Brussels (Brussels Morning) – EU Commission approves €1B for Greek renewable projects, aiding energy transition, meeting climate targets, boosting green economy.
Today, the European Commission has authorised, under EU State aid regulations, €1 billion in Greek measures to fund two projects for the generation and storage of renewable energy in Greece. The efforts contribute to fulfilling Greece’s climate and energy targets, as well as the purposes of the European Green Deal and ‘Fit for 55’ package, by helping the integration of renewable energy conceptions in the Greek electricity system.
Greece informed the Commission of its plans to provide backing to two projects for the generation and storage of renewable energy for a total budget of €1 billion. The Faethon Project involves the construction of two photovoltaic units, each with a capability of 252 MW, along with integrated molten-salt thermal storage divisions and an extra-high voltage substation. This project strives to enable electricity generation during the day and to permit the surplus energy to be kept. The excess will be converted into electricity to be utilised during times of peak consumption, such as sundowns and nights.
The Seli Project involves the construction of a 309 MW photovoltaic unit with an integrated lithium-ion battery energy storage technique. This project strives to optimise electricity generation and grid resilience. Both constructions are scheduled to be completed by mid-2025. The aid will take the formation of a two-way contract for a difference over twenty years. The strike price will be decided by a technical commission based on, inter alia, a cost-benefit analysis and a risk estimation. The reference price will be computed as a monthly output-weighted average of the demand price of electricity in the day-ahead markets.
When the concerned price is below the strike price, the beneficiaries will be permitted to receive payments equal to the distinction between the two prices. However, when the reference price is beyond the strike price, the beneficiaries will have to disburse the difference to the Greek authorities. The scheme will assure long-term price stability for renewable energy producers by ensuring a minimum level of return, while at the same time providing that the beneficiaries will not be overcompensated for times when the reference price is increased than the strike price. Support for the projects will be disbursed annually for 20 years.
Both projects are anticipated to increase the annual net renewable energy in the Greek electricity mix by around 1.2 TWh. This denotes around 2.1% of Greece’s total electricity production in 2020. In addition, the two projects will increase renewable energy production by 8% corresponding to 2020 levels. The storage units in both schemes will help decouple electricity transmission from production, thereby mitigating the erratic nature of solar power and enhancing the stability of the Greek electricity grid.
The Commission estimated the scheme under EU State aid regulations, in particular of the Treaty on the Functioning of the European Union (‘TFEU’), which allows Member States to support the expansion of certain economic activities subject to certain conditions, and the 2022 Guidelines on State aid for climate, environmental protection and energy (‘CEEAG’).
The Commission found that: The measures promote the development of an economic activity, in particular renewable electricity connected with storage plants. The aid is necessary and appropriate to defend the decarbonisation of the electricity sector, in line with the EU and national environmental targets; The assistance has an “incentive effect” as the beneficiaries would not carry out the investments in decarbonisation to the same measurement without the public support; The aid has a limited influence on competition and trade within the EU. In particular, the aid is proportional, and any negative impact on competition and trade will be limited given the structure of the contracts for difference, which will ensure that the aid portion is kept to the minimum; The Greek authorities will ensure that the know-how obtained as a result of the projects will be driven available to any company willing to design such technologies in Greece. On this basis, the Commission authorised the Greek measures under EU State aid rules.
