EDEY: Greece has 30 years to utilize natural gas resources

Taking into account that 2050 is often presented as the carbon-neutral target year, Greece has a 30-year period of opportunity to utilize the country’s natural gas resources and generate revenue, plus the additional potential provided by the role of gas in blue hydrogen production, EDEY, the Greek Hydrocarbon Management Company, has noted in a report accompanying its financial results for 2020.

EDEY posted a total turnover reduction to 2.8 million euros for 2020, down from 5.5 million euros in 2019, as well as a drop in profit after tax to 1.7 million euros in 2020 from 4.3 million euros in the previous year.

Greece continues to have a window of opportunity to create revenue from natural gas resources through efforts that do not contravene the country’s ambitious green-energy transition now in progress, EDEY noted, highlighting that carbon emissions released by natural gas are 50 percent lower than those of fossil fuels and the National Energy and Climate Plan’s objective (NECP) for a natural gas energy mix share of 40 percent by 2030.

 

New RES support framework, featuring changes, imminent

The energy ministry appears to have taken initiatives intended to increase capacity quantities offered at RES auctions and also retain national control over the determination of these quantities, depending on developments, given the more ambitious National Energy and Climate Plan (NECP) for the installation of a greater number of RES units, reflecting loftier EU goals, energypress sources have informed.

A draft detailing the new RES support framework for Greece has been finalized following talks between the energy ministry officials and European Commission officials and is now in the hands of the finance ministry’s Central State Aid Unit (KEMKE), responsible for the framework’s official implementation, expected in a few days.

Considerable changes have been made to an initial plan announced by former energy minister Kostis Hatzidakis, not only in terms of the number of auctions to be staged and capacities offered, but also in terms of its overall principles, sources noted.

The new framework makes no mention of an initial Greek proposal for six auctions, each offering 350 MW, for a total of 2.1 GW, but it does call for a capacity of at least 3 GW.

It also includes provisions for geographically based auctions covering areas such as Crete, Evia and the Cyclades, as well as special procedures for small-scale PVs.

In addition, the auctions will not need to be held by 2023 but will be extended until 2025, based on EU directives.

Through the new RES support framework, wind and solar farm energy investors will, through competitive procedures, secure feed-in tariffs for twenty-year periods.

 

 

Operator network boost for 1,750 MW in new RES entries

Distribution network operator DEDDIE/HEDNO will use Recovery and Resilience Facility (RRF) funds to cover a considerable proportion of an investment for capacity boosts at certain existing low and medium-voltage substations around the country to facilitate the entry of new RES units.

The capacity boost at these substations, it is estimated, will enable grid entry for new RES units with a total capacity of approximately 1,755 MW.

This prospective RES addition represents nearly 40 percent of the 4,640 MW in new RES unit entries planned for the achievement of National Energy and Climate Plan (NECP) RES penetration goals.

This DEDDIE/HEDNO investment will cost close to 30 million euros, of which 12 million euros will stem from the RRF.

Substations in the Peloponnese and Epirus, northwestern Greece, will be boosted by 250 MVA. Substations in the wider Athens area will be boosted by 100 MVA, such facilities in central Greece will be boosted by 200 MVA, and Macedonia and Thrace units in the north will be boosted by 250 MVA.

All project contracts are expected to have been finalized by the fourth quarter of 2023, while the projects are scheduled to be completed by the fourth quarter of 2025.

 

Fires, UN climate change report to raise NECP objectives

Not long after the European Green Deal and the European Commission’s decision to reduce greenhouse emissions by 55 percent, compared to 1990 levels, the National Energy and Climate Plan will, once again, need to be revised into an even more ambitious strategy following the extensive wildfires around Greece over the past week or so that have scorched over 90,000 hectares of land in Evia, the northern section of the wider Athens area, as well as the Peloponnese.

The climate change crisis and faster ascent to a global temperature limit set by scientists, as highlighted in a UN report released yesterday, increases the sense of urgency for an even more ambitious NECP, a challenge of paramount importance for the government, as it is  expected to made clear in coming days.

New NECP figures have yet to emerge, but a government committee has already delivered a gap analysis with new policies and measures that need to be tabled. A deeper analysis of the data, in association with external scientific associates, will soon follow before revised targets are set.

The RES sector, according to the country’s latest NECP, is expected to constitute at least 35 percent of energy consumption by 2030, but this goal will now surely be raised.

 

Grid to rely on lignite units amid extreme weather for 2 more yrs

The country’s grid sufficiency will rely on power utility PPC’s high-polluting and high-cost, for the utility, lignite-fired power stations for at least a further two years whenever extreme temperature fluctuations are experienced, as was the case last week, on Friday, when the heatwave pushed demand up to 9,258 MW, as well as Wednesday, when demand rose to similar levels.

PPC’s group of old lignite-fired power stations will need to keep offering solutions until at least 2023 during extreme weather conditions, be they heatwaves or snowstorms, a situation that will need to be seriously taken into account by the committee responsible for the new National Energy and Climate Plan (NECP).

The committee will stage its first meeting today to begin preparing the new 2030 NECP. Many uncertain factors still remain.

According to the existing NECP, now being revised, new natural gas-fired power stations offering a total capacity of 1,650 MW, plus Ptolemaida V – a lignite-fired unit to be converted to a natural gas-fired unit in 2025 for an eventual capacity of 1,000 MW – will need to be launched by 2030.

The new NECP will anticipate greater RES penetration by 2030 than the existing NECP. The existing plan expects renewable energy sources to cover 62 percent of overall electricity demand by the end of the decade, whereas the new NECP will increase this level to 72 percent.

