INTERVIEW - Greece's debt crisis may put at risk domestic renewable energy industry
(SeeNews) – Sep 21, 2011 – The current debt crisis in Greece and the risk of the country going bankrupt and leaving the euro zone will inevitably affect the domestic renewable energy sector, as the political and financial stability of a country are important factors for investors, Leo Noethlichs, managing director of Greece-based RE Services EPE, told SeeNews in an interview.
by Tsvetomira Tsanova
The financial crisis in Greece, one of the hottest topics at present not only in Europe but globally, is threatening a key aspect of new energy project development -- the ability to calculate the income from a power facility for a certain period of time.
Leo Noethlichs explains that given the political uncertainty in the country it is all natural for investors to choose to leave the market and spend their money on other projects around the world, which may offer better technical, commercial and political conditions.
Asked whether the crisis in Greece may drive investors towards other markets in Southeastern Europe, Noethlichs said that competition within the sector is not only between developers or equipment makers, but also between countries. "Most investors are acting international and will invest where the best conditions are available".
Noethlichs' company RE Services develops renewable energy projects in Greece, provides services to the wind and solar photovoltaic (PV) industry and has 150 MW of wind and 25 MW of photovoltaic power plants in the pipeline.
The founders of RE Services have been working in Greece since 2000, when the country offered a "normal" feed-in tariff (FiT) and provided subsidies to cover 40% of a project's costs. At present, the subsidies are still available, while the FiT for wind power is EUR 87.85 (USD 105.42) per MWh. A project owner can choose to substitute the subsidy with a 20% bonus to the FiT, bringing it to EUR 105.42 per MWh.
The company operates the 42-MW Garbis and Sefiros wind farm near the town of Tripoli in the southern part of the country. It has also secured all permits for another 42-MW wind power project at the same location and is currently looking for financing. "Even if an investor would like to invest his money in Greece, at the moment there is no bank available for financing," Noethlichs said.
It is hard to predict what will happen with the renewable energy sector in Greece, Noethlichs said. When it comes to wind energy, for example, there are many projects in the pipeline and once they are in operation the locations that offer the best wind resource will be gone and Greece will reach its targeted capacity. Still, the political uncertainty now represents a serious obstacle for the realisation of these very projects.
"For sure the Greek market will collapse for a long period if Greece has to file for bankruptcy and leave the Euro," Noethlichs concluded.
Greece fell significantly in the latest Renewable Energy Country Attractiveness Indices of US audit and consultancy company Ernst & Young, published earlier this week. In the May 2011 issue of the indices the country ranked 10th, while it is now on the 21st place, due to the access to finance benchmark as it struggles to reduce its enormous debt.