Athens urged to look at energy as way out of crisis

Greece’s woes could be lifted through energy market reform and exporting solar power, says the International Energy Agency and the European Union’s Energy Directorate General. In separate developments, the two institutions have suggested alternative ways in which Greece can get power its economy back into action.
Athens urged to look at energy as way out of crisis

Increasing competition and reducing the role of the state in Greece's energy sector could make a significant contribution to the country's economic recovery, says the International Energy Agency (IEA) in a report published earlier this week. "Reforming Greece's electricity and gas markets is a policy imperative that should add efficiency and dynamism to the Greek economy. This, in turn, should help generate self-sustained employment and prosperity for the country," IEA Executive Director Maria van der Hoeven said as she presented the new study, Energy Policies of IEA Countries - Greece 2011.

The report says regulatory authorities must be given the necessary power and independence to reduce the market power of dominant firms. Commendably, Greece adopted a law to this end in August 2011. "The envisaged reforms are fundamentally sound and can help the economy grow. The government's key focus should now be on implementing this law in full without delay," Ms. Van der Hoeven stated.

The report also notes that Greece has a large potential for wind and solar energy and is rightly determined to fulfil this potential. The renewable energy sector also provides opportunities for new industrial development, in particular if linked with R&D activities. To facilitate renewable energy projects, the government has recently increased feed-in tariffs, shortened and simplified the licensing procedures and introduced stronger incentives for local acceptance. "These changes are very welcome, as they significantly improve investment conditions in the sector," Ms. Van der Hoeven said. In addition, it will be crucial that framework conditions to investment remain stable.

Energy Policies of IEA Countries - Greece 2011 Review acknowledges that Greece has improved its oil and gas security in recent years and that the sources and import routes for these fuels are already well diversified. However, gas use is projected to increase, as the country moves to decarbonise its coal-dominated power sector. Experience from IEA member countries has shown that enhancing energy efficiency can help improve energy security in a cost-effective way. This, in turn, can help mitigate climate change and deliver economic benefits. "The IEA encourages Greece to further tap into this low-cost potential, for example in the building and transport sectors," concluded Ms. Van der Hoeven.

Solar solution

In a separate development, Gunther Oettinger, the European Union’s Energy Commissioner, the Director General for Energy, Philip Lowe, and the head of the EU’s Athens task force, Horst Reichenbach, have tabled a proposition for Greece to pay back some of its debts to EU member states, such as Germany, by providing them with solar energy.

According to reports by EurActiv, the Energy Directorate General of the EU has been asked to look at the proposal in more detail, after it received an initially cool response from other EU member states.

“Several German companies have expressed interest in the idea but it would clearly be more interesting if several member states were involved,” a senior source told EurActiv.

Marlene Holzner, Gunther Oettinger’s spokeswoman, said that talks were on going. “There is a task force in the European Commission where we have energy experts looking into the question of how energy could help Greece to grow economically,” she informed EurActiv. “Solar is one topic, and energy efficiency is another.”

As the IEA said in its report, “Greece has a large potential for wind and solar energy and is rightly determined to fulfil this potential”. With 50% more solar radiation than Germany, some are asking why the Mediterranean country is not tapping this valuable energy and economic resource to the same extent as less sunnier countries such as Germany, where solar energy output is 80 times higher according to the Greek Energy Ministry.

One of the barriers is a lack of investment in solar R&D and a shortage of domestic firms. Indeed, Germany is one country looking to exploit Greece’s woes to its own advantage by moving Germany solar firms into the country to help ramp up its solar capacity.

Germany’s Economy Minister, Philipp Rösler, has already visited Athens with 60 business leaders on an mission to explore investment opportunities and has been quoted by German broadcaster ZDF as saying: “In the spirit of solidarity, it is the task of all Europeans to help Greece get back on its feet economically… we want to take German firms to Greece”.

No doubt Germany’s interests are not solely philanthropic, as German solar firms, which have seen a dip in domestic demand in recent times due to lower feed-in tariffs, would benefit financially from such a move. Furthermore, earlier this month, the German chancellor, Angela Merkel, urged for further cuts to her country’s solar energy subsidies and suggested that renewable energy should be imported from countries such as Greece instead.

Perhaps the timing of these recent announcements by the IEA and the EU are perfect, especially considering that last month, Athens announced Project Helios, an ambitious plan to boost Greece’s solar power production from 206 MW to 2.2GW by 2020, and then 10 GW by 2050. The plan is intended to attract up to €20 billion in investments and create between 30,000 and 60,000 jobs.

For additional information:

Energy Policies of IEA Countries - Greece 2011

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