The European Commission has approved, under EU State aid rules, €1 billion Greek measures to support two projects for the generation and storage of renewable energy in Greece. The measures contribute to achieving Greece's climate and energy targets, as well as the objectives of the European Green Deal and 'Fit for 55' package, by enabling the integration of renewable energy sources in the Greek electricity system.

THE GREEK MEASURES

Greece notified the Commission of its plans to provide support to two projects for the generation and storage of renewable energy for a total budget of €1 billion.

The Faethon Project entails the construction of two photovoltaic units, each with a capacity of 252 MW, along with integrated molten-salt thermal storage units and an extra-high voltage substation. This project aims to enable electricity generation during the day and to allow for the surplus energy to be stored. The surplus will be converted into electricity to be used during times of peak consumption, such as evenings and nights.

The Seli Project entails the construction of a 309 MW photovoltaic unit with an integrated lithium-ion battery energy storage system. This project aims to optimise electricity generation and grid stability. Both constructions are planned to be completed by mid-2025. The aid will take the form of a two-way contract for difference over a period of twenty years. The strike price will be determined by a technical committee on the basis of, inter alia, a cost-benefit analysis and a risk assessment. The reference price will be calculated as a monthly output-weighted average of the market price of electricity in the day-ahead markets. When the reference price is below the strike price, the beneficiaries will be entitled to receive payments equal to the difference between the two prices. However, when the reference price is above the strike price, the beneficiaries will have to pay the difference to the Greek authorities. The scheme will ensure long-term price stability for the renewable energy producers by guaranteeing a minimum level of return, while at the same time ensuring that the beneficiaries will not be overcompensated for periods when the reference price is higher than the strike price.

Support for the projects will be paid annually over a period of 20 years. Both projects are expected to increase the annual net renewable energy in the Greek electricity mix by approximately 1.2 TWh. This represents around 2.1% of Greece's total electricity production in 2020 . In addition, the two projects will boost renewable energy production by 8% compared to 2020 levels. The storage units in both projects will help decouple electricity dispatch from production, thereby mitigating the intermittent nature of solar power and enhancing the stability of the Greek electricity grid.

COMMISSION'S ASSESSMENT

The Commission assessed the scheme under EU State aid rules, in particular Article 107 (3)(c) of the Treaty on the Functioning of the European Union (‘TFEU'), which enables Member States to support the development of certain economic activities subject to certain conditions, and the 2022 Guidelines on State aid for climate, environmental protection and energy (‘CEEAG').