Municipal solar parks to help low-income household energy needs

Municipalities and prefectures will be offered 100 million euros in subsidies, through the recovery fund, for the development of solar energy farms whose resulting earnings will be used exclusively to cover the energy needs of approximately 30,000 low-income household around the country, energy minister Kostas Skrekas has announced in an interview with Greek daily Kathimerini.

These solar parks will offer a total capacity of 120 MW, the minister noted.

The minister also noted, in the interview, that a further 40 million euros from the recovery fund will be used to subsidize the replacement of 2,000 conventional taxis with electric-powered models.

Taxi owners will be entitled to 22,500 euros in subsidies for each vehicle replaced, the minister said, while adding that a variety of criteria, including car age, will be taken into account.

Support is also planned for energy communities, according to the minister.

“Energy communities are important when they serve their purpose and not merely promote capital-intensive investment. That is why we will support energy communities that will benefit those in need,” Skrekas explained.

Responding to a question regarding widespread resistance of local communities against wind energy installations and criticism faced by the ministry for being too cooperative with investor plans in this domain, the minister remarked: “We don’t license everything. Investor proposals currently exceed 100 GW, but we, through the National Energy and Climate Plan (NECP), estimate that, realistically, approximately 10 GW will be installed – in other words, one in ten.”

Revisions to a revised, and stricter, RES spatial plan will be completed by the end of the year, the minister told.

Energy investment activity rising, focus on RES projects, energy transition

Investment activity in the domestic energy sector is rising with major deals being negotiated, the main focus being on renewables and the energy transition, participants at yesterday’s Delphi Economic Forum made clear.

This activity promises significant growth for all RES technologies, even the more innovative, such as offshore wind farms and energy storage units.

Major energy players are moving to capitalize on opportunities that are emerging as the country pushes ahead with its decarbonization effort. Also, investor talks concerning domestic and international partnerships, the latter promising to secure expertise in sectors such as offshore wind farms, are in progress.

Power utility PPC, moving ahead with RES investments, aims to have launched projects with a total capacity of 1.5 GW by 2023. The utility’s redevelopment plan for the country’s two lignite-dependent regions, Ptolemaida, in the north, and Megalopoli, in the Peloponnese, is in progress.

PPC plans to invest 3.4 billion euros on RES project development in these regions, and an upgrade of their distribution networks, Konstantinos Mavros, chief executive of PPC Renewables, a PPC subsidiary, told the forum.

PPC is also expected to establish partnerships facilitating its entry into the offshore wind market. In addition, the company also aims to have formed a joint venture with German power company RWE by the end of summer for development of RES projects totaling 2 GW.

Elsewhere, energy company Mytilineos is also preparing a strategic alliance with a major international group for its entry into the offshore wind farm sector.

Mytilineos is also close to completing, this year, a major post-lignite investment in natural gas-fueled electricity generation. In addition, the company plans to develop 300 MW in wind farms and 1.5 GW in solar farms over the next two years.

Furthermore, Mytilineos plans to develop 20 energy storage projects, each with 50 MW capacity, by utilizing its immense knowhow gained in this field through involvement in such projects abroad.

Hellenic Petroleum (ELPE) is preparing RES and digital transition projects and will concurrently focus efforts to reduce carbon emissions and develop more eco-friendly products, including biofuels and hydrogen.

The Copelouzos group is nearing an investment decision on the development of a natural gas-fueled power station in Alexandroupoli, northeastern Greece. A decision is expected this summer. The group is currently engaged in talks with neighboring North Macedonia’s power utility for its possible entry into this project as a minority partner.

As for networks, power grid operator IPTO has planned numerous projects as part of a ten-year investment plan worth five billion euros. The operator anticipates new RES project penetration of 17 GW, a forecast exceeding the National Energy and Climate Plan’s goals.

DEDDIE/HEDNO, the distribution network operator, has put together a 3 billion-euro investment plan for the two next regulatory periods, each four years long. Projects include network undergrounding, service upgrades and improvement, new technologies, as well as grid digitalization projects.

NECP needs revising, EU CO2 emission goal more ambitious

The EU’s level of RES investment objectives has been raised even higher following an agreement reached this week by the member states and European Parliament for a swifter reduction of CO2 emissions by 2030, reached after many months of inconclusive negotiations.

The agreement for a CO2 emissions reduction of at least 55 percent by the end of the decade, instead of 40 percent, as had been previously set, will subsequently require EU member states to revise their National Energy and Climate Plans.

NECP objectives concerning wind, solar and all other green-energy technologies will need to be reset.

For Greece, this development means that a 2019 NECP goal for the installation of 8.8 GW in new RES capacity by 2030 needs to be increased to over 10 GW, sources have informed energypress.

The precise figure will be determined by the proportion, or mix, of wind, solar and other RES categories to be included in Greece’s updated NECP, as each technology offers different GWh results per GW installed.

Greece’s NECP committee will soon need to proceed with new calculations and decide on a revised strategy.

The country’s revised NECP will also detail Greece’s updated decarbonization plan, including PPC’s commitment to complete this effort sooner by turning off its Ptolemaida V facility as a lignite-fired unit in 2025, not 2028, as originally planned. PPC’s chief executive Giorgos Stassis pointed out this change of plan to analysts earlier this week.

PPC’s Kardia III and IV lignite power stations set for April 17 withdrawal

Power utility PPC’s Kardia III and IV lignite-fired power stations are nearing withdrawal as the two facilities are due to clock up 32,000 hours of operating time, their limit, on April 17.

PPC has scheduled to close down the two power stations this year as part of a decarbonization plan the company had announced in December, 2019. This plan was included in the National Energy and Climate Plan (NECP).

The two imminent power-station withdrawals, representing a capacity loss of 540 MW, will follow a first stage of exits carried out last year by PPC, when its withdrawal of Amynteo I and II, totaling 546 MW, launched the country’s decarbonization effort.

