George Polychroniou: Energy integration in Greece & the East Med

Energy integration

in Greece and the East Med

Connecting remote areas and the islands

to the mainland energy system

using Small Scale LNG solutions

EastMed Energy Roundtable

Brussels

28.03.2017

George Polychroniou Poseidon Med II – Project Manager

Executive Director Strategy, Development, Administration & IT,

DEPA S.A.

• 53 Islands (population >1.000)

• Connections with 162 ports

• Non interconnected power generation plants

• High density residential areas & large industrial & commercial customers in Western Greece & the Islands without access to Natural Gas

• Strategic Geographical Position

• Tradition in shipping – World leader

• Availability of LNG – Revithoussa terminal

Greece: Specific needs / Opportunities for LNG

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Existing Network Network under Development

New Regions

Main HP System

• Many non interconnected islands (36 power stations) to the mainland electricity system

• High seasonal variations in energy demand due to significant tourist activity

• Local power production based on oil fuels

• Environmental impact of local power production

• High RES penetration in several islands - Significant RES potential

• High interconnection cost

Power production in the Greek Islands

Small Scale LNG Supply Chain

Small Scale

LNG supply

chain

LNG import

terminal

Final gas

consumption

Gas extraction

Liquefaction

Large scale

ship

transport

Regasification Gas

transportation /

distribution

LNG terminal Small scale ship

transport

LNG Mother

terminal

LNG road

transport

LNG receiving

terminals

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Key markets for small scale LNG

Marine Fuel Road Transport Fuel Off-grid customers

LNG can compete favorably in

the heating, commercial, and

industrial sectors with

conventional fuels such as

diesel and propane in areas not

currently served by regional

pipeline gas infrastructure.

The historically high price

differential between natural

gas/LNG and low emissions

oil products necessary to

meet the growing restrictions

on ship emissions, are key

drivers for using LNG as

Marine fuel.

LNG is increasingly becoming

the most economical, cost-

effective, and environmentally

friendly alternative

to conventional transportation

fuels for heavy-duty trucks

and fleets.

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Why is LNG a real and necessary perspective

for Greece ?

• EU Directive 2010/75 on industrial emissions (integrated pollution

prevention and control)

• EU Directive 2015/2193 on the limitation of emissions of certain pollutants into the air from medium combustion plants

• IMO Decision (November 2016) on the implementation of a global sulphur cap of 0.5% on Marine Fuels starting from 01.01.2020

• EU Directive 2014/94 on the deployment of alternative fuels infrastructure (Greek Law Ν. 4439/20.11.2016)

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• Maintain a leading role in the liberalized competitive domestic

market.

• Increase the natural gas penetration in the Greek energy market by

developing infrastructure projects and by supplying natural gas to

regional markets (mainland, Aegean islands).

• Become a key player in the broader region – expand trading activities

through participation in international infrastructure projects.

• Maintain and continuously improve the competitive and sufficiently

diversified natural gas supply portfolio.

DEPA’s Strategic Goals

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DEPA’s initiative: Small Scale LNG Project

LNG Import Terminal Revithoussa

Bunkering Piraeus

LNG Bunker Vessel

Power Generation Aegean Islands

LNG Feeder Vessel

LNG Feeder/ Bunker Vessel

Core ports adjacent distribution networks

Bunkering Core ports

Remote Customers/ Distribution Networks, LNG fuel stations in Western Greece & Aegean Islands

LNG Trucks 1st Phase:

• Piraeus • Patras • Selected

Aegean Islands

LNG Trucks & LNG Bunker Vessel

Core ports Mother terminal

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• All preparatory works before the construction phase for SSLNG project in the 3 core ports are implemented within PMED II which is co-funded by EU and coordinated by DEPA

• The Patras Port Authority BoD approved the cooperation with DEPA and made available the necessary land in the port area for installing LNG reception facilities

• Private sector (shipping company) has been involved for the construction and operation of feeder/bunker vessel

• Contacts with EIB and commercial banks for financing the investment

• MOU with PPC to jointly assess the supply of natural gas to selected non interconnected islands/regions.

• MOU with ATTICA Group to jointly assess the introduction of LNG as ship fuel for the vessels of Attica Group fleet

Project status

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Poseidon Med II

Piraeus

Patras

Heraklion

Igoumenitsa

Limassol

Venice

3 Countries

6 Ports

Greece

Italy

Cyprus

4 out of 5 Greek

Core Ports

EUR 53M

50% CEF-Transport

Jun 2015 – Dec 2020

26 Partners

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Poseidon Med II – Activities

Regulatory framework

Financial aspects

Pilot case (Venice)

Sustainability-Synergies

Executive Design and Construction of an Innovative LNG Vessel

Installations Financial Assessment - Financial Instruments for the Global Projects Investments

Adaptation of the Regulatory Framework

Assessment of Efficient Supply Chain/Synergies – Sustainable LNG Pricing Patterns

Project Organisation

Ports & LNG Terminal Infrastructure

Vessels Infrastructure

Coordination – Management – Dissemination – Social/Public Consultation – Awareness

Environmental/Safety/Site Studies – Ports Master Plans updating – Supporting/Preliminary/Detailed Design Studies

Tender documents

Technical studies for selected vessels

Act. 1-3

Act. 6-12

Act. 14

Act. 15

Act. 4-5

Act. 13

Act. 16-17

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• Energy providers face the uncertainty of a capital intensive investment without secured demand, while

• Energy consumers have to undertake high investment costs to comply with new environmental restrictions without a secured and affordable fuel availability in place

• Different financial tools are being investigated

• EU funding could unlock necessary investments in both supply and demand side

Break the Chicken-Egg circle

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With Poseidon Med II the East Mediterranean sets sail into the LNG era turning Greece into an LNG Bunkering hub in SE Europe.

THANK YOU FOR YOUR ATTENTION!