5 tsakalof street, 106 73 athens, t: +30 210 3612800, f: +30 210 3612820, e:...

5 Tsakalof Street, 106 73 Athens, T: +30 210 3612800, F: +30 210 3612820, E: [email protected], W: www.kelemenis.com

Greece: Legal and economic framework for photovoltaics

Dr. Yannis Kelemenis


O u t l i n e

Profile of Kelemenis & Co.

Size and dynamics of the Greek PV market

Incentives and feed-in tariffs

Licensing and grid access

Connection to the grid and Operator Agreements

Corporate Environment

Tax Environment


F i r m P r o f i l e

Kelemenis & Co. is an Athens-based law firm providing quality legal services in the key corporate and commercial areas. The firm advises a varied

client base that includes corporations, governments, large institutions and high-net-worth individuals. The firm draws on a team of lawyers with

excellent academic qualifications from world-class universities (e.g. Oxford, Cambridge, Harvard, Heidelberg).

Kelemenis & Co. has built a reputation for acting on complex, high volume cross-border transactions for a range of corporate and financial

institution clients. The firm's track record spreads across an array of sectors including energy, infrastructure, hotels, leisure, real estate, retail and

technology. Although Greece has been the focal point of the firm's activities, the firm has been active in Southeast and Eastern Europe where it

advises local governments on legal approximation with the EU acquis communautaire and international investors on their cross-border ventures.

Kelemenis & Co. enjoys excellent rankings in all leading international legal directories and is a recommended law firm in all key practice areas. The

firm is regularly invited to contribute the Greece chapter to commercial law handbooks published by highly regarded international publishers.

Kelemenis & Co. is a member of several professional associations and chambers. It is a sustaining member of both the British Hellenic and the

Greek American Chambers of Commerce. The firm is the Greece member of Multilaw, a leading global law network consisting of more than 65 law

firms worldwide and over 6,000 lawyers in over 150 commercial centres. Being part of the Multilaw network ensures an instant global reach for

clients who require multi-jurisdictional legal advice.

Well-regarded ... able to advise on complex issues ... received high plaudits due to the outstanding cross-border practice..."

PLC Which Lawyer 2007

"A practice which has shown promise since its inception... The practice impressed the market..."

IFLR1000 2008

"...advised on some of the biggest deals in the Greek market of the past year"

World Tax 2008

"Clients ... praise the firm's 'deep knowledge and expertise within different industries and jurisdictions', and Anglo-American style of service."

Legal 500 2007


Kelemenis & Co’s Energy Practice

The Practice

The firm has built a strong reputation for its energy practice not only in Greece but in the wider region of southeast Europe. The practice, which is headed by

name partner Dr. Kelemenis, is well-versed into both transactional and regulatory work. It has advised, inter alia, the regulators of Greece (RAE) and FYR

Macedonia (ERC) and the governments of Romania, Moldova, FYR Macedonia and Albania. The firm has also been advising several energy undertakings in

Greece and in southeast Europe and provides a one-stop shop service in any of the countries that make part of the Regional Energy Market of Southeast Europe.

Scope of Work Energy Regulation Energy Infrastructure/PFI/PPP Projects Energy Acquisitions and Disposals Energy Finance Energy Disputes

The Team

The practice is supported by a team of lawyers with excellent academic qualifications from world-class universities and often draws upon a pool of economists,

analysts, engineers and senior consultants to ensure the comprehensive management of its assignments. The firm is regularly invited to contribute chapters to

leading international publications on energy. It is the author, inter alia, of the Greece chapter for the loose-leaf "Energy Law and Regulation in the EU" (Sweet &

Maxwell), the leading energy law publication in Europe; and of the chapters on Oil and Electricity Regulation in the “Getting the Deal Through Series” published

by the International Bar Association and the Global Competition Review.

