Greece’s Energy Storage Market Booming Due to Regulatory Changes
Standalone and Co-Located Battery Systems Enabled
Greece’s energy storage market is booming as a result of several new regulations opening the door for additional uses. The government is currently developing a new plan that will permit batteries to be placed in front of meter battery energy storage systems either standalone or in conjunction with currently operating solar plants.
Greece produced 57% of its required electricity from renewable sources last year. The nation is anticipated to record an even higher percentage of renewable electricity this year, but this achievement comes with the challenging task of reducing excess green power when the electrical grid is unable to handle it. Greece has thus, somewhat belatedly, shifted its focus to energy storage.
1 GW Program for Standalone Front-of-Meter Batteries
The nation is currently focusing on standalone, front-of-the-meter batteries through a 1 GW program. About 700 MW of battery storage projects were awarded through two previous tenders held by Greece. The third tender for the program, which focuses on battery systems in areas that were formerly mined for coal, will soon be released. Under the 1 GW program, projects that are awarded are provided with public subsidy support in the form of operating and capital expenditure subsidies.
Enabling Behind-the-Meter Batteries and Subsidy-Free Front-of-Meter Systems
Accordingly, Skylakakis stated that the ministry is pursuing a strategy that would allow the battery storage market to open up in two different ways. First, permitting behind-the-meter battery colocation alongside already-existing photovoltaic plants. Furthermore, new standalone batteries should be permitted in front of meter batteries without the need for public subsidies.
Both of these policies could end up being significant turning points in the nation’s energy transition plan. For the new policies to be effective, however, a number of important details must be included.
Potential Challenges and Considerations
For instance, the location of the new standalone batteries that will be placed in front of the meters is still unknown. In Greece, there are many licenses for these kinds of systems. It remains to be seen if market participants will decide on this or if the state will specify the quantity and location of batteries required.
Concerns about the co-location of batteries and operational PV plants are similar. About 7 GW of photovoltaic capacity has been installed in Greece through a variety of payment schemes (such as feed-in tariffs and premium tariffs). Enabling the solar farms with the lowest tariffs to install batteries behind the meter makes financial sense for the government.
Thus, some would contend that the installation of batteries should only be permitted for solar farms that receive compensation in the form of premium tariffs determined through competitive tenders. However, some contend that the only solar farms entitled to install batteries behind the meter are those that actively participate in the energy markets and do not receive funding from the government.
Upcoming Regulatory Updates
It is anticipated that the energy ministry will release its revised plan before the end of the year for both in front of and behind the meter batteries.
Separately, the government may hold auctions for renewable energy plants that are prepared to accept higher than normal power curtailment rates and plants that include energy storage systems, thanks to a new law (Law 5106/2024) passed by the Greek parliament at the end of April. The government has not yet made any announcements about such tenders, but the new policy took effect on May 1.
