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Energy Policies of IEA Countries
2011Review
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Greece
Energy Policies of IEA Countries
-:HSTCQE=U^Y\YV:(61 2011 03 1P1)
978-92-64-09474-1 75
Energy policy in Greece could make a significant contribution to
the countrys economic recovery. Increasing competition and reducing
the role of the state in the energy sector should add efficiency and
dynamism to the Greek economy. This, in turn, should help generateself-sustained employment and prosperity for the country.
Reforming the electricity and gas markets is an economic and political
imperative. In particular, regulatory authorities must be given the necessary
power and independence to reduce the market power of dominant firms.
Commendably, Greece adopted a law to this end in August 2011.
The envisaged reforms are fundamentally sound and can help
the economy grow. The governments key focus should now be on
implementing this law in full without delay.
Greece has a large potential for wind and solar energy and is rightly
determined to fulfill this potential. The renewable energy sector also
provides opportunities for new industrial development, in particular if linkedwith R&D activities. To facilitate renewable energy projects, the government
recently improved investment conditions significantly by increasing feed-in
tariffs, shortening and simplifying the licensing procedures and introducing
stronger incentives for local acceptance.
Greeces oil and gas sources are already well diversified. Gas use is projected
to increase, as the country moves to decarbonise its coal-dominated power
sector. Experience from IEA member countries has shown that enhancing
energy efficiency can help improve energy security in a cost-effective way.
This, in turn, can help mitigate climate change and deliver economic benefits.
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INTERNATIONAL ENERGY AGENCY
The International Energy Agency (IEA), an autonomous agency, was established in November 1974.Its primary mandate was and is two-fold: to promote energy security amongst its member
countries through collective response to physical disruptions in oil supply, and provide authoritativeresearch and analysis on ways to ensure reliable, affordable and clean energy for its 28 membercountries and beyond. The IEA carries out a comprehensive programme of energy co-operation amongits member countries, each of which is obliged to hold oil stocks equivalent to 90 days of its net imports.The Agencys aims include the following objectives:
nSecure member countries access to reliable and ample supplies of all forms of energy; in particular,through maintaining effective emergency response capabilities in case of oil supply disruptions.
n Promote sustainable energy policies that spur economic growth and environmental protectionin a global context particularly in terms of reducing greenhouse-gas emissions that contributeto climate change.
n Improve transparency of international markets through collection and analysis ofenergy data.
nSupport global collaboration on energy technology to secure future energy suppliesand mitigate their environmental impact, including through improved energy
efficiency and development and deployment of low-carbon technologies.
n Find solutions to global energy challenges through engagement anddialogue with non-member countries, industry, international
organisations and other stakeholders.IEA member countries:
Australia
Austria
Belgium
Canada
Czech Republic
Denmark
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Japan
Korea (Republic of)
Luxembourg
Netherlands
New Zealand
NorwayPoland
Portugal
Slovak Republic
Spain
Sweden
Switzerland
Turkey
United Kingdom
United States
The European Commissionalso participates in
the work of the IEA.
Please note that this publication
is subject to specific restrictions
that limit its use and distribution.The terms and conditions are available
online at www.iea.org/about/copyright.asp
OECD/IEA, 2011
International Energy Agency9 rue de la Fdration
75739 Paris Cedex 15, France
www.iea.org
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Tableofcontents
3
TABLEOFCONTENTS
1.EXECUTIVESUMMARY ANDKEYRECOMMENDATIONS.........................................................................9
Executivesummary......................................................................................................................9
Keyrecommendations...............................................................................................................13
PARTIPOLICYANALYSIS.......................................................................................................15
2.GENERALENERGYPOLICY......................................................................................................................17
Countryoverview.......................................................................................................................17
Supplyanddemand...................................................................................................................18
Institutions.................................................................................................................................20
Keypolicies.................................................................................................................................22
Critique.......................................................................................................................................25
Recommendations.....................................................................................................................26
3.CLIMATECHANGE..................................................................................................................................27
Overview....................................................................................................................................27
CO2emissionsfromfuelcombustion.........................................................................................28
Institutions.................................................................................................................................31
Policiesandmeasures................................................................................................................31
Critique.......................................................................................................................................34
Recommendations.....................................................................................................................35
4.ENERGYEFFICIENCY...............................................................................................................................37
Finalconsumptionofenergy.....................................................................................................37
Institutionalframework.............................................................................................................39
Policiesandmeasures................................................................................................................40
Critique.......................................................................................................................................48Recommendations.....................................................................................................................52
PARTIISECTORANALYSIS.....................................................................................................53
5.OIL..........................................................................................................................................................55
Supplyanddemand...................................................................................................................55
Infrastructure.............................................................................................................................57
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Marketstructure........................................................................................................................60
Pricesandtaxes.........................................................................................................................61
Securityofsupply.......................................................................................................................63
Critique.......................................................................................................................................66
Recommendations.....................................................................................................................67
6.NATURALGAS........................................................................................................................................69
Supplyanddemand...................................................................................................................69
Marketreform...........................................................................................................................71
Industrystructure......................................................................................................................72
Infrastructure.............................................................................................................................73
Pricesandtariffs........................................................................................................................77
Securityofsupply.......................................................................................................................78
Critique.......................................................................................................................................79
Recommendations.....................................................................................................................81
7.COAL......................................................................................................................................................83
Supplyanddemand...................................................................................................................83
Pollutioncontrol........................................................................................................................87
Critique.......................................................................................................................................87
Recommendation.......................................................................................................................88
8.RENEWABLEENERGY.............................................................................................................................89
Supplyanddemand...................................................................................................................89
Institutions.................................................................................................................................91
Policiesandmeasures................................................................................................................92Critique.....................................................................................................................................101
Recommendations...................................................................................................................103
9.ELECTRICITY.........................................................................................................................................105
Supplyanddemand.................................................................................................................105
Regulatoryframeworkandmarketdesign..............................................................................109
Industrystructure....................................................................................................................111
Transmissionanddistribution..................................................................................................114
Pricesandtariffs......................................................................................................................116
Critique.....................................................................................................................................118Recommendations...................................................................................................................121
PARTIIIENERGYTECHNOLOGY........................................................................................... 123
10.ENERGYRESEARCH, DEVELOPMENTANDDEMONSTRATION..........................................................125
Overview..................................................................................................................................125
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Institutions...............................................................................................................................127
Funding....................................................................................................................................128
Publicprivatepartnerships......................................................................................................129
Internationalcollaborationandselectedprojects...................................................................130
Critique.....................................................................................................................................131
Recommendations...................................................................................................................132
PARTIVANNEXES............................................................................................................... 133
ANNEXA:Organisationofthereview.....................................................................................................135
ANNEXB:Energybalances andkeystatisticaldata...............................................................................139
ANNEXC:InternationalEnergyAgencySharedGoals.........................................................................145
