Greek Green Energy Investors Face the ‘Cannibalization’ Challenge

The Ministry of Environment and Energy is tasked with solving a complex puzzle regarding the renewable energy sector, particularly in self-consumption projects and energy storage. The main issue is so-called cannibalism: as more photovoltaic installations are encouraged, their economic viability decreases. Now, energy storage offers a solution to the problem of lost green production during midday hours but faces the same challenge. As more storage units are installed in Greece, revenues from the electricity market decline due to shrinking price differences between day and night. When this difference falls below a certain point, investments become unprofitable. This paradox arises: more storage heals photovoltaics but harms itself, and more photovoltaics heal storage but hurt themselves. The solution lies in securing project revenues outside the electricity market. Since the Ministry isn’t offering subsidies anymore, bilateral contracts remain the only option. Producers and consumers sign agreements for predetermined quantities and fixed prices over several years. However, the development of such contracts lags in Greece, as highlighted by producers and industries at a recent conference. It’s a complex tool with high technical and legal costs. Another idea on the table is for the state to offer guarantees for projects, though progress has been slow. Professor Pantelis Kapros of NTUA, head of the lab developing EU energy models, warned: “Without a serious support program for the green portfolio with guarantees instead of subsidies, it will fall through, leading to investment reversals.”