Greece, Bulgaria, Romania make cautious steps towards renewable energy goals
Under the European Union’s (EU) 20/20/20 climate and energy targets Romania, Bulgaria and Greece have to boost the share of renewables in their energy mixes to 24%, 16% and 18%, respectively. The countries have chosen different mechanisms to achieve these goals and each one is struggling with its own challenges. As a whole, the three member states have really good wind and solar power potential which has already been recognised by many investors and project developers. Yet, the financial crisis in Greece and unfavourable regulatory changes in Bulgaria are putting a significant strain on the local renewable energy markets. Furthermore, Romania and Bulgaria share a common challenge - ageing infrastructure and grid bottlenecks, which if not totally discouraging for investors, are at least a significant obstacle to a smooth project development process.
Greece eyes solar power as way out of crisis
In 2011 solar and wind power accounted for 5.5% and 1.0%, respectively, of total power generation in Greece. Newly installed PV capacity in the country nearly tripled to 426 MW last year, data from the Hellenic Association of Photovoltaic Companies (Helapco) show. At the same time, installed wind power capacity for 2011 surged by 23% on the year to 1,626.5 MW, according to the Hellenic Wind Energy Association.
Growth for the past few years has been fuelled by the existing feed-in tariffs (FiT) and also, as an alternative, government subsidies that cover 40% of a project’s costs. The FiTs for solar power were cut in February 2012, following a global trend motivated by falling equipment costs. Combined with the country’s abundant solar resources, the tariffs remained appealing.
Now the future of the renewable energy sector is unsure due to the financial crisis in Greece, one of the hottest topics globally. The crisis hit a key aspect of new energy project development – the ability to calculate the income from a power facility for a certain period of time – so lack of financing is currently hampering numerous wind and solar power projects. The worsening financial situation has resulted in more cautious capacity building projections for the coming years. In the May 2011 issue of US audit and consultancy company Ernst & Young’s “all renewables” indices Greece occupied the 10th place, while it plunged to 21st in the August 2011 indices. A year later in the August 2012 issue of the ranking the country occupied the 18th spot. However, as part of an ambitious plan which has already secured Brussels’ blessing, the Greek solar power sector may turn from a victim of the crisis into a savior from it. The plan, called Helios, envisages the construction of a solar power complex with a capacity of up to 10,000 MW to significantly boost Greece’s