Konstantinos Mavros, CEO of Positive Energy: "It takes 3-4 years from the introduction of the FIT to market take-off. I believe we are now at this stage in Greece"

In this exclusive interview with Renewable Energy Magazine, Konstantinos Mavros gives us an insight into future opportunities the Greek PV market offers investors and how the Greek government has helped the market reach take-off speed. Positive Energy is an Athens-based EPC contractor that implements and manages renewable energy projects in SE Europe. Positive Energy success is founded on a premium engineering design methodology and project management experience born out of 20 years industry experience in the region.

The company has a long-lasting track-record in the region and with a forward looking backlog of 30 MWp emerging as one of the dominant renewable energy specialists.

Positive Energy has initially concentrated on the solar market and has a total installed capacity of 15 MWp, over 20 MWp contracted projects in progress throughout Greece and in May of this year, was awarded an EPC contract the largest photovoltaic park in Greece. The 4,994.88 kWp project is located in the Drama region of northern Greece and is expected to be commissioned before the end of 2010.

Athens-born Konstantinos Mavros is Positive Energy’s CEO and is also Vice President of Gennet. This group of companies is involved in information and communication technologies, renewable energies and real estate investment.

Konstantinos began his career as a lecturer at the University of Macedonia in Thessaloniki (Greece). He then moved on to develop considerable experience in corporate finance and banking with Societe Generale Bank, Renault VI in Brussels and the Intracom group in Athens. As well as working for Positive Energy and Gennet, Konstantinos is currently a visiting lecturer on the Athens Economics University International MBA program.

Interview date: September, 2010

Interviewer: Toby Price

Good morning Mr. Mavros! To start off, could you explain why Positive Energy was founded and what inspired its name?

Positive Energy is a member of a group of companies founded by a team of noted Greek entrepreneurs with a strong presence in the broader South Eastern Europe region in the investment and construction sectors and long lasting experience in the technology, energy and real estate and development sectors.

The group has gradually developed a wide network of partners, maintained for many years now, through strategic partnerships and alliances. At the same time, a large team of executives with long experience in constructing and managing large PV projects, post-graduate education in renewable energy sources and high-level technical skills and experience in risk management entered the group’s workforce in 2007. Positive Energy was thereby created, being one of the most dynamically developing Greek companies in the PV system construction sector in Greece.

The fact that company’s creation would lead to a venture having strong prospects that, in addition to the business benefits to be gained, would incontestably offer multiple socio-environmental benefits, has inspired us to come up with this specific trade name, since, considering our business activity up to present, we have been filled in with nothing but positive energy!

The company was founded twenty years ago. How has the Greek renewables industry changed over the last two decades?

The renewable energy industry has evolved dramatically in the last two decades. Although Greece was one of the first countries to develop small wind and solar farms in the early ‘80s, it was not until 1994 that the first feed- in tariff (FIT) was introduced. At that time it was a flat FIT that was appropriate for wind energy but was obviously insufficient for other renewable technologies. In 2006, the first FIT for PV was introduced and a new era emerged for renewables in Greece. Photovoltaics became a mainstream technology, offering excellent investment opportunities. We realised this and invested heavily with the aim of becoming a leader in this new emerging market.

Why has Positive Energy focused on solar photovoltaics? Obviously the Greek solar resources must be a factor, but has the regulatory framework in Greece also played its part?

Although Greece has excellent solar potential, the environmental factor is not the main driver for the development of the market. PV markets have developed in countries with clear and robust incentives that have not necessarily been sunny. Germany would be the clearest example of a country with this profile. Greece is now a promising market because it has good incentives for PV in place. There is a generous FIT guaranteed for 20 years (and even 25 years for the residential sector), hundreds of active PV companies, a PV manufacturing base, and readily accessible PV project finance. These market components are the key drivers for the development of the sector.

Although the regulatory framework was a bit complicated a few years ago, there have recently been positive changes to remove red tape. We are confident that all this progress will lead us to a mature and quickly developing market. An analysis of other markets, such as the German, Spanish, Italian and French, shows that it takes 3-4 years from the introduction of the FIT to a point of market take-off. I believe we are now at this stage in Greece.

Positive Energy is a member of the Hellenic Association of Photovoltaic Companies and the Panhellenic PV System Association (PASYF). Why?

Positive Energy has joined forces with other PV companies for many reasons. We have our own important portfolio of large projects within the group, but we always believe that collaboration with others can be beneficial for everyone involved. When we started, the market was restrained by bureaucracy. HELAPCO, the Greek Association of PV Companies, was doing a great deal of work trying to improve regulations. I believe that the common effort of the industry has brought many positive changes in the last two years.

Act No. 3851/2010 on Accelerating the Development of Renewable Energy Sources to Combat Climate Change took effect in June 2010. What impact is this having on the renewables industry?

