Greece’s battery energy storage sector is entering a critical phase, with merchant projects expected to drive expansion as the first wave of subsidized systems comes online in 2026, according to Aurora Energy Research.

The global power market analytics firm projects that merchant battery energy storage system (BESS) capacity could reach up to 3 GW by 2030, while cautioning that access to financing and project bankability will be key to unlocking further growth.

Developers in Greece will have access to multiple revenue streams, including day-ahead and intraday markets, as well as ancillary services such as aFRR, mFRR, and FCR. Wholesale electricity prices are expected to fluctuate widely, creating strong opportunities for energy arbitrage, though balancing market revenues may face pressure as BESS capacity increases.

According to Aurora, energy arbitrage is likely to become the main revenue source for standalone two-hour merchant BESS entering from 2027. Co-locating solar assets can further boost returns through stronger day-ahead trading and operational cost savings.

However, risks remain. Limited access to balancing markets, low electricity prices, and potential overbuild of BESS could reduce revenues. Aurora’s analysis shows restricted balancing access could cut returns by up to 12%, while rapid deployment may further compress profits due to price cannibalization.

To mitigate these risks, developers can adopt tolling agreements, day-ahead spread swaps, and hybrid PPAs, which provide contracted revenue streams covering significant portions of a project’s lifetime earnings. These hedging strategies have already facilitated BESS financing across Europe, offering a clear pathway for scaling merchant storage in Greece.

According to Louiza Moutafi Research Associate at Aurora Energy Research, "ensuring bankability is one of the most critical challenges for merchant battery projects in Greece today. As revenue streams evolve, developers and investors must carefully navigate market risks, particularly the increasing cannibalisation in balancing markets. At the same time, opportunities are emerging through energy arbitrage and RES-BESS co-location. Hedging mechanisms will be key to unlocking financing and supporting the next wave of BESS deployment in the Greek market."