ANNEXD:Glossaryandlistofabbreviations..........................................................................................147
Listoffigures,tablesandboxes
FIGURES
1.MapofGreece.......................................................................................................................16
2.Totalprimaryenergysupply,1973to2010...........................................................................18
3.Energyproductionbysource,1973to2010..........................................................................19
4.BreakdownoftotalprimaryenergysupplyinIEAmembercountries,2010.........................19
5.Totalfinalconsumptionbysource,1973to2009.................................................................20
6.EnergyrelatedCO2emissionsperTPESinOECDmembercountries,2009..........................29
7.CO2emissionsbysector,1973to2009..................................................................................30
8.CO2emissionsbyfuel,1973to2009......................................................................................309.Totalfinalconsumptionbysector,1973to2009..................................................................37
10.Totalfinalconsumptionbysectorandbysource,1973to2009.........................................38
11.EnergyintensityinGreeceandotherselectedIEAmembercountries,1973to2010........39
12.Oilconsumptionbyproduct,1996to2010.........................................................................56
13.Oilconsumptionbysector,1973to2009............................................................................57
14.MapofGreecesoilinfrastructure,2010.............................................................................59
15.Breakdownofretailoilsalesbycompany,2009.................................................................61
16.IEAunleadedgasolinepricesandtaxes,secondquarter2011............................................61
17.IEAautomotivedieselpricesandtaxes,secondquarter2011............................................62
18.IEAlightfueloilpricesandtaxesforhouseholds,secondquarter2011.............................62
19.AveragegasolineanddieselpricesandtaxesinGreece,1999to2010..............................6320.GreecesoilstocksandcompliancewiththeIEA90dayobligation,March2001
toMarch2011.....................................................................................................................65
21.Naturalgassupplybysector,1997to2009.........................................................................70
22.DEPAgroupstructure...........................................................................................................73
23.MapofGreecesnaturalgasinfrastructure,2010...............................................................74
24.NaturalgaspricesinIEAmembercountries,2010..............................................................77
25.Coalsupplybysector,1973to2009....................................................................................84
26.Locationofexistingandproposedcoalfiredpowerplants,2010......................................85
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27.Renewableenergyasapercentageoftotalprimaryenergysupply,1973to2010............90
28.RenewableenergyasapercentageoftotalprimaryenergysupplyinIEAmember
countries,2010....................................................................................................................90
29.ElectricitygenerationfromrenewableenergyasapercentageofallgenerationinIEA
membercountries,2010.....................................................................................................91
30.WindspeedmapofGreece..................................................................................................99
31.Electricityimportsandexports,1998to2009...................................................................106
32.Electricitygenerationbysource,1973to2010.................................................................106
33.Electricityconsumptionbysector,1973to2009..............................................................107
34.Monthlypeakelectricitydemand,2006to2009...............................................................108
35.Netelectricitygeneratingcapacity,1975to2009.............................................................109
36.Designofthewholesaleelectricitymarket........................................................................111
37.StructureoftheGreekelectricitymarket,2010................................................................113
38.Greektransmissionnetwork,2010....................................................................................114
39.ElectricitypricesinGreeceandinotherselectedIEAmembercountries,2000to2010.117
40.ElectricitypricesinIEAmembercountries,2010..............................................................118
41.GovernmentspendingonenergyRD&D,2005to2011....................................................129
TABLES
1.Privatisationofstatecontrolledenergycompanies..............................................................24
2.GreenhousegasemissionsinGreece,1990to2009.............................................................28
3.ReductionsinGHGemissionsfromimplementedandadoptedpoliciesandmeasures.......32
4.ReductionsinGHGemissionsfromplannedpoliciesandmeasures.....................................32
5.AllocationofallowancesintheNationalAllocationPlan20082012bysector...................33
6.Modalsplitofpassengerlandtransport,2008......................................................................43
7.OilrefineriesinGreece,2010................................................................................................58
8.LegalbasisforoilsecuritymeasuresinGreece.....................................................................649.Gassupplyagreements..........................................................................................................70
10.LigniteproductioninGreece,1980to2010........................................................................84
11.CoalfiredpowerplantsinGreece,2010.............................................................................86
12.Mainprojectionsfor20102020intheNationalRenewableEnergyActionPlan
byscenario...........................................................................................................................93
13.Electricityfromrenewablesources,2005to2020..............................................................95
14.FeedintariffsvalidsinceJune2010....................................................................................96
15.Feedintariffsforphotovoltaicsfrom2009to2020...........................................................97
16.Installedelectricitygeneratingcapacityintheinterconnectedsystem,
31December2009.............................................................................................................108
17.Combinedinstalledelectricitygeneratingcapacityintheinterconnectedand
autonomoussystems,31December2009........................................................................109
18.Licensednewinvestmentsinthermalpowerplantunits,2009........................................113
19.NettransfercapacitiesbetweenGreeceanditsneighbours,winter20102011..............115
20.Averageannualelectricityprices,2004to2010................................................................116
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BOXES
1.Law4001/2011toimplementthethirdElectricityandNaturalGasMarketDirectives..22
2.IEA25energyefficiencyrecommendations...50
3.Finalenergyconsumption:differencesbetweenIEAandEUmethodologies.94
4.KeyrecommendationsoftheIEAWindEnergyRoadmap....102
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1.EXECUTIVESUMMARY
ANDKEYRECOMMENDATIONS
EXECUTIVESUMMARY
Energy policy in Greece has the potential tomake a significant contribution to the
countryseconomicrecovery.IncreasingcompetitionandreducingtheroleoftheState
intheenergysectorshouldaddefficiencyanddynamismtotheGreekeconomy.This,in
turn,shouldgenerateselfsustainedemploymentandprosperityforthecountry.
Amongthekeypiecesof legislationthattheEUmemberstateshaveadopted inrecent
yearsarethethirdInternalEnergyMarketDirectiveswhichobligethememberstatesto
further liberalise theirelectricityandnaturalgasmarkets.The2020 renewableenergytarget,theEmissionsTradingSystem (EUETS)and theEUairqualitystandards in turn
arepushingGreecetodecarboniseitslignitedominatedelectricitysector.
The IEA urged Greece to reform its energy sector already in the 2006 Energy Policy
Review.Thecompletionofthesereformsisnowevenmorenecessarythanatthetime.
Reform intheelectricity,naturalgasandcoalsectors isalsoacondition forthecrucial
financialassistancefromtheeurozonecountriesandthe InternationalMonetaryFund.
These conditions go only to some extent beyondwhat is already required under the
adoptedEUdirectivesandthedecisionsbytheEuropeanCommission,mainlyinthearea
ofprivatisationandunbundlingoftheSystemOperatorsinbothgasandelectricityfrom
the verticai integrated companies.Accordingly,Greecehasdecided topartlyprivatise
statecontrolled energy companies, including the dominant Public Power Corporation
(PPC)andPublicGasCorporation(DEPA).
It is important to note that, regardless of the economic situation in Greece, these
reforms are fundamentally sound energy and economic policy and contribute to the
countrys longterm development. It is therefore very welcome that the Greek
Parliament has inAugust 2011 adopted a law to this end. The new law (4001/2011)
transposes intonational legislation the third InternalEnergyMarketdirectives.Among
others,itstipulatestheunbundlingofthesystemoperatorsandenhancestheroleofthe
independentregulatorregardingsecurityofsupply, licensing,monitoringofthemarket
andconsumerprotection.Overall,thenew law improves the legislative framework for
themonitoring,controlandregulationofelectricityandgassectors.Nowthatthe lawhasbeenadopted,theIEAurgesGreecetoimplementitinfullwithoutdelay.
ELECTRICITYMARKETREFORM
Further reform in electricity market structures and regulations is needed if Greece
wishes to reach its ambitious energy goals, including those on renewable energy.
Although competition is finally emerging, PPC dominated more than 75% of the
wholesalemarketandmore than90%of the retailmarket in2010.Thecompanyalso
remainstheowneroftransmissionanddistributionassetsandhasa49%stakeinHTSO,
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theoperatorofthetransmissionsystemandwholesalemarket.Meetingtheobligations
underthethirdEUElectricityMarketDirectivewill improvethissituation. Inparticular,
theRegulatoryAuthority forEnergy (RAE)has lacked full independenceand sufficient
powerstoexecuteeffectively.Anotherareawherereformisurgentlyneededismoving
tocostreflectiveendusertariffs.
AstrongandindependentregulatorisneededtomitigatePPCsdominance,ensurenon
discriminatory treatment for independent power producers (IPPs) and provideregulatory certainty for investors in a competitive energy market. Investments and
competition are needed for ensuring the financial efficiency of the electricity sector.
Investments by IPPs in both renewable and flexible conventional generation will be
necessary inthetransformationtoa lowcarbon,greenelectricitymarket.Competition
canalsodrivepricesdownandhelpmitigatethecostsofnecessarynetworkinvestments
andrenewableenergysupports.
Theregulatorshouldalsobetaskedwithstrongersupervisionofthewholesalemarket.
This isparticularly important in theGreek contextof amandatorypoolwith ahighly
concentrated supply situation and regulated enduser tariffs that do not necessarily
reflectallsuppliercosts.Asthesoleownerofligniteplantsandlargehydroplantswhich
generatecheapelectricity,PPChassignificantcapacitythatcanbeputfirstinthemeritorderandthereforehasthepotentialtoaffectwholesaleprices.Atthesametime,the
company isobligedtosellelectricitytoendusersatregulatedtariffsthatoftendonot
reflect costs. Greece shouldmove to fully costreflective retail tariffs and eliminate
crosssubsidies.
To limit PPCs dominance in the electricitymarket, the government should consider
divesting a reasonable percentage of PPCs power generating capacity. It could also
movethenetworkassetsofPPCintoseparatecompaniesand laterprivatisethem.This
wouldbebetter forelectricitymarketdevelopment than simply reducinggovernment
ownershipinPPC.
NATURALGASMARKETREFORM
Natural gas is emerging as the fuel of choice for power generation, both to replace
lignite and to support the expected large increases in variable generation from
renewablesources.Astheelectricitysector,thenaturalgassectorhastraditionallybeen
statecontrolled,butafteraslowstart,market reform isnowgainingpace.SinceApril
2010,independentsuppliersandlargecustomerswillingtobeselfsuppliedmayimport
gastothecountry.Thereformsareyettomaketheirfullmarkonthegassector,butitis
encouragingthatmorethanadozennewplayershadenteredtheGreekgasmarketby
the end ofMay 2011. The IEA congratulates the government for this reform as a
necessarystepineffectivemarketliberalisation.Ensuringaccesstothenetworkandthe
liquefiednaturalgas(LNG)terminaliscrucialforeffectivecompetitiontoemerge.
AlthoughtheStateremains incontrolofmostofthegassupplythroughDEPAandthe
gastransmission infrastructurethroughDESFA,theTSO,newentrantscanbeexpected
tograduallyreducethisdominanceandbringmultiplebenefitstotheeconomyandthe
citizens. Therefore, the government should review the role ofDEPA as themajority
owner of current and future distribution companies (EPAs), as it is unclearwhat net
benefit DEPAs dominance brings to the customers. Again, there is scope to reduce
DEPAs role in themarketby taking someof the samemeasures as in the electricity
sector.
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SECURITYOFGASANDOILSUPPLY
Greeceimportspracticallyalltheoilandgasitneeds,andsecurityofsupplyisoneofthe
keyobjectivesoftheGreekenergypolicy.Inthecaseofnaturalgas,thesupplysources
are already diversified, as Russian gas is imported through theGreekBulgarian entry
point,whiletheGreekTurkishentrypointallowsGreecetoimportgasfromtheMiddle
EastandtheCaspianregion.GreecealsoreceivesLNG,mostlyfromAlgeriaonlongterm
contractsaswellasadditionalvolumesfromthespotmarket.DuringtheJanuary2009RussiaUkrainegassupplycrisis, thegassystemshowedbetter resilience than inother
countries in the region,butexperiencehas shown that inagascrisis, the twoborder
entrypointstoGreecemaybecomesimultaneouslyunavailable.
