Priority in terms of connection to the electricity grid will be photovoltaic projects, with a total capacity of approximately 1,000 MW so that they can operate immediately, in order to support the program of low prices for rural electricity in the form of bilateral long-term contracts (PPAs) and to implement the PPAs of the industry.
According to what the official of the Ministry of Environment and Energy (YPEN) reported to the “Economic Post”, the 560 MW of photovoltaics will concern industry and the rest farmers. In fact, the specific projects will not have the obligation to install batteries for energy storage.
As the same source points out, the main burden for supporting the government’s plan for cheaper electricity for farmers through the program of bilateral long-term contracts will fall on PPC, which also serves the majority of the country’s rural electricity supplies, without excluding the involvement of other power suppliers.
How will the program work for farmers?
In the program of low prices for rural electricity in the form of bilateral contracts, all holders of rural electricity supplies will be able to participate, which is why it is estimated that the administrative costs for PPC, or any other electricity provider involved, will be high.
The prices
Each farmer, or groups of farmers participating in cooperative schemes or producers practicing contract farming will enter into ten-year electricity supply contracts. For the first two years (with pricing starting from April 1st), prices will be fixed for all consumption and will range from 9.3 – 11 cents/KWh (kilowatt hour). In particular, the prices for two years will be:
- 9.3 cents/KWh for farmers who belong to cooperative schemes or practice contract farming and have no arrears.
- 9.8 cents/KWh for the rest of the farmers who have no overdue debts.
- 10.5 cents/KWh for those farmers who have overdue debts and belong to cooperative schemes or practice contract farming and
- 11 cents/KWh for individual farmers in arrears.
For the remaining 8 years of the bilateral agreement, through the PPAs, the farmers will purchase electricity from the photovoltaic plants that PPC (or any other supplier) will have built within the first two years at a fixed price of 9 cents/KWh for 1/3 of their consumption. For the rest of the consumption, the farmers will freely purchase electricity from the market (from the same or another provider). The ten-year agricultural PPAs will have a single exit clause of €70.
It is noteworthy that the rural consumption is estimated at 1.9 TWh (terawatt hours) which corresponds to 4% of the total electricity consumption.
82 million euros due
With regard to the overdue debts of the farmers, which they will be able to settle to the electricity suppliers with repayment over a decade and zero interest, they are estimated at around 82 million euros.
The financing of the regulation will come from the Energy Transition Fund (ETF), will be equally distributed over the decade and is estimated at 6 to 8 million euros per year.
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