Besides producing electricity, the two Kardia units, located in Greece’s north, have also been used to provide district heating. Local authorities have asked the energy ministry to keep the two units on standby for a few more weeks until the early spring’s chilly weather is well and truly over.

PPC’s prospective Ptolemaida V unit will eventually take over district heating services following the adoption of intermediate solutions to cover next winter.

PPC also plans to withdraw Megalopoli III, in the Peloponnese, this year, earlier than the 2022 objective listed in the NECP.

RES spatial plan to be delivered within 2021, Action Plan notes

The completion of a RES sector spatial plan within the current year has been included in an energy ministry Action Plan for 2021, just published along with the respective action plans of all other ministries.

The energy ministry’s action plan lists interventions planned for 2021 in nine areas under its authority, including energy-sector privatizations, energy market reforms, support for decarbonization and recycling, adoption of circular economic principles, greenhouse gas emission reduction, the tackling of climate change effects, as well as green energy transition.

RES sector measures this year will help cut down the time needed by new RES projects for licensing procedures to two years, the ministry anticipates in its action plan.

It also expects the installation, by the end of the year, of at least 2,000 recharging units for electric vehicles in public areas, including along highways, and at private properties, including domestic and commercial.

On the privatization front, the energy ministry expects all seven energy privatization plans to have been completed or reached an advanced stage by the end of the year.

On energy market reforms, the adoption of a remuneration mechanism for grid sufficiency, to replace a transitional mechanism remunerating flexibility, is a standout feature.

The energy ministry also intends to adopt, as Greek law, an EU directive promoting energy storage and demand response systems.

The ministry’s action plan also anticipates the signing of agreements this year for distribution network development and RES penetration support. It also expects DEDDIE/HEDNO, the distribution network operator, to announce a tender for the installation of smart power meters within the current year.

Taking into account plans by DEDDIE/HEDNO and power grid operator IPTO, the ministry expects investments in distribution and transmission networks to reach one billion euros this year.

Investments for gas network upgrades and expansion are expected to reach at least 300 million euros, primarily driven by projects planned by gas distributor DEDA, covering all areas around the country except for the wider Athens, Thessaloniki and Thessaly areas.

On international projects, the action plan notes that a Greek-Bulgarian gas pipeline project, the IGB, promising to significantly diversify Greece’s gas sources, will be completed by the end of 2021.

A latest edition of the Saving at Home program subsidizing energy efficiency upgrades of properties, budgeted at one billion euros, will stimulate work on 80,000 buildings in 2021, according the energy ministry’s action plan.

This activity will contribute to a National Energy and Climate Plan objective for an improvement, by 2030, of energy efficiency at buildings by 38 percent, reducing energy consumption to levels below those registered in 2007, the action plan notes.

 

PPC seeks IPTO support for EC lignite compensation request

Power utility PPC wants power grid operator IPTO to provide a statement declaring whether the power utility’s lignite-fired power stations, nowadays loss-incurring units as a result of elevated carbon emission right costs, are still necessary for the achievement of grid sufficiency, the utility’s objective being to gain support for a lignite compensation request submitted to the European Commission, not to immediately shut down its lignite units, sources have informed.

Brussels has been examining the PPC compensation request for months, initially as part of a package incorporating the European Commission’s lignite antitrust case against Greece, and more recently, following settlement of the latter, as a separate issue that has dragged on.

Throughout the entire period, officials in Greece have needed to respond to extensive Brussels questioning over PPC’s compensation request. Most recently, the European Commission is reported to have informed PPC, by email, that it would deliver a decision as soon as possible, once all information has been processed.

PPC, in its letter to IPTO, informs that it would be prepared to shut down the lignite units now if the operator considers them unnecessary for grid sufficiency as they are the cause of losses on a daily basis.

The power utility has planned a phaseout of its lignite facilities over the next three years, as part of the country’s decarbonization effort.

IPTO, in a grid-sufficiency study covering 2020 to 2030, conducted within the framework of the National Energy and Climate Plan, has stressed the period between 2021 and 2024 will be crucial as a result of PPC’s planned phaseout of lignite-fired power stations.

Subsequently, the grid’s sufficiency will depend on how soon three new gas-fueled power stations with a capacity totaling 2,150 MW – PPC’s Ptolemaida V, and units being developed by Mytilineos and TERNA – will be ready for launch, IPTO’s NECP-linked study noted.

Suppliers target electromobility, smart home and city markets

Domestic energy suppliers, targeting the electromobility, smart home and smart city markets, are closely following rapid technological developments, internationally, company executives told an industry event, the 4th Ecomobility conference, held yesterday.

Elpedison, anticipating electromobility market growth, is offering related services for homes and businesses through its DriveGreen package, which includes electricity tariffs below night rates on a 24-hour basis and free-of-charge kilowatt hours every month for electric vehicle usage, the company’s chief executive, Nikos Zahariadis told the event.

A National Energy and Climate Plan projection on the auto market penetration of electric vehicles by 2030 is too ambitious as a result of high price tags on electric vehicles, lack of infrastructure and lofty taxes, Zahariadis noted. Revisions are needed if the NECP’s electromobility objective is to be achieved, he added.

Aristidis Grammatikopoulos, product development manager at energy supplier Fysiko Aerio, informed of the company’s participation in the development of recharging infrastructure. Fysiko Aerios has also prepared special packages and services for supply and installation of smart recharging units for domestic use, he added.

The Fysiko Aerio official also announced new smart-tech services, via mobile phone, offering customers optimal energy packages though an algorithm linked to individual energy consumption patterns.

