The European Commission has approved €1 billion ($1.1 billion) in state aid for two Greek solar projects with a combined capacity of 813 megawatts (MW).
The Faethon and Seli Solar Projects
The Faethon Solar Project—comprising two 252 MW units—will incorporate molten-salt thermal storage and an extra-high voltage substation. This design allows it to supply electricity during the day while storing excess energy for peak consumption periods.
The Seli Solar Project, a 309 MW facility, will integrate a lithium-ion battery energy storage system, as noted in the Commission’s announcement that confirmed 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,” the Commission stated.
Projects to Elevate Net Renewable Energy Share
Expected to be completed by mid-2025, these projects are set to increase the net renewable energy share in Greece’s electricity mix by approximately 1.2 terawatt hours. This represents 2.1 percent of the country’s total power generation in 2020, the Commission noted.
The financial support will be provided through two-way contracts for difference. This is a mechanism where an electricity operator sells power to the market and either receives or pays 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 ensure revenue certainty for producers.
Under the Greek aid framework, a technical committee will determine the strike price based on factors such as cost-benefit analysis and risk assessment, according to the news release.
Limited Impact of Aid on Competition
The aid was approved under the fair competition regulations of the EU. The Commission considers the impact on competition and trade to be limited and proportionate, thanks to the contract-for-difference design, which is intended to minimize the aid amount. Government support will be paid out in annual disbursements over a 20-year period.
Margrethe Vestager, Commission Executive Vice-President for Competition Policy, stated, “These €1 billion measures support two innovative solar projects that will accelerate the green transition, while minimizing potential distortions to competition.”
She emphasized that these measures will help achieve decarbonization, climate neutrality, and a reduced reliance on imported fossil fuels, aligning with the EU’s renewable energy strategies and plans.
The innovative storage technologies and structured financial support underscore Greece’s commitment to sustainability and align with EU decarbonization strategies. These projects are pivotal steps in driving the green transition forward.
