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Greece taxes and incentives for renewable energy KPMG Global Energy & Natural Resources.

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Investments and Incentives under Investment Incentives Law 3908/2011

Article 6 of Law 4242/2014 stipulates that the final deadline for submitting applications with regards to investment projects under the provisions of Law 3908/2011 was determined to be 5 March, 2014. At this time, the competent Ministry is not accepting further applications for launching investment projects. In order for respective incentive framework to remain active for new applications, a legislative amendment is required to be introduced to the Greek Parliament.

In light of the above, various entities — including joint ventures (JVs) that qualify as synergy and networking JVs and engage in the production of energy from renewable resources such as wind and hydro — are generally eligible to apply under the provisions of Law 4242/2014 (assuming that the relevant provisions of the law are re-activated and applications’ submissions are re-initiated). Entities active in the production of energy from PV systems are not eligible (NACE Code 35.11.10.09). Investments are divided into General Business Investments and Special Investment Plans.

Incentives Available

Investment Incentives Law 3908/2011 became effective February 2011, replacing the previous incentive Law 3299/2004. However, investments made under the previous incentive Law 3299/2004 continue to be subject to the requirements of that law and are eligible for the incentives of that law. According to Law 3908/2011, the following incentives are available:

  • Tax relief, which constitutes an income tax exemption on profits before taxes as determined on the basis of tax legislation. The amount of the tax relief granted becomes a tax free reserve for the equivalent amount.
  • Cash grants provided by the State that cover part of the expenses of the investment project
  • Leasing subsidies provided by the State that cover part of payable installments related to the leasing of new equipment. The leasing subsidies do not exceed a 7-year period. These incentives may be granted solely or in combination. However, apart from tax relief (which is available to all investments qualifying for incentives under Law 3908/2011), cash grants and leasing subsidies may not be available to all qualifying investments

General Eligibility Requirements

According to Law 3908/2011, certain criteria should be met in order for the aforementioned incentives to be granted. In general, these criteria include the following:

  • The investment should be initiated after the official eligibility approval. Under certain conditions, the investment may be initiated prior to the official approval as above but in any case after the filing of the respective application.
  • The minimum amount of the investment is set at EUR1 million for large enterprises, EUR500,000 for medium-size enterprises, EUR300,000 for small enterprises and EUR200,000 for very small enterprises. The above minimum amounts are reduced to 50 percent for General Business Investments.
  • The enterprises must be established in Greece and have the form of either a sole trader, a commercial entity/partnership or a co-operative. Enterprises must maintain double-entry accounting books or an income and expenses book (category B of the Code of Books and Records). Also, enterprises that submit business plans exceeding EUR500,000 (instead of EUR300,000 which was provided by the prior investment scheme of Law 3299/2004) must operate in the form of a commercial entity or co-operative
  • Investor’s own participation of at least 25 percent is required for investments for which cash grants or tax relief is provided
  • Certain requirements exist in respect to loans received that are to be used for the subsidized investment
  • Special requirements may apply depending on the nature of each investment project.

Operating Subsidies

According to the provisions of the relevant legislation (Laws 3468/2006, 3734/2009, 3851/2010, 3889/2010, 4062/2012 and 4254/2014) the following apply:

Price of energy (EUR/MWh)    
Electricity generated by: Electricity Price (EUR/MWh)
  Connected System Non-Connected Islands