EntrycapacitytotheGreekgassystemseemssufficienttoaccommodatetheprojected
growthindemandto2020,butthegrowingpeakdemandmayposechallenges.Greeces
efforts to further diversify import routes and sources, while expanding LNG import
capacities,arethereforetobecommended.
Turningtooilsecurity,Greecedeservescreditfordiversifyingitssourcesofcrudeoiland
oilproductsand for takingmeasures to increase its indigenousoilproduction.Greece
hasalsobeen compliantwith the IEA90day stockholdingobligation since theendof2004.
The draft Joint Ministerial Decision on the National Emergency Plan outlines the
responsemeasuresandtheir implementingprocedureswhichwouldbecome thebasis
forGreecesemergency responsemechanisms.This JointMinisterialDecisionhas long
hadthestatusofadraftandwouldneedtobe improvedonseveralkeypointsbefore
being enacted, so that Greece can immediately and efficiently participate in an IEA
collectiveaction.
The IEA urges the government to revise the draft JointMinisterial Decision and to
prioritise theemergency responsemeasures tobe taken ina global crisis,notablyby
stating that use of stocks obligatorily held by the industry is a primary responsemeasure. Thedraft should also stipulate that the release of industry stocks could be
complementedbydemand restraintmeasures,and that thegovernmentwillensurea
direct and unrestricted flow of oil to the globalmarket in the event of an IEA co
ordinatedaction.
RENEWABLEENERGY
Inaremarkablechangefromthesituationafewyearsago,thegovernmenthasadopted
ambitioustargets,policiesandmeasuresforincreasingtheuseofrenewableenergy.The
countryaimstoraisetheshareofrenewableenergyingrosstotalfinalconsumptionto
20%by2020,whichis2%higherthanitsEUobligationandalmosttriplethe6.9%sharein 2005. It has also set a specific target for renewable sources to provide 40% of
electricitygenerationbythesameyear(thesharein2010was15%)andtoprovide20%
of primary energy for heating and cooling in 2020. The government deserves to be
applaudedforsettingthesetargetsandadoptingpoliciesandmeasurestoreachthem.
Thegovernmentshouldnowworktoensurethattheambitious2020targetsaremet.In
the electricity sector, large investments in grids and generating capacity are needed.
Greecehassignificantwindpowerpotentialandthegovernment foreseeswindpower
capacity to increase from around 1.3 gigawatts (GW) in 2010 to 7.5GW in 2020, far
morethanotherrenewableenergytechnologiescombined.Carefulplanningisrequired
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toensureasmoothintegrationofnewrenewableelectricitycapacityintothegridandto
maintain the reliability of the electricity system as the share of variable generation
increases.A key part of this development is to connectGreek islandswith abundant
wind and solarpowerpotential to themainland transmissionnetwork. Itwill alsobe
essential to expand hydropower and/or natural gas capacity and build more
interconnections to helpbalance variations inpower generation fromwind and solar
resources. Power system flexibility should also be increased by storage and demand
response, including advanced metering and timeofuse pricing of power. The
government should also closely control the costs of the feedin tariff system, for
examplebyreducingthetariffsovertimeorlinkingthemmorecloselytothewholesale
powerprice.
Complex licensingand sitingprocedureshavecaused longdelays in renewableenergy
projects. It is therefore remarkable that Law 3851/2010 has shortened the licensing
process by several years, and tojust a fewmonths in some cases. The 2008 Special
Spatial Framework, in turn, has facilitated siting procedures for renewable energy
projects.Thesearemajor improvementsandthe IEAcongratulatesthegovernment. In
anotherwelcomedevelopment,Law3851/2010alsoincreasesthepublicacceptanceof
renewableenergyprojectsbychannellingthe localcommunitiesmoremoneyfromthegeneratorsasimpleandeffectivemeasure.
CLIMATECHANGEMITIGATION
Greece issettomeet itsKyototarget,whilethemaincontributiontoreducingenergy
relatedCO2emissionstomeetits2020EUtargetwillcomefrommeasuresonrenewable
energy,fuelswitchingandenergyefficiency.Thegovernmentisencouragedtofocuson
costeffectiveness and to prioritise economic instruments when incorporating these
measuresintoacoherentwhole.
Becauseof itsstrongrelianceonoiland lignite,primaryenergysupply inGreece isthe
mostcarbonintensiveamongtheIEAmembercountries.Thegovernmentisfullyawarethat thiswillhave tochangeand isdedicated togreening theeconomy.Greecehasa
largepotential forwindandsolarenergyand isrightlydeterminedto increase itsuse.
Therenewableenergysectoralsoholdspromise forjobcreation, inparticular if linked
withresearchanddevelopment(R&D)activities.
ExperiencefromIEAmembercountriesshowsthatimprovingenergyefficiencytypically
offers large costeffective potential formitigating climate change, savingmoney and
improving energy security. The IEA urges the government to look more into this
potential and further strengthen the coordination and evaluation of its various
programmes and projects. Oil could be a focus area. In Greece, oil use is high by
internationalcomparisonandoil isthemost important fuel inallendusesectors.The
governmenthasrightlysupportedthegasificationofthecountry,mandatedrenewable
energyuseforheatingandpromotedpublictransport,amongothermeasures.Attimes
ofhighoilpricesandeconomicdistress,intensifiedeffortstosaveoilandreduceitsuse
wouldbearationalchoiceforgovernmentaction.
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KEYRECOMMENDATIONSThegovernmentofGreeceshould:
Continue to implement theplanned reforms in the energy sector to improve the
countryseconomicprospects; inparticular, intensifyelectricitymarket reformand
continue natural gas market reform to increase efficiency and ensure attractive
frameworkconditions
for
future
investments;
consider
further
limiting
market
dominance of the Public Power Corporation and the Public Gas Corporation,
includingthroughprivatisation.
Continue to promote longterm gas security policies and complement, where
appropriate,oilsecuritypolicytomeetIEAbestpractice.
Continuetoworktowardsthedecarbonisationoftheeconomyoverthelongterm.
Intensifyeffortstopromoteenergyefficiencyinordertosavemoney,improveenergy
securityandmitigateclimatechange.
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POLICYANALYSIS
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16
Figure1.MapofGreece
ALBANIA
FYROM
TURKEY
TURKEYGREECE
Athens
BULGARIA
Sea of Marmara
Mediterranean Sea
Ionian Sea
Peloponnesus
Crete
Central Greece
Epirus Thessalia
Macedonia
Thrace
Euboea
Cephalonia
Zante
Lesbos
Limnos
Samos
Thassos
Hios
Naxos
Alexandroupolis
ThessalonikiPlaty
Larissa
Preveza
Volos
Lamia
Megalopolis
Heraklion
Livadia
Patrai
ThivaChalkida
Inofita
Lavrio
PiraeusCorinth
Aspropyrgos
Pentalofos Drimos
Karperi
Komotini
Xanthi
Kavala
Drama
SerresKula
0 50 100km
Rhodes
This map is for illustrative purposes and is without prejudice to the status of or sovereignty over any territory covered by this map.
Aegean Sea
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2.Generalenergypolicy
17
2.GENERALENERGYPOLICY
Keydata
(2010
estimates)
Population:11.3million
GDP:USD254billion(2000pricesandPPPs),+26%since2000
GDPpercapita:USD22500(OECDaverage:USD26900)
TPES: 27 Mtoe (oil 52%, coal 27%, natural gas 12%, renewables 7.5%),
0.1%onaverageperyearsince2000
TFC: 20.6Mtoe in 2009 (transport 41%, residential 24%, industry 21%, other 15%),
0.6%onaverageperyearsince2000
Electricitygeneration:60.8TWh
(coal45%,naturalgas27%,oil13%,hydro11%,wind4%)
Inlandenergyproduction:9.2Mtoe,34%oftotalenergysupply
COUNTRYOVERVIEW
Greecehasanareaof132000km2andbordersonfourcountries:Albania,theformer
YugoslavRepublicofMacedonia(FYROM),BulgariaandTurkey.Thelandareaconsistsof
the largepeninsulasof thePeloponnese andAttica, thenorthernmainland,andover
2000 islands coveringmore thanonefifthof the territory.The countryhasextensive
coastlinesontheAegeanSea,theeasternMediterranean,andtheIonianSea.Ithas11.3million inhabitants,ofwhicharounda third lives in theAthensareaandmore thana
million in the Thessaloniki area. A large part of the mainland is mountainous and
sparselypopulated.
ServicesarebyfarthelargestsectorintheGreekeconomy.In2010,theygenerated78%
ofGDP,whileindustrycontributed18%andagriculture,forestryandfishing4%.Services
aredominatedbytourism,shippingandthepublicsector.Afterseveralyearsofstrong
butdebtdrivengrowth,theinternationalfinancialcrisistriggeredtheGreekeconomyto
contractby2%in2009.Governmentfinancesquicklydeterioratedandthebudgetdeficit
reached unsustainable levels. In May 2010, the government adopted an austerity
programme in order to receive financial assistance from the InternationalMonetary
Fund (IMF)and theeurozone countries.Theprogramme includes cutting governmentspending, reducing thesizeof thepublicsector,decreasing taxevasion, reforming the
health care and pension systems, and improving competitiveness through structural
reformstothelabourandproductmarkets,includingtheelectricity,naturalgasandcoal
sectors. GDP declined by 4.4% in 2010 and is set to decline further in 2011.
