Greece: Project Helios doesn't need exports to the North

Dear reader,

as the author here came across this article today, he wondered if it isn't a misconception of the Greeks that there is a need of a long distance connection for getting their future solar power plants to work. Although only a few indicators were found so far that Greece is hoping to access German grid market by gaining access to German 'EEG Vergütungen' (guaranteed Feed-in-Tariff), somehow disappointment about 'cold water' is premature.

Of course it would be 'easy money' to build some solar parks in Northern Greece, connect them to German grid and get for 20 Years the fixed Tariff payed for by German electricity consumers. But currently there are three major obstacles to prevent such a thing:   

1.) Under current EEG (which is a German law from year 2000, revised later) it's not possible to connect a solar power plant of whatever size in a location outside German soil.(jurisdiction)
2.) Investments are usually financed to a high degree by banks handing out loans often running 20 years, where returns are pretty save, while under German jurisdiction and within German AAA stability of probably not exiting the eurozone.
3.) As mentioned before the whole EEG payouts to green power plant owners are being financed by surcharges per kWh used by consumers and small businesses. As burdens already being felt in Germany there are just now radical reductions in future payouts to solar power stations as a result of growing public anger about sky rocketing electricity bills. So hard to imagine what public reaction would be if German electricity consumers are forced to subsidize also Greek solar power production units.

There would be a fourth problem which is the long time needed for building long distance, super high voltage DC power transmission lines to Northern Europe. Even more so when they have to cross other non EU territories as well , with all foreseeable problems around legislation, governmental obstructions of those transit countries, and of course the costs for such a project. The costs which will even rise the longer the construction process will take.

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On the other hand there is already an existing power grid in Greece and interconnections to neighboring grids like the one in Bulgaria, FYROM etc. As an integration of large solar plants would be much easier, faster while costing much less than long distance transmission with prior transformation to super high voltage. (DC technology needed in order to avoid AC related massive transmission losses)  
By using PVGIS interactive solar energy map presuming Thessaloníki area and CdTe technology (better known under brand name of First Solar) and 10% system losses we learn that some 1370 kWh of electricity can be 'harvested' per year. # (Probably even somewhat more, since these are always conservative estimates by PVGIS) Assuming a system prize currently (April 2012) of about 1600 €/kWPeak for units of 1 MWPeak or more we need at least 13 Ct/kWh in order to have the investment returned without interests in 10 years*. This assuming that grid integration is done locally by using the mid-range voltage grid of 10-20 KV and some existing power cables in the area. Feed-in-tariff until Jan 2012 (a cut was announced, maybe implemented but no sources yet) was  32 Ct/kWh which is way too high taking into account recent slumps in prices of PV-systems. Feed-in-tariffs in countries with +-1400 kWh/kWPeak are not only not needed but also harmful, because they give wrong incentives and form an obstruction to prize competition.

The space used per MWPeak is about 3 ha, as roughly 300 KWPeak² can be build per ha.² This immediately brings up the first problem with Greece, since there is a lack of reliable administration of who owns what piece of land. The second problem is that so far DEI, the Greek state owned power company did whatever they can to prevent, or at least delay the connection of more PV power to their grid. It is not only documented in the source provided here, but also known to the author by hearing first hand from installers working in Greece for many years. So the technical part is relatively easy to implement,  if Greek state reform is no longer forming an obstruction to development itself.

Next point is finances: In order to protect investment from a potential exit of Greece from the eurozone it is necessary to have those areas producing 'sun power' be out of jurisdiction of the Greek state. At least until reforms are completely achieved and the future of Greece in the eurozone is secured.  The ROI is at least 10 years, the life expectancy of solar plants at least 20 years (depending on what technology is used), so a lease period of 20-30 years for a symbolic prize would be recommended as well as the status of being 'ex-territorial', not subjected to Greek law, but to the investors 'home country'. Not subjected to Greek VAT taxes either, since it is for the time being not secure to count on tax returns for the initially invested sums. Greek grid company (or better plural, not state owned in future) must buy all power produced for a fixed price in Euro, or to allow the transmission to neighboring countries through their grid for a fixed price, paid also in Euro. (Although recommended only when domestic needs have been met in full, and a surplus of production would otherwise have to be taken off the grid).
So instead exporting electricity, revenues can be collected locally and being transferred back to the investing countries.

