As the world addresses diverse and challenging questions related to energy production and supply, Greece is in a pivotal position to chart its energy future, emerging as a strategic energy hub in Southeast Europe and a desirable location for investment.

A Sustainable Investment

The energy policy of Greece favours major private sector investment.

It is estimated by the World Bank that investment of more than 30 billion Euro will be required by 2020 in the upgrade and building of power plants, in transmission and distribution, and in renewable energy sources (RES).

Greece’s comprehensive energy policy, to establish sustainable, competitive, and secure sources of energy, has established an encompassing regulatory and market framework for the energy sector. This, in combination with Greece’s wide-ranging investment regulatory framework, provides for exceptional opportunities for investment in a number of areas.

Recent legislation (Law 2773/1999) provides for the deregulation of the electrical energy market and as such, domestic production, transmission, and distribution in the energy field is open to private investors.

This sweeping change has transformed the electricity and energy market in Greece into one of the most exciting sectors of growth and opportunity in Europe. While previously all electricity production, transmission, and distribution was under the monopoly of PPC, today companies from around the world are taking advantage of this tremendous market opportunity.

Among the companies currently active in Greece are: Hellenic Petroleum, Motor Oil, Public Gas Corporation (DEPA), Prometheus Gas, Public Power Corporation (PPC), Public Power Corporation (PPC) RES, Mytilineos Group, Terna, Global Energy, Energy Solutions, Solar Cells Hellas, Next Solar, Enova, EDF, Edison, Conergy, EGL, Acciona, Enel, Eurus Energy, Gamesa, Rokas-Iberdrola, Endesa, WPD, Atel. These companies are involved in mainstream electricity production, gas distribution, and the expanding field of renewables.

Greece’s strategic geo-economic location, between energy producers in the Middle East, North Africa, and the Caspian Sea region, as well as on the vital transport routes of the Aegean Sea and the Eastern Mediterranean, mark it as the expanding hub between East and West.

Greece has initiated crucial, major ventures in oil, gas, and alternative sources that literally put the country at the heart of the Southeast European energy axis.

Three decisive projects are laying the groundwork for a diverse, competitive, and secure energy supply: the Burgas-Alexandroupolis oil pipeline, the Interconnector Turkey-Greece-Italy (ITGI), and the South Stream natural gas pipeline. With these transformative projects Greece is emerging as an oil and gas conduit, supplying the markets of Southeast and Western Europe as well as those as far away as North America.

Burgas-Alexandroupolis Oil Pipeline
The Burgas-Alexandroupolis oil pipeline will contribute significantly toward the decongestion of the sensitive Bosporous Strait and provide a new, export channel for Black Sea oil to European and North American markets. The Greek-Russian-Bulgarian mega project will see the participation of Greek companies with 23.5% and the Greek state with 1%. The 279-kilometre pipeline, from Burgas in Bulgaria to the northern Greek port town of Alexandroupolis, is slated to have an initial annual throughput of 50 million tonnes of oil, and with an annual capacity of more than 50 million tonnes. The cost of the project is estimated at 800 million Euro.

Interconnector Turkey-Greece-Italy (ITGI)
The Interconnector Turkey-Greece-Italy (ITGI) gas pipeline will be a key conduit for Caspian and Iranian gas to reach the markets of Western Europe. Operation commenced in 2007.Currently, Greece is connected to Turkey and Italy via an undersea pipeline that will be connected to the wider European gas network by 2010. The project is made up of two parts: onshore and offshore (Poseidon Pipeline) with preliminary budgets of 900 million Euro (onshore) and 350 million Euro (offshore). The onshore section is to be part of the Greek National Grid and the offshore section is to be built by the Poseidon company, a joint venture of Edison and DEPA. The total length of the pipeline, from Komitini to the Ionian Sea, is 590 kilomteres. Completion date is to be 2012.



Source: Hellenic Gas Transmission System Operator S.A


South Stream
The South Stream Pipeline, with an end point in Italy, is a major project to supply Russian gas to Western Europe. The pipeline is to pass through Greece and may connect to the Interconnector Turkey-Greece-Italy (ITGI).

Source: Hellenic Gas Transmission System Operator S.A

Greece imports LNG from Algeria by sea, further diversifying energy sources.

Current plans also call for the upgrade and development of new electricity interconnections with neighbouring countries, further enhancing cross-border exchanges between Greece and its neighbours. These plans create significant investment opportunities in the electricity interconnection market.

In addition to acting as a strategic transport hub, Greece is also a favourable location from which to develop energy investment in the greater area of Southeast Europe. The Energy Community of Southeast Europe, based in Athens, focuses on the creation of a unified energy market in the Balkan region, through the establishment of common market rules and regulations, to be integrated at an appropriate date within the EU energy market. Signatories to the Energy Community Treaty, created in cooperation with the European Union (of which Greece is a member) include: Croatia, Bosnia and Herzegovina, Serbia, Montenegro, FYROM (Former Yugoslav Republic of Macedonia), Albania, Romania, Bulgaria, UNMIK on behalf of Kosovo.


