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Energy Storage: Is Greece Becoming Europe’s Battery?

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With quite ambitious investment plans on energy storage, could Greece be on its way to becoming Europe’s battery? Credit: Public Domain

A series of ambitious plans by the Greek government on energy storage begs the question: Is Greece’s ambition to become Europe’s battery? Converging environmental and financial circumstances might offer an answer.

Early last summer, the government announced an ambitious plan to issue a bid for 700 MW of battery storage capacity this Autumn. The plan is part of an energy storage policy framework aimed at strengthening Greece’s energy storage sector, which is currently underdeveloped. 

According to Alexandra Sdoukou, secretary general for energy and mineral resources at the Ministry of the Environment and Energy, a dedicated team was created to develop an energy storage strategy over the past Summer.

The framework is expected to include policies for a variety of batteries and energy storage systems, ranging from massive hydroelectric batteries to smaller energy storage systems.

The ambitious framework may have come at a perfect time, for a change. Given the endless uptick in energy prices in the world affecting the Greek economy, a plan for energy storage and renewable sources boosting could be very beneficial.

The Ministry is working on creating a subsidy scheme to support energy storage projects in Greece. It is within this scope that the Greek government aims to put out a bid for 700 MW of battery storage in 2021.

The procurement round will award around €200 million ($242.3m) in subsidies. That was the announcement made in June by Energy minister Kostas Skrekas, in one of many digital energy conferences in which he participated.

According to Greek media, funds for supporting the battery storage bid’s budget would be sourced from Greece’s COVID-19 recovery plan. The energy storage bidding process was initially scheduled for the first quarter of 2022.

Energy storage and hydrogen production

Apart from energy storage, Greece is also interested in pursuing development in the field of hydrogen production. A roadmap on this technology is due to be presented by the end of the year.

These steps by the government are part of the country’s economic recovery through investment in energy. But they also converge with Greece’s ambitious environmental goals as well.

Greece has set a goal of reaching a 35% share of renewables in final energy consumption by 2030. It also intends to shut down most of its coal-fired plants by 2023.

The country’s first electro-mobility law was passed in 2020, and is now in full play, combined with a slew of incentives. Given that that by the end of 2020 Greece had less that 1,000 electric cars and no more than 100 charging stations, the challenges are significant.

The vision, however, goes beyond the environmental benefits, and is focused on the creation of a new industry. Boosting green transportation is a priority. Yet, equally important is the attraction of investments related to the e-mobility value chain, from charging points to batteries.

International groups like Germany’s Volkswagen and France’s Citroen have taken notice. They have partnered with the Greek government on the development of Green island projects in the island of Astypalaia and in Halki, respectively.

Through the replacement of conventional vehicles with electric, and RES-based electricity production, the Greek islands could become carbon neutral, while also turning into centers of innovation.

Natural gas is the biggest source of power generation on Greece’s grid, accounting for about 52% share of the country’s power consumption. Renewables, including hydro-power, are at about 19%. But a significant portion of Greece’s power still comes from lignite, the most polluting form of coal.

State capital assistance to battery projects

The government’s goal is to provide capital expenditure (capex) assistance for battery projects. Meanwhile, subsidies awarded via the tender mechanism will represent a top up for any income investors make on the electricity market.

As for the financing part of the plan, the Covid-19 Recovery and Resilience Facility (RRF) will do the trick. It comprises €54.5 billion ($63.23 billion), of which at least €10.4 billion ($12.07 billion) will be invested in upgrading energy infrastructure, and the promotion of green energies and smart technologies.

All in all, the government expects a total of €750 billion from grants and cheap loans by the RRF. Another €59.8 billion ($69.37 billion) is expected from mobilized investment resources, of which half is expected to be in grants.

Greece has also earmarked €450 million ($522.05 million) for 1.4 GW in storage in the country’s power system. To date, Greece is the only EU member state to sign an agreement with the European Investment Bank to co-manage up to €5 billion ($5.80 million) of Greece’s RRF.

An energy storage webinar organized last year by Greece’s energy regulator RAE, suggested the country would need about 1,500 to 1,750 MW of new energy storage capacity. It is needed, in order to meet 60% of its 2030 electricity needs via renewable energy, which is in line with Greece’s national energy plan for 2030.

Coal energy eliminated by 2025?

Energy storage projects, alongside an electricity network expansion, both within Greece and in the Balkan countries, is deemed necessary. It’s the only way for Greece to reach its 2030 electricity goals and phase coal out completely by 2025.

The government initially said in 2019 it would phase lignite out by 2028 at the latest. However this timeline has been scaled back to 2023, with the exception of one coal plant that will be converted to run on an alternative fuel source by 2025.

The Regulatory Authority for Energy RAE has received 98 applications since 2019 for battery and pumped storage, and projects combined with other technologies. The overall planned capacity is a staggering 8.9 GW, including Terna’s Amfilochia power plant.

The panel issued production licenses for over 60 of these projects, covering over 4 GW of the desired capacity. Another 34 projects are left for review, with a total of 4.5 GW capacity.

This is Greece’s aggressively ambitious energy storage and production plan. It is meant to combine investment opportunities with environmental policies. If -and that’s a big “if”- successfully implemented, it could actually turn the country into Europe’s new battery.

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