Unemploymenthadreached15.9%inFebruary2011.
Greece is a parliamentary democracy headed by a president. Executive powers are,
however,vestedinthegovernmentheadedbyaprimeminister.SinceOctober2009,the
country isgovernedby thePanhellenicSocialistMovement (PASOK).Thenextgeneral
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electionisscheduledfor2013.GreecehasbeenamemberoftheEuropeanUnionsince
1981.
SUPPLYANDDEMAND
SUPPLY
Total primary energy supply (TPES)was 27million tonnes of oil equivalent (Mtoe) in
2010,down8.2%from2009and11.1%from2008.Between1990and2008,TPESgrew
with an annual average of 2%,whileGDP increased bymore than 3% per year (see
Figure2).
Figure2.Totalprimaryenergysupply,1973to2010*
0
5
10
15
20
25
30
35
1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009
Mtoe
Other *
Hydro
Biofuels andwaste
Natural gas
Coal
Oil
* Estimates for 2010.
** Other includes wind, solar, geothermal and ambient heat used in heat pumps.
Source: Energy Balances of OECD Countries, IEA/OECD Paris, 2011.
Domestic sources, primarily lignite but also renewable energy, covered a third of
Greecesenergyneeds,andtheentireindigenousproduction.Theremainingtwothirds
ofTPESwereoilandnaturalgaswhicharealmost100%imported.
OilremainsthemostimportantenergysourceinGreece,althoughitsshareinTPEShas
gradually declined from 77% in 1973 to 52% in 2010. Over the years, oil has been
substitutedfirstbyligniteandmorerecentlybynaturalgas.Ligniteisthesecondlargest
energysource,accountingfor27%ofTPES in2010. It isthemost importantsourcefor
electricity in Greece. Natural gas provided 12% of TPES in 2010. Over the past two
decades,lignitesupplyhasfluctuatedbetween8and9Mtoe,butdroppedto7.3Mtoe
in2010. Incontrast,naturalgashasbeen the fastestgrowingenergysource in recent
years.Intotal,fossilfuelsaccountedfor91%ofTPESin2010,oneofthehighestshares
amongtheIEAmembercountries(seeFigure4).
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In comparison, renewableenergy supply is relatively low.Themain renewableenergy
sourcesarebiofuelsandwaste,providing1Mtoeor4%ofTPES in2010, followedby
hydropowerwith0.6Mtoeor2%ofTPES.Solarandwindenergyeachaccounted for
around0.2Mtoe,lessthan1%ofTPESin2010.
Figure3.Energyproductionbysource,1973to2010*
0
2
4
6
8
10
12
1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009
Mtoe
Other **
Solar
Wind
Oil
Hydro
Biofuels andwaste
Coal
* Estimates for 2010.
** Otherincludes natural gas, geothermal and ambient heat used in heat pumps (negligible).
Source:Energy Balances of OECD Countries, IEA/OECD Paris, 2011.
Figure4.BreakdownoftotalprimaryenergysupplyinIEAmembercountries,2010*
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Oil Natural gas Peat Coal Biofuels and waste Hydro Nuclear Other **
Greece
* Estimates.
** Otherincludes geothermal, solar, wind, and ambient heat production.
Source:Energy Balances of OECD Countries, IEA/OECD Paris, 2011.
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DEMAND
Totalfinalconsumption(TFC)was20.6Mtoe in2009.LikeTPES,itgrewfastfrom1990
to2007,onaverageby2.5%per year.Then,asa resultof theeconomic situation, it
decreasedby2.8%in2008and2009(seeFigure5).
OilhasbyfarthehighestshareinfinalenergyconsumptioninGreece;65%in2009.This
sharehasremainedrelativelysteadyovertime.Inadditiontothetransportsector,oilis
also the dominant fuel in industry and the buildings sector. Among the IEAmember
countries,Greece has the highest shareof oil in TFC, and only Ireland is in a similar
situationwhereoildominatesallconsumptionsectors.AmongtheOECDcountries,only
MexicohasahighershareofoilinTFC.
Electricity,asthesecondlargestenergysource,provided23%ofTFC in2009. Itsshare
hasgradually increasedfrom17% in1990and isnowslightlyabovethe IEAaverageof
21.7%.Theservicesectorconsumed41%ofallelectricity,theresidentialsector33%and
industry26%.Beyondoilandelectricity,theotherenergysourcescovered12%ofTFC.
Naturalgasandcoalaremostlyused in industryandrenewableenergy inhouseholds,
mainlyforheatingwater.
Figure5.Totalfinalconsumptionbysource,1973to2009
0
5
10
15
20
25
1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009
Mtoe
Other *
Coal
Biofuelsand waste
Natural
gas
Electricity
Oil
* Otherincludes solar, geothermal and heat (negligible).
Source:Energy Balances of OECD Countries, IEA/OECD Paris, 2010.
INSTITUTIONS
MinistryofEnvironment,EnergyandClimateChange(MEECC)
Theministrywas formed inautumn2009bymerging several functionsof the former
Ministries forDevelopment and the Environment.MEECC is the central institution in
climate and energy policy making in Greece. Within the Ministry, the General
Directorate for Energy is responsible for energy policy and the publication of energy
statistics. It is also responsible for the developmentof renewable energy and energy
efficiencypolicy andoversees theCentre forRenewable Energy Sources (CRES). It is
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responsible forthetranspositionofenergyrelatedEUdirectives intoGreek legislation.
TheministrycooperateswiththeRegulatoryAuthorityforEnergy(RAE)inaccordance
withGreekandEUlegislation,andisresponsiblefortheexerciseofmajorityshareholder
functions of the Public Power Corporation (PPC), the Hellenic Transmission System
Operator(HTSO),thePublicGasCorporation(DEPA)andtheGasTransmissionSystem
Operator(DESFA).
Ministry
of
Infrastructure,
Transport
and
Networks
TheMinistryof Infrastructure,TransportandNetworks is inchargeof transportpolicy
planning and it coordinates closely with the Ministry of Environment, Energy and
ClimateChange).
MinistryforFinance
TheMinistryforFinance isresponsiblefortaxationandfortheexerciseofthemajority
shareholderfunctioninHellenicPetroleum.
RegulatoryAuthorityforEnergy(RAE)
RAEwassetupin2000astheindependentregulatorforallenergymarkets(electricity,
gasandoil).Itusedtohaveprimarilyadvisorypowers,butalsosomedirectpowersoverpricesinnaturalgasretail.RAEschairmanandtwovicepresidentsareappointedbythe
Ministerial Council, following the consent of the Greek Parliament. With the
transpositionoftheEUthird internalenergymarketdirectives inAugust2011,RAEhas
gained more independence and powers, and it is now responsible for licensing,
secondarylegislationandmarketcontrolandsupervision.
HellenicCompetitionCommission(HCC)
TheHCCisanindependentbodyresponsiblefortheproperfunctioningofcompetitionin
allmarketsinGreece.Itcancommenceinquiriesintomarketpowerormarketabuseex
ufficio and it acts as an advisory body to the government. HCC is overseen by the
MinistryforFinance.
CentreforRenewableEnergySources(CRES)
CRES is thenational centre for renewableenergy sources, rationaluseof energy and
energy saving, and it coordinates national policies in these areas. It also produces
energy systemsanalysisand isactive inEUfundedprojects.CRES is supervisedby the
MinistryforEnvironment,EnergyandClimateChange.
PublicPowerCorporation(PPC)S.A.
PPCisthemajoritystateownedelectricityproducer,distributorandsupplierinGreece.
Itsuppliedmorethan75%ofwholesaleandmorethan90%ofretailelectricityin2010.
Thecompanyalsoremainstheowneroftransmissionanddistributionassetsandhasa49%stakeinHTSO,theoperatorofthetransmissionsystemandwholesalemarket.Law
4001/2011foreseesatransferofHTSOssystemoperationandplanningresponsibilities
to aPPC subsidiary,whichwill thenbecome theTSO.HTSOwill remain theoperator
wholesalemarket.
PublicGasCorporation(DEPA)S.A.
DEPA is themainnaturalgas supplier inGreece. It is65%ownedby theGreekState,
while Hellenic Petroleum owns the remaining 35%. DEPA owns the Hellenic Gas
Transmission SystemOperator (DESFA), the owner and operator of the highpressure
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transmissionnetworkofnaturalgasandtheRevithoussaLNGterminal.DEPAalsoowns
51%oftheregionalgasdistributioncompanies(EPAs)throughits100%subsidiaryEDA,
and50%oftheInterconnectorGreeceItaly(IGIPoseidon).Law4001/2011foreseesthat
DESFAwillbeunbundledfromDEPA.
KEYPOLICIES
MARKETREFORM
Greece issteppingupeffortsto liberalise itshistoricallystatecontrolledelectricityand
naturalgasmarkets,takingalso intoconsiderationtherecentobligationsundertheEU
thirdInternalEnergyMarketDirectives.
