Greece's battery energy storage system (BESS) market has entered a new phase, with its first grid-scale projects now operational and generating revenues. However, the country risks losing momentum to neighbouring markets such as Romania and Bulgaria, where merchant battery storage is expanding at a faster pace, according to a new analysis by Aurora Energy Research.

The consultancy says Greece has moved "from pipeline to profit", but warns that delays in grid connection allocations and cautious bank financing could slow the next stage of market growth, despite an increasingly attractive investment case for battery storage.

Aurora estimates that energy markets could account for around 70% of the lifetime revenues of a standalone two-hour battery operating at approximately 1.5 cycles per day. While balancing markets continue to provide an important revenue stream, the firm expects increasing battery deployment to put downward pressure on ancillary service prices, making revenue optimisation across multiple markets increasingly important.

The report also highlights the opportunities created by Greece's new regulatory framework for co-located solar-plus-storage (PV+BESS) projects. The introduction of static injection limits under Articles 11A and 11B has reshaped project economics, making system design, asset sizing and trading strategies key factors in determining project profitability.

According to Aurora, both standalone merchant batteries and co-located PV+BESS projects can achieve double-digit returns under its central market assumptions. However, well-optimised co-located projects generally deliver the strongest financial performance.

The consultancy also identifies a significant advantage for early investors. Projects entering operation over the next two to three years are expected to benefit from wider price spreads and stronger balancing revenues before increasing battery deployment compresses market margins. Under Aurora's central scenario, this translates into pre-tax internal rates of return (IRRs) of around 10–12% for standalone merchant batteries and approximately 10–13% for co-located PV+BESS projects, with co-located systems offering the highest returns.

Aurora notes that the new injection limits have altered the economics of co-located projects but argues that developers can still maximise profitability through optimised system design. Under the 11A framework, oversizing the solar installation delivers the best results, while under 11B, larger battery systems generate higher returns. The consultancy estimates that the injection limits reduce the IRR of an 11B project by around three percentage points compared with pre-regulation expectations, versus only around 0.5 percentage points for an 11A project. Within each configuration, profitability also depends on cycling strategies, the timing of market entry and the ability to capture revenues from both wholesale and balancing markets.

Despite the positive investment outlook, Aurora identifies two major obstacles to faster deployment: the slow allocation of grid connection capacity for merchant standalone batteries and increasingly cautious lending conditions, with banks favouring projects backed by contracted revenues or portfolio-based financing structures.

The report also concludes that battery storage will play a key role in reducing renewable energy curtailment in Greece, although the amount of storage required to address the issue at scale remains well above current deployment targets.

Commenting on the findings, Louiza Moutafi, Research Associate at Aurora Energy Research, said Greece has made significant progress by bringing its first batteries online and establishing a regulatory framework for co-located projects. However, she argued that the country's subsidised phase has reached its limits and that future growth will depend on accelerating the merchant market.

Moutafi added that even subsidised projects experienced significant delays in reaching commercial operation, with some still unfinished, undermining investor confidence and increasing development costs. She warned that while Romania and Bulgaria are expanding merchant battery storage much faster, Greece now needs to accelerate grid connections and financing if it wants to remain competitive.

"The investment case is already there; what matters now is how fast developers, investors and policymakers act on it," she concluded.