Greece is gearing up for its second competitive auction for standalone, front-of-the-meter energy storage facilities connected to the electricity transmission network. The auction is part of Greece''s 1 GW energy storage program.
The country announced its 1 GW energy storage program in the summer with three separate tenders featuring 400 MW, 300 MW and 300 MW of capacity. The first tender awarded 12 energy storage projects in August, with 411,79 ΜW of capacity in total. The second auction aims to award another 288,21 MW of storage capacity.
Investors who are interested in participating in the tender need to submit their applications by Dec. 22. The regulator will publish an initial list of qualified applicants on Feb. 8, allowing a few extra days for appeals over the list. The plan is to run the tender immediately after the appeal process has ended.
Greece''s energy storage program awards two subsidies to winning projects: a reduced one-time payment of €100,000 ($109,000) per megawatt upon construction, serving as a capital expenditure subsidy, compared to the initial €200,000 per megawatt in the first tender.
Winning projects in Greece''s energy storage program receive contracts for difference (CfDs) providing a guaranteed income for 10 years, with capped prices set at €115,000/MW per year in both the first and second auctions. Projects must be operational by the end of 2025, and investors are mandated to submit progress reports every three months to ensure timely construction.
The winning projects are expected to participate in the country''s energy markets, prioritizing the alleviation of network congestion to facilitate greater penetration of green energy. However, awarded energy storage projects are restricted from entering power purchase agreements (PPAs) with private investors and cannot terminate their CfDs before the end of the 10-year period.
To qualify for tenders, applicants must furnish three financial guarantees: a participation letter (€35,000/MW), a timely business performance letter (€150,000/MW), and a quality operation letter (€150,000/MW). Additionally, an application fee of €2,500 per submission to the regulator is required.
A 100% tender subscription rule fosters competition, requiring at least 576 MW of energy storage capacity to vie for selection to secure 288 MW. Investors are capped at a maximum of 100 MW in both the first and second tenders, necessitating an annual confirmation to the regulator for the entire 10-year CfD support period, verifying ownership below the specified limit.
The first tender in August resulted in an average price of €49.748/MW per year, while the lowest successful bid was €33.948/MW per year. The highest successful bid was €64.122/MW per year.
Helleniq Energy secured three projects (100 MW), Intra Energy secured another three projects (100 MW), PPC Renewables won two projects (98 MW), Energy Bank secured a 50 MW project, and Mytilineos Group''s Aenaos won a 48 MW battery contract. In addition, Energiaki Tehniki secured a 7.8 MW project, and an 8 MW energy community project was also awarded.
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This year''s PV connections are expected to be over 1.7 GW, the highest figure ever. In the next two years, we expect the market to surpass the 2 GW milestone. These are huge numbers for a small country like Greece. Then, why some market stakeholders are not enthusiastic?
I believe there are two main reasons for that: First, a bottleneck in grid connection offers. IPTO, the Greek TSO, is planning to offer connection terms for 28-30 GW of RES by 2030. Some 20 GW of them will be for PV. Yet, there are over 70 GW of PV applications competing. Not everyone will get the desired connection terms, and this creates uneasiness in the market. True, but who needs all these projects? On the other hand, this is the case all over the world.
For almost 15 years, the Greek market was dominated by small and medium size ground-mounted systems, supported by feed-in-tariffs and feed-in-premiums. Now, a lot of large-scale projects have matured, and we expect them to take over with regard to overall installed capacity.
The self-consumption market is also increasing. The relevant market segment doubles in size every year and we expect it to be vibrant during the next years. Just recently (April 2024), the Greek government has abolished the existing net-metering scheme for prosumers and established a net-billing scheme instead, raising a lot of concern among small-sized installers.
In 2023, Greece ranked first in Europe in terms of the percentage of domestic electricity produced by photovoltaics (PV), with a percentage more than double the European average (8.6%) and more than three times the global average (5.4%).
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