The Foreign Investors Council (FIC) has actively participated in the recent public consultation regarding the proposed Ministerial Decision on the “Procedure for submitting requests for the issuance of a Final Connection Offer for the installation of individual electricity storage stations, in accordance with paragraph 2 of Article 11D of Law 4685/2020.” This initiative marks a significant step towards optimizing Greece’s energy storage framework, aligning with the country’s broader goals of energy security and renewable energy expansion.

The Importance of Energy Storage

Energy storage systems are crucial for the stability and efficiency of power grids, especially as renewable energy sources become more prominent. The Ministry’s proposal to facilitate the connection of 3.5 GW in storage capacity, representing an estimated investment of €1.5 billion, is a commendable effort to enhance Greece’s energy transition. However, the implementation of such a scheme presents various financial and regulatory challenges.

Key Points of FIC’s Submission

FIC’s response to the consultation underscores both the positive aspects and critical areas requiring refinement. Below are the main points raised:

1. Financial and Regulatory Challenges

• The energy storage sector is relatively new and not yet fully assessed by financial institutions. Securing project financing remains a challenge due to the inherent uncertainties in investment returns.
• The regulatory framework is still in its infancy, necessitating further clarifications and adjustments to ensure investor confidence.

2. Guarantees and Investment Security

• The introduction of bank guarantees is a positive measure to ensure that only financially capable entities can apply. However, overly strict penalty mechanisms (such as automatic forfeiture for minor delays) could deter investors.
• A more balanced approach, such as proportional penalties based on project delays, would create a fairer system.
• The return of guarantees should be allowed in cases where project delays result from factors beyond the investor’s control, such as supply chain disruptions.

3. Loan Pre-Approval Requirements

• The requirement for loan pre-approval as a condition for participation is considered restrictive.
• Given that loan agreements are typically finalized after project parameters are clarified, this requirement may discourage participation from otherwise viable investors.
• FIC suggests that loan pre-approval be a condition at a later stage, such as before the issuance of the Final Connection Offer.

4. Transparency and Evaluation Criteria

• FIC emphasizes the need for greater transparency in the evaluation process, including clear access to submitted applications and the right to appeal decisions.
• The publication of detailed lists of eligible projects would enable investors to assess their competitive position and likelihood of approval.

5. Regional Allocation and Competition Concerns

• The proposed geographical distribution of connection capacity should take into account existing renewable projects to avoid excessive competition in certain regions.
• Anti-concentration measures should be strictly enforced to prevent market dominance by a few major players.
• Prioritization criteria should also consider projects that offer greater storage capacity and efficiency.

FIC supports the Greek government’s initiative to accelerate energy storage deployment but stresses the need for a more balanced, transparent, and investor-friendly approach. Addressing the concerns outlined in its submission will contribute to the long-term success of the program, ensuring that Greece attracts high-quality investments while strengthening its energy security.

FIC remains committed to constructive dialogue with policymakers and industry stakeholders to refine the regulatory framework for energy storage in Greece.

For further details on FIC’s position and recommendations, view the whole proposal!