Elevated power price volatility driven by global gas market uncertainty is creating a near-term opportunity for battery storage and renewable energy investors in Greece, according to new analysis from Aurora Energy Research. Aurora's modelling shows that a standalone two-hour battery energy storage system (BESS) entering operation in 2027 could achieve an internal rate of return (IRR) of approximately 11–12 percent, around two percentage points higher than an equivalent project commissioned in 2030. The findings suggest that, despite expected capex reductions and increasing price cannibalisation by 2030, near-term volatility continues to support the economics of both utility-scale solar PV and BESS projects entering as early as 2027.
Greece – storage steps in as PV tariffs lose their shine
The stronger returns are being driven by higher wholesale power prices and wider intraday price spreads. Greece remains heavily exposed to developments in global gas markets, with gas-fired generation accounting for around 35–45 percent of electricity supply. Against a backdrop of continued uncertainty surrounding LNG supplies and the Strait of Hormuz, Aurora expects Greek wholesale electricity prices to average around €100/MWh over 2026–2029.
What the Russian gas phase-out means
Beyond Hormuz, market attention is increasingly shifting toward the European Union's planned phase-out of Russian gas imports from September 2027. Under current legislation, Russian LNG imports and remaining pipeline gas flows are expected to cease, including volumes transported via TurkStream, which currently accounts for around 45 percent of Greece's gas supply. The analysis by Aurora indicates that a complete suspension of remaining Russian gas supplies could result in a 27 percent increase in Greek gas prices and a 13 percent increase in Greek baseload prices by 2028. However, the impact on project economics is expected to be more moderate, with IRRs changing by less than one percentage point.
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Sokratis Al Zoampie, Research Analyst at Aurora Energy Research: "Recurring geopolitical crises are creating a new normal of elevated price volatility. Aurora's analysis shows that these developments can materially affect project economics, with RES and BESS returns varying significantly depending on how gas supply disruptions unfold. However, history suggests that policy interventions often follow periods of market stress and have the potential to correct market disruptions. In this respect, the upside for projects may prove temporary rather than structural.“ (hcn)
