Greece has secured approval for a €2.3 billion programme aimed at decarbonising its islands, with Athens directing more than €2 billion to electricity interconnections, renewable generation and storage. The approval was granted by the European Commission and the European Investment Bank as part of the island transition effort.
Funding split for interconnections, renewables and storage
The programme allocates about €1.1 billion to electricity interconnections and related infrastructure across the Dodecanese, Cyclades and North Aegean. A further €977 million is earmarked for renewable-energy projects combined with storage.
Additional funding includes €200 million for multipurpose dams and reservoirs and €56 million for electric-vehicle charging infrastructure. The scale of the grid-focused component is described as making the package more significant than a conventional renewable-support programme.
Island power systems and mainland grid connections
Many Greek islands have historically depended on isolated electricity systems supplied largely by expensive oil-fired generation. Connecting these islands to the mainland network is intended to enable cheaper generation to reach island demand while also creating new outlets for local wind and solar production.
The interconnection approach can also reduce the need to maintain thermal generation solely for security of supply. It targets two constraints on island decarbonisation: insufficient transmission capacity and limited ability of small isolated systems to absorb large volumes of intermittent renewable generation.
Role of storage as solar and wind capacity grows
Storage is expected to become more important as additional solar and wind capacity is connected. Batteries and other flexible assets can absorb surplus output during high-renewable periods and release electricity when generation falls.
This configuration is intended to reduce curtailment and limit dependence on fossil backup. It also aligns with the broader shift in Greece’s approach to building an integrated island power system rather than focusing only on isolated renewable assets.
Regional integration across Southeast Europe
The strategy is also linked to Greece’s role in Southeast Europe’s electricity transition, with rapid expansion of solar and wind generation alongside investment in domestic transmission and cross-border links. Island interconnections extend that process into systems that have traditionally operated at the edge of the continental market.
Projects across the Cyclades have already shown how interconnection can reduce reliance on local oil generation. Extending similar arrangements towards the Dodecanese and North Aegean would increase the share of island demand brought into the interconnected market.
Network constraints for renewable developers
For renewable developers, the programme could open areas where generation potential has previously been constrained by weak networks. Future project value is expected to depend increasingly on combining generation, storage and connection capacity rather than installed renewable megawatts alone.
The programme also includes investment in water infrastructure, creating potential links between energy management, water supply and climate resilience on islands where both electricity and water demand rise sharply during the tourism season .
Estimated total funding and carbon allowance linkage
Available funding is currently estimated at around €2 billion, with the final amount partly dependent on the value of EU carbon allowances . That structure introduces some funding-price exposure while keeping the programme’s strategic direction in place.
The €2.3 billion programme places transmission and storage at the centre of Greece’s shift toward operating a more integrated island power system .
