EU Approves €2 Billion Investment Plan for Greek Island Decarbonization Fund

en.Wedoany.com Reported - The European Commission and the European Investment Bank (EIB) have recently approved the investment plan for the Greek Island Decarbonization Fund. This financing framework, tailored specifically for Greece, was jointly developed by the Greek government, the European Commission, and the European Investment Bank, with a total scale of €2 billion (equivalent to $2.3 billion). It will fund electricity interconnections between Greek islands and the mainland grid, as well as clean energy, energy storage, and e-mobility projects on the islands. According to the Greek Ministry of Environment and Energy, the approved investment plan covers projects and initiatives totaling approximately €2.3 billion.

The Island Decarbonization Fund is financed through the EU Emissions Trading System (EU ETS). According to the Greek Ministry of Environment and Energy, the Fund's resources are currently estimated at approximately €2 billion, a calculation based on current emission allowance prices under the EU ETS. The total available resources will fluctuate in line with changes in allowance prices over the Fund's operational period.

The approved investment plan is divided into four categories. Approximately €1.1 billion will be allocated to electricity interconnections and related energy infrastructure for the Dodecanese, Cyclades, and the northeastern Aegean islands. The Greek Independent Power Transmission Operator (IPTO) stated last week that the electricity interconnection between the mainland and Kos has entered the construction phase. IPTO has awarded the contract for the design, supply, and installation of the high-voltage direct current (HVDC) cable system between Corinth on the mainland and Kos to Fulgor, a subsidiary of Hellenic Cables.

The second investment category amounts to €977 million, allocated to renewable energy and energy storage projects. This portion of the investment plan places particular emphasis on installing self-consumption photovoltaic systems in households, hotels, restaurants, shops, offices, hospitals, care facilities, schools, public buildings, and agricultural facilities. The third investment category allocates €200 million for multi-purpose dams and reservoirs, while the fourth sets aside €56 million for electric vehicle charging infrastructure.

Many Greek islands still rely on diesel-generated power, which carries high electricity costs that are ultimately shared by electricity consumers across Greece. The Greek Ministry of Environment and Energy stated that combining new electricity interconnections with renewable energy and storage projects on the islands can reduce the operation of fuel-based power plants and enhance the flexibility of the power system. Relevant agencies are currently conducting detailed project planning for this €2 billion program.

Greece has implemented clean energy projects on several islands in recent years, employing varying technologies and business models. On Tilos, a privately owned hybrid power plant combining solar PV, wind, and energy storage covers more than half of the island's annual electricity demand. On Chalki, a photovoltaic plant operating under a net-metering scheme provides solar power to local residents, having been donated to the island by private sponsors. Other islands, including Astypalaia and Agios Efstratios, are pursuing different clean energy models. It remains to be seen which technological pathways the Island Decarbonization Fund will support next, and how the program will drive a lasting reduction in fossil fuel consumption on the islands.