It is clear that the period between 2020-2030 will see increased development in Greece, with the energy sector contributing decisively to this process.
The energy industry in Greece has significant growth potential in terms of its marketability and efficiency. Energy security supply and the diversification of the supply sources and routes remain the priorities and significant foreign policy tools.
The central goal of the Greek Government is to further develop the natural gas network and to enhance the natural gas infrastructure and installations in the country.
The expansion of the already existing natural gas network within Greece, namely in Attica, Thessaly, and Thessaloniki is scheduled to be completed by 2021, At the same time, the construction of natural gas networks in new regions is planned in Central Greece, Central Macedonia, and the Eastern Macedonia- Thrace regions. In order to cover the natural gas supply to remote areas of the mainland, the Ministry of Energy and Environment is organising the development of CNG infrastructure (Compressed Natural Gas).
The use of natural gas for electricity production, which amounts to 65% in the Greek energy mix, depends on how well the domestic electricity market functions and on future investments in the natural gas sector. Natural gas consumption is likely to depend on electricity demand, the further expansion of renewables, and on the energy balance through the regional interconnections.
Expanding the use of natural gas is being supported by a series of legal tools, including the separation of the supply and the distribution companies (unbundling), as well as the complete liberalisation of the retail market, which will lead to a more competitive environment and subsequently lower prices for the Greek energy consumer.
A very important element in the realisation of the aforementioned goals is the planning and execution of large-scale infrastructure projects on both the national and regional scale, with an emphasis on the expansion and interconnection of natural gas networks between Greece and the countries of South Eastern Europe and the Eastern Mediterranean.
These projects include, the TAP pipeline, which is currently under construction, to be completed in 2019; the IGB interconnector (also to be completed in 2019); FSRU in Alexandroupolis (in the planning stages); East Med gas pipeline (also still being planned); Upgrading of the Revythoussa LNG terminal; and the realisation of a modern gas storage unit that will cover the medium term needs of the Greek market in natural gas during periods of high prices and create the framework for the establishment of a natural gas hub.
All the more relevant are the projects related to electricity, particularly the expansion and modernisation of the domestic and regional electricity networks in Greece and Bulgaria through the Nea Santa- Maritsa line and the Euro- Asia Interconnector to link Israel, Cyprus, and Greece.
Critical to the Greek energy landscape is also the issue of the future electricity interconnection of the country’s islands with mainland Greece. The goal is to have all Greek islands interconnected with electricity by 2030. In order to achieve this goal is the completion of the interconnection between the Cyclades and the Attica region. Phase 1 of the project is already completed, while the remainder is due to be completed by 2022. Other future projects include the interconnection of Crete with the Peloponnese by 2021 and Crete with Attica by 2024, as well as the installation of renewables in the non-interconnected islands.
Under the existing programme of EDEY (the Hellenic Hydrocarbons Agency), new offshore fields are bound to be auctioned in the coming years in the Ionian Sea and as well as in Crete, with the goal of boosting oil and gas extraction and production.
The new energy strategy, as contained in the wider development programme of the Greek Government, can be seen as an ambitious, though it reflects the crucial geography of Greece, as well as the immense potential yet to be exploited.
For the aforementioned goals to be realised, Foreign Direct Investment is absolutely necessary as is the completion of an economic evaluation programme. The main issue is the lack of a stable and long lasting inclusive legal and tax framework that will attract global investors and keep them in Greece, and at the same time secure their economic interests.
Hydrocarbons are regulated under certain Greek laws that oversee the legal type of lease agreement. with some elements of concession or production sharing, according to each field. The legal community then decides if the legal framework needs to be updated and an introduction of a different type of contract needs to be offered to foreign energy companies that are interested in participating in field exploration and development in Greece.
Though this sort of action has yet to occur, the framing of a new contract would take the form of a Production Sharing Agreement and give strong tax incentives to foreign energy companies.
The opening and liberalisation of the energy market with the full privatisation of natural gas and electricity companies is also a question that hasn’t been answered although the relevant process for privatising state energy holdings DEPA and DESFA started this year after years of several false starts.
Multiple pipeline interconnections are already under construction, as well as other projects that are currently under discussion. The key issue, however, is to have an energy hub in Greece with a natural gas price that is shaped by the global market. For a major pipeline project like the East Med to become a reality, the price of natural gas has to match what is available on the markets for companies to the green light for construction.