Update on electricity storage in Greece
(Article by Μira Todorovic Symeonidis, Partner published in the Energy & Natural Resources Newsletter of the ILO on Dec 4, 2023)
- Introduction
In 2022, Greece amended the Energy Framework Law No. 4001/2011 by providing the legal framework for electricity storage particularly
regarding licensing, remuneration and market participation. Thus, the law now recognises the following types of electricity storage: - standalone electricity storage units (mainly batteries) with exclusive activity the electricity storage;
- RES plants with storage with no ability to charge from the grid;
- RES plants with storage with ability to charge from the grid;
- pumped hydro storage plants; and
- hybrid plants for the non-interconnected islands and Crete.
This article focuses on standalone batteries. The legal framework on electricity storage is intended to service the smooth integration of
a higher share of renewable energy sources (RES) in the Greek electricity system with a reduced level of curtailments, particularly by
storing electricity when electricity market prices are low and injecting it back into the grid when electricity market prices are high.
Standalone batteries
State aid approved by the EU Commission
In 2022, the European Commission approved to Greece Financial support in favour of electricity storage facilities.(1) The scheme
provides for two forms of support to be granted cumulatively to the selected storage facilities:
- an investment grant – this grant nances capital expenditure which will be paid during the construction period of each project (ie,
until the end of 2025) in an amount that does not exceed 40-50% of a project’s capital expenditures (investments costs); and - a two-way contract for difference – this contract extends over a ten-year period to cover the balance of any residual funding gap,
after payment of the investment grant (the annual support) to be paid from the commencement of operation of the project (ie, by
2035 at the latest) in the amount equal to the difference between the amount of revenues tendered by each project as necessary
for its nancial viability, and the revenues that each project will earn from its participation in the various electricity markets.
The scheme is included in the Greek National Recovery and Resiliency Plan. This investment should support the installation of the total
1,580-megawatt capacity of storage in the electricity system (ie, 680 megawattts for the Amlochia Pump Hydro Storage Project and the
remaining capacity of up to 900 megawatts for the standalone storage plants). The storage projects to be supported by the scheme will
be selected through a tender process held until the end of 2023. No support will be granted in cases where the start of works on the
project took place prior to the submission of the bid for granting of the state aid.
The installation of the storage facilities should take place by the end of 2025. The supported projects will be legally obliged not to
conclude private power purchase agreements and will have to participate in the markets on an individual basis. The total budget of the
measure is estimated at €341 million, including the investment grant (€200 million) and the annual support (€141 million). That gure
has been derived assuming a total capacity of 900 megawatts under the scheme.
Greece’s energy storage scheme allows projects from the European Economic Area (EEA) outside of Greece, provided there is an
electricity interconnection and fully coupled power grids between Greece and the EEA country. Currently, only Bulgaria meets these
expectations.
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