Green Investments: RES in Greece

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1 Green Investments: RES in Greece Green Investment Perspectives Forum, Athens University History Museum, October 12, 2016 Nikos Stamou, Investment Promotion Manager

2 Agenda The Greek RES Market today The Greek Investment Proposal Success Stories Enterprise Greece and services offered

3 The Greek RES Market today THE GREEK RES MARKET TODAY

4 Energy in Greece: Highlights & Prospects Highlights Prospects Energy Sector Energy is accounting for 4% of the country s economic activity Electricity is the largest sub-sector representing c 53% of the sector s economic output, followed by Petroleum (44%) and natural gas (2%) Electricity Total installed capacity of c. 18GW mostly dependent on lignite, natural gas and RES, c. 25% each Renewable energy production capacity of c.5.2gw, supported by a new feed in premium framework Transmission system of c.16,000 km of highvoltage lines Distribution system of c.226,500 km of medium/low voltage lines Vertical integrated Public Power Corporation ( PPC ) dominating the supply chain Petroleum/Natural Gas Limited fossil fuel reserves but large scale seismic research for natural gas is currently under way 2 refining companies operating in Greece with an annual capacity in the area of 26m metric tons Electricity Generation EU commission is pushing for lignite market deregulation Significant renewable energy resources potential With the current unbundling reform and deregulation of the Greek power market several independent power producers have entered or are in the process of entering the market Electricity transmission/distribution Significant need for investment in electricity networks upgrade, including the interconnection of islands and Crete with the main Grid Petroleum/Natural Gas Demand for new infrastructure in natural gas transmission (liquid gas terminals, gas pipelines, gas distribution systems) International Tenders for the exploration and exploitation of hydrocarbon Offshore & Onshore blocks in Greece. Electricity Demand (National Grid, Interonnected)

5 Electricity Production in the Greek System: by source Electricity Production Mix January August % 90% 80% 70% 60% 50% 40% 30% 20% 10% 20% 10% 27% 0% 43% 28% 29% 30% 31% 10% 23% 0% 39% 16% 15% 12% 22% 0% 33% 26% 0% 0% 28% 31% 26% 37% 23% 22% 26% 13% 12% 0% 27% 11% 30% 27% 0% 0% 35% 36% The Greek RES market has grown with a very strong pace. Total installed capacity stood at 1,06 GW in 2008 and 4,6 GW in2015, 334% increase within the last 7 years! During the economic crisis in Greece, the RES sector was one of the very few growing economic sectors where investments were made and employment was created 0% Jan Feb Mar Apr May Jun Jul Aug Lignite Other Natural Gas Hydro RES Source: Electricity Market Operator (ADMIE)

6 Wind Energy Statistics The Big Players in Greece Installed MW per wind energy producer (2015) Installed MW per Wind Manufacturer (2015) TERNA ENERGY EDF IBERDROLA Rokas ENEL GREEN POWER ANEMOS (ELLAKTOR) PPC Renewables OTHERS< 10 EREN GROUP PROTERGIA RF ENERGY EUNICE ACCIONA BABCOCK & BROWN RENINVEST ENERCON Invest WP IWECO BCI JASPER ENERGY INTRAKAT IKTINOS THEMELI ENVITEC ENTEKA PLASTIKA CRETE AEROTECHNIKI WRE 82,9 72,5 71,2 62,6 60,4 59,8 43, ,9 29,9 26,9 24,7 22, , ,1 15,3 11,9 10,2 10,2 250,7 200, ,6 358 VESTAS ENERCON GAMESA SIEMENS NORDEX OTHER 47,2 114,2 233,4 196,2 507,1 Installed capacity (2015): 2150,8 MW 1052, Source: HWEA Wind Statistics, ELETAEN

7 The Greek PV Market at a glance Greece ranks 8 th worldwide with regard to installed PV capacity per capita. PV s covered 7.1% of total electricity demand in 2015, ranking Greece as #2 country worldwide in terms of PV contribution to total energy consumed In 2014, the country installed only about 17 MWp. The sharp drop in new installations was mainly the result of a freeze on the receiving and processing of new applications for PV systems from August 2012 until April PV & Wind absorbed the largest share of RES investment, 93% of total over the period with EUR 5.4 billion for PV and EUR 1.7 billion for Wind In April 2014, Greece has set a new target for PV until 2020, aiming at the installation of 2 more GWp of PV until the end of the decade. Thus installed capacity in RES grew at an average rate of 28% p.a. between 2006 and 2013 Source: HELAPCO

8 Project Pool : RES projects in the pipeline TECHNOLOGY With PRODUCTION License With INSTALATION License With Binding connection terms With connection contract With POWER PURCHASE AGREEMENT With OPERATION License Total capacity (MW) Wind Biomass Geothermal Small Hydro PV Solar Thermal Hybrid Total Capacity (MW) ,704 MW of mature RES wind projects 3,617 MW of mature RES P/V projects Source: Ministry of Environment & Climate Change, end of JUNE 2014

9 THE GREEK INVESTMENT PROPOSAL

10 The strengths of the Greek RES market create a very attractive business opportunity Bound by EU regulations and Kyoto Protocol agreements National target for RES at 20% on final energy consumption by 2020, 2% above the mandatory levels of 2009/28/EC, 40% electricity production from RES NEW TARGETS FOR PV 20 year PPA (power purchase agreement)-revised Feed in Premium compensation scheme for RES electricity producers ratified this summer and activated after 2017 Ideal conditions for wind and solar energy, in 2012 the average capacity factor of wind parks was estimated at 26%, coupled with increased productivity of new wind turbines leading to enhanced performance The system operator deploys a long term plan for the development of the electricity network, strengthening the network and facilitating additional energy capacity through RES The installation cost for wind parks in Greece is considerably lower, compared with other renewable energy technologies (EUR 1,200/kW in the interconnected system, EUR 1,400/kW in the non interconnected islands) Highly-skilled, world-renowned RES personnel available for hiring Availability of investment incentives, depending on project scale and tech Projects with rewarding cash flows and attractive Returns on Investment

