Fostering a Decarbonisation Pathway

Kostas Skrekas, Minister of Environment and Energy, says Greece is committed to facilitating investments in renewable energy projects, removing obsolete bureaucracy, and fostering the development of new technologies in the market.

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GIG: You recently talked about a support mechanism for “Green PPAs” as a means to speed up the participation of renewable energy sources (RES) in the energy mix (with competitive terms), while also bringing down the cost of energy for the industry. Can you tell us about this? How will this mechanism work?

Kostas Skrekas - Minister of Environment and Energy

Skrekas: Bilateral green power purchase agreements (PPAs) are an effective instrument to secure clean energy to cover industrial needs, which amount to over 10% of national electricity consumption. Crucially, PPAs can play a significant role in financing renewable energy projects, while hedging the exposure of large consumers to wholesale electricity prices. In addition, PPAs effectively reduce the carbon footprint of electricity-intensive activities and clearly demonstrate corporate commitment to sustainability. Overall, PPAs are fully aligned with the climate targets, and in particular, the objective of the European Commission to turn Europe into the first climate neutral continent by 2050.

Beyond their subtle technicalities, the main concept behind green PPAs entails agreements between RES producers and corporate buyers, such as industrial or commercial clients, to purchase renewable energy at a fixed price and for a fixed number of years.

One of our priorities is to ensure that energy costs remain competitive and affordable, both for businesses and households, so our intention is to offer subsidies for the energy sold through green PPAs.

That is why we are currently in discussions with the competent authorities of the European Commission, to ensure that there are no issues regarding state aid in this proposal. We also intend to use PPAs between power suppliers and RES producers to allow the provision of cheaper, green energy for households, as a way to tackle energy poverty.

GIG: Strong investor interest in new RES projects (particularly in solar but also in wind) has created a backlash in many areas, as local communities fear these projects could be harmful for the environment. How do you plan to deal with the reactions?

Kostas Skrekas - Minister of Environment and Energy

Skrekas: The environment is undeniably our most valuable asset. As the COVID pandemic revealed, the mitigation of climate change is vital in all terms, not only for economic growth. We are aware of the concerns expressed by local communities regarding new RES projects, and we have enhanced our focus on the introduction of environmental safeguards and on strengthening communication with citizens.

Our objective is to guarantee rapid and sustainable growth in the post COVID-19 era, which is why the government opted for a simplified, transparent, and efficient licensing procedure for RES investments, removing obsolete bureaucracy that yielded severe delays in the past. Facilitating new investment in renewables is also crucial, given the government’s recent pledge to phase out all but one of the country’s lignite powered stations by 2023, with a view to ensuring that 35% of the energy consumption is covered from RES sources by the end of the decade. However, we cannot achieve these ambitious goals without the wholehearted support of local communities. That is why we intend to work closely with citizens and municipalities, in order to communicate the protection mechanisms being legislated and the multiple benefits of RES, hence, easing local concerns. Our commitment is to combine new investments with strict rules that guarantee our tangible respect to the natural and historic landscape of our country.

RES. Copyright: geniusksy / shutterstock.com

GIG: You are actively supporting the development of new RES technologies. What are your plans for offshore wind, hydrogen, and electricity storage?

Kostas Skrekas - Minister of Environment and Energy

Skrekas: New RES technologies are crucial for the energy transition of the country, and we want to stimulate these investments with transparent and fair frameworks. The Ministry of Environment and Energy is currently preparing the legal framework for the development of offshore wind parks, and numerous potential investors have already expressed their interest.

In addition, the development of facilities to store energy from RES is central to the decarbonisation path of the country, as outlined in the National Energy and Climate Plan (NECP).

We are currently drafting a national storage strategy, in order to clarify the remuneration scheme, possible support mechanisms, and licensing and regulatory aspects. These elements will provide investor clarity and accelerate implementation.

We are also devising a national strategy for hydrogen, which is crucial for the decarbonisation of our gas infrastructure in the long run, the creation of new revenue streams for renewables, as well as the just transition of lignite regions. We are effectively establishing a clear roadmap towards the emergence of a future market for hydrogen, which will untap potential for several sectors of our economy, from electricity production to maritime and rail transportation.

GIG: How is the frontloaded decommissioning of the country’s lignite plants evolving?

Kostas Skrekas - Minister of Environment and Energy

Skrekas: Last December, when the EU took the bold decision to amend the targets of its 2030 Energy Strategy, to achieve a 55% reduction of its total greenhouse gas (GHG) emissions compared to the levels of 2005, Greece was among the first countries to support the revised agenda. As Prime Minister Kyriakos Mitsotakis recently pledged, Greece will complete its flagship reform, the retirement of all lignite-fired power plants sooner than any other Member State.

We remain fully committed to the target of expanding, by 2030, the share of renewable electricity in our electricity mix to up to 60%.

We are aware that such a momentous shift will inevitably pose a number of challenges for the local economies which now rely heavily on lignite, as well as for the flexibility and resilience of our electricity system. That is why we have put together our Just Transition Development Plan which offers important financial incentives to support the economies of the most affected regions in Greece, particularly Western Macedonia and Megalopoli. The just transition strategy includes investment initiatives amounting to €5 billion over the next 10 years to ensure that none of the vulnerable social groups are left behind.

GIG: You recently announced a collaboration with three major French companies (Citroen, Vinci, Akuo), to green another Greek island, a project that comes on the heels of a collaboration with Volkswagen to make Astypalaia a green and sustainable island. What are your plans for the decarbonisation of the islands?

Kostas Skrekas - Minister of Environment and Energy

Skrekas: We want to transform our islands into innovation hubs, exploiting the possibilities offered by the Clean Energy for EU islands Initiative of the European Commission. To achieve this ground breaking goal, the Ministry of Environment and Energy will set up a special committee in the coming months, which will put forward a plan on how to make the best use of the approximately €700 million available from the EU for this purpose. Our plan for the islands is based on three pillars:

  • 1) Developing hybrid power stations for energy production and storage. The island of Tilos, where such facilities are in operation, offers an excellent example of our vision;
  • 2) Promoting electric mobility by gradually replacing conventional public and private vehicles on islands with electric ones; and
  • 3) Expanding clean energy in maritime transport through low sulfur fuels and LNG.

Simultaneously, we are pushing forward with our long-term plan to overhaul the electricity system in the next decade by connecting most of our islands with the national electricity transmission network (ESMHE).

In this context, the fourth phase of the interconnection of the Cycladic islands is due to begin, involving the interconnection of major tourist destinations, such as the islands of Santorini, Milos, Folegandros and Serifos. Within 2021, both sub-phases of the fourth phase will be contracted, with construction starting in late 2021 or early 2022.

In April 2021, the first of the two interconnectors between Crete and the mainland grid – the one connecting in Peloponnese – was electrified. By 2023, the higher capacity, higher voltage cable between Crete and Attica will also be completed. By 2030, all major Aegean Islands including Lemnos, Lesbos, Chios, Samos and Ikaria, as well as all the Dodecanese islands ,will also be linked with the ESMHE.

These interconnections are crucial for the decarbonisation of our islands and the reduction of public service obligation levies in consumers’ electricity bills, while simultaneously, unraveling new potential for renewables.

They will also facilitate cross-sectoral synergies and innovative projects, enhancing the holistic transition required for the transformation of our economy towards a low carbon era. Overall, our commitment is to stimulate investments with competitive terms, regulatory clarity, transparency, and minimum costs for our consumers. Sustainable growth is fundamental for a sustainable future, and this principle underlines all our policies.

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