The Greek Government is considering the introduction of a capacity market aimed at supporting natural gas-fired power plants. This initiative is part of a broader strategy to maintain the economic viability of these facilities as the country accelerates its shift toward renewable energy sources. As solar and wind increasingly dominate daily electricity production, the need for flexible and reliable backup power has become more important. The proposed mechanism would provide financial stability to gas-fired units by ensuring they are compensated for their availability, even if they are not frequently used.
This policy move coincides with the announcement of a new 792 MW gas-fired power plant in Larissa, a joint venture between Greece’s natural gas network operator DEPA and Israeli investors. The Larissa project joins three other major gas plants currently under development in Agios Nikolaos, Komotini, and Alexandroupoli. Collectively, these projects amount to 3.3 gigawatts of new capacity and represent nearly 2 billion euros in investment.
As gas plants are increasingly dispatched only during periods of peak demand or to offset renewable supply fluctuations, their operational hours—and revenue from electricity sales—have declined. A capacity market would address this challenge by offering payments for standby capacity, thus encouraging private investment and ensuring that these plants remain available when needed.
In addition to their role in Greece’s domestic energy system, gas-fired plants also enhance regional energy security. Neighboring countries such as Bulgaria occasionally rely on electricity imports from Greece, highlighting the importance of maintaining a dependable gas-based generation fleet. Greek plants, particularly those powered by gas and coal, contribute to grid stability across southeastern Europe.
The government’s goal is to design a competitive capacity market that encourages participation from multiple operators while keeping costs under control. A variety of companies—including Metlen, Motor Oil, GEK TERNA, PPC, and Copelouzos—are leading the development of these new facilities, which are strategically located to serve different parts of the country.
Altogether, this marks a significant evolution in Greece’s energy landscape. The capacity market, alongside new gas infrastructure, will support the ongoing renewable transition while reinforcing the country’s role as a cornerstone of energy reliability in the region.
