(11) Greece submitted that the hybrid model entered into force by way of the following national measures: Articles 105, 107 and 108 of Greek Law 4821/2021 and the national regulatory authority’s (RAE) Decisions No 755/2021 and 807/2021.
(12) Greece further submitted that, for the transitional period, the hybrid model has proven to be the most suitable, efficient and effective market system for Crete compared to the two alternatives that were considered, namely the integration of Crete in the Greek electricity market through a single or two bidding zones respectively. In support of that statement, Greece submitted information demonstrating that the hybrid model has resulted in significant cost savings, the avoidance of excessive redispatching costs, lower costs of supplied electricity and the efficient use of less polluting technologies.
(13) In relation to the retail market, Greece submitted that it is open to all suppliers, with approximately fifteen currently active in the island of Crete. Given the fact that the generation costs in the island of Crete are higher than the costs of the Greek interconnected electricity system, Greece opted for the application by the suppliers of a single tariff for each category of customers throughout its entire territory. That decision was driven by reasons of social cohesion.
3.
THE REQUESTED DEROGATION
(14) The request for derogation submitted for the island of Crete is based on its qualification as a small connected system within the meaning of Article 64(1), point (a), of Regulation (EU) 2019/943. This qualification was confirmed in recitals 36 to 40 of Decision (EU) 2022/258.
3.1.
Derogation pursuant to Article 64 of the Regulation (EU) 2019/943
(15) Greece requested a new derogation for the island of Crete from Article 6, Article 7(1), Article 8(1) and (4) and Articles 9, 10 and 11 of Regulation (EU) 2019/943.
3.2.
Derogation pursuant to Article 66 of Directive (EU) 2019/944
(16) Greece requested a new derogation for the island of Crete from Article 40(4) to (7) of Directive (EU) 2019/944.
3.3.
Duration of the requested derogation
(17) Greece requested that the derogation be of equal duration as that of the transitional period, namely until the end of 2025, by which time Crete will be fully interconnected to mainland Greece. Greece clarified that while certain network upgrades on the island of Crete will be gradually taking place until the end of 2028, they will not jeopardise the completion and operation of the Phase II interconnection.
(18) In the Application, Greece submitted that, while full interconnection had been scheduled to be completed by the end of 2023, corresponding to the duration of the derogation granted in Decision (EU) 2022/258, the completion of the project has been delayed. According to the updated timeline submitted by Greece, full interconnection is due to be completed by the end of 2025. Greece explained that the project is experiencing substantial delays due to events which could not have been foreseen prior to the commencement of the construction works.
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