Located at the crossroads between the East and the West, Greece plays a vital role in the broader region’s energy markets, with ample renewable energy potential, combined with ongoing large-scale infrastructure projects. Highlighting the country’s significant investment opportunities in all energy industries, Michalis Verriopoulos, General Secretary of Energy and Mineral Resources, discusses the energy sector, current projects and future plans.
European Times: What are the primary objectives of the Ministry of Environment and Energy?
Michalis Verriopoulos: Through our Green Development model, our primary objective is achieving energy security, diversification and affordable prices while simultaneously fighting climate change. With its strategic location abundant energy potential, Greece plays a pivotal role in charting Europe’s energy map, emerging as a strategic energy hub and as the energy gateway between the East and the West.
The Ministry’s priority is to safeguard and manage energy resources in a manner which secures a smooth, uninterrupted and reliable supply of the nation’s energy needs and access for all users to affordable, secure energy. Our second objective is to secure energy stocks, through alliances and alternatives energy sources and routes in order to ensure the supply of the domestic market and protect consumers in the case of emergencies, and out third objective is the viable and sustainable development of the energy sector from the stage of production to the end-use while protecting nature and safeguarding the environment.
European Times: The energy segment in Greece is undergoing fundamental reforms. In which direction is the energy sector developing?
Michalis Verriopoulos: With the process of globalizations, the energy sector, like every other sector, is significantly influenced by regional and global politics, policies and issues. Modern and quickly expanding energy technologies, environmental issues, as well as requirements which arise from regional and international cooperation have substantial impact on the institutional and legislative framework.
Our “energy” is focused on liberalization of the electricity and natural gas markets, increased competitiveness, extension and enhancement of the domestic and cross-border electricity, natural gas and oil networks, further separation of production and supply from transmission networks, consumer choice, increased share of energy from Renewable Energy Sources, reduced share of fossil-fuel generated electricity, improved energy efficiency, energy saving and the protection of the environment.
The energy sector in Greece has a high contribution to gross value added (GVA) and employment, which is expected to increase significantly in the following years, driven by a number of factors, such as the required optimization of the energy mix; the planned privatization of major energy assets such as part of lignite power production of Public Power Corporation (PPC), the natural gas supplier (DEPA), the Hellenic Gas Transmission System Operator (DESFA) and the Hellenic Petroleum; the potential to become a European gateway for natural gas, electricity and oil resources through mega- infrastructure projects such as the TAP-IGB-EastMed gas pipelines and new FSRU in Alexandroupolis, or gas and oil exploration and production; major infrastructure development initiatives such as the interconnection of the Greek islands with the main electricity grid; expansion of Gas distribution networks via pipelines or small scale LNG / CNG networks; efforts to improve energy efficiency and reduce costs driven by such technologies as smart metering, smart-grid technologies, LED lighting, energy efficient buildings etc.
The total investment in the entire energy sector is expected to reach €25 billion in the medium term.
European Times: Renewable Energy Sources are the “energy of the future”. What is Greece doing to increase the share of Renewable Energy Sources in the total energy consumption of the country?
Michalis Verriopoulos: The development of Renewable Energy Sources has been the major segment of the Greek energy policy for the last decade. It is considered as an important contribution to the improvement of the Greek environmental indicators and, in particular, to the abatement of CO2 emissions. In this regard, the Curabitur’s strategy to support renewable energy technology (RET) investments envisions numerous legal and financial incentives.
EU’s legally-binding clean energy targets dictate that, by 2020, 20% of the total energy consumption within the national energy mix should be derived from renewable sources, such as wind, solar, geothermal wave, biomass/biofuel, tidal, hydro-electric power, landfill gas, sewage treatment plant gas and biogases, which should increase to 27% by 2030.
Greece enjoys remarkable wind resources with local average wind speeds often exceeding 8–10 m/s, especially in the Aegean Sea islands and on mountain ridges on the mainland. The country is also renowned for its solar potential with more than 250 days of sunshine—a year. Having commissioned the first commercial wind park in Europe in, early nineties Greece experienced a fourfold increase in installed wind capacity.
In this regard, Greece is planning on determining renewable energy production by competitive tender process. We are aiming to attract up to 2020 nearly €3 billion of investments in the renewable energy sphere. The first tender will be held in July, where permits will be given for the building of 300 MW of wind power and 300 MW of solar photovoltaics. Wind projects will range between 3 MW and 50 MW and solar projects in will be placed in two categories — less than 1 MW and between 1 MW and 20 MW. We plan on offering 300 MW of wind and solar each on an annual level from 2018 to 2020. We will also hold two auctions for an additional 400 MW of combined sources, thus bringing the total procured capacity to 2.6 GW. Last year, the EBRD committed to lending €300 million to finance clean energy, and we expect that both the EIB and EBRD will be lending to the developers of these projects.
In 2017, the total installed capacity of renewables exceeded 5.2GW, and with the planned procurements, the country is definitely on track to meet and exceed its RES targets.
European Times: Tell us about some of the successful investment stories in the sector.
Michalis Verriopoulos: The energy sector in Greece has attracted a significant amount of FDI over the past couple of decades. For example, US Third Point Gas has entered into the share capital of Energean Oil & Gas, Qatar Petroleum International and the Greek company GEK Terna have signed an agreement to acquire an interest in the Heron II power plant; Chinese Shenhua Group has entered into a co-operation agreement with Copelouzos Group to develop RES projects and upgrade lignite units; China State Grid has acquired a 24% stake of the Independent Power Transmission Operator (ADMIE); Canadian investment fund Fairfax Holdings has become the third largest shareholder of Greek industrial energy group Mytilineos; US York Capital Management has announced investments in Greece’s GEK Terna; recently a consortium with the participation of Snam , Enagas and Fluxys was nominated as the preferred bidder in the privatisation process of National Transmission System Operator – DESFA; EXXON Mobil, TOTAL and Repsol are participating in Greece’s Hydrocarbon Exploration and Exploitation programmes; etc.
European Times: What is your personal message to potential investors?
Michalis Verriopoulos: Greece is a country with an abundance of investment opportunities, particularly in the energy sector. The energy demand is increasing, which necessitates an expansion of the sector. Our country offers favourable geographical location, strong rule of law, stable political and economic climate and an open economy. I invite all interested investors to explore the potential and incentives and bank on the investment opportunities that Greece has to offer.