Greece finally implements cost-sharing provisions of law for high-voltage grid connections

Introduction

Decision E-89A/2025 (Government Gazette – Vol. B no. 5577 / 20.10.2025) of the Greek Regulatory Authority for Waste, Energy and Water (RAAEY, as per its Greek acronym) delivers the long-awaited implementation details of Article 98 of Law 4951/2022 applicable to renewable energy, high-efficiency cogeneration of heat and power, conventional thermal power projects, energy storage projects, and consumers that are connected to the high-voltage (HV) power grid (transmission system).

Although the statutory cost-sharing mechanism entered into force in early July 2022, its practical application to HV grid connection and expansion works was enabled only after a regulatory delay of almost three and a half years, during a period of rapid deployment of large-scale renewable energy projects and increasing congestion in the transmission system. 

The decision has immediate and material relevance for a broad range of projects implemented or electrified since July 2022. This is particularly the case for utility-scale solar photovoltaic projects, many of which were required under the previous regulatory framework to finance and construct extensive HV grid infrastructure upfront, including HV substations, ultra-high-voltage substations, and transmission lines. 

The new decision allows project owners to recover some of their grid connection costs through regulated cost recovery – something the law allowed but which could not be done in practice until now. It also sets up a clear, EU-style process for cost calculation and regulatory oversight. This gives developers, investors, and lenders much-needed clarity while protecting consumers from excessive system costs.

Legislative background and scope

Article 98 (paras. 1 and 6-10) of Law 4951/2022 was introduced to address structural disincentives arising from traditional “deep connection charge” models, under which first-mover projects bore the full cost of grid expansion even where such works generated enduring system-wide benefits. Article 139 of Law 5037/2023 clarified and broadened the scope of Article 98, extending its application to include HV-level consumers that are connected to the transmission system through system expansion works.

Decision E-89A/2025 implements this framework for the transmission system by amending the Transmission System Operation Code (TSO Code).

It therefore applies to system expansion works necessary to connect renewable energy projects, high-efficiency cogeneration of heat and power projects, conventional thermal power projects, energy storage projects, and consumers to the Hellenic Transmission System, where such grid works are implemented or electrified after 4 July 2022.

Eligible assets include medium- to high-voltage step-up substations, ultra-high-voltage substations, transmission lines, bays, transformers, and associated equipment. These assets become assets of the Greek transmission system operator (Independent Transmission System Operator (IPTO) S.A., or ADMIE, as per its Greek acronym) regardless of whether they were built by ADMIE or by the project owner under the relevant grid connection agreement.

The cost allocation model

Article 98 (paras. 1 and 6-10) of Law 4951/2022 establishes a statutory 50/50 cost-sharing model for eligible transmission system expansion works:

• ADMIE’s share (50%): ADMIE covers 50%. This cost is added to its regulated asset base and recovered from all system users over time through regulated tariffs. Project owners are paid back in instalments after electrification and within 24 months from submitting the final invoice endorsed by ADMIE.
• Users’ share (50%): The remaining 50% is borne by the connecting user or users. Where subsequent users benefit from the same system expansion works, proportional recovery from later connections applies based on the capacity reserved by each user.

This model represents a decisive shift away from full deep-charging and aligns Greece with broader EU regulatory trends favouring hybrid approaches to grid expansion financing. 

Calculation of recoverable grid connection costs 

A critical aspect of Decision E-89A/2025 concerns the methodology for calculating the recoverable system expansion costs and the regulatory status of the unit cost price list referred to in sub-section 8.20(5) of the TSO Code.
 
The framework relies on a hybrid ex ante and ex post methodology, structured as follows:

• Regulated unit cost benchmarks: The new official unit cost price list for ADMIE projects has not been approved by the RAAEY yet. Until it is, the applicable benchmarks are based on a list that is nearly two decades old, dating back to 2007¹.  There is market speculation that the new list will not really differ from the old benchmarks, but this should not be taken as a formal regulatory position.
• Ex post verification of actual costs: Irrespective of the applicable unit benchmarks, the final recoverable amount is determined based on actual, eligible construction costs, supported by invoices, technical documentation, and an independent auditor’s report, according to new sub-section 8.21 of the TSO Code, following the successful completion of the required trial operation period of the system expansion works and the projects.
• Eligible costs: Only construction-related costs qualify for recovery. Land acquisition and expropriation costs, licensing and administrative fees, and supervision or oversight charges payable to ADMIE under the relevant grid connection agreements are expressly excluded. Eligible costs are capped at the official unit cost price list for ADMIE projects that is applicable when they enter into the relevant grid connection agreement.  
• Procurement principles: For system expansion works with a budget greater than €5 million, project owners and system users must prove that the works were awarded through an open, transparent and competitive bidding/procurement process in accordance with the principles of transparency, equal treatment, fairness, and integrity embedded in Law 4412/2016 on public procurement of works, supplies, and services.
• Payment process: Subject to the foregoing requirements, 30% of ADMIE’s share is payable within one month from the successful completion of the required trial operation period, 40% of ADMIE’s share is payable within 10 months thereafter, and 30% of ADMIE’s share is payable within another 10 months. 

