Law 4001/2011 as in force, provides for the legal basis for the granting of state aid for the establishment of electricity storage stations (“ESS”). In particular, it stipulates that an investment aid or an annual operating aid can be granted to ESSs connected to and operating in the Hellenic Electricity Transmission System, as well as to ESS that are installed in countries within the European Economic Area. The said aid takes the form of an additional compensation to the net income arising from the operation of the above stations in the electricity markets, subject to the prior approval of such aid scheme by the European Commission in accordance with the conditions defined in the respective decision of the European Commission approving the aid and pursuant to articles 107 and 108 of the Treaty on the Functioning of the European Union (TFEU).

To this end, the state aid shall be granted both through competitive bidding processes and on an individual basis, as follows:

i. State aid through competitive bidding processes

Pursuant to the said Law, it is foreseen that, with regards to the cases where the state aid is granted through competitive bidding processes, a Ministerial Decision shall be issued, which shall provide for the way of conducting such competitive bidding processes, the eligibility and the tender award criteria.

ii. State aid granted on an individual basis

The Law also provides for an operating aid on an individual basis, for which a respective Ministerial Decision is required to be issued that shall define the main elements of the aid to be granted, namely the duration of the operating aid, the rules for the formulation of the methodology for calculating the permitted income, the incentives for efficient and beneficial operation of the electricity system which are provided to the owner of each station awarded with operating aid etc.

Under the said Law, ESSs that are included in the abovementioned state aid schemes will mandatorily participate in the electricity market, in accordance with the provisions of the existing legislation.

Within the above legislative framework, Greece, on 10.06.2022, notified to the European Commission its intention to establish a scheme to provide support for the establishment of ESSs in Greece. The scheme is included in the Greek National Recovery and Resiliency Plan (“RRP”) and is part of the investment for “Support of the installation of storage systems to enhance RES penetration”. This investment aims to support the installation, construction, and operation of ESSs for a total capacity of up to 900 MW connected to the high voltage network. The European Commission approved the said scheme with an estimated budget of €341 million, which will be mainly funded by the Recovery and Resilience Facility (“RRF”).

Form and duration of the aid funded through RRF

This particular scheme provides for two forms of aid to be granted cumulatively to the selected ESSs:

(i) an investment grant, which will be paid during the construction phase of all supported ESSs; and

(ii) an annual support to be paid during the operational phase of the ESSs, for a 10-year period.

The amount of the support will be calculated on an annual basis, as the difference between the amount of revenues tendered by each project as necessary for its financial viability (“bid revenues”), and the revenues that each project will earn from its participation in the electricity markets (“market revenues”). In case the market revenues are lower than the bid revenues, they will be complemented with the necessary amount of annual support in order for each project to receive its bid revenues on an annual basis. On the other hand, in case market revenues exceed the bid revenues, a claw-back mechanism will be established for the project to return any amount of excess revenues, thus preventing the possibility of windfall profits and overcompensation.

The ESSs to be supported by the scheme will be selected through tenders. The responsibility for setting the parameters of the tender’s process, the eligibility criteria and the award process will be borne by the Ministry for the Environment and Energy. No such tender has taken place until today. It is expected that the first tender will take place within 2023, since the installation of the ESS should be completed by the end of 2025.

The editorial team