OJ B 2373/25.10.2011). The RES support system was amended in August 2016 by Law no. 4414/2016 (OJ A’149/09.08.2016) that introduced the Feed in Premium (FiP) scheme. Subsequently, several Ministerial Decisions and Decisions of the Regulatory Authority for Energy (RAE) were issued for the implementation of the new support system.

RAE is the independent energy regulator, established in 1999 and authorized to control, regulate and supervise the operations of all sectors of the energy market. Its competences include the issuing of energy generation licences, certification of the Independent Power Transmission Operator (IPTO) and the Hellenic Electricity Distribution Network Operator (HEDNO), approving and issuing of the codes and methodologies for the access tariffs to the networks, approving and requesting amendments, if necessary, of a ten-year energy development plan (TYNDP). It also acts as a dispute settlement authority with respect to complaints against the network operators and/or owners and against any energy companies for infringement of their obligations regulated by energy legislation and their energy licenses. RAE has established a separate arbitration tribunal, that disputes between parties participating in the energy market may be voluntarily referred to. It cooperates closely with the Hellenic Competition Commission, that has also issued some resolutions on energy disputes with a focus on competition law aspects. RAE grants licenses for RES electricity generation in accordance with the RES Law and the RES Licensing Regulation.

Monitoring of the energy sector is also performed by the Ministry of Energy and Environment. The Ministry is in charge of establishing an energy policy and the adoption of specific acts, as provided in the Energy Framework Law, including the issuance of licensing regulations for generation, supply and trade with electricity and of the Electricity Supply Code.

Overview of the RES Licensing Procedure

The licensing steps for a wind farm of more than 1 MW are as follows:

  • Electricity Generation License – Granted by RAE for an initial term of twenty-five (25) years, following the evaluation of zoning, technical and financial capability criteria.
  • Grid Connection – Issued by the competent grid operator (such as IPTO) and sets out the technical terms, budgetary estimation and conditions for the grid connection of the project. Becomes final and binding for four (4) years (three (3) years since May 2013) on the award of the Environmental Terms Approval.
  • Environmental Terms Approval – Granted by the regional state authorities or the Ministry of Energy and Environment as per project specifications, for an initial term of ten (10) years, following review of the project’s Environmental Impact Assessment study, as such study was prepared by the investor of the project.
  • Installation License – Granted by the Secretary General of the Region, wherein the project is located, for an initial term of two (2) years. It may be extended by another two (2) years after the start of construction under particular requirements.
  • Power Purchase Agreement – Standard text defined by Law 4414/2016.
  • Building Permit – Granted by the local town planning authorities following a standard application. RES projects normally enjoy a simplified licensing process.
  • Operation License – Granted by the General Secretary of the Region after the trial operation of the project, for an initial term of twenty (20) years. Successful testing is required, prior to the certification of the project in operation.

Electricity Generation License

The Electricity Generation License (EGL) is the first of the licenses and permits that the interested investor must acquire, in order to enter the Greek RES industry. The issuance of the EGL is regulated in Art. 3 § 1 of the RES Law and the RES Licensing Regulation.

Issuance: the EGL is issued by RAE (Art. 3 § 1 of the RES Law). RAE examines whether certain criteria are met and decides whether to issue or not a Production License within two (2) months from the application submission date. The relevant term commences when RAE considers that a complete application file has been submitted thereto.

In particular, the following criteria are considered for the evaluation of the application:

  • National security, when the implementation of the project may jeopardize national security,
  • Protection of public health and safety,
  • Safety of the electricity system,
  • The power efficiency output, as this results from the energy studies and the business plan of the applicant,
  • The maturity of the project implementation process, as reflected in already conducted surveys and studies,
  • The capacity of the applicant to implement the envisaged project, based on the applicant’s economic, scientific and technical competence.
  • The provision of utility services and protection of the customers, if there is such legal obligation and
  • The overall implementation of the project in accordance with the Special Framework for Spatial Design and Sustainable Development for RES (OJ B 2464/03.12.2008, soon to be amended).

Content: the EGL includes the following information:

  • the license holder (either a natural or legal person),
  • the location of establishment of the wind farm,
  • the installed power (in MW) and the maximum generation power,
  • the utilized RES technology,
  • the validity duration of the EGL and
  • the natural or legal persons that ensure the financing of the project, that may be different from the holder or its shareholders and have been evaluated by RAE.

