April 8, 2024

Greece to Provide Two Solar Projects with $1.1 Billion in State Funding

Approval from the European Commission has been granted to the Greek government for €1 billion ($1.1 billion) in state aid for two solar projects, collectively boasting a capacity of 813 megawatts (MW).

The Faethon and Seli Solar Projects

The Faethon Solar Project, featuring two units each with a capacity of 252 MW, is poised to incorporate molten-salt thermal storage units and an extra-high voltage substation. This setup is intended to facilitate electricity supply during daylight hours while storing excess energy for peak consumption periods.

Concurrently, the Seli Solar Project, a 309 MW solar power facility, will integrate a lithium-ion battery energy storage system, as per the Commission's announcement endorsing the approval under European Union state aid regulations.

"The incorporation of storage units in both solar projects aims to decouple electricity dispatch from production, thus addressing the intermittent nature of solar power and fortifying the stability of the Greek electricity grid," affirmed the Commission.

Projects to Elevate Net Renewable Energy Share

These solar projects which are anticipated for completion by mid-2025, are forecasted to elevate the net renewable energy share in Greece's electricity mix by approximately 1.2 terawatt hours, constituting 2.1 percent of the country's total power generation in 2020, as outlined by the Commission.

The financial support will materialize through two-way contracts for difference, a mechanism wherein an electricity operator vends power to the market and either receives or disburses the difference between the market price and a pre-agreed strike price with a public entity. This arrangement aims to stabilize prices, prevent windfall profits, and assure revenue certainty for producers.

Under the Greek aid framework, the strike price will be determined by a technical committee based on various factors, including cost-benefit analysis and risk assessment, according to the news release.

Limited Impact of Aid on Competition

Endorsed under the fair competition regulations of the EU's 27-member bloc, the aid's impact on competition and trade is deemed limited and proportionate by the Commission. This conclusion is drawn considering the design of contracts for difference, which aims to minimize the aid amount. The government support will be paid out over a 20-year period in annual disbursements.

Margrethe Vestager, Commission Executive Vice-President for Competition Policy, asserted, "These €1 billion measures support two innovative solar projects that will accelerate the green transition, while minimizing potential distortions to competition." She emphasized the role of such measures in achieving decarbonization, climate neutrality, and reducing reliance on imported fossil fuels, aligning with EU strategies and plans for renewable energy.

The incorporation of innovative storage technologies and structured financial support underscore Greece's commitment to sustainability, aligning with EU strategies for decarbonization. These projects serve as pivotal steps in driving the green transition forward.

You may also like

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}