Greece: reference prices for biogas and biomass — a market premium instead of a fixed tariff

Greece supports electricity from biogas and biomass not with a fixed tariff but with a premium on top of the market price. Law 4414/2016 replaced guaranteed tariffs with a system of premiums (feed-in premium) and auctions. The premium is the difference between the reference price for a technology and capacity and the Special Market Price, calculated monthly. For biogas up to 1 MW the reference price is 219 EUR/MWh, and for biomass up to 1 MW it is 176 EUR/MWh.

How the premium works

According to the European Commission (the Clean Energy for EU Islands portal), support takes the form of operating aid based on a "price difference": it is described as the difference between the Special Market Price for a given technology and the Reference Price (Art. 3 para. 1 of Law 4414/2016); in the examples below we calculate the premium as the reference price minus the Special Market Price. The premium is calculated monthly, and the generator earns additionally from selling energy on the market; support is paid by DAPEEP. For biomass and biogas the Special Market Price is the monthly average of the System Marginal Price (Art. 6 of Law 4414/2016). According to the IEA, auctions are technology-specific, and smaller installations (e.g. wind power plants below 3 MW and other renewable projects below 500 kW) may be excluded from auctions and covered by the tariff.

Reference prices

The reference prices result from ministerial decision 30971/1190 of 2020 (ΥΠΕΝ/ΔΑΠΕΕΚ/30971/1190/2020), introduced after Law 4685/2020, which streamlined licensing and strengthened support for some renewable categories:

What this yields in practice

The premium depends on the market price. In October 2024 DAPEEP published the Special Market Price for biomass at 101.54 EUR/MWh. With a reference price of 176 EUR/MWh (biomass up to 1 MW) this means a premium of about 74 EUR/MWh (Substraty.pl calculation: 176 − 101.54 = 74.46), and at 133 EUR/MWh (above 5 MW) about 31 EUR/MWh. The generator thus receives in total a level close to the reference price, provided it sells energy at the Special Market Price; when the latter rises, the premium falls, and when it falls, the premium rises.

For biogas the Special Market Price is defined in the same way as for biomass (the monthly average of the System Marginal Price). If in a given month it were the same as in the example, 101.54 EUR/MWh, the premium for biogas up to 1 MW would be about 117 EUR/MWh (219 − 101.54 = 117.46), and for biogas above 3 MW about 90 EUR/MWh (192 − 101.54 = 90.46). This is an illustrative Substraty.pl calculation, not official data.

Degression with increasing capacity

Reference prices fall as installation capacity rises. For biogas the difference between an installation up to 1 MW and one above 3 MW is 27 EUR/MWh (219 versus 192), and for biomass between an installation up to 1 MW and one above 5 MW it is 43 EUR/MWh (176 versus 133). This reflects the assumption that larger units have a lower unit cost of investment and operation, so they need less support per MWh.

Differences from the previous system

Before Law 4414/2016, guaranteed tariffs (feed-in tariffs) applied, in which the generator received a fixed rate for energy delivered to the grid. The law introduced a premium instead of a fixed rate for new installations; the tariff remained for smaller projects.

Scope and currency of the data

The reference prices described result from the 2020 decision, and the calculation example from the October 2024 price. The Special Market Price changes every month and is published by DAPEEP, so the level of the premium in another month will be different.

Comparison with Poland

In Poland, support is determined by a reference price set by regulation and an auction, and the generator receives the price from its bid (see 2023 reference prices for renewables). The Greek reference prices have the same aim, i.e. a revenue guarantee, but the difference mechanism is settled monthly against the system price.