Appeal: Within a deadline of fifteen (15) days from the time, when the Decision of RAE is published (uploaded on RAE’s website), any person or entity with a legal interest may appeal against that Decision for the control of its legality before the Minister of Energy and Environment. The Minister must rule on the appeal within twenty (20) days from the filing of the appeal. In the case of no ruling within the 20-day period, the appeal is considered rejected. Until the ruling is granted, any further licensing procedure is suspended. Furthermore, the general provisions of Art. 32 and 33 of the Energy Framework Law also apply: any person with a legal right may apply for a revision of the RAE Decision within thirty (30) days from their issuance.

Public Register: RAE’s decision is registered with the Registry maintained by the RES Service of the Ministry of Energy and Environment. (Art. 3 § 2 of the RES Law).

Obligations of the EGL holder: the holder must adhere to the terms of the EGL, as well as to the applicable regulatory framework. The holder must inform RAE on the progress of works. Furthermore, until the issuance of the Operation License, the EGL holder must (Art. 41 of the RES Licensing Regulation):

  1. submit a six-month progress report to RAE (pursuant to Annex 4 of the RES Licensing Regulation), that contains:
    • information on any amendments to the information of the EGL,
    • description of the currently attained stage of the permitting procedure and any problems that appeared during the licensing procedure,
    • any permit, license, positive and negative opinion received in respect to the completion of the project and
    • a road map for the necessary works and actions, including deviations from past progress reports,
  2. submit any documents and information that RAE requests and
  3. inform RAE, upon issuance of the Installation License, on the start and completion of the project’s trial operation.

Following the issuance of the Operation License, the holder must, within the first two (2) months of each year, inform RAE on the annual electricity output and the maximum power recorded, the annual percentage of non-operation of the wind farm and any operational deficiencies due to the electricity grid.

The holder must, without delay, take all necessary steps to issue the installation license and, in any case, within thirty (30) months from the time of issuance of the EGL, as well as for the completion of the project (Art. 3 § 4 of the RES Law). More specifically, the EGL holder must request a provisional, non-binding GCO from the competent operator and, at the same time, take all necessary actions in respect of the ETA. Only after successful completion of the above can the EGL holder request the issuance of the installation license.

The EGL holder is obliged to have obtained the installation license as soon as possible and definitely within the thirty (30) month period from the issuance of the EGL. Art. 3 § 4 of the RES Law further prescribes that the project must be completed promptly and without delay, i.e. it is a subjective criterion, whether the EGL holder is doing anything that is required, from a technical perspective, in order to complete the project. Pursuant to Art. 3 § 4 section (c) of the RES Law, “RAE recalls the EGL in case of non-compliance of the holder with the above obligation, according to the relevant regulations of […] the RES Licensing Regulation”.

RAE retains the right and has a bound obligation, pursuant to Art. 3 § 4 section (c) of the RES Law, to withdraw the EGLs of the projects of the Seller, at any time, as the Seller has not had the Installation License issued within thirty (30) months and has not taken all the necessary steps to complete the projects without undue delay.

Costs: the EGL holder must pay an annual contributory fee to RAE, whose rate is readjusted every year on the basis of the change in the consumer price index. The fee is approximately 8 €/MW (Art. 38 of the Energy Framework Law).

Furthermore, the EGL holder must pay an annual EGL retention fee of 1.000€/MW to LAGIE SA, according to Sub § I.2. § 1 of Law 4152/2013 within the first four (4) months of each calendar year.

Non-payment of any of the above fees constitutes a breach of the EGL holder’s legal obligations vis-à-vis RAE; pursuant to Art. 41 of the RES Licensing Regulation, RAE may withdraw the EGL.

Amendment: in case any of the data and information of Art. 3 § 3 are amended, the EGL may be amended by virtue of a RAE Decision, after the relevant application of the holder. RAE issues its decision within sixty (60) days from the day of submission of the application, provided that the application is considered formally complete (otherwise 60 days from the formal completion of the application). The application is considered formally complete, if RAE does not request any additional documents within twenty (20) days from the day of application. The Decision for amendment is uploaded on RAE’s website and is registered with the RES Service of the Ministry of Energy and Environment (Art. 3 § 5 the RES Law).

Approval of Environmental Terms: the provision of an EGL to an interested investor is a formal requirement for the submission of a request for the issuance of an Approval of Environmental Terms (ETA) (Art. 3 § 8 of the RES Law).

Renewal: The EGL is granted for a period of up to twenty-five (25) years and can be renewed for as long as possible.