In the electricitymarket, new entrants are gaining ground in the wholesalemarket,
althoughPPCstillsuppliedmorethan75%ofthevolumein2010.Italsosuppliedmore
than90%of theretailmarket in2010.Competition in theretailmarkethasbeenvery
limited, because of regulating enduser prices at levels that do not always cover
generatingcosts.Sincethebeginningof2011,PPCsretailtariffshavebeenrestructuredtowards eliminating crosssubsidisation between different categories of clients. Retail
tariffsareexpectedtobefullyderegulatedbymid2013.
Inthegasmarket,independentsuppliersandlargecustomerswillingtobeselfsupplied
may,sinceApril2010, importgastothecountry.AlthoughtheStateremains incontrol
ofalmostallgas supplyand the gas transmission infrastructure throughDEPAand its
subsidiaries, thenewentrants canbeexpected togradually reduce thedominanceof
DEPAandbringmultiplebenefitstotheeconomyandthecitizens.
The new energy law 4001/2011 (Official Gazette FEK 179/ / 22 August 2011)
strengthens thepowerof the regulatoryauthority,provides for consumerprotection,
andallowsforunbundlingelectricityandgastransmission(seeBox1).ThegovernmentisalsocommittedtoreducingitsownershipinPPCandDEPAtoclearlybelow50%.
Box1.Law4001/2011toimplementthethirdEUElectricityandNaturalGas
MarketDirectives
Law 4001/2011, adopted on 22 August 2011, transposes into national law the EU
Directives 2009/72/EC and 2009/73/EC. It introduces significant reforms to the
electricity and natural gas market structure and aims to establish a stable and
transparent legislativeand regulatory framework formonitoring thesemarketsand
forprotectingconsumers.Thelawconsistsofthefollowingfourchapters:
Chapteron
RAE
Theroleofthe independentregulator (RAE) isstrengthenedbygranting itadistinct
legalpersonalityandfinancialautonomy.MembersoftheBoardwillbechosenbythe
ParliamentaryCommitteeonInstitutionsandTransparency.
RAE has new responsibilities regarding security of supply, licensing, network
developmentprogramme,networkusagetariffs,monitoringofthemarket,consumer
protectionandissuingsecondarylegislation(codesandregulations).
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Box1.Law4001/2011toimplementthethirdEUElectricityandNaturalGas
MarketDirectives(continued)
Chapteronconsumerprotection
Freeandeasyaccesstoinformationfacilitatingtheselectionofsupplier.
Provisions protecting consumers from abusive practices of suppliers and specific
proceduresforcomplaintssubmissionareestablished.
EstablishmentofaLastResortSuppliermandatedtoensureuninterruptedandsecure
energysupplyforthecustomers.
Establishment of a Universal Supplier Service facilitating households and small
businessestoselectanewsupplier.
Furtherprotection forvulnerableconsumerswithspecificmeasuresproviding lower
tariffs,paymentfacilitationandtheprohibitionofsupplydisruptionincriticalperiods.
Chapteronnaturalgas
UnbundlingoftheTSO(DESFA)fromDEPA,themajornaturalgassupplier.
AllexistingcommercialagreementsbetweenDESFAandDEPAaretobesubmittedto
RAEforapproval.
TheTenyearDevelopmentPlanfortheNationalGasSystemistobedraftedannually
byDESFAandapprovedbyRAE,which isalsomandatedtomonitorandevaluate its
implementation.
Public service obligations for the providersmay be imposed byMinisterial Decree
(MinisterforEnvironmentEnergyandClimateChange).
Chapteronelectricity
TheTransmissionSystemoperatoristobeunbundledonthebasisoftheITOmodel.
The Independent Transmission System Operator (ADMIE), is designated as the
Administratorandtheowneroftheassets.
The Tenyear Development Plan for the Electricity Transmission Network is to be
draftedannuallybyADMIEandapprovedbyRAE.AnAdvisoryCommitteetomonitor
thenondiscriminatoryoperationofADMIEisestablishedwiththeparticipationofthe
usersoftheSystem(producersandsuppliers).
Allpowersof theHTSO regarding system transmissionoperationare transferred to
ADMIE.
HTSOishereinafterdefinedastheMarketOperatorwithcompetencesregardingthe
overallfunctioningoftheDailyEnergyProgramming(IEP).
The Network Distribution Operator (Hellenic Electricity Distribution Network
Operator)isestablishedasa100%subsidiaryofPPC.ThepersonneloftheDirectorate
General for Distribution are transferred to the Hellenic Electricity Distribution
NetworkOperator.PPCretainsthedistributionassets.
Source:MinistryofEnvironment,EnergyandClimateChange.
Withthegoaloffurtherincreaseincompetition,efficiencyanddynamismoftheenergy
sectorandtheGreekeconomyingeneral,inadditiontolaw4001/2011,Greecehasalso
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already laid down a programme for privatising statecontrolled energy companies, as
partoftheMidtermFiscalPlan(seeTable1).
Table1.Privatisationofstatecontrolledenergycompanies
CompanyCurrent State
share, %
State shares to besold, % of all
company sharesPublic Gas Corporation (DEPA) 65 55
National Natural Gas System Operator (DESFA) 65 31
Public Power Corporation (PPC) 51 17
Subsea gas field of Notia Kavala (for gas storage) 100 100
Source: Law 3985/2011 (Official Gazette A 151/1 July, 2011).
SECURITYOFSUPPLY
Greece importspracticallyall theoiland gas itneeds,while ithas ample reservesof
ligniteanda largepotentialforrenewableenergy.Ithasdiversified itscrudeoil import
sources, reducing its dependence on OPEC countries by gradually increasing imports
from Russia and OECDmembers. The country is in compliance with the IEA 90day
stockholdingobligationsince2004,
The key elementsofGreecespolicyon natural gas security are thediversificationof
supplysourcesandthedevelopmentofthenaturalgastransmissionsystem.Inaddition,
new gasfiredplants are required tohold at least fivedaysofdual fuel reserves (i.e.
eitherdiesel storedat theplant site,orLNGat theRevithoussa terminal). Ina supply
disruption,DESFA,thetansmissionsystemoperator,wouldresorttothefollowingthree
keymeasures:
interruptionofgassupplytolargeusers,onthebasisofaprioritylist;
fuelswitchingatpowerstations;
useofgasreservesattheLNGterminal.
Peakdemandofelectricityismetbyincreasingimportsandofferingfinancialincentives
forlargeuserstoreducedemand.Totalcapacityofcrossborderconnectionsamountsto
around15%ofpeakdemand.PlansexisttoincreasecrossbordercapacitywithBulgaria
and Italy. The foreseen increase in variable renewablepower generation to 2020will
increasetheneedforsystemflexibilitytoensuresecurityofsupply.
CLIMATECHANGEMITIGATION
Greece is a Party to the United Nations Framework Convention on Climate Change
(UNFCCC) and to the Kyoto Protocol. The related EU BurdenSharing Agreement
(2002/358/EC) limits itsgreenhousegas (GHG)emissions toanaverageof25%above
theirbaseyear1levelfrom2008to2012.GHGemissionspeakedin2007,andbecauseof
theeconomicrecessionandefficiencyimprovements,Greeceissettomeetthistarget.
AspartoftheeffortsharingoftheEUGHGtargetof 20% from1990to2020,Greece
willhavetoreduceemissionsby4%fromtheir2005levelinthesectorsoutsidetheEU
1.1990forcarbondioxideCO2,methaneCH4andnitrousoxideN2O;and1995forFgases(hydrofluorocarbons,
perfluorocarbonsandsulphurhexafluoride).
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EmissionsTradingSystem(ETS).TheETSsectorhasasingleEUwidetargetof 21%from
2005to2020.
ThemaincontributiontoreducingenergyrelatedCO2emissionstomeetthe2020target
will come frommeasures on renewable energy, energy efficiency and fuel switching
fromligniteandoiltonaturalgasandrenewableenergysources.TheEUETSandEUair
pollution legislation are driving a decarbonisation of the countrys power supply. In
addition, Greece aims to raise the share of renewable energy in gross total finalconsumptionofenergy to20%by2020,which is2%higherthan itsEUobligationand
almost triple the 6.9% share in 2005. It has also set a specific target for renewable
sourcestoprovide40%ofelectricitygenerationbythesameyear(thesharein2010was
15%)andtoprovide20%ofprimaryenergyforheatingandcoolingin2020.
CRITIQUE
Sincethe lastindepthreviewin2006,Greecehas improveditsenergypolicy inseveral
areas. New energy infrastructure is providing alternative sources of natural gas and
ensuringlongtermenergysupply.Thenaturalgassystemwasreinforcedandexpanded,
anditspenetrationindomestic,industrialandtertiarysectorspromoted.Investmentsin
renewable energy have been substantially increased. Greece has commendably
diversified its sourcing of crudeoil andoil products and takenmeasures to boost its
indigenousoilproduction.The IEAalsoapplaudsGreecespriority toenhance regional
energy cooperation through the construction of new, and the upgrading of existing,
energy interconnectorswithneighbouring countries.Greece has been compliantwith
theIEA90daystockholdingobligationsincetheendof2004.
