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The Energy Future of Greece

09 Mar 2023

WRITTEN BY Kostas Andriosopoulos
Professor in Finance & Energy Economics and Executive Director of the Research Centre for Energy Transition & Sustainability Center, Audencia Business School

Αcademic Director Executive Program in Energy Business at Alba Graduate Business School

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Within the last few decades, 2022 was the first year that developments in the energy sector were so strongly determined by geopolitical decisions. The EU’s high energy dependence on Russia and the slow pace of renewable energy development, stress the need for immediate political decisions and investments.


The 1970s crisis was based on oil – embargo, shortages and sky-high prices, whereas the 2022 crisis has permeated the whole spectrum of the energy sector bringing forward social and humanitarian issues. Εlectricity and gas prices shot up to levels of €700/MWh and €300/MWh respectively, demonstrating the problem of the absolute dependence of gas and electricity pricing on the TTF contract, which does not reflect neither the real cost of gas imports via pipelines, nor that of LNG in Europe, thus causing great pressure on governments for necessary fiscal reforms to deal with the respective inflationary pressures.


The EU needs to develop a new energy market architecture and move from ad hoc crisis response measures to more permanent plans and decisions, such as a European gas market and a new transaction-based benchmark for liquefied natural gas (LNG) contracts.


Additionally, different opinions and conflicted interests among the 27 EU Member States make reaching a consensus a time-consuming procedure. Furthermore, the explosive growth in energy demand forecasted for China in 2023 is expected to affect not only the energy prices, but also the security of the necessary energy supplies in a fully competitive geopolitical environment.


The roadmap to redesign the EU energy architecture provides Greece with the short-term potential to be transformed into an energy hub of the region and a strategic gateway for the entry of energy resources into Southeastern Europe. Leveraging its geographical position and natural advantages in terms of wind and solar conditions, Greece is already taking steps towards this direction.


Greece has already managed to secure its natural gas needs through LNG and has focused its attention on new terminals and pipeline investments. In addition, considering the recent developments in the south-western region of Crete, it is evident that the efforts in hydrocarbon exploration and production, are renewed.


In terms of RES development, the new NECP foresees 9 GW more RES in 2030 compared to the 2019 plan, reaching a total of 28GW. However, the development of adequate electricity grids and energy storage systems is deemed necessary for achieving the imposed targets.


Through these actions, Greece will be able by 2030 to enhance its energy security against future threats and supply disruptions. Undoubtedly, the country’s energy strategy gives the impetus needed for investment and high-added value to the national economy with the creation of 38,000 new jobs.


In an energy environment that is constantly changing, it is very important to have a long-term planning, moving towards the rules of energy security - economic viability - sustainability with the development of networks playing a key role, so that the new structural energy transformation becomes a reality.

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