Electricity Production in the interconnected system for 2010:




TRANSMISSION LINES IN SOUTHEAST EUROPE

Source: Hellenic Transmission System Operator S.A.

Natural Gas

Natural gas was introduced to Greece in 1988 when the Public Gas Corporation (DEPA) was established. DEPA is 35% owned by Hellenic Petroleum and 65% by the Greek State.

Today, the de-regulated energy market in Greece provides for companies to participate in the transmission and distribution of natural gas. Natural gas has become an important component of Greece’s energy policy as the country diversifies to include cleaner and more competitively priced energy sources.

The construction of the natural gas transportation grid is one of the largest energy infrastructure projects to have taken place in Greece in recent years. There are three entry points for the natural gas transportation system:(1) At the Greece-Bulgaria border, where natural gas enters via a central pipeline from Russia; (2) At the Greece-Turkey border, where the National Natural Gas Transportation System interconnects with the Turkish system; and (3) At the island of Revythousa in the Gulf of Pachi near Megara, where there are facilities to receive, store, and gasify Liquid Natural Gas (LNG) that is exported by tanker from Algeria. The National Natural Gas Transportation System transports gas from the entry points to consumers in mainland Greece.There are currently three Gas Supply Companies (EPA) operating: EPA Attikis, EPA Thessalonikis, EPA Thessalias.

The National Natural Gas Transportation System consists of:
• The gas transportation central pipeline. The high-pressure central pipeline (70 bar) is 512 km long. It extends from the Greek-Bulgarian border (Promahonas) to Lavrio in Attica and from Thessaloniki to the Greek-Turkish border (Kipoi).
• Transportation branches total 689 km in length. The branches set out from the central pipeline and supply the areas of Eastern Macedonia and Thrace, Thessaloniki, Platy in Imathia, Volos, Viotia, Inofyta, Attica and Corinth. In 2007 construction work began on branch lines toward Western Thessaly and Evia, adding 119 km.
• The Natural Gas Metering and Regulating Stations
• The Control Center and the Load Distribution Center Operation
• Operation and Maintenance Centres in Attica, Thessaloniki, Thessaly and Xanthi.

Suppliers
Natural gas is supplied to DEPA by the Russia’s Gazexport (a subsidiary of Gazprom) and the Algeria’s Sonatrach. Supply contracts expire in 2016 (Gazexport) and 2020 (Sonatrach). The Gazexport agreement guarantees the supply of 2.8 billion cubic metres annually. The Sonatrach agreement provides for the delivery of between .51 and .68 billion cubic metres annually.

Transportation System
The natural gas transportation system is comprised of several basic components:

• Main high-pressure pipeline for the transportation of natural gas (70 bar) from the Greek-Bulgarian border to the Attica region—a total length of 512 km
• High-pressure branch lines to Eastern Macedonia and Thrace, Thessaloniki, Volos and Attica—a total length of 440 km
• Metering and regulating stations for metering the amount of gas supplied and regulating its pressure
• Remote control and telecommunications systems
• Operational and maintenance centres in Attica, Thessaloniki, Thessaly, and Xanthi

The expansion of the transportation system from Komotini to the Greece-Turkey border (at Kipoi) has entered the final study phase (12/08).

Distribution System
The mandate of the Gas Supply Companies is to expand, operate, and maintain “city networks” as well as to distribute gas to domestic, commercial, and industrial users (with an annual consumption of up to 100 GWh Gross Calorific Value). DEPA holds 51% equity of the Gas Supply Companies through its 100%-owned subsidiary Gas Distribution Company (EDA) and private investors hold a 49% share and have management control.

The distribution system consists of:

• Medium pressure (19 bar) networks in Attica, Thessaloniki, Larissa, Volos, Inofyta, Platy Imathias, Katerini, Kilkis, Serres, Drama, Xanthi, Kavala, Alexandroupolis, and Komotini 
• Low pressure (4 bar) networks in Attica, Thessaloniki, Larissa, Volos, Inofyta, Kilkis, Xanthi, Komotini.

DEPA will concede the use of these networks to new Gas Supply Companies (EPA) as they are established.

Expansion of Networks, New Gas Supply Companies
The strategic development laid out by DEPA is to increase the share of natural gas in the national energy market. Initiatives are under way to increase urban gas consumption rapidly through the establishment of new EPAs and through the extension of networks to new industrial areas and through the promotion of investment in gas-powered power production.

New Applications
In combination with efforts to increase natural gas consumption in conventional uses, DEPA is endeavouring to develop new natural gas applications:

• The cogeneration of power and heat is an area where natural gas can significantly improve competitiveness through the reduction of total energy costs.
• Noteworthy technical advances in power production using natural-gas fuel cell technology achieve greater energy efficiency and improved environmental performance.
• The use of natural gas in greenhouses is widely practiced throughout Europe and offers opportunities in Greece. Natural gas assists in the production of carbon dioxide (which is produced during the combustion of natural gas), thereby promoting photosynthesis and plant growth.