The People

Dr. Yannis Kelemenis

Tom Kyriakopoulos

Manya Tsoumita, LL.M. (Berlin)

Georgia Stagaki

Iro Stamataki, LL.M (Heidelberg)


DEVELOPMENT OF THE GREEK PV MARKET

1. Introduction of Statute 3468/2006 on the production of electricity from renewable energy sources

2. By 31.12.2008 the total licensed capacity is scheduled to come up to 350 MW for the interconnected system and

to 140 MW for the non-interconnected islands

3. By 31.12.2009 the total licensed capacity is scheduled to come up to 450 MW for the interconnected system and

to 180 MW for the non-interconnected islands

RegionsTotal power

(MWp)<20 KWp

(MWp)

>20 and < 150kWp (MWp)

>150 and <2 MWp (MWp)

>2 MWp (MWp)

East Macedonia's and Thrace 45 4,5 15 13 12,5

Central Macedonia 60 6 24 15 15

West Macedonia 10 1 3 3 3

Epirus 18 1,8 5,4 5,4 5,4

Thessaly 55 5,5 16,5 16,5 16,5

Ionian islands 15 1,5 4,5 4,5 4,5

West Greece 60 6 18 18 18

Central Greece 60 6 18 18 18

Peloponnese 122 12,2 36,6 36,6 36,6

Attica 40 4 12 12 12

Thessaloniki's Prefecture 15 1,5 4,5 4,5 4,5

Total 500 50 157,5 146,5 146


The Rising Interest in the Greek PV Market and Recent Developments in the Granting of Licenses

PVs

APPLICATIONS FOR GENERATION LICENSES

Amount Power (MW) Total power to be granted permission till 2010 >150KW and

<2MW

Area

1004 1217,039 147,980

East Macedonia and Thrace 83 106,779 12,500

Attiki 41 51,722 10,920

Northern Aegean Sea 1 1,609 *

Western Greece 120 158,694 18,000

Western Macedonia 36 47,000 12,000

Ipiros 50 58,230 5,400

Thessaly 177 245,984 16,020

Ionian Islands 3 4,046 *

Central Macedonia 127 124,263 15,000

Crete 26 15,281 * South Thessaloniki 20 20,306 4,500

Southern Aegean Sea 1 0,200 *

Peloponnesus 203 244,290 36,590

Sterea Ellada 116 138,634 17,060

296 1824,900 147,480 East Macedonia and Thrace 26 99,938 12,000

Attiki 10 43,952 10,920

Western Greece 30 131,357 18,000

Western Macedonia 17 99,744 12,000

Ipiros 7 37,000 5,400

Thessaly 44 256,851 16,020

Ionian Islands 1 4,000 *

Central Macedonia 38 197,943 15,000

Crete 4 22,996 *

South Thessaloniki 7 34,395 4,500

Peloponnesus 62 685,655 86,590

≥2MW

Sterea Ellada 50 211,070 17,060

Total 1300 3041,939 345,460


Incentivation for PV projects (1)

Financial support for the construction of PV parks has been generously provided by the State, primarily as part of

the so-called Operational Program for Competitiveness (OPC) and the investment incentives under Statute

3299/2004. The OPC has drawn resources from the EU Third Community Support Framework to provide state aid to

alternative energy sources. State aid accounts for 30% of the eligible cost of the projects and can go up to 50% in

the case of construction of transmission lines connecting renewable energy plants to the electricity grid. OPC is now

subject to the Fourth Community Support Framework.

Statute 3299/2004 introduced substantive and procedural changes to the regime of state aid to corporations and

provides for various types of incentives (i.e. cash grants, leasing subsidies, tax relief and a cash grant for payroll

expenses relating to employment created by an investment). The law was partially amended at the end of 2006 to

be harmonized with the new regional aid map that will apply to the EU for the period from 2007 to 2013.

Statute 3468/2006 on RES introduced an additional incentive for the generation of electricity from PVs. According

to article 24, every producer of electricity from RES who obtains a production license has to pay, when starting his

commercial activity, a special rate to the Greek Transmission System Operator (HTSO) amounting to 3% of the sale

price, excluding VAT. However, this same article exempts PV producers from this obligation.



FEED-IN TARIFFS OF ELECTRICITY PRODUCED FROM R.E.S. Energy production from:.

