In 2025, Greece has accelerated its plans for utility-scale Battery Energy Storage Systems (BESS), signalling a shift in policy, financing, and market expectations. However, while the scale of ambition is high, there are several tensions emerging—especially around the move toward unsponsored (merchant) projects. The Voice of Renewables looked closely at numbers and recent announcements and we are now pleased to publish a summary of what is happening, who is pushing what, and what the main concerns are.
Key Recent Developments
Greece has taken a decisive step forward in its energy transition with the launch of a 4.7 GW programme of standalone battery storage projects that will receive priority grid connection but operate without subsidies, marking a shift toward fully merchant models. This move follows three previous subsidy-backed auctions, the most recent of which awarded around 189 MW of front-of-the-meter storage capacity. Meanwhile, the state-owned Public Power Corporation (PPC) has begun construction on two major BESS sites in Northern Greece — Melitis 1 (≈48 MW / 96 MWh) and Ptolemaida 4 (≈50 MW / 100 MWh) — both positioned to support future photovoltaic parks and utilise former lignite sites, reinforcing the government’s twin goals of grid stability and regional energy transition.
At the same time, the regulatory framework governing BESS deployment has become more stringent. Merchant projects must now secure environmental permits, demonstrate loan pre-approval, comply with minimum technical standards such as a two-hour storage duration and defined efficiency thresholds, and post financial guarantees within strict deadlines. Non-compliance can lead to penalties or the loss of priority connection status. The urgency of this effort is underscored by the scale of renewable curtailment: in March 2025 alone, roughly 200 GWh of renewable generation was curtailed — a quarter of the previous year’s total — and forecasts suggest that without rapid storage expansion, losses could exceed 1.7 TWh by year-end.
Stakeholder Views & Emerging Concern Areas
While many in the energy sector have welcomed Greece’s rapid scaling up of battery energy storage, a number of developers, financiers and analysts have voiced concerns about the growing risks facing the next wave of projects. The shift towards unsponsored, merchant BESS means that many schemes will operate without state support and will be fully exposed to market conditions — a development that, while seen as a mark of maturity, has also raised questions about bankability, grid readiness and regulatory consistency.
One of the most significant concerns relates to revenue stability and project bankability. Without the backing of subsidies or fixed payments, developers must rely on market-based income from wholesale electricity trading, balancing and ancillary services, energy arbitrage, or private power purchase agreements. These sources are inherently volatile, making long-term forecasting difficult. Developers and lenders alike stress the importance of contractual stability — through long-term off-take arrangements, clearly defined ancillary service rules, or predictable curtailment compensation. In the absence of such mechanisms, investors apply higher risk premiums, which in turn drives up the cost of capital and threatens the financial viability of many proposed installations.
Beyond financing, regulatory and grid-related bottlenecks pose further challenges. Although Greece has established a comprehensive policy framework for BESS, developers report that environmental permitting, connection approvals, and the physical capacity of the grid remain major obstacles. Strict “declaration of readiness” deadlines add to the pressure: projects that fail to meet administrative or technical milestones risk losing their priority connection status or incurring penalties. Smaller firms, less experienced in navigating complex licensing or legal requirements, are seen as particularly vulnerable to these procedural risks.
Technical requirements are also evolving. The government now mandates minimum performance standards for all large-scale BESS, including at least two hours of storage duration, defined efficiency thresholds, and end-of-life recycling provisions. While these measures are designed to ensure safety, reliability and environmental integrity, they also add to project costs. Longer-duration systems — four hours or more — are being encouraged in some auctions, but these demand more expensive technology and complex design solutions, potentially stretching the financial feasibility of projects further.
There is also an ongoing debate about who ultimately bears the risk in this new merchant-driven environment. With government support scaled back, the burden increasingly falls on developers, investors, and, indirectly, consumers. Smaller or less capitalised players fear being crowded out by large incumbents with greater financial and technical resources. Meanwhile, any delays, under-performance or regulatory shifts could leave investors exposed without a clear mechanism for recourse.
Finally, stakeholders continue to emphasise the importance of policy stability and regulatory clarity. Frequent changes in guarantee requirements, subsidy schemes, or grid-connection rules erode investor confidence and can stall projects already in development. Several analysts have also called for a transparent framework to address renewable curtailment compensation, warning that unless such provisions are integrated into financial models from the outset, curtailment will continue to represent a significant and under-priced risk to both renewable and storage investors.
Implications & Outlook
Greece’s ambitious energy storage targets face a number of emerging risks that could slow progress or reshape the market landscape. Despite strong government momentum, many unsponsored projects are likely to encounter delays due to permitting challenges, grid connection bottlenecks, and financing constraints. Without the certainty of subsidy-backed revenues, some developments may struggle to reach financial closure, while others could remain on paper if merchant market conditions prove too unpredictable. Larger incumbents such as PPC and major renewable operators are better positioned to weather this uncertainty, given their stronger balance sheets and established relationships with regulators. In contrast, smaller developers may find it harder to secure financing or meet the increasingly complex technical and procedural requirements.
At the same time, the transition to a market-driven model risks driving up costs. Volatile revenues could lead to higher financing costs, as investors demand greater risk premiums, which in turn may translate into higher overall system costs. To sustain momentum, Greece will likely need to introduce complementary policies — including standardised long-term contracts, more robust ancillary service markets, streamlined licensing processes, and transparent curtailment compensation. Above all, maintaining investor confidence will depend on policy stability and regulatory clarity. Any abrupt changes to market rules or support mechanisms could undermine trust, delay investment, and weaken the credibility of Greece’s broader clean energy transition.
Conclusion
Greece in 2025 is at a turning point with Battery Energy Storage. The government’s shift toward large unsponsored, merchant BESS with priority grid connection reflects confidence that market conditions — especially curtailment pressures — are making subsidised models less necessary. Yet that confidence comes with risk. For the ambitious 4.7 GW target to be realised on schedule, many pieces will have to fall into place: stable revenue frameworks, efficient permitting, grid upgrades, technical standards, and consistent policy.
While the path ahead is promising, the concerns voiced by developers, financial institutions, and analysts are real and bear watching. Whether Greece can combine its renewable deployment momentum with robust storage capacity will be central to how well its energy transition proceeds.
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