Greece profiting ?
Well, systems can be build by local installers being paid in Euros even when Greece is forced to exit the eurozone. Power systems can/must be maintained and secured by Greek staff and tax revenues can be collected from Greek grid companies and (maybe later existing wholesalers of electricity). Once Greek domestic demand in peak power during daytime is met, it can export the power to neighboring countries and can collect transmission fees. Greek power grid would see also massive investments and will not only provide work for electricians but also will help to achieve a better, more stable grid. Future solar power plants will presumably be providing cheaper power, since by and large the investments in building such a plant are the dominant factor. Greece can reduce its imports in fossil fuels and power in times of global peaking demand and the prize surges which went along with this and which are expected to continue. (See also latest developments on Iranian Oil embargo and implications for Greece) Therefore reducing its massive trade deficit and the current prizing of oil, coal etc is certainly an additional point for 'home power'. Depending on the life span of technology used those plants can produce power for more than 20 years, albeit it with a somewhat reduced efficiency, and could be sold to a domestic grid company after the lease for a few Euros or could be forced by Greek law to produce at a much lower level, maybe 5 Ct/kWh. (Maintenance costs of 1-2 Ct/kWh). Domestic Greek taxes such as VAT could apply from the moment the power leaves the 'extraterritorial production zone' and while using solar power could be a bit more expensive than other locally produced power based on fossils it would nevertheless be beneficial. In the long run most certainly, since we saw the prices of PV systems decreasing quite substantially in the last couple of years, and short term effects of rapidly increasing labor costs seen in Greece in the years after the introduction of the Euro, have been much more harmful to the underdeveloped production sector anyway.

So how long will it take ?
As described above, main obstacle to the implementation of solar investments on a huge scale in Greece is to overcome current problems of local land register, and the occurring obstruction of DEI employees, which prevent the quick grid connection of PV systems of all kind. Some legal acts from the central legislative body would be needed to address that problem of obstructing (corruption?) as well as punishment of those municipalities, which delay the introduction of reliable cadastres, which are the preliminary requirements to assign pieces of land to future use of power production. Even more so when foreign investment is involved, which needs the certainty not to invest in land, which can be later disputed by other 'owners'. Another problem to be addressed is the need for speeding up procedures of laying needed additional power cables for connecting the newly build capacities to the nearest usable grid. Also for the placement of additional 'linking equipment' such as transformer stations. A legislation for ensuring fast access to land required, technical requirements for e.g. safety and land use after cables are being laid in the ground, or the erection of masts, and for compensation of those land owners being affected by those measures. Also limiting their possibilities to start legal procedures in order to delay or prevent such measures. So all this just in order to ensure wide scale domestic use of solar power, not even thinking about exporting to other countries. Planning and even more so building the solar plants however only take 6-12 months, once a legal framework exists, which addresses all previously described points. Installing the solar panels is just a matter of days (metal construction can be rammed into the ground, no need for concrete foundations) , laying cables to existing grid and setting up required units, a question of weeks, depending on the local conditions. It is worth to notice that Germany has seen some months in 2010 and also 2011 where a monthly new buildup of PV capacity surpassed 2 GWPeak ! So, once all obstacles to investment have been eliminated a fast buildup of solar capacity can start.
Those exporting efforts can be done after production capacity is sufficient for domestic use, because the legal and financial procedures which are involved would presumably take much longer.
For exporting to neighboring countries and meeting their demand for power as well as for long distance transmission to Northern Europe there are a lot more preparations required, since some of the Balkan states are not even members of the EU, yet. So all measures for building up high voltage DC lines above ground or below, would require steps being undertaken by those governments involved, and it also conceivable that some transit fees must be negotiated in order to get things done. All this would require bilateral talks by Greece with its neighbors, as well as getting the EU and its Energy Commissioner Oettinger on board. It might even be needed to involve the foreign ministers of countries, which are interested in receiving the Greek power: Germany and others in the North of Europe. But there might be some alternatives, which are much closer to Greece and also in need of energy produced in the region. Bulgaria comes to mind, where is still the need of replacing at least one controversial power plant and there is Italy on the other hand which is currently heavily dependent on imported electricity. There would be a third alternative, which is to consider Greece a hub for power deliveries from a 'Eastern DESERTEC', maybe from Turkey and Egypt. Also one has to address the power needs of the many Greek islands in the Aegean Sea. So coming back to point , which is 'speed' the neighboring countries as well as Italy come to mind, especially since latter one already has an existing DC power cable linking it to Greece. So additional solar production capacity can be build in north-western Greece for export to Italy as well as for serving FYROM, Albania, possibly Serbia, Bosnia, Montenegro. Italy needs additional backbone capacity for power transport across its north-south axis, as well as later transit capacity for DESERTEC can be needed to transport the power to the northern industrial centers of Italy, and maybe also across the Alps. The existing linkage to Greece has of course to be assisted by some additional transport capacity.
Additional benefits to EU industry
Recent developments have shown that European manufacturers as well as installers/owners of solar powered plants such as Solar Millenium, a former important partner of DESERTEC, came into difficulties staying afloat in difficult times, while medium to long term chances remain high for those companies to pick their fair share of the market. Not being dependent on tax payer's or power consumer's money, but to earn back the investments done and to deliver an addition long term profit by the power of the sun's photons. The sun being our central star, delivering much more energy than we as humans can possible use, by 'burning' Hydrogen into Helium and therefore direct use of sun power is tapping into a huge fusion process, only from a save distance ;-)
So by developing the large scale power production in Greece with the help of foreign investment, possible covered by state guarantees by strong Northern countries it not only serves the Greek growth & employment, but also gives struggling northern producers some breathing space needed to survive after massive (but IHMO justified) cuts in subsidies by those countries. Also serving another economic anti-cyclic purpose for those northern core states. Another point is that by establishing new branches of Northern businesses in the South, it can serve as a counterweight to massive attraction of both capital & employment from south to north. In the macro economic thinking of this author here the northern governments can provide tax breaks, as well as providing guarantees for parent companies/holdings in Germany, The Netherlands, etc which invest in Europe's periphery, and thereby helping stabilizing the current imbalances which are putting such a strain on the eurozone.