Price of Energy (€/MWh)

Connected Syctem Non Inter- ConnectedIslands

(a) Wind Energy 75,82 87,42

(b) Wind Energy produced from off-shore wind parks 92,82

(c) Hydro energy produced from hydro power plants of a capacity ≤ (15) MWe 75,82 87,42

(d) Solar Energy produced by PV power stations of a capacity ≤ (100) kW

(e) Solar energy produced by PV power stations of a capacity > (100) kW

452,82

402,82

502,82

452,82

(f) Solar energy produced by non-PV systems of a capacity ≤(5) MW

(g) Solar energy produced by non-PV systems of a capacity > (5) MW

252,82

232,82

272,82

252,82

(h) Georthermal energy, biomass, gas emitted from landfill area and from biological treatment plants and biogas 75,82 87,42

(i) Other R.E.S. 75,82 87,42

(j) CHP 75,82 87,42



PROPOSED NEW FEED-IN TARRIFS Year Month A B C D

Connected Islands not connected >100kW <=100kW >100kW <+100kW

2009 January 400,00 450,00 450,00 500,00 February 394,00 443,25 443,25 492,50 March 388,09 436,60 436,60 485,11 April 382,27 430,05 430,05 477,84 May 376,53 423,60 423,60 470,67 June 370,89 417,25 417,25 463,61 July 365,32 410,99 410,99 456,65 August 359,84 404,82 404,82 449,80 September 354,45 398,75 398,75 443,06 October 349,13 392,77 392,77 436,41 November 343,89 386,88 386,88 429,87 December 338,73 381,08 381,08 423,42





2014 January 184,25 207,28 207,28 230,31 February 183,32 206,24 206,24 229,15 March 182,41 205,21 205,21 228,01 April 181,5 204,18 204,18 226,87 May 180,59 203,16 203,16 225,73 June 179,68 202,15 202,15 224,61 July 178,79 201,13 201,13 223,48 August 177,89 200,13 200,13 222,37 September 177 199,13 199,13 221,25 October 176,12 198,13 198,13 220,15 November 175,24 197,14 197,14 219,05 December 174,36 196,16 196,16 217,95


THE 3-STEP LICENSING PROCEDURE· Production License / Exemption from obligation to obtain a production license · Connection terms · Environmental terms approval· Installation license (for power stations over 150 Kwp· Contracts for Connection and Purchase· Operation License (for power stations over 150 Kwp

Application for granting Electricity Production License (RAE)

Preliminary Environmental Assessment and EvaluationRAE forwards the Preliminary Report on Environmental Impact to the Authority

that is responsible for environmental licensing

Electricity Production License RAE / Ministry of Development

Determination of the connectionterms to the System or the Grid (The offer)

(DESMIE / DEI)

Intervention or Concession Approval(Secretary General of the Region /

Local Forest Authority)

Power Purchase Agreement(DESMIE / DEI)

Contract for the connection with the System and the Grid

(DESMIE / DEI)

Operation License(Secretary General of the Region / Dept. of Planning & Development)

Installation License(Secretary General of the Region / Dept. of Planning & Development)

Environmental Terms Approval


THE EVALUATION PROCEDURE

Conflict with other projects ?

Stage 2 of EvaluationComparative Evaluation of conflicting projects

Impediments in cases of:Connection to the grid

Overlaps Saturation of region

PositiveOpinion ofRAE

Preliminary positive review

Rejected Applications

Negative Opinion

RAEEnd of

Procedure

Stage 1 of Evaluation Evaluation of a single application

Review of the Application’s requirementsNational Security

Location of the projectTechnical-economic capability of the applicantEnvironmental matters Technical quality of the application dossier

Energy efficiency of the project and prospects of feeding the produced energy into the grid Technical-economic efficiency of the project

Old projects without any Installation/Operating/Environmental problems

Preliminary positive review

Rejected Applications

NegativeOpinion RAE

Launch of Procedure

PositiveOpinion ofRAE


Application for Production License

Part 1 – Details of the Applicant

Part 2 – Description of the project

Part 3 – Technical Proposal

Part 4 – Securing the right to use the area where the power station will be installed

Part 5 – Preliminary technical evaluation

Part 6 – Business plan

Part 7 – Overall business plan

Part 8 – Economic viability of the applicant to materialize the project

Part 9 – Warranties and supporting documentation

APPLICATION FOR GRANTING THE PRODUCTION, INSTALLATION AND OPERATION LICENSE

PROCEDURE DEPENDING ON THE CAPACITY OF THE PV STATION

[1] Photovoltaic systems of capacity > 20 Kwp

[2] Photovoltaic systems of capacity 20 ≤150 (kWp)