Greek market data in 2020 show potential for the electromobility sector, despite difficulties, energy supplier NRG’s strategic manager Ilias Petris asserted.

The development of recharging infrastructure is the most pivotal factor for electromobility market growth, the NRG official stressed, adding that a current focus on the wider Athens area requires adjustment for a widespread approach.

The Motor Oil group, owner of NRG, has been a pioneer in electromobility through the installation of recharging networks along national highways as far back as two years ago, Petris noted.

 

Chinese firms barred from distribution operator sale

Conflict of interest, including in grid energy storage, a fast-growing market, has prompted power utility PPC to stop two Chinese firms interested in the prospective sale of a 49 percent stake in distribution network operator DEDDIE/HEDNO, a PPC subsidiary, from taking part.

State Grid Corporation of China (SGCC), a strategic partner of Greek power grid operator IPTO with a 24 percent stake, and another Chinese company, still undisclosed, both participated in a market test for the DEDDIE/HEDNO privatization, indicating an interest to submit bids.

A total of 19 firms reportedly expressed preliminary interest in the sale’s market test, conducted by the procedure’s consultants.

The DEDDIE/HEDNO partial privatization’s conditions include a term barring the participation of any firms directly or indirectly related to IPTO.

The conflict-of-interest term was included in the sale’s rules as electricity network companies, whether involved in high voltage, such as IPTO, or mid and low voltage, such as DEDDIE/HEDNO, are expected to find themselves competing in various electricity market services, including energy storage.

The grid energy storage market – offering large-scale storage systems that store electrical energy during times of abundance, low prices, or low demand before returning it to the grid when demand is high and electricity prices tend to be higher – is experiencing rapid growth on a global scale.

Greece still lacks a legal framework covering this domain. The energy ministry is working on this pending issue, crucial for the country’s effort to achieve National Energy and Climate Plan objectives through greater RES penetration.

This legal framework will, amongst other matters, determine market participation and remuneration terms for energy storage units, as well as related services to be traded on the energy exchange.

PPC anticipates first-round expressions of interest from four to six consortiums for the DEDDIE/HEDNO sale of a 49 percent stake.

 

EBRD: Green projects in Greece a priority, RES-based economic recovery

The European Bank for Reconstruction and Development (EBRD) is strongly interested in Greek energy market investments, Andreea Moraru, the bank’s head of Greece and Cyprus, has stressed in an interview with energypress.

The EBRD official spoke extensively on significant investment opportunities being created by the energy transition.

Since 2015, the EBRD has invested over four billion euros in Greece, participating in numerous major projects, Moraru informed, noting its recent support for power utility PPC, an investment worth 160 million euros, one of the bank’s largest, to cover customer payment volatility following the outbreak of the pandemic, exemplifies EBRD’s strong support for Greece.

The full interview follows:

What is the role of the EBRD compared to that of other banking institutions? 

The EBRD is a development bank committed to furthering progress towards ‘market-oriented economies and the promotion of private and entrepreneurial initiative. Our role is to be complementary to the commercial banks, to work alongside them and to support them.

Αdditionality is among the founding principles underlying our work and the particular support and contribution that the EBRD brings to an investment project which is not available from commercial sources of finance. Alongside transition and sound Banking, it is one of the three founding principles underlying our work. By ensuring that we are additional in everything we do, we ensure that our support for the private sector makes a contribution beyond that available on the market and does not crowd out other private sector actors.

Whenever we consider financing a project, we analyze whether similar financing can be obtained from private sector local banks or non-banking institutions.

Many of our markets are relatively high risk, and the private sector will only lend for short periods of time or at such high rates as to make the project unfeasible. For major new projects in the field of infrastructure, for example, longer-term financing may not be available on reasonable terms or conditions. This is where the EBRD fits in.

Additionality can also be non-financial in nature, where EBRD’s interventions contribute to better project outcomes that would not have been required or offered by commercial financiers. This can include the provision of comfort to clients and investors by mitigating non-financial risks, such as country, regulatory, project, economic cycle or political risks. Additionality may also be derived from the EBRD’s involvement in helping projects and clients achieve higher standards than would have been required by the market, such as through sharing its expertise on better corporate governance or above ‘business as usual’ environmental or inclusion standards.

Do you consider the energy sector in Greece to be suitable to contribute to the development and reconstruction of the Greek economy? For what reasons?

Absolutely. In general, the EBRD’s vision for the energy sector is of a partnership between industry, governments and consumers that delivers the essential energy needs of societies and economies in a manner that is sustainable, reliable and at the lowest possible cost.

In Greece the energy sector is embarking upon its biggest transformation yet, moving away from its reliance on lignite (c. 20% of total electricity production in 2019) to renewables and a smaller fleet of significantly less carbon intensive gas generating units. The NECP aims to achieve reduction in greenhouse gas (GHG) emissions by more than 55% by 2030 compared to 2005, planned to be achieved through: (i) decommissioning of all 4 GW of lignite-fired generation capacity by 2028 (3.4GW by 2023), (ii) 8.7 GW of new renewable generation capacity to added by 2030, reaching a total of 19 GW, and (iii) 2 GW of new gas generation capacity added for system support and security. The country remains committed to implementing the NECP as planned despite the negative impacts the CV19 crisis is expected to have on the Greek economy in 2020 and beyond.

Greece’s withdrawal from coal is a fundamental transformation that will create substantial sector and social challenges with the following broad implications: (1) constructing large volumes of low carbon generating capacity in order to ensure energy security in an increasing electrified economy, (2) reengineering the country’s transmission and distribution networks to reflect the additional penetration of distributed, intermittent renewable energy, and (3) addressing the social and economic impacts of the closure of a major part of its existing energy infrastructure, i.e. ensuring a just and inclusive transition.