*= 1370 kWh/kWPeak/year *0,13€/kWh *10years=1781€ max prize/kWPeak for a fixed system

#= 1640 Cyprus/ 1550 Athens  kWh/kWPeak/year
² = assuming that CdTe-Technology is used, otherwise approx. 500 KW/ha crystalline silicon

references:
Photovoltaics
Photovoltaic_system
Photovoltaic power station
DEI -Public Power Corporation of Greece
Desertec
German_Renewable_Energy_Act
Stromerzeugung
Solar Millennium
Bankruptcies Have German Solar on the Ropes
Photovoltaik Kosten (2006 - 2012)
http://en.wikipedia.org/wiki/G%C3%BCnther_Oettinger
HVDC - High-voltage direct current
NorNed (for pricing of HVDC)
Greek Economy Needs Growth Strategy
Loss of VAT revenues costs billions
U.S. Solar Firm Cracks Chinese Market (pricing of 2009 ! Today costs would be approx. 3,2 bn €)
First Solar and CPINE form US-China PV partnership 
China Power New Energy Development ltd. Expands in Solar
Senkung der Preise für Solarstrom aus Photovoltaik in Griechenland
PVX Spotmarkt Preisindex Solarmodule
Electricity and natural gas price statistics
Greece to raise electricity prices by 9.2 pct
Germany has major solar energy plan 
Milliardenprojekt “HELIOS”
Italian power import/export 2012 (Terna,eng)
Italy spends record amount on foreign energy

useful links:
Athen sieht große Chancen für Solarenergie
Helios solar project seen helping EU carbon, jobs targets
Strom aus der Wüste Erstes Desertec-Projekt entsteht in Tunesien 
Huge “Project Helios” plant planned for Greece
Griechenland soll mit Solarenergie zur Exportnation werden
Cyprus generator failure causes supply outages