GiventhecurrenteconomicsituationinGreece,muchhastochangebeforethecountry
can return to sustained growth. Reforms are needed also in the energy sector to
improve economic efficiency.Greecehasmade someprogress since 2006 in opening
energymarkets,butmuchmoreremainstobedone.Furthermarket liberalisationcanbeexpectedtobringbenefitstotheconsumers,andthegovernmentshouldtrytoreap
thesebenefitsofmarketreformsfortheconsumers
Reducing concentration and increasing effective competition in the electricity and
natural gasmarkets is a particular challenge.Market power of PPC andDEPA is still
strong,the levelof independenceofthetransmissionsystemoperators is low,andthe
RegulatoryAuthority forEnergy (RAE)and theHellenicCompetitionCommission (HCC)
havehad ratherlimitedpowersandindependence.
InAugust2011,theGreekParliamentadoptedthenewenergylawwhichtransposesthe
EUthirdEnergyMarketDirectives.IthasalsopledgedtopartlyprivatisePPCandDEPA.
Thelawshouldbeimplementedasamatterofurgency.Inparticular,thedominanceofthe incumbentelectricityandgascompanies shouldbemitigated,whileRAEandHCC
shouldbegivenmoredecision andrulemakingpowerandappropriateresources.
In recent years, energy and climate policies have become more prominent on the
politicalagenda.Greecedecidedtorearrangethestructureoftheministriesworkingon
energyandenvironmentpolicy,havinginmindthenecessaryconsistencyofenergyand
environmentpoliciesandbeingcommittedtothethreeEsofgoodenergypolicy:Energy
security, Environmental sustainability, and Economic efficiency. The IEA congratulates
the government for forming a new Ministry for Environment, Energy and Climate
Change, in particular because a horizontal approach is needed to respond to the
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EuropeanUniontargetsfor2020ongreenhousegas(GHG)mitigation,renewableenergy
andenergyefficiency.
While Greece looks set to complywith its Kyoto Protocol target for 20082012, the
globalneedtodecarboniseoureconomiesjustifiesamorestrategiclongtermapproach.
Thegovernmentseesgreeningtheeconomyasawaytopromotejobcreation,especially
intherenewableenergysector.Thecountryhasintroducedambitioustargetstofurther
increase the shareof renewable energy and adopted amajor law (3851/2010) and aNationalRenewable EnergyAction Plan toprovide formeasuresneeded tomeet the
2020targets.ThegovernmenthasalsoformedaNationalEnergyEfficiencyActionPlan
andhasbeguntoimplementprogrammesinsupportofthetargetsoutlinedinthisplan.
All inall,theIEArecommendsthegovernmenttodevelopcoherentenergyandclimate
strategies to 2020 and beyond which cover all sectors (e.g.electricity, buildings and
transport)andplaceaparticularlystrongemphasisonthedemandside.Thegovernment
should continue to considerdifferent scenarios thatassess the costeffectiveness and
theenvironmentalsustainabilityofenvisagedpolicieswhendevelopingthesestrategies.
For investors andmarketparticipants inall energy sectors, it is essential,notonly in
Greece, to have political and administrative decisions (e.g.licences, spatial planning,
regulatoryframework)implementedasquicklyandeffectivelyaspossible.ConditionsforinvestinginrenewableenergyhavebeenimprovedbyLaw3851/2010.Asregardsother
existing regulatory frameworks, theremay still be room for improvements, be it in
design(stable,simple,complete)or implementationofregulatoryframeworks.The IEA
encouragesthegovernmentto intensifyeffortstotakedecisionsand implementpolicy
quicklyandeffectively.
Asmanyothercountries,Greeceisfacinglocalresistanceandadministrativebarriersto
new energy infrastructures, including renewable energies like wind energy. The
governmentisthereforestillencouragedtobemoreactiveincommunicatingitsenergy
policy,policygoalsandconstraintstothebroaderpublic.
Tofacilitatea longertermviewonenergyandenvironmentalpolicy,allstakeholdersincluding government, other authorities, industry, research, nongovernmental
oganisationsandthegeneralpublicneedtheabilitytojudgeinaconsistentandeasily
understandablewaytherisksandopportunitiesofdifferentenergysupplyoptions(such
asfossilandrenewableenergy).
RECOMMENDATIONSThegovernmentofGreeceshould:
Continueto implementtheplannedmarketreforms,inparticular,takemeasuresto
mitigatethe
dominance
of
the
incumbent
electricity
and
gas
companies
and
strengthentheRegulatoryAuthorityforEnergyandtheCompetitionCommissionby
givingthemmoredecisionandrulemakingpowerandappropriateresources.
Continue to develop coherent energy and climate strategies to 2020 and beyond
which cover all sectors (e.g. electricity, buildings and transport) and place a
particularlystrongemphasisonthedemandside.
Utilisedifferent scenarios thatassess thecosteffectivenessand theenvironmental
sustainabilityofenvisagedpolicieswhendevelopingthesestrategies.
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3.CLIMATECHANGE
Keydata
(2009)
TotalGHGemissions(excludinglanduse,landusechangeandforestry):
122.5MtCO2eq,+17.4%from1990.
20082012target:+25%frombaseyear
CO2emissionsfromfuelcombustion:90.2Mt(+1.4%onaverageperyearsince1990)
Emissionsbyfuel:oil54%,coal39%,gas7%
Emissionsbysector:electricityandheatgeneration49%,transport27%,industry12%,
households8%,other4%
OVERVIEW
Greece is a Party to the United Nations Framework Convention on Climate Change
(UNFCCC) and to the Kyoto Protocol. The related EU BurdenSharing Agreement
(2002/358/EC) limits itsgreenhousegas (GHG)emissions toanaverageof25%above
theirbaseyear2levelfrom2008to2012.
AspartoftheeffortsharingoftheEUGHG targetof 20% from1990to2020,Greece
willhavetoreduceemissionsby4%fromtheir2005levelinthesectorsoutsidetheEU
EmissionsTradingSystem(ETS).TheETSsectorhasasingleEUwidetargetof 21%from
2005to2020.Greeces totalemissionsof the sixGHGshave increased since1990.According to the
Greek national inventory submission to the UNFCCC, total GHG emissions in 2009
amountedto122.5milliontonnesofCO2equivalent(MtCO2eq),which is17.4%more
than in1990and15.1%more than thebaseyearemissionsof106.5MtCO2eq.This
increaseisdominatedbyasteepincreaseinemissionsofCO2,whiletheemissionsofthe
othermajorgaseshavedecreasedcomparedto1990.However,CO2emissionspeakedin
2007andhavesincebeendecreasing,partlyowingtoimprovementsinenergyefficiency
and increases in theuseof renewableenergyandnaturalgas. In2009,CO2emissions
decreased furthermainlybecauseofeconomic recession. In 2009,CO2accounted for
85.1%ofGHGs,CH4for7.1%,N2Ofor5.6%andtheFgases(HFCs,PFCsandSF6)for2.2%
(seeTable2).
2.1990forcarbondioxideCO2,methaneCH4andnitrousoxideN2O;1995forFgases(hydrofluorocarbons,perfluorocarbons
andsulphurhexafluorideSF6).
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Table2.GreenhousegasemissionsinGreece,1990to2009
Emissions(MtCO2eq)
GHG 1990 1995 2000 2005 2007 2008 2009
CO2 83.3 86.8 103.2 113.4 114.4 110.1 104.3
CH4 9.8 10.0 9.9 9.2 9.0 8.8 8.7
N2O 10.1 8.9 8.4 7.8 7.8 7.1 6.9
HFC 0.9 3.3 4.3 4.0 2.1 2.5 2.6
PFC 0.3 0.1 0.2 0.1 0.1 0.1 0
SF6 0 0 0 0 0 0 0
Total 104.4 109 126 130.7 133.4 128.6 122.5
Breakdownbygas(%)
GHG 1990 1995 2000 2005 2007 2008 2009
CO2 79.8 79.6 81.9 84.4 85.8 85.7 85.1
CH4 9.4 9.1 7.9 6.8 6.7 6.8 7.1
N2O 9.7 8.2 6.7 5.8 5.8 5.5 5.6
HFC 0.9 3.0 3.4 2.9 1.6 1.9 2.1
PFC 0.3 0.1 0.1 0.1 0 0.1 0
SF6 0 0 0 0 0 0 0
Total 100 100 100 100 100 100 100
Indexofemissions(baseyear=100)
GHG 1990 1995 2000 2005 2007 2008 2009
CO2 100 104.2 123.9 136.1 137.4 132.2 125.3
CH4 100 102 101.8 94 92.1 90.1 89.5
N2O 100 87.9 83.3 76.8 76.9 69.9 67.8
HFC 100 131 121.3 64.3 76.1 78.8
PFC 100 176.8 85.2 70.2 88.7 42.1
SF6 100 111.3 180 276.7 210 140
Total 100 104.4 120.7 128.7 127.8 123.2 117.4
Note: CO2is carbon dioxide, CH4 is methane, N2O is nitrous oxide, F-gases are HFC (hydrofluorocarbons), PFC (perfluorocarbons) and SF6(sulphurhexafluoride).
Source: Greeces 2011 national inventory submission to the UNFCCC.
CO2EMISSIONS
FROM
FUEL
COMBUSTION
In2009, fuel combustionaccounted for95%ofallCO2emissionsand81%ofallGHG
emissions inGreece.CO2emissions from fuel combustion increasedbyalmosta third
from1990to2009,to90.2Mt.3
3.TheanalysisinthissectionisbasedonestimatesdonebytheIEAbyusingtheIntergovernmentalPanelonClimateChanges
defaultmethodsandemissionfactors. IntheGreeksubmissiontotheUNFCCC,CO2emissionsfromfuelcombustionin2009
werereportedtobe98.9Mt.
