Energy & Mining
Notus – Wind and the Greek Economy
Renewable Energy in Greece
Greece installed its first wind energy facility in 1982.
Though this was a promising development, Greece was for a long time far from where it could be in terms of renewable energy usage.
A lack of consistent planning and the perception that the fossil fuel industry is one of the backbones of the economy are key reasons for this.
Climate change is now a widely spoken existential threat, despite it being labeled a ‘Chinese Hoax’ by US President Trump.
In response to the threat, the European Union set a 2030 target for member states to increase their renewable energy targets by at least 27%.
Greece is expected to reach that 27% target by 2030, assuming all legislative changes and the required investment go as planned.
The country’s track record for between 2004 and 2017 shows that the ambitious plan set by the EU is reachable. Greece doubled its renewable energy production in 13 years, from roughly 7% up to 15.5%.
By the end of 2018, renewable energy production exceeded 20% of the gross final energy consumption. This production is, however, less than that of Germany, a country with a much more limited renewable energy potential compared to Greece.
New incentives and governmental efforts, coupled with a positive attitude toward renewables from the public, the country’s dependence on fossil fuels seems to make further development difficult.
Lignite, also known as brown coal, is the national fossil fuel of Greece, and single-handedly amounts to 30% of the energy mix, not to mention the massive employment it creates.
Increases in renewable energy pose a threat to lignite sector, and lobbyists are doing everything in their power to slow the invasion of renewables down.
Despite this, Greece’s national energy plan shows that it intends to cut down lignite electricity production to 16 percent, and aims to generate 58% of electricity from renewables, namely hydro, solar, and wind power over the next 10 years.
In 2018 Greece ranked among the top 10 countries worldwide for generating electricity from wind and solar power.
More than 20% of its electricity ucame from these sources last year, according to a report issued by REN21, a global renewable policy network.
Greece is blessed with strong winds which makes the country very attractive for energy production.
Exploiting the full potential, production can be as high as 12,000MW a year.
The National Renewable Energy Action plan set an ambitious target of 7,500MW by 2020, forecasting wind power to be the primary RES amounting to 55% of total renewables. The target is far from realization at the moment considering that Greece needs twice as many wind park installations as what it is now to reach that target, however, the country reached a 3,000MW production rate in May of this year, which is a major milestone.
In the first half of 2019, a total of 107 new wind turbines with a combined capacity of 198MW were connected to the grid, boosting Greece’s cumulative wind energy capacity by 7.1% compared to the end of 2018. The top companies in the sector are Terna producing 536.1 MW followed by El. Tech Anemos, with 285.6 MW, Iberdrola Rokas, 250.7 MW, EDF Hellas, 238.2 MW and EREN, 210.9 MW.
A small Greek island, Tilos, located in the Aegean Sea and home to 500 people (3,000 during the high season), is the first autonomous renewable green island in the Mediterranean.
It has harnessed wind power with an 800KW wind turbine and a 160KW solar photovoltaic system. The project is funded by the EU, and shows the world how to become self-sufficient. Currently, however, all the Greek islands, except Tilos, heavily rely on diesel for power generation.
It is estimated that including transportation costs and imported value, powering the islands costs over USD800 million per year. Tilos, in this regard, is a game-changing case study.
Investment in solar energy projects have also been accelerated in recent years. The total capacity of photovoltaic units in the country produces 2,665MW which covers around 7 percent of Greece’s energy needs, ranking the country fourth globally after Honduras, Italy, and Germany.
The Greek renewables sector presents multiple opportunities for domestic and foreign investors. Both the Greek Ministry and RAE (Greece’s energy regulator) have been very active on the regulatory front in an effort to increase capacity from renewable sources.
Greece passed a RES regulatory framework law back in 2010 to simplify the legal process for the new projects.
An autonomous one-stop-shop office was established under the framework where licensing stages for both small and larger projects were considerably simplified.
Greece also applies 20-year feed-in-tariffs and PPA (power purchase agreement) mainly for wind projects, and to a certain extent for solar projects.
This means that the RES producers have the priority over electricity produced from conventional sources (oil, gas, lignite) and the government guarantees to buy the electricity on predetermined feed-in-tariffs prices.
RAE announced a new renewable energy tender master plan last year, with plans to auction off large quantities of solar PV and wind power capacity, in order to drive private sector investment in this area.
According to this road map, Greece is aiming for an increase of its solar and wind capacity to 13.4 GW by 2030.