Cogeneration

Cogeneration plants are able to use all raw material fuel types, including biomass, as a source of energy. The dominant fuel used today, both for environmental and economic reasons, is natural gas. The efficiency of a cogeneration plant may exceed 90% and cogeneration offers energy savings of between 15%-40% compared with energy derived from more conventional means.

Cogeneration produces approximately 4% of total electricity in Greece, a percentage that is expected to increase significantly in the near future. A number of factors are key to the expanding role of cogeneration in Greece:
• The de-regulation of electricity generation has attracted many project proposals, most of which are gas-fuelled
• Electricity demand in Greece is expected to grow at 3.5% annually from 2010 to 2020. According to Greece’s Energy Regulatory Authority (RAE), 6,000 MW of additional capacity will be needed by 2015.

Four important changes in the Greek natural gas system:

• Major structural gas projects are being carried out to connect Greece and Italy with the Caspian region (supply)
• The de-regulation of the gas market with new tariffs
• The Greek government is promoting the use of gas for electricity production and for heating, complying with supply policy and environmental commitments
• European policy and support schemes toward the creation of a single electricity and gas market in Europe

Since 1990, Greece’s PPC has converted a number of power stations to cogeneration mode and is becoming far more receptive to the cogeneration model. In addition, conditions for the development of CHP (Combined Heat & Power) is improving both in legal certainty and fuel supply (Law 3486 implements the electricity liberalisation directive and developments in the gas infrastructure).

The food sector is currently benefiting most from CHP; not far behind is the refinery sector. In the past, the most efficient CHP installations were refineries, due to their continuous operation, inexpensive fuel (distillery by-products) and favourable power-to-heat ratio.

The Hellenic Association for the Cogeneration of Heat and Power (HACHP, www.hachp.gr) estimates that the total potential for CHP is more than 700 MW in the industrial sector and 100-300 MW in the services sector under current CHP policies.

HACHP states that the market prospects for cogeneration in Greece are increasing, a result of the wider use of natural gas and the financial support for cogeneration installations provided through EU funds and through the attractive investment incentives of the Greek government.


Renewable Energy Sources (RES)

A Sustainable Future
Greece, and the European Union, have established key priorities and binding policies related to the production of electricity from renewable sources.

To establish security and diversification of its energy supply, and ensure environmental protection and sustainable development, Greece promotes the establishment of power using renewable energy sources.

Increasingly, renewable energy sources play an important role in Greece’s energy production profile. Current production is based on large-scale hydropower stations operated by PPC. Renewables account for approximately 5% of electricity production, not including the 5% contribution of hydropower stations.

The present investment framework calls for a striking increase in production from Wind, Solar, Geothermal, and Biomass/Biofuels, which are expected to contribute increasingly as a transport fuel.

For 2010, the total installed capacity of RES stood at 1736.3 MW, 75% of which came from wind energy production,, 11.5% from solar, and the remaining 13.5% from biomass and hydro-electric production units.

Greece’s target is to produce electrical energy from RES at a 29% share of the total electrical power by 2020.

DEVELOPMENT OF INSTALLED CAPACITY RES - 2020 TARGET



Solid RES Advantages
- High guaranteed sale prices for renewables
- Guaranteed demand for 20 years
- High demand
- Binding EU targets for renewable energy production
- Ideal climate conditions

Pictures courtesy of Iberdrola Renovables:
Wind Park
Photovoltaic Park

R&D; Support
The Centre for Renewable Energy Sources (CRES) is Greece’s premier R&D; centre dedicated to the research and promotion of RES/RUE/ES applications. CRES develops applied research for new energy technologies and supports the market for the penetration and implementation of these technologies and investment projects. CRES provides the link between basic research and industry to develop local products and services. CRES also acts as advisor to the Greek government on national energy policy, especially as it relates to business initiatives and investment ventures. www.cres.gr

Energy Policy Resources
Ministry of Environment, Energy & Climate Change (www.ypeka.gr)
Regulatory Authority for Energy (www.rae.gr)
Centre for Renewable Energy Sources (www.cres.gr)
Public Power Corporation (www.dei.gr)
Hellenic Transmission System Operator (www.desmie.gr)
Greek Association of RES Electricity Producers (www.hellascres.gr)
Public Gas Corporation S.A. (www.depa.gr)
Hellenic Petroleum S.A. (www.hellenic-petroleum.gr)
Greek Solar Industry Association (www.ebhe.gr)
Hellenic Association for the Cogeneration of Heat & Power (www.hachp.gr)
Hellenic Association of Photovoltaic Companies (www.helapco.gr)
Hellenic Wind Energy Association (www.eletaen.gr)