Revocation: RAE may revoke the EGL in the event of non-compliance of the holder with the obligations prescribed by the EGL, the RES Licensing Regulation and the applicable legislation (article 3 of L. 3468/2006 and RAE Production Licences Regulation).

Grid Connection Offer and Agreement

Depending on the power output of the RES project, the EGL holder must apply either to the HEDNO, for projects up to 8 MW, or the IPTO, for projects above 8 MW, in order to obtain a RES Installation License (Art. 8 § 3 of the RES Law).

The procedure can be further distinguished between the:

  • The Grid Connection Offer (GCO) and
  • The Grid Connection Agreement (GCA)

A non-binding, provisional GCO is issued by the competent operator following the issuance of the EGL. The EGL holder first submits a relevant application, the competent operator reviews the application’s details and conducts a connectivity study. The IPTO must respond within four (4) months of the application. The provisional GCO determines a preliminary solution for the connection of the project to the electrical grid, subject to the existence of adequate capacity in the local grid at the point of issuance of the ETA for the project. The EGL holder ought to reply within forty-five (45) days whether it accepts the GCO.

The binding GCO is issued following the issuance of the ETA. The binding GCO is valid for three (3) years from the day of issuance; within this period, the GCA must be concluded.

A bank guarantee is required since 01.01.2015, in order to maintain in force a binding GCO from its signature up to the execution of the Grid Connection Agreement.

The amount of the bank guarantee is determined according to the project’s installed capacity in the progressive scale below:

  • For the first ΜW: 42.000€/MW
  • For additional capacity between 1-10 ΜW: 21.000€/MW
  • For additional capacity between 10-100 ΜW: 14.000€/MW
  • For any additional capacity beyond 100ΜW: 7.000€/MW

Upon execution of the Grid Connection Agreement, the required bank guarantee is reduced to one fourth (25%) of the amount of the initial bank guarantee.

There is a risk, between the issuance of the provisional GCO and the issuance of the ETA, that the grid is considered saturated, i.e. its electrical capacity is not enough in order to absorb at any time, in a technically safe way, the nominal electrical power generated by the wind farms that have obtained binding GCOs.

Grid Connection Agreement

The Grid Connection Agreement (“GCA”) is concluded between the IPTO (or HEDNO for projects below 8 MW) and the EGL holder. It outlines the obligations of the parties in respect to the implementation of expansion works required for the connection of the wind farm to the grid. The GCA stipulates the way of connection, the technical, legal and financial terms of the connection, as well as the price for the works and services assumed by the IPTO. All at the cost of the EGL holder. The GCA is only valid following the issuance of the Installation License (Art. 3 § 2 of the RES Law).

Environmental Terms Approval (ETA)

All projects and activities of the public and the private sector, whose establishment and operation may have adverse consequences for the environment, are subject to environmental approval pursuant to Law 4014/2011 (OJ A 209/2011). According to the previous licensing regime, a preliminary Environmental Impact Assessment (“EIA”) submission was required right after the issuance of an EGL. Under the current, simplified process, the EGL holder submits the EIA with all required documentation, as outlined below, to the competent authority, to receive the ETA.

Projects regarding the production of electricity by renewable energy are classified, depending on their impact to the environment, in two categories, A and B (Ministerial Decision 1958/2012, OJ B 21/13.01.2012). Projects that fall under category A are required to conduct an Environmental Impact Assessment, so that negative implications for the local environment are appropriately handled.

Projects of category A are further distinguished in categories A1 and A2 as follows:

Sub-category A1 includes projects:

  • with installed capacity greater than 60MW, or
  • with installed capacity greater than 30MW and either located in protected areas (Natura 2000 Network etc.) or require the construction of a High Voltage Line of a length longer than 20 km.

For sub-category A1, the competent licensing authority for the evaluation of EIA study is the Special Environment Authority of Ministry of Energy and Environment and the EIA Study is approved by a respective Ministerial Decision

Sub-category A2 includes projects:

  • with installed capacity between 5MW – 60MW or
  • with installed capacity between 5MW – 30MW and located in a protected area.

For sub-category A2, the competent licensing authority for the evaluation of EIA study is the Regional Directorate of Environment of the Decentralized Administration of the area, where the project is planned to be installed and the EIA is approved via a Decision of the General Secretary/the Coordinator of the local Decentralized Administration.

Content of the EIA

 Description of the main project, its accompanying works, and, in particular, the road and electrical interconnection with the System or the Network.

