The domestic market of renewable energy sources is experiencing strong investor interest by local and foreign groups, but at the same time serious problems which are hampering its momentum of recent years.
Just days after the Motor Oil-Ellaktor deal concerning the green energy portfolio of the construction group, the head of the Independent Power Transmission Operator (ADMIE), Manos Manousakis, described the problem of electricity capacity saying, “I have applications for projects of 23 gigawatts and don’t know what to do with them.”
The delayed development of the grid compared to the penetration of RES is one of the biggest obstacles to the implementation of new investments. The model of issuing grid connection terms on a first-come-first-served basis, instead of factoring in the solvency of each investor, has increased the problem. ADMIE has received a lot of applications from serious investors and others, which are now holding up the process for the issue of connection terms and generating considerable delays in project implementation, its officials note.
In the absence of grid capacity and facing a long and complex licensing procedure, which can in some cases exceed a decade if there are court cases and local opposition, investors are now opting for the shorter and more certain route of buyouts: Demand for operational, mature RES facilities has increased significantly not only in Greece but also in the broader European market; that is led by oil groups (accelerating their shift to remain in a market that is turning away from hydrocarbons to greener options), major investment funds targeting sustainable development, and strong energy conglomerates that can support low returns in the short term, as high demand raises the prices of RES projects considerably.
The pricing of Ellaktor’s portfolio in the deal with Motor Oil, reaching 1 billion euros from just €200 million four years ago, highlights the market trend. This deal opens the cycle of acquisitions and sector concentration, while changing the country’s energy map. A few days earlier the portfolio of Siemens Gamesa in Greece, along with those in Italy, Spain and southern France, went to Britain’s SSE Renewables.