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Solar power projects market heats up as new trends emerge

On Thursday, Mytilineos announced the sale of a 47MW portfolio of solar parks to Motor Oil for 45.8 million euros. The target for Mytilineos over the next five years is to build and sell energy parks with a capacity of 1500 MW mainly abroad, where it has a large portfolio of projects in countries such as Australia, UK, Spain, Cyprus, South Korea, and Mexico.

The buying and selling of solar power parks is a new trend emerging in the market. A new generation of tailor-made investments, such as those held by Greek industrial company Mytilineos, is drawing interest from investors. On Thursday, Mytilineos announced the sale of a 47MW portfolio of solar parks to Motor Oil for 45.8 million euros.

It is the first transaction of its kind for the company and one that looks to be repeated from now on. The target for Mytilineos over the next five years is to build and sell energy parks with a capacity of 1500 MW mainly abroad, where it has a large portfolio of projects in countries such as Australia, UK, Spain, Cyprus, South Korea, and Mexico.

On the construction side, there are specialized operators such as METKA, a subsidiary of Mytilineos, that are building and selling solar parks to local and foreign investors on the back of growing opportunities brought on by the shutting down of lignite powered units in Greece and abroad.

Among the buyers rank companies such as Motor Oil that want to develop their own green energy portfolio or funds that want low-risk returns. In both cases, these buyers are looking to acquire a turnkey operation, a project that is ready to start operating.

Another similar deal was recently completed involving Hellenic Petroleum (ELPE). The Greek company bought from Germany's Juwi a 204 MW solar power park, located close to northern Greece's Kozani. This deal suits ELPE as it lacks the technical know-how to build its own solar park and looks to quickly expand green portfolio.

When completed in 2021, this park will be the biggest in Greece in a 150 million euro investment that produces more than 300 million kilowatts per year. Juwi has locked in a favorable tariff rate of 5.73 cents per kilowatt. 

PPC's model

In the case of Greece's former power monopoly PPC, the company has adopted a different model. It chooses joint ventures with other players as it lacks the capital to go it alone but adds a clause in these deals giving it the right to acquire a majority stake in the project in the future.

Based on this logic, its subsidiary, PPC Renewables, is expected to submit an application for a 1 GW solar park in Megalopolis to energy regulator RAE, along with the remaining megawatt for a respective project in western Macedonia, with a capacity of 2 GW, one of the biggest internationally.

Before this, it had submitted an application in December for a 1,500 MW permit on a solar power park in western Macedonia, meaning that there is an application for an additional 500 MW. It is targeting the start of construction of projects that will rank among the biggest globally, by 2021, in order for them to be operational by in 2024. This will help provide a bridge into the country's new power era.

The solar power market is heating up in Greece. The sale of turnkey projects is just one part of the sector. There are also deals being done involving the sale of permits, while projects mature, adding a buzz to the sector on the back of cheaper technology, simpler permits' process and growing competition. Alongside the traditional players in the industry, there are some new additions, such as Germany's ABO wind.

So far, there have been applications submitted to RAE and Hellenic Electricity Distribution Network Operator for the construction of 26 GW, of which 13.8 GW were submitted in December. Though many of these projects will not move ahead due to a lack of suitable conditions.

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