  • A description of the current environmental situation with the necessary data and documentation to evaluate and assess the main environmental impacts of the project on humans, fauna, flora, soil, water, air, climate, landscape, material assets, cultural heritage, as well as the interaction of the factors mentioned in the previous cases.
  • A brief description of the measures to be taken to avoid, reduce and, where possible, remedy significant adverse effects on the environment.

The EIA study for a wind farm must examine every possible impact of the required works/intervention on the environment, including the effects of:

  • wind generators (number, type and siting),
  • access roads (routing and improvement on existing roads), overhead or underground high voltage lines etc.
  • the platforms needed for the erection of the wind generators and the ground areas where the foundations will be located,
  • the site of the substation.

The EIA study must be accompanied by supporting documentation in the form of topographic maps, flora and fauna studies, restoration studies, visual impact studies etc.

Τhe competent Decentralized Administration forwards the EIA study to all other competent authorities for their expert opinions on the project; additional restrictions may be imposed in relation to forest protection, local urban and spatial planning, land use, national defense, archaeological monuments, etc.

The EGL holder is responsible to take any necessary measures (and subsequently assume all relevant costs associated with said measures) to mitigate the impact of the envisaged project on the environment, in case the EIA study indicates so. If the EGL holder does not take the appropriate measures, the EIA study will not be approved by the competent authority. Furthermore, the ETA may be issued under the condition of assumption of certain measures by the EGL holder and, unless such measures are promptly undertaken, the ETA may be revoked.

The opinions are not binding for the competent authority issuing the ETA. However, said authority will consider opinions that are scientifically substantiated and might reject ones that are based on general or political criteria or are beyond the field of competence of the specific authority that issued them.

Following consideration, the competent authority issues the Environmental Terms Approval (ETA) and the approved project receives an Environmental ID. The duration of the ETA is for ten (10) years and may be renewed.

Forest Intervention Permit

Art. 45 L. 998/1979, as amended, sets out that interventions on forestry land (along with the associated works i.e. the necessary road construction, connection with the substations) are permitted in order to install RES projects. The intervention permit may either precede or follow the relevant ETA, yet it must be issued prior to the commencement of any works.

An intervention permit shall be issued when the developer submits to the Forestry Authority:

  1. the final road work study regarding the project site, the access roads and the connection to grid or the sub sub-station
  2. final characterization acts regarding the project site, the access roads and the connection to grid or the sub sub-station and
  3. the land use fee.

The intervention permit specifies the terms and conditions of each intervention, including the details of the recipient, the limits, the location of ​​the area, the purpose of the intervention and the option of renewal. The validity period of the permit follows the ETA validity period.  It also refers to the amount of the land use fees, the location and the area for reforestation, as well as the conditions for restoration of the natural environment following the end of the of the duration of the intervention.

If the forestry Authority believes that the intervention to the forest due to the broadening of the access roads, the erection of the wind generators, the construction of the plant alter severely the area, it may impose to the EGL holder to conduct reforestation of a certain area even before the termination of the wind farm operation.

This is determined on an ad hoc basis and it may be part of the restoration measures to be undertaken by the EGL holder after the termination of the wind farm operation as per the specifics of the ETA.

RES Installation License

For the installation or expansion of a RES project, a relevant RES Installation License is required. Pre-requisites for the issuance of an Installation License are (article 8 § 3 of the RES Law):

  • A binding Grid Connection Offer by the competent Administrator;
  • The ETA; and
  • A Forest Intervention Permit (included in the ETA).

The RES Installation License is granted upon the filing of a relevant application before the competent Region. The application must be accompanied by a set of supporting documents specified in the Regulation on the Issuance of Installation and Operation Licenses (article 8 of the RES Licensing Regulation).

The RES Installation License is granted by the Secretary General of the Region within fifteen (15) working days of the completion of the processing of the relevant application. Such processing ought, in any case, to be completed within thirty (30) working days of the filing of the application. If the license is not issued within the above period, the competent Secretary General of the Region issues a statement with a reasoned justification for the inability to issue the license. This statement along with the file of the application is forwarded to the Minister of Development, who decides on the granting of the RES Installation License within thirty (30) days of receipt of the foregoing documents. The RES Installation License for larger RES projects is granted directly by the Minister of Development within thirty (30) days from filing (Article 8 § 1 and 2 of RES Law).

The licensing process includes the examination of the distance between wind turbines. In case of neighboring wind farms, an agreement of the respective RES producers is needed. If there is no such agreement between the neighboring producers, because e.g. one RES producer is not willing to make such an agreement the distance may not be less than seven times the diameter of the largest impeller; Vice versa, if the site of the wind generator at the edge of a wind farm is seven times the diameter of the largest impeller from the nearest wind generator of the neighboring producer, then an agreement is not required and the legal requirement has been fulfilled, therefore the Installation License will specify the exact location of the wind generators according to the above distance.