We have supported many energy projects so far, especially renewables, working together with leading companies, such as GEK Terna, Mytilineos and HELPE among others.

A recent milestone is our support for the largest renewable energy project in Greece and the largest solar energy project in south-eastern Europe to date, the new solar park in Kozani. In 2017, we also approved a framework committing up to €300 million to finance renewable energy investments in the country.

The main reasons why this sector is important for the development of the Greek economy and thus our participation, is first to help the decarbonization of the country and the transition to a greener economy, as well as to strengthen local linkages and regional integration.

What is the EBRD’S philosophy about its presence in the Greek economy and especially in the energy sector?

In Greece in particular, supporting sustainable energy and infrastructure is among our top priorities. In fact supporting sustainable energy and infrastructure is one of the pillars of the newly approved country strategy. Our investment strategy in the energy sector going forward will aim at further liberalization and diversification of the energy market focusing on renewables and increased renewable energy capacity and a more diversified energy mix to promote decarbonization of the economy. EBRD could support a second phase of feasible renewable energy projects with project preparation / technical assistance and financing (biomass and biogas plants, use of waste heat in greenhouses for high value-added agriculture, electricity storage facilities, green hydrogen production plants and other forms of energy storage.

We see that it’s challenging to meet EU climate goals in Greece and our goal is to support the country with that. Our approach and philosophy is in line with the National Energy and Climate Plan and we are very glad the Greek government is committed to close all lignite plants. We need to keep this momentum, despite the current Covid-19 crisis, and turn the country greener.

One good example is our recent support for PPC (DEI). This has been one of our largest investments (€160 million) and the first time we supported the public sector in Greece. This facility supports PPC’s working capital needs at a time of customer payment volatility following the outbreak of the crisis. It also strengthens the resilience of the electricity sector as a whole by ensuring the stability of essential utility supplies and maintaining the momentum towards decarbonization.

What are the characteristics of private companies that could apply to be supported by the EBRD?

When we consider financing a project we analyze different aspects, such as how it supports the green economy, if it promotes women or youth inclusion, if it can enhance the competitiveness and resilience of the Greek economy etc. We look at the financial strength of the project as we operate according to sound banking principles. We cannot finance companies in certain sectors like defence-related activities, tobacco, substances banned by international law or gambling facilities.  As I have already mentioned, we also need to be additional.

We work in a wide range of sectors, from energy, infrastructure, manufacturing, property, tourism, agriculture to trade and financial institutions. We also support SMEs with business advice, know-how transfer and trainings.

What are your conclusions from your cooperation so far with Greek companies and institutions?

We’re very proud of all our projects in Greece so far. Since commencing our operations in 2015, the Bank has invested more than €4 billion in the country, helping respond to the financial crisis. Against a turbulent political and economic backdrop, the EBRD helped stabilize the financial sector, support private companies through export-oriented growth and lay the foundations for greater private sector participation in critical energy and infrastructure projects that have also strengthened regional integration.

We faced several challenges because of the financial crisis, but this was expected and was exactly the reason why we came to the country. Our main conclusion is that Greek companies have strong potential and very talented workforce, who we’re glad to be working with. The COVID-19 pandemic has abruptly interrupted Greece’s steady recovery, but we’re confident that the country can build back better.

We have an excellent cooperation with the Greek Government whom we are supporting on a number of initiatives.  In late 2020, the EBRD joined forces with the Ministry of Development and Investments of Greece to establish a new public-private partnership (PPP) preparation facility cooperation account, following a request from the Greek authorities. We are also working close with the Ministry of Finance on development of a capital market strategy, a project supported by DG Reform.

What are your plans for the new year?

We will focus on supporting the recovery of the Greek economy, by helping with the immediate needs of the Greek businesses because of coronavirus, as well as with their long-term growth plans. Green projects, including in the energy sector, will be our priority, but we’ll also be active in other sectors. We’ll continue supporting the banking sector, too.

Do you consider the investment risk in our country increased after the great economic crisis and in the light of the current crisis due to a pandemic?

The financial crisis had a strong impact on Greece, but we recognize that the Greek economy had started recovering and growing in the recent years. It’s true that COVID-19 containment measures are likely to depress economic output and cause particular disruption to the tourism industry, reversing the economic recovery and hindering investments in the near term, not only in Greece, but also in most countries. There are still many things that need to be improved in the country to attract more investors, but we don’t consider the investment risk much higher than it used to be. The Greek economy can recover after the pandemic.

 

Decarbonization strategy’s spatial planning enters crucial stage

The country’s decarbonization master plan is entering one of its most crucial stages, the establishment of spatial planning for a just transition, or establishment of new commercial activity in regions to be financially impacted by the country’s withdrawal of lignite units, now underway.

These spatial plans, which will need to be submitted to the European Commission for approval, will determine the speed and success of the overall effort as just transition mechanism funding approval will be based on them.

A just transition mechanism sum of 5 billion euros is expected to be utilized. However, Greek officials will need to present analytical spatial plans detailing the transitions in accordance with the National Energy and Climate Plan. These plans will be incorporated into the EU’s National Strategic Reference Framework funding program.

Power utility PPC, monopolizing the country’s lignite facilities, will obviously be involved in the process. The utility will keep some of the land hosting lignite mines to develop its own investment plans, including solar energy parks.

The lignite-dependent economies of west Macedonia, in the country’s north, and Megalopoli, in the Peloponnese, will need to be completely redeveloped as part of the decarbonization plan.

It remains unclear when Greece’s spatial redevelopment plans will be ready to be submitted to the European Commission. They are not expected to be ready any time before the new year.

