Greece’s Renewable Sector Faces Challenges as Energy Oversupply Deepens

14:05 7/7/2025 - Πηγή: Dikaiologitika

In just the first half of 2025, curtailments of renewable energy output in Greece reached 1,000 gigawatt-hours, a figure significantly higher than during the same period in 2024.

Greece’s renewable energy sector is facing mounting pressure as power curtailments—forced reductions in electricity production—are

increasing at a troubling rate, severely impacting the financial viability of many projects. This trend is reshaping the country’s green energy landscape, with implications that extend beyond national borders as the global energy transition gains pace.

In just the first half of 2025, curtailments of renewable energy output in Greece reached 1,000 gigawatt-hours, a figure significantly higher than during the same period in 2024. This surge reflects a growing problem of energy oversupply clashing with the grid’s limited capacity to absorb it. As a result, there has been a steady rise in the number of hours each day when electricity prices fall to zero, leaving many projects—especially those without long-term contracts—exposed to extreme volatility and without guaranteed income.

The financial consequences for producers are immediate. Energy that cannot be delivered to the grid or is sold at zero market value generates no return. For projects operating under a merchant model or selling on the day-ahead market without the protection of power purchase agreements, the risks are even more pronounced. The lack of revenue predictability makes long-term financial planning nearly impossible, undermining investor confidence.

These issues are now spilling over into the banking sector. Greek and international financial institutions are becoming increasingly reluctant to finance renewable projects that lack stable, contracted revenue streams. Traditional project finance models, which rely on consistent and forecastable cash flows, are being upended by the current environment of curtailments and volatile pricing.

According to banking executives, the risk profile of renewable projects in Greece has shifted so significantly that new business models are now essential. Developers are being urged to adopt more flexible strategies, which may include entering the energy trading and supply markets to hedge against revenue shortfalls.

This challenging environment is accelerating consolidation in the Greek renewables market. Only vertically integrated energy companies—those involved in both production and retail supply, or those active in energy trading—are now able to withstand the shocks and uncertainties. For independent producers without such capabilities, survival is becoming increasingly difficult, potentially limiting competition and slowing the pace of renewable development in one of Europe’s sunniest and windiest regions.

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Greece’s Renewable Sector Faces Challenges,Energy Oversupply Deepens