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In 2009, energy supply in Greecewas the secondmost carbonintensive among the
OECDcountries,afterEstonia(seeFigure6).Thisisexplainedbytwofactors.Greecehas
oneofthehighestsharesoffossilfuelsinitsTPES(92.4%in2009)andpowergeneration
ismuchmorecarbonintensivethaninotherOECDcountries.
Ligniteremainsthemainfuelforpowergeneration,providing56%oftotalgenerationin
2009(45%in2010),andoiluseisalsocommon,providing13%ofthetotal.Manyofthe
powerplantsareoldand relatively inefficient.Asa result, in2009,averageemissionsfrompowergenerationwere729gCO2perkilowatthour(kWh) inGreece,asopposed
to454gCO2perkWh intheOECD.4Thiscarbon intensityofpowergeneration issetto
declineinthefuture,asrenewablesourcesandnaturalgascontinuetoreplacelignite.
Figure6.EnergyrelatedCO2emissionsperTPESinOECDmembercountries,2009
0
0.5
1
1.5
2
2.5
3
3.5tCO2 per toe
Source: CO2Emissions from Fuel Combustion,IEA/OECD Paris, 2010.
Carbon intensity of the Greek economy declined by 24% from 1990 to 2009 when
Greeceemitted0.33kgofCO2perthousandUSDofGDP(in2000pricesandpurchasing
powerparities).ThisdecreaseresultsfromrapidGDPgrowth,67%from1990to2009.
However,evenafter suchadecrease, theGreekeconomy remains16%more carbon
intensivethanOECDEuropeonaverage.GreecesCO2emissionspercapita,at8tonnes
in2009,were17%higherthantheOECDEuropeaverage,and15%higherthanin1990.
By sector, power and heat generationwas the largest emitter of energyrelated CO2
emissions in 2009, accounting for half the total. Transport accounted for 27% of all
emissions,manufacturing for8%,households for8%andbothotherenergy industries
(mainlyrefineries)andothersectors(services,agricultureandfishing)for4%each(see
Figure7).Since1990,totalemissionshavegrownby30%,withaboveaveragegrowthin
households (60%), other energy industries (46%) and transport (63%). In contrast,
emissions frommanufacturing industries decreased by 30% from 1990 to 2009. The
economicdownturnisreducingCO2emissions.From2007to2009,emissionsdecreased
inallsectors,intotalby7.8%.
4.AccordingtotheGreekAdministration,thefigurefor2009was824gCO2perkWh.
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Figure7.CO2emissionsbysector*,1973to2009
0
20
40
60
80
100
120
1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009
Million tonnes of CO2
Other **
Residential
Transport
Manufacturingindustry and
construction
Other energyindustries
Electricity andheat
* Estimated using the IPCC Sectoral Approach.
** Includes emissions from commercial and public services, agriculture/forestry and fishing.
Source: CO2Emissions from Fuel Combustion, IEA/OECD Paris, 2010.
Figure8.CO2emissionsbyfuel*,1973to2009
0
20
40
60
80
100
120
1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009
Million tonnes of CO2
Oil
Gas
Coal
Other **
* Estimated using the IPCC Sectoral Approach.
** Includes industrial waste and non-renewable municipal waste (negligible).
Source: CO2Emissions from Fuel Combustion, IEA/OECD Paris, 2010.
On a fuel basis, oil remains the dominant source of CO2 (see Figure 8). In 2009, it
accountedfor54%ofemissions,arelativelystablesharesince1990.Emissionsfromcoal
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use(39%ofthetotal)remainclearlyhigherthanthosefromnaturalgasuse(7%).Since
the late 1990s, natural gas has steadily becomemore common as a fuel for power
generation.PartlybecauseofEUETS,emissionsfromnaturalgasusehave increased in
recentyears,whileemissionsfromcoalusehaveremainedfairlystable.Dataonfueluse
forelectricitygenerationdo,however,point toa steepdecline inCO2emissions since
2008 owing to the recession and the penetration of renewable energy sources (see
Chapter9onelectricity).
INSTITUTIONS
TheMinistryofEnvironment,EnergyandClimatechange(MEECC)isresponsibleforthe
coordinationofallothercompetentministriesandotherpublicand/orprivateentities
for:
implementingtheprovisionsoftheKyotoProtocol;
formulatingandmonitoring theNationalProgramme forachievingnational targetssetundertheKyotoProtocol.
MEECC isalsoresponsibleforthe implementationoftheEUETS inGreece. Inpractice,
this work is done by the Emissions Trading Office within theministrys Directorate
GeneralfortheEnvironment.ThisofficeisalsothedesignatedNationalAuthorityforthe
Clean Development Mechanism (CDM) and the designated focal point for Joint
Implementation(JI)projects.TheNationalRegistry isoperatedbytheNationalCentre
forEnvironmentandSustainableDevelopment,aninstitutesupervisedbyMEECC.The
coordination of all competent authorities is assigned to a sevenmember inter
ministerialcommittee.
POLICIESANDMEASURES
OVERVIEW
ThebasisofGreecesclimatepolicy isthesecondNationalClimateChangeProgramme
from 2002 and its subsequent revisions, theNational Renewable Energy Action Plan
(NREAP)and theNationalEnergyEfficiencyActionPlan (NEEAP)Nationalpoliciesand
measures are closely linked to the European common and coordinated policies and
measures,includingtheEmissionsTradingSystem,aswellasthefinancingmechanisms
andfiscalmeasuressupportingtheimplementationofprojects.
The impactofcurrentand futureclimatepoliciesandmeasures isquantified inthe5th
National Communication of Greece to the UNFCCC, published in January 2010. Thecommunicationcontainstwoemissionsscenarios:thewithmeasuresscenarioincludes
adopted and implemented emissions reduction policies and measures. The with
additional measures scenario assumes the implementation of current and planned
policies.The latter scenariowasupdated inMarch20115to take intoaccount revised
policies andmeasures related to the compliancewith the EU 202020 targets to be
reachedby2020.
5.ReportunderArticle3(2)oftheDecision280/2004/ECrelatedtonationalpoliciesandmeasuresandGHGemission
projections.MinistryofEnvironment,EnergyandClimateChange,2011.http://cdr.eionet.europa.eu/gr/eu/ghgmm/envtx8f8w
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For2020,thetotalGHGemissionsreductionpotentialfrom implementedandadopted
policies andmeasures is estimated at 50.3Mt CO2eq and the total reduction from
plannedpoliciesandmeasuresisestimatedat11.8MtCO2eq(seeTables2and3).The
largest potential for GHG reductions lies in reducing the carbon intensity of power
generationthroughincreaseduseofnaturalgasandrenewablesources.Thesamepolicy
islimitingemissionsalsoinindustry,householdsandservices.Thesesectorsholdalarge
potential for improved energy efficiency. In the transport sector, emissionswouldbe
reduced mainly by promoting public transport, improving traffic management and
renewingthevehiclefleet.
Table3.ReductionsinGHGemissionsfromimplementedandadoptedpoliciesandmeasures
MtCO2eq.
Policies and measures 2005 2010 2015 2020Gradual replacement of old inefficientthermal power units with efficient newones increase in the share of naturalgas in electricity generation
6.0 11.2 16.0 26.1
Promotion of natural gas in other sectors 0.5 0.7 0.8 1.1
Promotion of renewable energy sources 1.0 10.2 14.0 16.2Biofuels use in transport 0.4 0.8 1.2
Energy efficiency measures in industry 0.2 0.3 0.3
Energy efficiency measures in householdsand services
1.4 1.5 2.2
Measures in transport 0.2 0.3
Measures in the waste sector 0.5 1.3 2.0
Measures in agriculture 0.6 0.7 0.9
Total 7.5 25.2 35.6 50.3
Source: Report under Article 3(2) of the Decision 280/2004/EC related to national policies and measures and GHG emissions projections. Ministry ofEnvironment, Energy and Climate Change, March 2011.
Table4.ReductionsinGHGemissionsfromplannedpoliciesandmeasures
MtCO2eq
Policies and measures 2015 2020Promotion of natural gas 0.3 0.4
Promotion of renewable energy sources 2.7 6.2
Biofuel use in transportation 0.3 0.6
Full implementation of the National Energy Efficiency Action Plansmeasures on industry
0.7 1.0
Full implementation of the National Energy Efficiency Action Plansmeasures on households and services
3.5 3.6
Total 7.5 11.8
Source: Report under Article 3(2) of the Decision 280/2004/EC related to national policies and measures and GHG emissions projections. Ministry forEnvironment, Energy and Climate Change, 2011.
AsaresultoftheeffortsharingoftheEUGHGtargetof20%from1990to2020,Greece
willhavetoreduceemissionsfromthenonETSsectorsby4%fromtheir2005levelsby
2020. For this, it is allowed to use international flexibility mechanisms to cover an
amountequalling3%ofthenonETSsectoremissionsin2005,i.e.75%ofitstarget.After
2012,theETSsectorintheEUasawholewillhavetocutemissionsby21%from2005to
2020(seebelow).
