€2.3B to fund energy transition across Greece’s islands

The programme provides an integrated financing framework for the energy transition of Greece’s islands, combining electricity interconnections, renewable energy sources and energy storage, water infrastructure projects, and electric mobility infrastructure.

The largest funding category concerns electricity interconnections and related energy infrastructure, with €1.1 billion allocated to the Dodecanese, Cyclades and North Aegean islands.

This is followed by renewable energy and storage projects, with total funding of €977 million, with a particular focus on the installation of photovoltaic systems for self-consumption. The measures cover a broad range of consumers and infrastructure, including households, hotels and retail businesses, as well as hospitals, schools, public buildings, agricultural facilities and cultivated land.

The programme also includes €200 million for multi-purpose dams and reservoirs, while €56 million has been earmarked for the development of electric vehicle charging infrastructure.

Electricity interconnections at the centre of the programme

Electricity interconnections are a central component of the investment programme, as the objective is to progressively integrate the island electricity systems with the mainland grid.

Their implementation is expected to reduce reliance on oil-fired power generation, increase the capacity to absorb clean energy and strengthen the energy security of the islands.

At the same time, improved interconnection between the islands and the mainland system could help reduce energy costs, while creating additional opportunities for renewable energy development and strengthening energy infrastructure in areas with particularly high levels of tourism activity.

Renewable energy and storage projects, meanwhile, are expected to increase the islands’ energy autonomy and provide greater flexibility to the electricity system.

Around €2 billion in resources from emissions allowances

According to the Ministry of Environment and Energy, the Fund’s estimated resources currently amount to approximately €2 billion, based on prevailing prices for emissions allowances under the European Union Emissions Trading System.

The final level of available resources, however, will depend on the evolution of emissions allowance prices throughout the Fund’s operational period.

Approval of the investment programme now marks the transition from planning to the detailed development of individual projects, with the Ministry and the relevant authorities tasked with organising the implementation of the planned measures.

Hoekstra: Time to implement the programme

European Commissioner for Climate, Net-Zero and Clean Growth Wopke Hoekstra described the Fund as an example of how revenues from the Emissions Trading System can be used to finance clean energy projects that deliver direct benefits to consumers.

He noted that implementation of the programme could result in cleaner and more secure electricity, improved interconnections and expanded electric vehicle charging infrastructure.

For his part, Minister of Environment and Energy Stavros Papastavrou described the approval as another important step in Greece’s energy transition, stressing that the Fund provides a financing instrument for the implementation of specific projects across the islands.

At the heart of the government’s strategy is the strengthening of energy security in island regions, ensuring access to affordable energy for households and businesses, and making greater use of electricity generated from solar and wind power.

With the €2.3 billion investment programme, the energy transition of the Greek islands now has a comprehensive, multi-layered financing framework, bringing together electricity interconnections, renewable energy, storage, water infrastructure and electric mobility as complementary components.

The key challenge now shifts from approval to the speed at which projects can be developed, prepared and ultimately implemented.