[3] Photovoltaic systems of capacity > 150 kWp

[4] Photovoltaic systems of capacity 150-2.000 KwP and >2000 kWp

Application and Procedure for the Establishment License including approval on environmental terms

Application and Procedure for the Operation License


REQUIREMENTS OF CONNECTION WITH THE SYSTEM AND THE GRID AND STANDARD TERMS OF OPERATOR AGREEMENTS

Granting of all the necessary licensesInstallation licenseOperation license Approval of Environmental TermsNB. The terms of connection to the system are strictly technical. The local branch of PPC examines the necessity, for instance, of a transformer, power substation, length of cable etc.)

Duration: 10 + 10 (or 20 years under pending amendment)

Cost of Connection: Charged on the holder of the installation license

Standard Terms of Operator Agreements (e.g. duration, risk allocation etc)


Corporate Environment

Legal forms of PV firms operating in Greece

Types of Corporation: Companies Limited by Shares and Companies with

Limited Liability

Procedures of establishment, maintenance and corporate governance

Costs

Transfer of licenses and change of ownership in PV firms


Tax Matters Main Taxes on Corporate Transactions

Dividends

Share Acquisitions and Disposals

Asset Acquisition and Disposals ‘

Mergers

Joint Ventures

Company Re-organisations

Tax Environment and Criteria for Providing Credit Facilities by Greek Banks

Criteria for Providing Credit Facilities by Greek BanksFinancing of this kind of Projects comes up to 40-50% of the total investment cost

Decision based on:

- Detailed Project Description and Substantial Feasibility Study of the Project.

- Certified measurements for the location of the Project

- Final and detailed Project cost (based on offers)

- Financial structure of the project and proof of necessary amount of equity (bank references, financial statements etc.).

- Land ownership; terms & conditions of the lease contract, if this is the case.

- Issuance of all necessary (at each stage) permissions and licenses.

- Definition of the company’s structure of the Project Owner.

- Brief Company Profile and Financial Statements of the Owner of the Project and its shareholders (previous experience and business activities)


Dr. Kelemenis is the founder and managing partner of Kelemenis & Co. He obtained his LL.B from the University of Athens and his M.Phil and D.Phil degrees from

Oxford University. He went up to Oxford on a Rhodes Scholarship awarded by the John Cecil Rhodes Trust of Oxford University. Dr. Kelemenis' expertise lies primarily in

corporate and commercial matters, corporate fraud, and litigation. In terms of sectoral expertise, he has been heavily involved in energy and natural resources. He has

been repeatedly selected by the EU Commission and the World Bank to advise on the legal approximation of Eastern European transition economies with the EU acquis

communautaire. In so doing, he has advised the governments of FYR Macedonia, Moldova, Romania, Serbia and Albania.

Dr. Kelemenis is a recommended lawyer for M&A, corporate & commercial work, energy, and litigation in all leading international legal directories (e.g. PLC Handbooks,

European Legal Experts, Legal 500, Chambers & Partners, IFLR). PLC Which Lawyer 2008 describes him as a “prolific and respected deal-focused corporate advisor

with acknowledged advisory experience in deals involving the hotel and leisure, energy and food industries”, whereas Legal 500 2008 as “a versatile business lawyer who

can inspire colleagues and clients alike”. Dr. Kelemenis is authorized to appear before the Supreme Court of Greece.

Dr. Kelemenis has authored several articles and chapters in edited volumes including the Greece chapter for Sweet & Maxwell’s leading loose-leaf publication “Energy

Law and Regulation in the EU”, as well as the Greece chapter on both Electricity and Oil Regulation for the “Getting the Deal Through Series”; on renewable energy for

the "Renewable Energy Finance Yearbook 2007/2008" published by Euromoney; on M&A for the "European M&A 2007/2008” published by the Global Competition

Review; and on dispute resolution for ICGL’s "Litigation & Dispute Resolution 2008" and PLC’s “Dispute Resolution Handbook 2008/09”. He was recently commissioned

by Oxford University Press to write the Greece chapter for the Digest of Commercial Laws of the World.

Yannis Kelemenis


THANK YOU

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