Adecision published by Greece’s Ministry of the Environment and Energy in the State Gazette last Friday was a surprise for the domestic energy storage sector. The ministry ran a public consultation in late February, proposing a new 3.5 GW energy storage program. However, its final decision is targeting a total of 4.7 GW of new utility-scale, front-of-the-meter, standalone battery energy storage projects.

Of this capacity, 3.8 GW of batteries will link to the transmission network and 900 MW of capacity will be installed on the distribution network. Independent island networks are excluded from the program, however projects on islands that link to the mainland electricity network are eligible to participate in the new scheme.

The program concerns battery projects that have gathered the necessary licenses (e.g. environmental permits). Following the publication of the ministerial decision in the State Gazette on Friday, investors interested in participating in the program need to apply to the energy ministry and the grid operators within specific timelines.

Thus, projects that seek to link to the transmission network need to submit an application within 90 days, while projects that seek to connect to the distribution grid can apply within 150 days of the decision’s publication. Battery systems sought for the islands that link to Greece’s mainland electricity system (e.g. Crete) also have 150 days to apply for the new program.

Projects larger than 10 MW need to apply for a grid connection agreement to the transmission network operator, while projects up to 10 MW need to apply to the distributor grid operator.

Greece’s new battery storage program has taken into account the areas most congested by the output of renewable power stations as well as the kind of renewable projects connected to the grid. Thus, investors aiming to connect their batteries to the transmission network need to apply through the following categories: projects that have entered into offtake agreements of at least eight years duration with energy-intensive industries; batteries that have offtake agreement with other businesses that are not energy-intensive; batteries that will be installed in former coal mines; projects that will be owned and operated by energy traders participating in Greece’s electricity markets; and batteries that will be installed in specific geographic areas as instructed by the ministerial decision.

Similarly, investors aiming to link their batteries to the distribution grid need to apply through specific program sub-categories. However, in this case, most sub-categories have to do with the size of the battery systems.

The amount of storage capacity installed via each subcategory is also defined by the new program, however the policy is not strict and should a subcategory under performs the remaining capacity can be offered by the grid operators to other subcategories of the scheme.

Qualified investors need to prove they possess the equity capital to develop the projects or present a pre-approved loan, while the scheme has set that the cost to develop 1 kWh of battery capacity is at least €200. To apply to the scheme, investors also need to submit performance bonds of €200,000/MW for transmission-connected projects and €50,000/MW for distribution-connected projects.

Qualified projects need to be ready to connect to the grid within 18 months following acceptance of their application and the signing of a connection agreement. Performance bonds are halved after three years of operating the battery systems and are fully returned to the investor after six years of their system operation.

Finally, to allow for adequate competition in the market, the new program has set strict limits regarding ownership of the batteries. Thus, no single investor can own more than 500 MW of battery storage across all categories and sub-categories of the program by the year 2029. Further ownership limits also apply within each sub-category of the program, aiming to split the battery capacity among as many investors as possible.

In terms of technological requirements, batteries need to offer a storage duration of at least two hours, although up to 200 MW of battery storage capacity in the highly congested Peloponnese Peninsula need to have a four hours long duration.

Overall, following last months public consultation, the Greek ministry of the environment and energy presented a bolder and even more ambitious battery storage program, allowing for longer completion times but retaining the financial and competition guarantees in place.

The ministerial decision for Greece’s 4.7 GW battery storage program is the last decision signed by Minister of Energy Thodoros Skylakakis and Deputy Minister Alexandra Sdoukou before a cabinet reshuffle initiated last week. Skylakakis and Sdoukou will be replaced by Minister Stavros Papastavrou and Deputy Minister Nikos Tsafos.