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EUEMISSIONSTRADINGSYSTEM(EUETS)
The EUETS limits the amount of CO2 emissions from installations in nine energy
intensiveindustries:combustioninstallations,hydrocarbonrefineries,cokeovens,metal
ore roasting or sintering installations, production of pig iron and steel, production of
cementclinker,manufactureofglass,manufactureofceramicproductsandproduction
ofpulpandpaper.Eachinstallationisallocatedemissionallowancesandmustsurrender
allowancestocover itstotalCO2emissions.Ifitsemissionsarehigherthanexpected,itshallpurchasemoreallowancesontheallowancemarkettocovertheshortfallbetween
allocationandactualemissions.If,inturn,itneedsfewerallowancesthanitholds,itcan
sell them.Allocation in the first twophasesof theEUETS (20052012) isbasedona
NationalAllocationPlanthat ispreparedbythenationalgovernmentandapprovedby
the EU Commission. Allocation criteria are laid out in Annex III to the EU Emissions
TradingDirective(2003/87/EC).
TheEUETSwas launched in2005and its firstcommitmentperiodranuntiltheendof
2007. For 20082012, the second commitmentperiod,Greecemay allocatea totalof
315.4MtofCO2allowances to the140 incumbentsand26.1Mt fornewentrants.At
68.4Mt CO2eq, total annual allocation in 20082012 is 8% smaller than in the first
commitment period and 19.8% less than the ETSsector emissions in 2005. Power
generation received71%ofallowances to incumbents,and cement industry17% (see
Table5).Allallowancesareallocatedfreeand installationsmayuseJIandCDMcredits
tocoverupto9%oftheiremissionsobligation.
Asfrom2013,newrulesforEUETSwillapply,onthebasisofDirective2009/29/EC.For
example,allallowancesforthepowersectorwillhavetobeauctionedwithtemporary
exemptions for somenewEUmember states,whereasprocess industriesmay receive
partor, ifsubjecttocarbon leakage,alloftheirallowances for freeat the levelofthe
benchmarkof industrybestpractice.Flexiblemechanismsmaybeused tocoverup to
50%oftherequiredreductionbetweenthe2005verifiedemissionsandtheaveragecap
over20082020.ThescopeoftheEUETSwillalsobebroadenedtocoverseveralnewsectors,includingaviationandtheproductionofaluminiumandchemicals.ETSwillalso
covertheemissionsofperfluorocarbonsandnitrousoxideincertainindustries.
Table5.AllocationofallowancesintheNationalAllocationPlan20082012bysector
Categories of activities Allowances allocated (t CO2)Power generation 222 520 789
Other combustion 2 012 220
Refineries 19 892 720
Metal ore roasting and sintering 4 048 345
Iron and steel 2 675 820
Cement 53 863 840
Lime 4 633 535Glass 285 585
Ceramics 4 570 885
Paper 936 900
Total 315 440 639
Reserve for new entrants 26 107 071
Source: Ministry of Environment, Energy and Climate Change.
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DOMESTICMEASURESOUTSIDETHEEUETS
Efforts to limit theGHG emission from the sectors outside the EUETS focus on fuel
switching, renewable energy and energy efficiency. They are listed inmore detail in
Chapters4and8onenergyefficiencyandrenewableenergy,respectively.
Householdsandservices
Adopted,implementedandplannedactionsincludeincreasingtheuseofnaturalgasand
renewable energy sources, but also improving the thermal behaviour of residential
buildings and promoting energyefficient appliances and heating equipment. These
actions are supported significantly by the incorporation in the Greek legislation of
Directive 2002/91/EC (through Law 3661/2008, Joint Ministerial Decision,
D6/B/5825/20.04.2010 and Presidential Decrees 72/2010 and 100/2010) which
proposesactionsforenergyconservation intheresidentialandservicesectors,suchas
usingacommonmethodology for theestimationof theenergyefficiencyofbuildings,
developmentofasystemforthecertificationofnewandexistingbuildings,inspectionof
boilers,mandatoryreplacementofalllowenergyefficiencylightsinthepublicandwider
publicsector,financialincentivesandsubsidiesforthereplacementoflowenergyclasshousehold deviceswith new energyefficient ones. The 2010 Energy Performance of
BuildingsRegulation, in linewithDirective2009/28/EC,specifiesenergy inspections,as
wellasenergyandenvironmentalcertificationofbuildings,andthushelpsto limitCO2
emissions.
Transport
Thesubstantial increaseofGHGemissionsfromroadtransport isdirectly linkedtothe
increaseofvehiclesandtransportationactivity.Therenewalofthepassengercarfleet
andthe implied improvementofenergyefficiency limitthe increaseofGHGemissions.
However,thepositiveresultsfromtheimprovedperformanceofvehiclesarereducedbythe high level of passenger car use. The government expects that the implemented,
adoptedandplannedmeasurestoimprovepublictransportwillmoderatethishighlevel
ofpassengercaruse.
Internationalmeasures
AccordingtothesecondNationalClimateChangeProgrammeadopted in2002andthe
latest projections, Greece will comply with its Kyoto Protocol target for the first
commitmentperiodbyexistingimplementedandadoptedpoliciesandmeasures,andby
theimplementationoftheEUETSwithouttheadditionaluseofJI/CDMcredits.
JIandCDMcreditsare,however,expectedtobeusedintheEUETSsector.Accordingto
theNationalAllocation Plan 20082012, installationsmay use credits from these two
mechanismsinanamountequallingupto9%oftheirallocatedallowances.
CRITIQUE
Under the EUBurdenSharingAgreement related to theKyoto Protocol,Greecemust
limit itsaverageannualGHGemissions in20082012to25%abovethebaseyear level.
Largelybecauseofstrongeconomicgrowth,theemissions increasedsubstantiallyuntil
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2007. However,Greece looks set to reach its Kyoto targetwith existing policies and
measures, in part because the economic downturn has led to further decreases in
emissions. The IEA acknowledgesGreeces success in abiding by its Kyoto target and
encourages the government to continue to monitor compliance towards the Kyoto
target.
Beyond2012,GreecesGHGtargetfor2020 is 4%fromthe2005 levelforthenonETS
sector,whiletheETSsectorhasa 21%targetfrom2005to2020.AsrequiredunderEUlegislation,Greecehasadoptedandisimplementingnationalactionplansonrenewable
energyandenergyefficiencytomeet itsGHG2020goal.TheMinistryofEnvironment,
Energy and Climate Change is ideally positioned to increase momentum for more
effectivecooperationandcoordinationinimplementingtheseplans.
ThemaincontributiontoreducingenergyrelatedCO2emissions is likelytocome from
measureson renewableenergy, fuel switchingandenergyefficiency.Thegovernment
should focus on costeffectiveness and prioritise economic instruments when
incorporating thesemeasures into a coherentwhole. Building on themomentum for
green growth under the current government and capitalising on themany planned
policies andmeasures on renewable energy and energy efficiency, the government
couldconsideraimingatmoreambitiousGHGreductionsthanobligedbytheEU,asthiswouldmoreeasilyhelpGreecemeet themoreambitious targets thatwillbe required
beyond2020.
RECOMMENDATIONSThegovernmentofGreeceshould:
Implementtheactionplansonenergyefficiencyandrenewableenergytoreachthe
2020targets.
Considermore ambitious targetsfor limiting energyrelatedGHG emissions in the
nonETSsector.
Continuetomonitordevelopmenttowardsthe2012targets.
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4.ENERGYEFFICIENCY
Keydata
(2009)
Energyusepercapita:2.4toe(OECDaverage:4.4),3.5%from2000
Energyintensity:0.11toeper1000USD(OECDaverage:0.16),21.1%from2000
Totalfinalconsumption:transportsector41%,residential24%,industry21%,services
and agriculture 15% (OECD average: transport 33%, industry 31%, residential 20%,
other16%)
FINALCONSUMPTIONOFENERGY
Greecestotalfinalconsumptionofenergy(TFC)was20.6Mtoein2009,down3%from
2008but42%higherthan in1990.Transporttookthe largestshareofTFC,accounting
foraround41%ofthetotal.Theresidentialsectoraccounted for24%and industryfor
21%. The service sector consumed 10% of TFC and agriculture 5% in 2009. In
comparison,theIEAaveragesin2009were32%fortransport,20%forresidential,31%
forindustry,and16%forothersectors.
Figure9.Totalfinalconsumptionbysector,1973to2009
0
5
10
15
20
25
1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009
Mtoe
Other *
Industry
Residential
Transport
* Otherincludes commercial, public service, agricultural, fishing and other non-specified sectors.
Source:Energy Balances of OECD Countries, IEA/OECD Paris, 2010.
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Figure10.Totalfinalconsumptionbysectorandbysource,1973to2009
Industry
0
2
4
6
8
10
1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009
Mtoe
Oil
Natural gas
Coal
Biofuelsand waste
Electricity
Residential/commercialsector
0
2
4
6
8
10
1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009
MtoeOil
Natural gas
Biofuelsand waste
Solar
Electricity
Transport
0
2
4
6
8
10
1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009
MtoeOil
Source:Energy Balances of OECD Countries, IEA/OECD Paris, 2010.
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Since1990,TFC inGreecehas increased inallsectors(seeFigures9and10),drivenby
strongeconomicgrowthto2008.Reflectingtheeconomicdownturn,however,TFCfell
from2008to2009.ThesectoralbreakdownofTFChaschanged inamannertypicalto
developedeconomies.Industryhasseen itssharedeclinefromonethirdto lessthana
quarter,whiletheresidentialandservicesectorshaveincreasedtheirshareofthetotal.