11 The Greek RES Market is expected to grow significantly Installed capacity 2015 Target 2020 National Action Plan for RES ( ) In 2010 Greece endorsed its National Action Plan for Renewable Energy Sources (time frame ) It is an ambitious plan aiming to reform the county s energy sector so that 20% of the primary energy use is coming from RES by 2020 (penetration level: 40% electricity, 20% heat and 10% transport) Source: Hellenic Association of Photovaltaic Companies In MW out of 3 MW should come from RES A new target of 2GW for 2020 was set for PVs in 2014 The infrastructure cost to meet targets represents 1/3 of the penalty to be paid by Greeks in case the targets are not met In the electricity sector, major RES players are going to be Wind and PV (7.5 and 4.2 GW target values for 2020). This does not exclude additional contributions from other RES e.g. biomass, geothermal energy and concentrated solar power

12 RES Investments needed -In the Timeframe- Investments needed ( ) Total (Mil.Euro) Lignite 2100 Natural Gas 3311 Oil 249 Large Hydro 650 Small Hydro 137 Pump storage 1672 PV 5508 Solar Thermal 1120 Wind 6710 Geothermal 264 Biomass / biogas 530 Total The overall investments needed in the energy sector are estimated to 22.2 billion euro for the timeframe. From these 16.5 will go to new RES capacity, nearly 7 billion to wind, 5.5 billion to PV, 1.6 billion to pump storage for supporting the variable RES production, 1.1 billion to solar heating and cooling, 0.5 billion to biomass and biogas projects. On fossil fuels, Greece will spend 2.1 billion euro for new «clean coal» (lignite in our case) power plants while 3.3 billion will be invested in natural gas facilities Details of the total budget needed for are shown on the table Source: CRES from which RES 16455

13 A market of abundant opportunities... Wind PV & Solar Thermal Greenfield investments or Joint ventures in Energy Production Plants Light manufacturing Service provision & maintenance Geothermal Biofuels Greenfield investments in energy production Plants Hydro

14 ...and great potential

15 and a supportive funding framework Customised funding programmes run by international financial institutions (EIB, EIF, EBRD, IFC, Black Sea Bank, etc.) in cooperation with Greek banking institutions New Development Fund to support RES investments through guarantees & loans The European Fund for Strategic Investments (EFSI/ Juncker plan ) Availability of investment incentives, depending on project scale and tech, through the new investment law

16 together with a favourable licensing framework through Fast Track Qualification Prerequisites Case #1 The total value of the investment exceeds 100 million Euro,or Case #2 Case #3 Case #4 The value of the investment exceeds 40 million Euro and, concurrently, the investment creates at least 120 new jobs, or The investment creates at least 150 new jobs or at least 600 jobs are maintained in a viable and sustainable manner The value of the investment exceeds 15 million Euro for industrial investments within organized industrial areas or the total investment cost exceeds 5 million Euro for investments regarding the development of Business Parks or 3 million Euro for investments included in JESSICA initiative The process One-stop-shop 45 day deadline Absolute priority Enterprise Greece S.A. has a key role in the whole process providing one stop shop services

17 SUCCESS STORIES Success Stories

18 Global players in the Greek RES market

19 Energy-A strong sector with several recent success stories US York Capital Management recently announced 100 mn investments in Greece's energy group GEK Terna, acquiring a 10% share of the firm. Canadian investment fund Fairfax Holdings has become the third-biggest shareholder of Greek industrial energy group Mytilineos, acquiring a 5 percent stake worth about 30 million euros ($41 million). US Third Point Gas has entered into the share capital of Energean Oil & Gas (a Greek based Oil & Gas producer and explorer) through an equity capital injection of $60 million Qatar Petroleum International (QPI) and the Greek company GEK Terna have signed an agreement to acquire an interest in the Heron II power plant, signaling QPI's first investment in Greece. Heron II is currently Greece's most efficient power plant. Azeri state energy company Socar signed deal for acquisition of Greece's natural gas transmission network operator DESFA

20 Success Stories ENTERPRISE GREECE & SERVICES OFFERED

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22 Energy Projects in Energy include 65 Renewable Energy Sources and Clean Tech projects by well established Greek firms/groups that are looking for equity participation or debt financing. Greenfield projects at a very mature stage of implementation on sale, are also part of our portfolio. The projects consist of business opportunities in Wind and Solar energy, Biomass, Solar thermal, LNG, Hydroelectric, etc.

23 World Bank 2014 «Enterprise Greece S.A. (former Invest in Greece Agency) evaluated positively for the good selling practices in promoting a public-private investment projects portfolio. The agency has put a lot of effort over the last four years to compile an investment portfolio of both public and private projects, from which the investment promotion unit is able to draw information based on the interests of individual investors. EG showed how specific investment opportunities can be identified through effective partnerships.» Enterprise Greece S.A (former Invest in Greece Agency) is among the few IPIs to achieve high scores on both the tourism-specific website content and the GIPB 2012 investor inquiry assessment

24 Your Investment Partner in the region 109 Vasilisis Sophias Avenue Athens, Greece t f e.