In a significant move to advance its green transition, Greece has secured approval from the European Commission for a €1 billion ($1.1 billion) state aid package. The funding is earmarked for two innovative solar power ventures that will integrate large-scale energy storage, collectively adding 813 megawatts (MW) of renewable capacity to the nation’s grid.
The two initiatives, the Faethon Project and the Seli Project, are central to Greece’s strategy to enhance grid stability and are slated for completion by mid-2025. The Faethon Project consists of two distinct 252 MW photovoltaic units, which will be paired with a molten-salt thermal storage system and an extra-high voltage substation. This advanced configuration is designed to store surplus energy generated during the day for dispatch during evening peak hours. The Seli Solar Project, a 309 MW facility, will utilize a lithium-ion battery energy storage system, as detailed in the Commission’s approval notice.
According to the Commission, the integration of storage is crucial for overcoming the inherent challenges of solar intermittency. “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. Once operational, the projects are projected to increase the share of renewables in Greece’s electricity mix by 1.2 terawatt hours annually, equivalent to 2.1 percent of the country’s total power generation in 2020.
The financial support will be structured through two-way contracts for difference (CfD), a mechanism designed to ensure financial stability. Under this model, operators sell electricity on the open market and settle the difference with a public entity against a pre-agreed strike price, thereby guaranteeing revenue while preventing windfall profits. A technical committee will establish this strike price following a detailed cost-benefit analysis and risk evaluation. The aid will be distributed in annual payments over a 20-year term.
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The Commission approved the aid package under EU rules, deeming its impact on competition to be proportionate and limited. Margrethe Vestager, the Commission’s Executive Vice-President for Competition Policy, praised the initiative. “These €1 billion measures support two innovative solar projects that will accelerate the green transition, while minimizing potential distortions to competition,” she said. Vestager added that the projects align with the EU’s broader strategic goals of decarbonization, climate neutrality, and reducing dependence on imported fossil fuels.
Greece to Provide Two Solar Projects with $1.1 Billion in State Funding
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