Rethinking EU energy policy and energy efficiency: a Greek perspective


The Russian invasion of Ukraine in late February 2022 brought home what most of us knew already but had assigned secondary importance to: renewable energy properly deployed is not only good for the environment and human health, it is also good for people’s pockets and their freedom.

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Solar water heaters in apartment buildings in central Athens, Greece.

Read our dossier "Ending Russia's war in Ukraine: Are we using all economic and energy policy options?"


The current geopolitical juncture and the need to rethink energy policies

Skyrocketing gas and oil prices and the danger of reduced supplies because of the war and the imposition of sanctions from all sides may, after all, serve to expedite the transition to renewables. The potential shift from Russian fossil gas to US shale LNG is no viable solution, as shale gas has even worse environmental impact while it does not provide a favourable economic case. If the good scenario prevails, adjusted energy policies will be based on a systematic and rapid switch to renewable energy sources. Alternatively, the transition away from coal and nuclear may be delayed, in an effort to avoid expensive and high-risk imports and rely on readily available domestic energy sources.

For Greece, the end to the use of lignite for electricity production -- initially declared to take place as early as 2023 – is now being deferred in order to secure the energy supply and to avoid further burdening the public purse of this heavily indebted country. In this brief article, we focus on measures that could be put in place in the short- and medium-term to expedite the transition to renewable energy sources, thus using this difficult juncture as a pivot for positive developments rather than for a return to the bad old polluting ways. One should not forget, of course, that the greenest energy is that which does not need to be produced, in other words the energy saved because of energy efficiency and energy saving measures.

The introduction of drastic changes in energy policy requires that certain conditions be met, namely that the necessary political will exists on the part of the government to introduce such measures, ideally with the express or tacit support of the other major political forces; that the society at large accepts that such measures are necessary, appropriate and just; that the private sector is willing invest in  the necessary technological solutions, products and services and offer them at reasonable cost.

Immediate impact measures: Energy for specific needs without electrification

1. Expand the use of solar water heaters (SWHs) for hot water but also heating for households, public buildings and businesses

For a country with plenty of sunshine like Greece, this is an easy way to tap into solar energy using locally developed technology and equipment with high benefit for the local economy. Solar water heaters have been a success story in Greece for decades and have international recognition. Households, businesses, public-municipal enterprises, education and health buildings, etc. should be encouraged to introduce or expand the use of SWHs for their traditional hot water application. SWHs could also be used for central heating purposes, as solar heating can efficiently cover a significant part of a building’s heating needs – 25% to 80% depending on the building and the weather conditions.

Offering tax exemptions for the purchase of SWHs would encourage their broader use both for hot water and for heating purposes. The latter would also benefit from the development of standard packages for the integration of SWHs into central heating circuits. The 1,352,041 households and businesses (2011 data, waiting for the new 2021 census data) that have a SWH for hot water usage correspond to an installed capacity of 2.8 GWthermal. If they increase by 50% then an additional 1.4 GWthermal would not need to be produced from locally burnt fossil fuel or to be taken from the electricity grid. A further expansion in businesses and public buildings, as well as SWH use for heating purposes, could double or more this additional thermal capacity.

2. Encourage households to install geothermal pumps or heat pumps (HPs)

Heat pumps are the most economical way of heating and cooling compared to other solutions. The savings achieved compared to a standard oil boiler are of the order of 70%. Unfortunately, as of now citizens and politicians are unaware of their energy savings potential.

Today, 3,464,092 Greek households are heated by electricity, oil and natural gas. If 1/30 of them, i.e. 115,470 households, adopt domestic geothermal and heat pumps, then with an average of 5-10 kw per geothermal application or heat pump, the installed capacity would be 550-1.100 MW. The government should immediately provide systematic information and incentives for HP installation in order to accelerate their diffusion. The cost per purchase and installation of a HP for an average household is approximately €10,000. A subsidy should be offered to reduce the payback period from 7-10 years to 3 years. Already, an initiative by the Public Power Corporation (DEI) offers incentives in this direction.

3. District heating policies in cities with hot springs

Almost all of the prefectures of Greece have thermal springs and several of them have organized thermal baths. In total, more than 750 thermal springs have been counted, of which approximately 150-180 are utilized and visited. There is a precedent with district heating in Greece, in the towns of Ptolemaida and Kozani, although in their case the hot water comes from the thermal power plants operating in their vicinity. The technology and know-how is the same, though, and can be easily extended to a number of other towns that are close to hot springs, about 50 such towns, as well as to greenhouse crops and other agricultural activities.