Transitional period (sub-section 15.3 of the TSO Code)

Sub-section 15.3.1 of the amended TSO Code introduces a transitional regime that is of particular importance for system expansion works that are electrified after 4 July 2022 and typically completed before the new official unit cost price list for ADMIE projects is approved by the RAAEY. During this period, many project owners – especially large-scale solar PV project owners – financed and constructed extensive HV grid infrastructure based on pre-existing grid connection agreements but still in the absence of an operational code-level framework for Article 98 of Law 4951/2022, and others continue to do so for the grid connection of their projects.

Subject to proper documentation and an independent auditor’s report, they will be entitled to recover the entire 50% of their eligible grid connection costs within 10 months from submitting the final invoice endorsed by ADMIE but only after the new official unit cost price list for ADMIE projects is approved by the RAAEY and provided that the relevant assets have been transferred in ownership from the project owner to ADMIE.

Sub-section 15.3.2 of the amended TSO Code also provides for the system expansion works that were agreed under grid connection agreements entered into with ADMIE after Article 98 of Law 4951/2022 came into force on 4 July 2022 and before the TSO Code was amended on 20 October 2022, but still not electrified or typically completed until the new official unit cost price list for ADMIE projects is approved by the RAAEY.

Likewise, subject to proper documentation and an independent auditor’s report, they will also be entitled to recover 50% of their eligible grid connection costs according to the cost verification and payment process provided for in new sub-sections 8.20 and 8.21 of the TSO Code, exclusively based on the first new official unit cost price list for ADMIE projects approved by the RAAEY (rather than the one applicable when they entered into the relevant grid connection agreement), provided that the system expansion works were awarded to the relevant contractor(s) before the TSO Code was so amended on 20 October 2022.

In either case, the relevant grid connection agreements do not need to be amended to this end, and the above provisions of the recently amended TSO Code prevail. 

Practical implications and open issues

From a transactional perspective, the new framework has direct implications for:

• SPV structuring and accounting treatment of grid connection costs
• Refinancing and repricing discussions with lenders
• Shareholder waterfall, distribution, and claw-back mechanics
• M&A valuation and due diligence processes

At the same time, some issues require careful attention:

• Transitional period: Projects with system expansion works developed between July 2022 and October 2025 may have followed procurement practices that were standard at the time but do not fully align with the new rules. These works could face increased scrutiny in the context of an untested framework whilst still awaiting approval of the new official unit cost price list for ADMIE projects by the RAAEY.
• Residual uncertainty: The fact that costs are verified after construction and recovered in stages can complicate cash-flow modelling, especially for power projects with significant grid-related capital costs.

​To mitigate these risks, we recommend early documentation and procurement audits, preparing defensibility analyses for past procurement decisions, aligning financing documents with potential receivables, using conservative assumptions in financial models, and engaging proactively with ADMIE in all cases.

Conclusion

RAAEY Decision E-89A/2025 marks a major development in Greek energy regulation. It turns the cost-sharing principle of Article 98 of Law 4951/2022 from a provision on paper into a workable, EU-aligned framework for financing high-voltage grid expansion works.

The decision significantly improves predictability and investment conditions for HV-connected projects and consumers, especially large-scale solar power plants that need to finance extensive grid infrastructure upfront. By activating the cost-sharing mechanism, the framework enhances bankability, supports refinancing, and helps create a more balanced allocation of grid expansion costs between energy network users and energy network operators.

At the same time, the framework is not without any residual uncertainty. The reliance on ex post verification of costs, the treatment of transitional cases, and the pending approval of updated unit cost benchmarks introduce elements that will require careful management by sponsors and lenders. In this context, the consistency, proportionality, and predictability of regulatory practice – rather than the formal rules alone – will be decisive.

Ultimately, the way the RAAEY and ADMIE implement these new provisions in individual cases will be the true test. This will determine whether the reform delivers not only legal clarity, but also stable, bankable, and commercially workable outcomes for the Greek energy market as it continues to expand and decarbonise. 

1. RAE Opinion No. 2/2007 remains relevant as the most recent regulatory act approving a binding unit cost price list for ADMIE’s transmission construction works. In the absence of a newly approved price list under sub-section 8.20(5) of the TSO Code, the 2007 benchmarks continue to operate as the only formally endorsed regulatory reference point for budgetary purposes.

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