The war in Ukraine has resulted in a rapid and fundamental reshaping of European energy policy, which will have lasting consequences. Within the next few months, the energy map of Europe will be completely redrawn, and will change the way Europeans source and consume their energy for decades to come.
For Greece, already positioned as a regional energy hub, this shift may catapult energy into one of the country’s strategic pillars of development, rivaling traditional industries like tourism or shipping. From energy importer, Greece could become an energy exporter in the foreseeable future.
As it is, in the current scramble for energy security, the last few months have already been marked by several milestones in Greece: a program to step up oil and gas exploration announced in April, the inauguration of a new liquefied natural gas facility in May, and the expected completion of a new natural gas pipeline to Bulgaria in June. Expect to see two or three other major projects announced between now and the end of the year.
But more interesting developments are around the corner. Even before the Ukraine war, spurred by concerns about climate change, the world was already undergoing an energy revolution. The move from power produced by hydrocarbons to sweeping adoption of electricity generated from renewables promises to be one of the most profound industrial transformations in more than a century.
Not since the invention of electricity or the shift from coal to oil in the early 20th century, has the world economy embarked on such a radical transformation. And Greece is in a pivotal position to take a leading role in that transformation.
For one thing, Greece may be hydrocarbon poor (unless, of course, viable reserves are found in the next few months), but it is rich in renewable energy potential. Of the world’s leading renewable energy technologies – wind, geothermal, hydro and solar – Greece has potential or existing capacity in each. And the country is particularly well-positioned in the race for the two fastest growing renewable sources: wind and solar.
With more than 250 days of sunshine per year, Greece – along with its neighbors in the Mediterranean – ranks as one of the sunniest countries in Europe. Earlier this year, Greece inaugurated a €130 million photovoltaic facility, the largest solar power park in the Eastern Mediterranean and one of the largest in Europe. Likewise, the windy seas of the Aegean and Ionian represent an inexhaustible source of renewable energy, one which the Greek government hopes to exploit with new regulations for the development of offshore wind parks.
Greece has already seen billions of euros invested in renewable energy projects over the past several years, particularly in new wind and solar facilities, as well as in supporting infrastructure, like the extension of the national power grid to Crete and the Aegean Islands. Later this year, the Greek government will introduce a new regulatory framework for the development of offshore windfarms, something that has already drawn foreign investor interest. And according to a recent OECD report, FDI currently accounts for 30% of global new investments in renewable energy.
Already more than a third of Greek energy consumption currently comes from renewable energy sources. And under the National Climate and Energy Plan, Greece aims to almost double installed capacity for renewable energy to 18.9 gigawatts, up from 11 GW currently. In total, the Plan foresees more than €40 billion in investment in the energy sector this decade.
But it is equally important that Greece, with its geostrategic location, will serve as a hub for channeling energy from resource rich producers in the region to a power hungry Europe. Two landmark projects – high voltage power cables from the Middle East and North Africa – are already paving the way for that future.
Earlier this year, the European Commission backed an ambitious €2.5 billion project to connect Greece with the power grids of Cyprus and Israel, while Greece has signed a landmark agreement with Egypt to do the same. Initially, those power lines will carry electricity generated from hydrocarbons, namely, the natural gas reserves of the Eastern Mediterranean, to European consumers. But in the future, the same undersea grid could equally carry RES-sourced electricity, produced from the sunbaked lands of the Middle East and North Africa.
Greece is poised to play a key role in this changing energy landscape. What this means for investors will be one of the issues discussed at the InvestGR Forum: A New Greece Emerges, to be held in Athens on July 5. The energy revolution has already started, and the question now is how to get onboard.
Andreas Yannopoulos is the CEO of Public Affairs and Networks and Founder of the InvestGR Forum.