Incentives for energy storage projects

The Ministry of Environment and Energy wants to introduce more and faster storage into the power system, redesigning tenders and subsidies to deal with the problem of cuts in green energy at a time when the production of renewable energy sources exceeds demand.

The plan, which is expected to take legislative form, is based on the logic of reducing subsidies approved for storage projects by the Recovery Fund and REPowerEU in order to encourage more investors to develop projects.

In this context, the decision to abolish operating aid for subsequent tenders appears to have already been finalized.

Support for new projects will be limited to co-financing of capital expenditure (CapEx) at a low percentage of 30-40%, which remains to be finalized. This percentage will be the starting basis for projects to be auctioned in future tenders and the eligibility criterion, although the ministry is alternatively or jointly examining the project’s electrification time (i.e. its connection to the grid) as an eligibility criterion.

The projects that will be implemented based on the new design will operate on market principles, fully bearing the investment risk. If the renewable energy unit adds batteries behind the meter, the energy stored in the system will be sold at the current wholesale price. Therefore, the stand-alone unit will generate revenue by storing energy during periods when the market price is low and making it available to the system during periods of peak demand when prices are high.

Based on this new philosophy, the auctions of the Regulatory Authority for Energy, Waste and Water (RAAEY), which were planned as part of the support from the Reconstruction Fund for a total amount of EUR 200 million, will also be rebuilt.

So far, RAAEY has conducted two auctions for a total capacity of 700 MW and another auction for 300 MW is expected, which will continue using new data as soon as it is finalized and regulated in law.

By trying to open up to investors, the Ministry is trying to alleviate the problem of overproduction of renewable energy sources in periods of low demand, which is currently compensated by energy cuts.