A RES producer who is harmed by the site of the wind generators of their neighboring RES producer may exercise each time available legal remedies, such as the revision of the Installation License before the competent authority and the cassation appeal.

A summary of the RES Installation License is published on the website of the RAE and, by actions of its holder, in one daily newspaper with nation-wide circulation and one local newspaper of the local Region (Article 8 § 9 of the RES Law).

The holder of the Installation License must, following its issuance, initiate the process of concluding the GCA of the wind farm with the competent Administrator (Article 9 § 1 of Ministerial Decision 13310/2007).

The installation permit is valid for two (2) years and can be extended for up to two (2) more at the request of the holder, provided that:

  1. at the end of the two (2) years, a project has been executed, the cost of which covers 50% of the investment; or
  2. the condition referred to in (a) above is not met but the necessary contracts have been concluded for the procurement of the equipment required for the implementation of the project; or
  3. there is a suspension by court order of any authorization necessary for the lawful execution of the project.

In the case that until the expiration of the period of validity of the RES Installation License, including its extensions, no request has been made to the competent administrator for the initiation of the testing period of the wind farm (article 68 § 2 of Law 4602/2019):

  1. the EGL and any other administrative act or contract relating to the wind farm are automatically annulled and a relevant act of certification of their annulment is issued by RAE;
  2. a sanction procedure is initiated and the license holder is obliged to restore the site in the form it had prior to the issuance of the RES Installation License, if the site concerns public land.

In case the EGL is for any reason revoked, the RES Installation License is also revoked (article10 § 2 of the RES Licensing Regulation).

Power Purchase Agreement (PPA)

Pursuant to Article 12 of the RES Law, a PPA must be executed between the energy producer and the competent grid operator, who is obliged by law to accept the sale of power. The following documents must be submitted along with the application:

  1. The EGL,
  2. The ETA,
  3. The Installation License,
  4. The GCA and
  5. All legalization documents of the EGL holder.

The test operation of the wind farm is not allowed before the execution of a PPA and any payment to the producer for the power contributed to the grid during the test operation is paid after the issuance of the Operation License.

The PPA is valid for twenty (20) years and may be renewed after a written agreement of the parties. Any extension of the PPA must be in accordance with the EGL.

Building Permits

For the installation of wind generators, a building permit (from the competent Urban Planning Authority) is not generally required, instead said authority issues an approval of small-scale construction works. In case that buildings must be erected in the wind farm area, then the legally required permit must be obtained, i.e. a building permit for the particular building or a certificate, that no such permit is required.

The applicant must submit an application to the competent Urban Planning Authority, along with a solemn declaration regarding the assignment of the project, a topographic map of the area and works, including road access, the construction coverage plan, top view design, work budget and proof of payment of any taxes, fees and payments to engineers due (Art 3. Law 2244/1994).

Operation License

A specific license is required for the operation of RES projects. The RES Operation License is granted by a decision of the same administrative authority that is competent for granting the RES Installation License (i.e. the Directorate of RES of the Ministry of Energy and Environment or the Department of Technical Control of the competent Decentralized Administration). The Operation License is granted following a request of the person concerned and prior to an audit of the technical conditions of installation during the testing period of the wind farm and a verification of the necessary functional and technical requirements of its equipment. The Operation License is granted within a maximum of twenty (20) days from the completion of the above checks (Article 8 § 11 of the RES Law).

The following conditions must be met for an Operation License to be granted:

  • RES Installation License in force
  • License to use water resources in force, if applicable.
  • Environmental Terms Approval (ETA) in force.
  • Completion of the testing period of the wind farm.

The RES Operation License is valid for at least twenty (20) years and can be renewed indefinitely. Particularly for solar thermal power stations the minimum duration of the operating license is set at twenty-five (25) years. During the period of validity of the license, the license holder is not relieved from the obligation to issue or renew the validity of other licenses required by the relevant provisions of the applicable legislation. If the wind farm is transferred to another entity, the transferor acquires all the rights and obligations of the transferee vis-à-vis the IPTO or the HEDNO. In this case, the EGL is also transferred to the new license holder, following a decision by the RAE. After the transfer, the authorization is renewed by a decision of the competent body and the authorization in the name of the new beneficiary (Article 8 § 12 of the RES Law).