NECP and efforts on the right track, Brussels report notes

The country’s efforts to reach objectives set in the National Energy and Climate Plan, shaped by long-term European climate and energy goals, as well as the domestic plan itself, have been favorably reviewed by the European Commission in a related report released yesterday as an appraisal of the finalized NECP submitted to Brussels by the Greek government.

The European Commission, which has reviewed the NECPs of EU member states and how they stand in connection with Europe’s energy and climate objectives, described the Greek plan and its progress as “satisfactory” and “sufficient”.

The Brussels review, however, pointed out that the country’s reforms concerning competition in the retail and wholesale electricity and gas markets, among other domains, require strengthening.

The report also called for an enhancement of Greece’s just transition plan concerning the post-lignite era. Greater detail in the assessment of the social and employment repercussions, as well as retraining requirements, in lignite-dependent areas where the lignite-fired power stations are planned to be withdrawn over the next three years is needed, it noted.

As for measures concerning the Greek economy’s pandemic-related recovery, at least 37 percent of recovery funds to be made available should be invested in climate-linked initiatives so that mid-term emission reduction targets are met, the report noted.

RAE issues undermining DEPA Infrastructure privatization

Delays, instability and flawed intervention by RAE, the Regulatory Authority for Energy, on important operating issues concerning gas utility DEPA’s subsidiaries EDA Attiki, EDA Thess and DEDA – the three distributors covering the wider Athens area, Thessaloniki-Thessaly and rest of Greece, respectively – are undermining the privatization procedure for DEPA Infrastructure, a new DEPA entity placed for sale, DEPA Infrastructure has warned in a letter to the authority.

In the letter, also forwarded to privatization fund TAIPED and the energy ministry, DEPA Infrastructure complains of a RAE delay in endorsing EDA tariffs for 2019 to 2022, which has consequently placed the gas company’s development plan in turmoil.

Besides not having reached a decision on gas distribution pricing policy, the authority has changed the WACC level three times since last year, including recently, which has negatively impacted the yields of DEPA subsidiary investments, sources noted.

Also, RAE regards initiatives taken by the three gas distributors to attract more consumers to the natural gas market as a form of state aid, DEPA Infrastructure protests in the letter, referring to distribution network connection fee discounts offered by the distributors, as well as subsidy support for natural gas system installations.

Any moves to curb these initiatives promoting gas usage would derail the natural gas sector’s energy-mix penetration target for 2030, as specified in the National Energy and Climate Plan, DEPA Infrastructure contends.

These unfavorable conditions threaten to delay the DEPA Infrastructure privatization, company sources stressed.

The sale procedure’s video data room is still lacking vital information for prospective bidders, who could begin seeing the DEPA Infrastructure privatization as a high-risk investment, the sources noted, adding that WACC level reductions will ultimately reduce the market value of DEPA Infrastructure and the subsidiaries.

GEK TERNA, Elpedison close to decisions on gas-fueled units

GEK TERNA and Elpedison are expected to announce finalized investment decisions for new gas-fueled power stations with total capacity over 1,400 MW within the next two months, energypress sources informed.

GEK TERNA plans to develop a 660-MW power station at the industrial zone of Komotini, northeastern Greece, while Elpedison, a joint venture involving Hellenic Petroleum ELPE and Italy’s Edison, intends to construct units with a total capacity of 826 MW at the ELPE facilities in Thessaloniki.

These project plans are estimated to be worth a total of at least 600 million euros.

The energy companies have already received energy production licenses as well as other licensing requirements, including environmental permits, for these prospective units, regarded as mature investment plans.

Both companies are awaiting new CAT mechanism details for gas-fueled power stations before finalizing their investment plans. The economic uncertainty caused by the pandemic, plus the anticipation of a second wave, are also crucial factors influencing the thinking behind these investment decisions.

Market capacity exists for new combined-cycle gas-fueled power stations during the energy transition over the next ten to 15 years, electricity market officials insist.

The planned withdrawal of power utility PPC’s lignite-fired power stations over the next three or so years combined with a lack of development in RES energy storage systems offers gas-fueled power generation an opportunity to cover capacity to be lost by lignite-fired power station closures.

A recent BloombergNEF report noted big natural gas-fueled power stations are not necessary. However, market officials point to the National Energy and Climate Plan as proof of the need for such units.

The Mytilineos group is developing an 826-MW CCGT in the Agios Nikolaos area of Boetia, northwest of Athens, with the aim of a launch in late-2021.

EC calls for CO2 cuts; NECP revisions, RES boost ahead

The European Commission has announced a new European Climate Law proposal for even more ambitious CO2 emission cuts in the EU, calling for reductions of 55 percent by 2030, instead of the present goal of 40 percent. If adopted, this proposal will prompt further revisions of National Energy and Climate Plans and RES installation increases by EU member states.

Compared to previous NECP objectives, RES facilities in most parts of the EU will need to increase by levels of between 20 and 30 percent by 2030, while energy consumption must drop further, between 15 and 20 percent, if the new Brussels proposal is adopted, reliable sources have informed.

Adoption of the proposal will require greater green-policy effort by member states and much bigger investments.

CO2 emissions produced by vehicles and buildings could be taxed, while more generous subsidy programs could be offered for energy efficiency upgrades.

In Greece, a 55 percent CO2 emissions cut by 2030 would require a further increase in RES installations so that a 19-GW target, by 2030, included in the country’s current NECP may be exceeded.

This more ambitious objective will enable the actualization of a greater number of possible projects on stand-by, currently representing a capacity of 76 GW. However, bigger investments for network reinforcement, increased interconnections and energy storage facility installations will be needed.

