IEA Greece 2023 report urges investment in green energy instead of gas

The International Energy Agency published its country report on Greece today, highlighting various aspects of its energy policy.

IEA notes that the Greek government enacted an impressive array of measures to support its ambitious climate goals while maintaining energy security. However, it warns about a possible overdependence on natural gas and suggests that investments should be directed towards renewables, storage and energy efficiency instead of expanding the gas network.

“Greece has set new targets for reducing greenhouse gas emissions, cut its use of coal-fired generation sharply, reformed its electricity and natural gas markets, expanded its cross-border interconnections, and passed legislation to enable the development of offshore wind generation. It has managed to lower its share of fossil fuels in its energy supply – from 91% in 2011 to 82% in 2021 – but it still remains above the IEA average of 78%,” the document reads

At the same time, the agency finds there are issues concerning the new National Energy and Climate Plan (NECP) with the role of natural gas. It expressed the opinion that Greece is overreliant on natural gas as a transitional fuel and that it risks ending up with stranded assets such as gas-fired heat and power plants.

Birol: Greece must go further and faster on renewables

“Greece has taken important steps in cutting its use of coal and harnessing its wind and solar resources,” said IEA Executive Director Fatih Birol. “It must now build on this success by going further and faster, including by speeding up the permitting process for new renewable energy projects. At the same time, it needs to ensure that planned new investments in gas infrastructure reflect what is needed to maintain security of supply and that the risks of creating stranded assets are fully evaluated.”

Licensing and regulatory issues critical for renewables

When it comes to renewables, IEA suggests ensuring transparent and stable legal and regulatory frameworks to enable renewables and electricity infrastructure projects to be implemented within a reasonable time frame. Also, it asked Greece to streamline the procedures to accelerate spatial planning and licensing.

The government should use the results of previous renewable auctions to update the structure as needed to ensure a sufficient number of high-quality bids, according to the agency.

As long as grid congestion remains a barrier, the government should consider organizing auctions only for locations where grid capacity is available for project connections, the authors claimed.

The government should ensure that the special account for renewable energy sources or ELAPE is sufficiently funded in a transparent and sustainable manner to maintain investor confidence, the IEA asserted.

Warnings about the energy regulator

Moreover, IEA considers the government’s efforts in the power and gas markets to be insufficient to maintain a proper level of competition. It warned that the Regulatory Authority for Energy (RAE) is understaffed and its independence is not properly ensured.

The report notes that by 2030, Greece plans to have 2 GW of offshore wind power, which is equivalent to 10% of its current electricity capacity. “Thanks to multi-decade policy support for solar thermal collectors, Greece is a leader in the share of building energy demand covered by solar thermal (5.1% in 2021, compared to the IEA average of just 0.6%).