A special "save-autonomy" program is required to encourage municipalities to adopt the use of district heating. For example, in Ptolemaida alone, 42,651 tons of CO2 per year are avoided and 25,000 tons of oil equivalent per year are saved with a financial benefit of over € 12 million / year. If the 50 towns install district heating with an average annual savings of 15,000 tons of oil equivalent, the result is an impressive savings of 750,000 tons of oil equivalent comes with a financial benefit of € 360 million.

Additionally, it is possible to generate electricity from high-enthalpy heat sources like hot springs. In combination with other local energy sources, this could allow many islands and villages with relatively small populations to become independent of fossil fuels and of the central grid.

4. Biogas and other local biofuel use

Gas produced by landfills can be more systematically used. Also, throughout the country there are unused branches from fruit tree pruning (e.g. olives, grapevines), municipal pruning, biomass from fire-fighting road cleaning, forest clearing, agricultural waste, etc. which today is dumped or burnt in the fields. All this biomass can be used by social economy cooperatives as biofuel in the form of pellets and briquettes, taking advantage of their thermal capacity. It is estimated that they could cover at least a third to even half of the local energy heating needs of schools and public services of a municipality. Burner conversions are needed.

5. Better insulation for less energy usage

A further expansion is needed of the so called "Eksikonomo" home energy savings programme of the Greek government, to cover more households and faster, with fewer bureaucratic delays. Moreover, those wishing to fix the energy deficiency of their home outside the programme framework, e.g. through double-glazing, insulation or other similar intervention, should be able to speedily obtain approval for the works (e.g. through energy inspectors) and benefit from a tax exemption for related purchases.

Expand electricity production from renewable sources

It is known from a recent survey that 37% of Greek citizens would clearly like to install photovoltaics in their house or office (roof, facade, yard). Another 35% would like to do so, but are reluctant because there is a lot of bureaucracy and little benefit. That is, 72% would install photovoltaics on roofs, canopies and cottages if there were the right incentives in place.

According to the EU Joint Research Center, rooftop PVs can cover 32% of electricity consumption in Greece. It was estimated that they have the capacity to produce 17,090 GWh per year. It is obvious that subsidizing the installation of photovoltaics will expedite market penetration and will bring significant benefits to the country's energy mix. This can be implemented through a tax exemption for the purchase of photovoltaics, accompanied by a simplified process of net metering and minimization of the acquisition cost of the instruments for measuring the supply and consumption of electricity.

Moreover, integrated green energy solutions can and should be implemented to promote the energy autonomy of islands and amenable mainland areas. This can be done with small and medium applications of hybrid hydroelectric plants, small waterfall turbines without dams, sea wave energy, utilization of pruning for biofuels- pellets-briquettes, domestic geothermal installations for heating-cooling, district heating, etc. Connections to the grid and local cable interconnections can further contribute to the security of power supply.

Not to forget: The transition has to be just

The introduction of the above measures cannot be socially blind. Special priority for subsidies or greater incentives should be given to vulnerable households affected by energy poverty. In Greece 80% of households spend more than 10% of their income as annual energy cost for electricity and heating. Let us also not forget the negative impact of restrictive measures due to COVID-19: 75% of citizens now spend more time at home, 60% increased the use of electrical appliances, 40% increased the use of heating by between 1 and 5 hours a day and 50% saw their income decline. There is a need to improve the energy efficiency of buildings and change energy-related behaviour. Municipalities, in cooperation with energy inspectors, must prepare and propose energy saving actions for these households.

What should not be done, or should be stopped

If the above are things that can and should be done rather quickly, there are things that should not be done or should be stopped, such as:

  1. Stop the expansion of gas networks for heating of household consumers and businesses: Investing further in infrastructure that will soon become obsolete because of the zero-carbon targets of the EU, and prolonging reliance on imported fuel with high price volatility and high geostrategic dependency cost should be clearly a no-no.
  2. Stop large energy companies from reaping energy community benefits: Remove from the register of energy communities those that have been created by large energy companies in order to reap the benefits. Today, these "so-called" energy communities constitute the vast majority of energy communities in Greece.
  3. Reconsider the installation of large wind farms: Energy autonomy achieved with previously presented measures would allow the reconsideration with a view to minimizing or even prohibiting the installation of large wind farms on islands, islets and in mountainous and remote areas aiming to export electricity to large urban centers outside the locations of installation. Coupled with the prevention of opening new roads this would allow the protection and promotion of mountain massifs and biodiversity.

The way forward

The introduction and implementation of the measures proposed above is entirely feasible and should  be pursued with urgency. This would result not only in significantly reduced dependence on imported fossil fuels but would also put back on track the phasing out of lignite and would stall resurfacing plans for gas and oil extraction in Greece itself. Let’s make the best out of a dire geopolitical situation by using it to accelerate the transition to carbon neutrality.