IEA Warns Greeks of Coal Use

The International Energy Agency (IEA) released November 2 a Review of Greek Energy Policies, six years since its last such review published in 2011. 

In the forward, IEA boss Fatih Birol praised the country’s success in reforming the energy sector despite declining consumption and constrained finances, but said it had to work harder at its longer-term energy goals: "The creation of competitive and price-responsive energy markets will be critical to ensuring long-term economic prospects while putting the country solidly on a path to a low-carbon economy,” he said.

Greece has restructured state-owned companies and transformed its energy system, which should provide long-term economic benefits and sustainable outcomes for the environment and Greek society, the IEA said.

The plans already being implemented to restructure state-owned companies and liberalise electricity and gas markets will lead to more competitive and financially viable energy markets, it said. Greece’s latest bailout requires limiting the dominance of state-controlled utility Public Power Corp and the ongoing sale of a 66% stake in gas grid operator Desfa.

It also welcomed the government's efforts to strengthen energy security through investments in natural gas and electricity infrastructure enhancing domestic and regional inter-connections, extending gas storage and promoting international gas pipelines to diversify supply routes.

Adoption of renewables and energy efficiency have contributed to this, allowing the country to achieve its 2020 emission reduction and energy efficiency targets. In fact, Greece had the second-highest share of solar PV in the total primary energy supply of all IEA countries in 2016. This has led to an impressive increase in the share of renewables in electricity generation, achieving 12.5% in 2016.

However, Greece is still one of the biggest coal producers in Europe behind Germany, Poland and the Czech Republic and most of its islands rely on diesel for their energy supply.

As a result, the IEA recommended that enhanced exploitation of its renewable energy potential and improving island interconnection to the main grid could result in a more balanced energy mix and contribute to increasing energy security.

It has also made a number of other recommendations for further policy improvements that are intended to help guide the country towards a more secure and sustainable energy future. These include:

• Development of an integrated national energy and climate policy framework for 2030 and beyond;
• Facilitation of energy system transformation in a recovering economy while advancing market reforms and setting ambitious renewable energy and energy efficiency targets;
• Continuation of energy reforms;
• Interconnections of the islands with the mainland transmission system to use the strong renewable energy potential;
• Continuation of ambitious energy efficiency policies;
• Making sure that regulators have the capacity to carry out their successful work on reform and oversight.

Birol observed: “Greece has a vast unexplored potential for renewable energy and we support the country’s efforts to explore this potential by interconnecting its islands with the mainland energy system.”

However, once the economy recovers, current policies will not be adequate to guide the Greek energy sector towards the long-term energy transition that the government is aiming for. This will require new initiatives that support sustainable increases in efficiency, and switching from oil and coal to natural gas and renewable energy. These should be included in a longer-term integrated energy and climate national energy plan to specifically take into consideration ambitions for energy efficiency and renewable energy.

Energy minister George Stathakis confirmed in September that Greece is in the process of preparing such an energy strategy to 2030, based on implementation of climate change and Paris accords, as well as EU agreements. It will also account for the profound changes in the energy market within the country and the EU, the liberalisation of the electricity and gas markets and the emergence of institutions that will guarantee the smooth operation of the market.

Charles Ellinas