The new renewables act is expected to accelerate the development of the market. In the last few months we also had a series of other regulatory changes aimed at lifting certain administrative barriers. As a result, Greece now has one of the best regulatory frameworks for the residential sector worldwide. For instance, we have achieved one-stop-shop authorisation procedures for the rooftop PV market. Authorisation procedures have also become easier for other market segments, such as medium and large scale ground-mounted systems, as well. The new RES legislation is also expected to facilitate the development of other renewable technologies. We anticipate, for example, that biomass will be particularly favoured by the recent regulatory changes.

How has the highly publicised Greek fiscal and debt crisis affected the solar sector’s near and mid-term outlook?

Although Greece is in the middle of a serious financial crisis, the PV business has not been affected. PV is probably the only sector in the country developing at its current pace. For two consecutive years, the market tripled its volume, and it is expected to follow this growth trajectory in the coming years.

Despite the general credit squeeze, banks are continually willing to finance PV projects. In fact they have taken a very positive role in advertising PV and building the image of our product, and we are in close cooperation with them. There is much confidence that the good climate will last for many years.

Regarding the market outlook for the coming years, the Greek government has set an indicative target of 1.4 GWp installed PV by the end of 2014. Considering that we will have a bit more than 150 MWp installed by the end of 2010, there are obviously many business prospects for the next years. An annual market of 300-400 MWp is quite reasonable for a small country like Greece.

In mid-September, Greece’s Regulatory Authority for Energy approved 840MW of green energy schemes worth more than €2bn in an attempt to attract investment to its fragile economy. Does more still need to be done by the Government to reverse the effects of the recession and meet Greece’s 2020 commitments? If you had the chance to sit down and talk to the Greek Prime Minister, George Papandreou, what would you ask of his government to help the Greek renewables industry grow?

Despite the generous feed-in tariffs for PV valid since 2006 and the much simpler and effective framework the new RES Law brought, the barrier of bureaucracy still needs work to be reduced. While some important improvements have taken place by these new regulations, there are still some key, mainly bureaucratic, barriers which create problems to the smooth deployment of PV projects and are considered crucial for the perspectives of the PV market in Greece.

So, if I had the opportunity of asking the Greek Prime Minister for just one thing, it would be to take all appropriate measures to remove unnecessary bureaucratic barriers which may prevent Greece from reaching its high targets. Today, the time needed for the development of projects in Greece is beyond the European average. We believe that the Government has identified and examined already most of these barriers, the options for their elimination are on the table and this is a totally feasible task.

Greece is a dynamic market with great potential, the legal framework is clear and motivates, the investment environment of PV in the country is very promising and unnecessary legal-administrative barriers should not exist.

Back in March, Positive Energy sponsored an event entitled “Entrepreneurship and opportunities in times of recession'' organised by the Alumni Association of Imperial College Business School. Where will the opportunities lie in the Greek solar power sector over the next five years for foreign investors?

We have participated as speakers at a large number of conferences, university lectures and roundtables this year discussing subjects related to the Greek economy, the financial crisis and the potential for green development as a way out of the crisis of the economy.

Today’s reality is that new legislation is more favourable to rooftop systems and ground-mounted systems up to 1 MWp. However, many foreign investors will be interested in a portfolio including bigger power plants. Currently this is only possible for those who have filed applications before last year. Newcomers will have two options: either create a portfolio of many smaller projects or acquire old permits. There are many such old permits with a cumulative capacity of hundreds of megawatts in existence so we are very optimistic that the market for multi-MW-size PV projects will be soon a reality in Greece. This is the current situation, but we strongly believe based on the investors’ great interest in Greece that the government will soon give access to the whole spectrum of sizes and capacities.

Chinese solar giant Yingli Green Energy has identified Greece as an emerging solar market. Do you see Chinese interest as a concern to Greek solar EPC contractors like yourselves?

Almost all of the major international PV players are now active in Greece. They are more than welcome as this helps the Greek market to develop faster and reach a stage of maturity sooner. We do not view big players as a threat. On the contrary, they are our collaborators. There is room for everybody in an emerging market. Every player has his own strategy and targets. Our target is not only to be one of the fastest growing PV companies in Greece, but also to remain a leader in the years to come and to extend our PV business into other countries, and especially those where our group is already present.

Finally, aside from photovoltaics, is Positive Energy looking to move into other renewable energies in the future? Solar thermal electric (CSP) for example?

To discuss your example, CSP has just started developing in Greece. The new RES legislation offers good feed-in tariffs guaranteed for 25 years for this technology. However, it will take some time before this market develops considerably. We are always open to new challenges, and one such challenge is to take advantage of our experience in the real estate sector and be more actively involved in the energy efficiency and energy services business. Despite these numerous developments, PV will remain our core business because it is a very interesting market and there is still a long way to go.

For additional information:

Positive Energy

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