Greece to subsidize two major solar and storage projects with EUR 1 billion

Greece plans to provide EUR 1 billion in state subsidies to support two solar power projects, with a total capacity of over 800 MW and with integrated energy storage units. The European Commission has given the green light for the subsidies, which will take the form of a two-way contract for difference over a period of twenty years.

The first project, called Faethon, involves two photovoltaic parks to be installed on an island, each with a capacity of 252 MW, along with integrated molten salt thermal storage units of 250 MW each. Stored surpluses will be converted into electricity and used during times of peak consumption, such as evenings and nights.

Faethon was launched by Tsakos Group in cooperation with Ilos New Energy Greece, controlled by Altus from Germany. The site is in Domokos in Central Greece.

The consortium has applied to declare the project a strategic investment on a national level, which would enable accelerated permitting, Energypress reported. The document shows the investment is valued at EUR 490 million.

The molten salt storage system would be combined with a 15 MW steam turbine with an efficiency rate of 35%. The investors are negotiating with the Municipality of Domokos on the possibility to provide district heating, too.

The salt, a mixture of potassium nitrate and sodium nitrate in a closed circuit with minimal to zero losses, will be heated to 550 degrees Celsius, according to the media outlet,

The second project, called Seli, entails the construction of a 309 MW photovoltaic unit, with an integrated lithium-ion battery storage system of 350 MWh. It belongs to Green Line Energy of the Agrogroup Bozatzidis-Mitsiolidis. The hybrid power plant is envisaged to be installed in Sili in the regional unit of Imathia in the country’s north.

The grid connection is limited to 178 MW, so the rest of the output must go to batteries, Energypress also reported. The article adds that there is a schedule for the deliveries to the network over 24-hour periods. Agrogroup revealed that the investment is worth EUR 300 million.

Under the planned contracts for difference (CfD), when the reference price is below the strike price, the beneficiaries will be entitled to receive payments equal to the difference between the two prices. However, when the reference price is above the strike price, the beneficiaries will have to pay the difference to the Greek government.

Faethon and Seli will add 1.2 TWh of green electricity a year to Greece’s power mix

The two projects, targeted for completion by mid-2025, are expected to increase the annual net renewable energy in the Greek electricity mix by about 1.2 TWh, equal to around 2.1% of the country’s total electricity output in 2020.

In addition, Faethon and Seli will boost renewable energy production by 8% compared to 2020 levels, while the storage units will help decouple electricity dispatch from production, mitigating the intermittent nature of solar energy and boosting the stability of the power grid.

According to the European Commission, the projects will help Greece achieve its climate and energy targets, as well as the objectives of the European Green Deal and the Fit for 55 package.

Margrethe Vestager, the commission’s executive vice-president in charge of competition policy, said the subsidies to the two innovative renewables projects will speed up the green transition, while minimizing potential distortions to competition.