Commission approves €1 billion Greek State aid measures to support renewable energy generation and storage projects

The European Commission has approved, under EU State aid rules, €1 billion Greek measures to support two projects for the generation and storage of renewable energy in Greece. The measures contribute to achieving Greece’s climate and energy targets, as well as the objectives of the European Green Deal and ‘Fit for 55’ package, by enabling the integration of renewable energy sources in the Greek electricity system.

Greece notified the Commission of its plans to provide support to two projects for the generation and storage of renewable energy for a total budget of €1 billion. The Faethon Project entails the construction of two photovoltaic units, each with a capacity of 252 MW, along with integrated molten-salt thermal storage units and an extra-high voltage substation. This project aims to enable electricity generation during the day and to allow for the surplus energy to be stored. The surplus will be converted into electricity to be used during times of peak consumption, such as evenings and nights. The Seli Project entails the construction of a 309 MW photovoltaic unit with an integrated lithium-ion battery energy storage system. This project aims to optimise electricity generation and grid stability. Both constructions are planned to be completed by mid-2025.

The aid will take the form of a two-way contract for difference over a period of 20 years. The strike price will be determined by a technical committee on the basis of, inter alia, a cost-benefit analysis and a risk assessment. The reference price will be calculated as a monthly output-weighted average of the market price of electricity in the day-ahead markets.

The Commission assessed the scheme under EU State aid rules, in particular Article 107 (3)(c) TFEU, which enables Member States to support the development of certain economic activities subject to certain conditions, and the 2022 Guidelines on State aid for climate, environmental protection and energy (‘CEEAG’). On this basis, the Commission approved the Greek measures.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “These €1 billion measures support two innovative renewable projects that will accelerate the green transition, while minimising potential distortions to competition. The measures will help the EU and Greece meet our decarbonisation and climate neutrality targets, as well as reduce our dependence on imported fossil fuels, in line with the EU Solar Energy Strategy and the REPowerEU Plan.”