 

Expanded energy efficiency upgrade program planned

A new subsidy program for domestic energy efficiency upgrades, to replace a preceding Saving at Home model in autumn, will feature more ambitious objectives than those set in the National Energy and Climate Plan, be constantly open for applicants, carry greater capital, and apply for a wider range of energy efficiency interventions, including smart home technology installations, deputy energy minister Gerassimos Thomas has pointed out in an interview with Greek daily to Ethnos.

Over the past decade, some 130,000 homes were upgraded at a cost of 1.3 billion euros, but a swifter rate will be sought through the new subsidy program, the minister noted.

The achievement of national energy policy objectives will require some 60,000 domestic energy efficiency upgrades per year and approximately 8 billion euros in funds until 2030, Thomas explained, adding that Greece will seek greater capital amounts through the EU recovery fund.

“Due to the requirements created in the context of the recent macroeconomic conditions and forecasts, we are working on a modern and much more ambitious framework to reinforce household energy upgrades for a transition to a support system offering energy upgrades and autonomy,” Thomas noted. “The new program is a direct government response to the post-pandemic era, the aim being to boost economic activity in domestic value-added sectors such as construction, manufacturing of building materials and solar systems, and also strengthen households by reducing energy costs.”

An even wider base of households will be eligible for the new subsidy program, while increased subsidy rates will be offered if predetermined energy efficiency targets are achieved by interventions, he added.

 

Monitoring mechanism ‘needed prior to target model markets’

A monitoring mechanism enabling RAE, the Regulatory Authority for Energy, to protect target model electricity markets from abusive, non-competitive behavior by electricity producers, must be ready before target model markets are launched, the European Commission has stressed in its latest post-bailout report on the Greek economy.

Legislation ratified by the Greek government late in 2019 strengthened RAE’s powers by giving it authority to raid company offices and impose fines for abusive behavior.

The crucial role of the monitoring mechanism has also been pointed out in Greece’s revised National Energy and Climate Plan.

The monitoring mechanism, to collect data from power grid operator IPTO and the Greek stock exchange, will be able to identify wholesale trade irregularities.

The European Commission report projects Greece’s target model will be launched in the third quarter of this year, beyond a June 30 target date. The pandemic has negatively impacted the delivery date of a trading platform by General Electric.

Earlier this week, market officials contended that a launch of spot markets at the Greek energy exchange is not possible until September, rejecting IPTO claims of an earlier target model start within August.

Electric vehicles market growth plan includes €5,000 subsidies

A draft bill promoting electric vehicle market growth is close to being finalized for consultation following preparations and processing by related ministries over the past six months.

The plan’s details include 5,000-euro subsidies for electric car purchases as well as financial support, as a percentage of the buying price, for electric bicycle and scooter purchases, according to sources.

More crucially, besides subsidies, the government plan also includes a strategy for this technology’s increased share of the auto market.

Tax incentives as well as other motives, including free-parking rights for electric vehicles, are also believed to be included in the package of measures.

Support for increased usage of electric vehicles was a key item on Prime Minister Kyriakos Mitsotakis’ pre-election agenda and has since developed into a priority in the government’s new green energy plan.

The plan will be forwarded for consultation next month, energy minister Costis Hatzidakis has announced.

Electric vehicle market growth also represents an important part of the new National Energy and Climate Plan.

The NECP includes a target for one in every three vehicles to be electric by 2030. If achieved, this target would introduce a total of 350,000 electric vehicles to Greek roads within the next decade and subsequently increase electricity consumption by 4 percent.

Energy storage discussed at RAE teleconference next week

RAE, the Regulatory Authority for Energy, is hosting a teleconference May 15 for discussion on energy storage needs and a support framework.

The findings of a related simulation study commissioned to the National Technical University of Athens, examining grid performance amid high RES penetration levels and energy storage needs, will be presented and analyzed during the event. Public agencies, market officials as well as citizens will be participating.

Energy storage stations are needed, while their usage promises benefits concerning wholesale electricity prices, the NTUA study has determined, sources informed.

The need for energy storage systems (pumped storage, batteries etc) is stressed in the revised National Energy and Climate Plan, noting development of such facilities is required if ambitious RES installation targets are to be achieved.

RAE has examined support systems used in other countries. Energy storage projects cannot be sustainable if totally dependent on market earnings, comparisons have indicated.

 

Ministry seeking to reignite stalled energy sector initiatives

The energy ministry is seeking to resume coronavirus-interrupted actions on a number of fronts, which, prior to the crisis, were expected to lead to major energy sector changes in 2020. These include the decarbonization effort, privatizations, green-energy infrastructure investments and a launch of the energy exchange.

The ministry’s strategic plan aiming to inject new impetus into these initiatives includes market liquidity protection through support mechanisms and bank loans for operators and key market players such as power utility PPC.

Efforts will also be made to accelerate decarbonization initiatives and keep alive pending energy sector privatizations, including those of gas utility DEPA’s two new entities, DEPA Infrastructure and DEPA Trade; the prospective sale of a 49 percent stake of distribution network operator DEDDIE/HEDNO, a PPC subsidiary; as well as an underground gas storage facility at a depleted offshore gas field south of Kavala.

Green energy investments, a key party of Greece’s revised and more ambitious National Energy Climate Plan, are expected to regain dynamic momentum as of 2021, following this year’s pandemic-induced disruption.

This is also the case for major infrastructure projects such as power grid operator IPTO’s grid interconnections for Crete, the south, west and north Cyclades and other areas. These interconnection projects require investments totaling more than 4 billion euros. These are expected to be completed by 2030.

Grid interconnection projects are also being worked on for the gas sector. Gas grid operator DESFA is looking to expand its network to cover 39 cities.

RES plan official processing prioritized in 5 categories

A ministerial decision prioritizing RES investment plan processing by authorities has just been signed by deputy energy minister Gerassimos Thomas.