1) Wind energy generated from onshore wind farms with capacity less than or equal to 5 MW 105 85
2) Wind energy generated from stations with capacity of more than 5 MW 105 82
3) Wind energy generated from stations in non-connected islands 110 95
4) Hydroelectric plants with a capacity less than or equal to 1 MWe 105 85
5) Hydroelectric plants with a capacity from 1 MWe up to 5 MWe 105 83
6) Hydroelectric plants with a capacity between 5 MW and 15 MWe 100 80
7) Solar energy from solar thermal stations with no storage 260 200
8) Solar energy from solar thermal stations with a storage system which ensures at least 2 hours of operation in the nominal capacity 280 220
9) Geothermal energy of low temperature pursuant to par. 1f of article 2 law 3175/2003 (‘A 207) 143 130
10) Geothermal energy of high temperature pursuant to par. 110 100
11) Biomass (or bio liquids) exploited through thermal processes (combustion, gasification, pyrolysis) from stations with installed capacity of less than or equal to 1 MW (excluding the biodegradable fraction of household waste) 198 180
12) Biomass (or bio liquids) exploited through thermal processes (combustion, gasification, pyrolysis) from stations with installed capacity between 1 MW and 5 MW (excluding the biodegradable fraction of household waste) 170 155
13) Biomass (or bio liquids) exploited through thermal processes (combustion, gasification, pyrolysis) from stations with installed capacity more than 5 MW including the biodegradable fraction of household waste) 148 135
14) Gas release from landfills and biological cleaning installations and biogas produced by biodegradable fraction of waste and organic material/waste water treatment and sludge recovered from plants generated from stations with capacity of less than or equal to 2 MW 131 114
15) Gas release from landfills and biological cleaning installations and biogas produced by biodegradable fraction of waste and organic material/waste water treatment and sludge recovered from plants generated from stations with capacity of less than 2 MW 108 94
16) Biogas derived from the anaerobic digestion of biomass (energy crops, silage, green fodder agricultural crops, livestock and agro-industrial organic residues and waste edible oils and fats, expired food) and generated from stations with capacity of less than or equal to 3 MW 230 209
17) Biogas derived from the anaerobic digestion of biomass (energy crops, silage, green fodder agricultural crops, livestock and agro- industrial organic residues and waste edible oils and fats, expired food) and generated from stations with capacity of more than 3 MW 209 190
18) Other RES (including the stations for the energy exploitation of the biodegradable fraction of municipal waste, not integrated in another category, which meet the requirements of the European legislation as in force from time to time) 90 80
19) CHP1 using natural gas power less than or equal to 1 MW regarding the categories (α) “Combined cycle gas turbine with heat recovery” or (γ) “condensing steam turbine” pursuant to article 3 of Ministerial Decision Δ5-ΗΛ/Γ/Φ1/οικ.15641/14.07.2009 (‘B 1420) 88+GPA2 76+GPA2
20) CHP1 using natural gas power less than or equal to 1 MW pursuant to article 3 of Ministerial Decision Δ5-ΗΛ/Γ/Φ1/οικ.15641/14.07.2009 (‘Β1420) 92+GPA2 80+GPA2
21) CHP1 using natural gas power between 1 MW and 5 MW regarding the categories (α) “Combined cycle gas turbine with heat recovery” or (γ) “condensing steam turbine” pursuant to article 3 of Ministerial Decision Δ5-ΗΛ/Γ/Φ1/οικ.15641/14.07.2009 (‘Β 1420) 80+GPA2 70+GPA2
22) CHP1 using natural gas power between 1 MW and 5 MW and other categories pursuant to article 3 of Ministerial Decision Δ5-ΗΛ/Γ/Φ1/οικ.15641/14.07.2009 (‘Β 1420) 84+GPA2 74+GPA2
23) CHP1 using natural gas power between 5 MW and 10 MW regarding the categories (α) “Combined cycle gas turbine with heat recovery” or (γ) “condensing steam turbine” pursuant to article 3 of Ministerial Decision Δ5-ΗΛ/Γ/Φ1/οικ15641/14.07.2009 (‘Β 1420) 74+GPA2 65+GPA2
24) CHP1 using natural gas power between 5 MW and 10 MW and other categories pursuant to article 3 of Ministerial Decision Δ5-ΗΛ/Γ/Φ1/οικ.15641/14.07.2009 (‘Β1420) 78+GPA2 70+GPA2
25) CHP1 using natural gas power between 10 MW and 35 MW regarding the categories (α) “Combined cycle gas turbine with heat recovery” or (γ) “condensing steam turbine” pursuant to article 3 of Ministerial Decision Δ5-ΗΛ/Γ/Φ1/οικ15641/14.07.2009 (‘Β 1420) 68+GPA2 62+GPA2
26) CHP1 using natural gas power between 10 MW and 35 MW and other categories pursuant to article 3 of Ministerial Decision Δ5-ΗΛ/Γ/Φ1/οικ.15641/14.07.2009 (‘Β1420) 72+GPA2 66+GPA2
27) CHP1 using natural gas power more than 35 MW regarding the categories (α) “Combined cycle gas turbine with heat recovery” or (γ) “condensing steam turbine” pursuant to article 3 of Ministerial Decision Δ5-ΗΛ/Γ/Φ1/οικ15641/14.07.2009 (‘Β 1420) 61+GPA2 57+GPA2
28) CHP1 using natural gas power more than 35 MW and other categories pursuant to article 3 of Ministerial Decision Δ5-ΗΛ/Γ/Φ1/οικ.15641/14.07.2009 (‘Β 1420) 65+GPA2 60+GPA2
29) Other CHP1 connected to the interconnected system 85 80
30) Other CHP1 connected to the non-interconnected system 95 90

1CHP: Combined Heat and Power

2GPA: Gas Price Adjustments

Additional Information

Operating Incentives

Law 3468/2006 implemented the EU directive 2001/77 concerning the promotion of renewable energy sources and regulates the production of electricity from renewable energy sources in Greece, (not including the feed-in tariffs for solar energy parks for which specific feed-in tariffs have been determined by Law 3734/2009) as amended by Laws 3734/2009 3851/2010, 3889/2010 and 4254/2014.

The feed-in tariffs referred to in the previous table were introduced by Law 4254/2014.

Duration

In general, the sale agreement for electricity produced by stations using renewable resources and CHP (High-efficiency co-generation of electricity and heat) and combined heat and power is valid for 20 years and may be extended under certain conditions. The sale agreement for electricity produced by solar thermal stations is valid for 25 years and may be extended under conditions.

Administrative Procedures

The specific licenses required depend on the installed power. Main licenses and authorizations include the following:

  • production license
  • establishment/installation license
  • operation license
  • approval of environmental terms
  • conclusion of connection agreement with Public Power Corporation (PPC)
  • conclusion of sale agreement of electric power with the Administrator (DESMIE or PPC).

Grid Access

Generally, priority access to the grid is provided to renewable energy producers for connection to the mainland grid, subject to the fulfillment of all conditions and requirements provided by the Code of Grid’s Administration.

Taxes and Incentives for renewable energy

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