The decision prioritizes processing of RES investment plans – applications and provision of connection terms – in five categories. Priority levels are determined by EU regulations and the contribution potential of investment plans to the National Energy and Climate Plan.

Green energy investments facilitating network utilization, such as self production, are promised top-priority categorization. This also applies for investments concerning energy efficiency, waste management and biogas.

Energy community investment applications will be given a one-month advantage in the waiting line. In other words, such applications will be examined as if submitted a month earlier.

Energy community plans involving local government organizations or over 60 members are promised an even bigger time advantage of four months.

Priority processing will also be offered to investment plans in northern Greece’s west Macedonia region, whose lignite-dependent local economy must be restructured as a result of the government’s decarbonization effort.

Energy community bids to lose priority, biogas plans supported

A ministerial decision revising RES application processing priorities for various categories is set to be finalized, possibly even today, a key feature being the cancellation of priority rights for new applications concerning energy communities.

The number of energy community applications has snowballed as a result of this prioritization, leaving unattended thousands of applications submitted by investors pursuing individual renewable energy projects.

Besides the termination of priority processing rights for energy communities – some cases will be exempted – the ministerial decision will also introduce a transitional formula for older energy community applications and offer priority status to certain technologies that have been neglected until now.

Investment plans are being prioritized according to their potential to contribute to the country’s updated and more ambitious National Energy and Climate Plan.

Green energy investments facilitating network utilization, such as self production, will be grouped into a priority-status category.

Biogas investments will also be supported under the new plan.

PPC’s lignite withdrawal plan also requires IPTO approval

Power utility PPC’s lignite withdrawal plan, involving an exit of lignite-fired units with an overall capacity of roughly 3.4 GW by 2023, has already been included in the National Energy and Climate Plan, subject to EU approval, but will also need to be endorsed by the country’s power grid operator IPTO.

The operator will make its decision after having fully assessed the grid’s needs to ensure energy sufficiency.

According to energypress sources, state-controlled PPC, whose lignite withdrawal plan is fundamental to the government’s decarbonization objectives, has already submitted its withdrawal schedule proposal to IPTO for endorsement.

It begins with an exit of PPC’s Amynteo I and II units this coming April. Next on the schedule are Kardia III and IV in 2021, once these units have clocked up 32,000 hours of operating time. Then, in 2022, PPC plans to withdraw Megalopoli III and Agios Dimitrios I, II, III and IV. PPC intends to complete the withdrawal plan in 2023 with the withdrawals of Megalopoli IV, Meliti I and Agios Dimitrios V.

Ptolemaida V, a prospective power station now under construction, is planned to enter the system as a lignite-fired unit in 2022 and operate as such until 2028 before being converted to run on an alternate fuel source. Various options, including biomass, natural gas, waste-to-energy, as well as combinations of these, are being examined at present.

PPC chief executive Giorgos Stassis, who last weekend visited northern Greece’s west Macedonia region, a lignite-dependent local economy, explained that the gradual withdrawal plan would facilitate finding solutions for company staff, regional telethermal needs and grid stability. PPC lignite-fired units are incurring losses, primarily as a result of rising CO2 emission right costs.

German players eyeing NECP opportunities ahead of Berlin forum

Greece’s major energy market opportunities, from the auto vehicle growth to decarbonization, renewable energy development, ambitious network investments and underwater cable interconnections are being eyed by German energy groups, preparing to participate at a high-level German-Hellenic Economic Forum next month.

The event, scheduled for March 9 in Berlin, is expected to be attended by Greek Prime Minister Kyriakos Mitsotakis and German Chancellor Angela Merkel, as a follow-up to a previous meeting between the two leaders in the German capital last August.

Greece’s new green agenda was tabled for the first time at that summer meeting, along with the idea to stage next month’s investment forum.

The Greek government, looking to execute an ambitious 44 billion-euro National Energy and Climate Plan by 2030, will gauge the level of German investor interest at the upcoming Berlin forum.

Leading German groups expected to participate at next month’s event include RWE, among the companies believed to be interested in supporting power utility PPC’s decarbonization effort, EON, eyeing opportunities at distribution network operator DEDDIE/HEDNO; as well as Enercon, seeking wind energy partnership. Prospective partnerships with Greek players such as PPC, Hellenic Petroleum (ELPE), Mytilineos and Terna Energy are expected to be discussed.

 

Terna

Network operator’s privatization may offer less than 49% limit

The government has set a 49 percent limit for the planned privatization of distribution network operator DEDDIE/HEDNO but the stake to be offered may end up being smaller.

A DEDDIE/HEDNO stake of up to 49 percent and increased rights for investors will be placed for sale, while the operator’s majority and management will remain under the control of power utility PPC, the operator’s parent company, the group’s chief executive Giorgos Stassis noted in an interview published by Greek daily Ta Nea over the weekend.

The size of the DEDDIE/HEDNO stake to be offered to investors will, on the one hand, depend on the amount of cash required by PPC to resolve financial matters for a path towards recovery, and, on the other, the ability of potential buyers to meet the price-tag demands of a major privatization.

DEDDIE/HEDNO’s assets are estimated to be worth 3.2 billion euros, meaning a 49 percent stake should cost potential buyers over 1.5 billion euros.

PPC has commissioned Goldman Sachs and Eurobank as the privatization’s consultants. The power utility’s administration would like to find a DEDDIE/HEDNO buyer by the end of the year.

An ambitious ten-year business plan for DEDDIE/HEDNO, one reflecting the lofty demands of the National Energy and Climate Plan, is being prepared for presentation to RAE, the Regulatory Authority for Energy, in about two months’ time.

DEDDIE/HEDNO will face the challenge of developing projects worth billions by 2030, including new interconnections and nationwide installation of smart meters.