ECONOMY

Wind energy: Bleak prospects for Greece despite favorable conditions and examples of spectacular success worldwide; bureaucrats to blame

The last year or so has seen some spectacular progress in wind power applications worldwide. According to the latest figures released recently by the European Wind Power Association (EWEA) and its American counterpart AWEA, some 7,000 megawatts (MW) of new installed wind power capacity was added during 2002, increasing generating capacity by 28 percent last year, bringing the total world wind power capacity to 31,000 MW, enough to power 7.5 million American homes or 16 million average European homes. This is an all-time high in terms of installed wind electric capacity and clearly shows that wind energy for power generation has matured as a technology that is compatible with mainstream thermal power applications. By comparison, Greece’s total interconnected electricity network is just above 11,000 MW. (A modern nuclear power station accounts on average for 1,000 MW.) The global scene In terms of investment, the new wind capacity installed globally last year accounted for 6.8 billion euros, which is indicative of the size and growth potential of the market. «This is just the tip of the iceberg; the global wind power market could be worth 25 billion euros a year by 2010. Wind power currently meets only 2 percent of total European electricity demand. That share will increase rapidly as the technology continues to develop, costs continue to fall, and the need to secure and diversify energy supplies becomes increasingly evident to decision makers,» says Corin Millais, EWEA chief executive. «Wind energy grew by 10 percent in the United States in 2002, a good performance given the poor state of the US energy market and the stop-and-go-and-stop-again policy signals directed at our industry,» says Randall Swisher, AWEA executive director. «With steady supportive policies, wind power could grow at a sustained pace closer to that of Europe, and provide well over 6 percent of US electricity by 2020.» Global wind power has quadrupled over the past five years, growing from 7,600 MW at the end of 1997 to more than 31,000 MW at the end of 2002, an increase of over 23,000 MW. Wind is the world’s fastest growing energy resource, with installed generating capacity increasing by an average of 32 percent annually for the last five years. Ninety-three percent of the additional wind capacity installed in 2002 was in Europe and the United States, and worldwide, 90 percent of capacity is found in those two regions. Analysis by EWEA shows that there are no technical, economic, or resource barriers to wind power supplying 12 percent of the world’s electricity by 2020. Today, wind power supplies approximately 0.4 percent of world electricity demand. With a stronger political commitment worldwide, the wind energy industry could install an estimated 230,000 MW by 2010, and 1.2 million MW by 2020. Over three-quarters of the world’s wind power is currently generated in Europe, and the region again fueled the bulk of last year’s growth, an achievement which is largely driven by the EU’s commitment to developing renewable sources of energy. A total of 5,871 MW, worth 5.8 billion euros, was installed in EU countries alone in 2002. Total wind capacity in the region grew 33 percent to 23,056 MW. The countries with the greatest wind capacity are mostly European, with Germany – by far the largest at just over 12,000 MW – followed by Spain, the United States, Denmark and India. Situation in Greece Against this phenomenal worldwide progress in wind power applications, Greece appears to be lagging seriously behind, in spite of consistent efforts over the years to develop this abundant energy resource. The story of modern wind energy development in Greece goes back to the late 1970s and early ’80s, a period during which the Public Power Corporation (PPC), the country’s electricity monopoly utility, started installing pilot windfarms and conducting extensive wind regime surveys all over Greece in order to identify the country’s wind power potential. It must be noted that Greece enjoys Europe’s largest wind potential per se, with hundreds, if not thousands, of historical wind paths where steady and strong wind flows are in evidence throughout the year. Up until recently, and certainly in the 1930s, Greece still had in operation more than 3,000 stone-built sail windmills, both inland and on the islands, which were used for wheat grinding. As late as the early ’60s, there were literally thousands (one estimate talks of a minimum of 30,000 units), of metal-type windmills, of both Greek and US origin, used for water pumping. Until 1994, wind applications in Greece were limited to a handful of windfarms developed and operated by PPC and a few individual wind generators installed on some islands to provide supplementary electricity, mainly to small industries and hotel complexes. Then the government, against stiff opposition from PPC, introduced legislation, in line with EU practice, enabling private companies to set up and operate windfarms and obliging PPC to purchase at fixed prices the generated electricity output. This led to the opening up of the market and in the next six years, until 2000, Greece saw some impressive developments in small to medium-sized windfarm projects. Some 200 MW of wind capacity was installed, with windfarms appearing mainly on the island of Crete and in southern Evia. However, the relatively fast pace of windfarm development came to a complete stop last year as a combination of negative factors came to the fore, thus bringing the whole market to a complete standstill. Although the negative factors that have plagued the Greek wind market for some time have not vanished, the market started moving early this year with significant new capacity being added on an almost monthly basis. A few weeks ago, Greece’s wind power capacity was given a tremendous boost with the commissioning of four new windfarms in Thrace, in the northeast, with a cumulative wind capacity of 55 MW. This new addition now brings the total installed wind capacity in Greece to almost 330 MW. These four windfarms, located on mountain ridges at an altitude of almost 1000m (3,300 feet) in the prefectures of Rhodope and Evros, some 60km (37.26 miles) north of Alexandroupolis, were officially inaugurated on April 12 by Development Minister Akis Tsochadzopoulos. This unique windfarm consists of 59 state-of-the-art wind generators, mostly built by Danish firm NEG-Micon, each with a capacity of approximately 900 KW and with a wing diameter of 52m (171 feet). The total investment amounted to 62 million euros and covered the construction of the wind generators, access roadworks, extensive underground cabling, several electrical substations and high-voltage cable connections to the main PPC grid some 25km (15.5 miles) away. The windfarms were erected in the record time of 10 months and were developed by a consortium of two Greek companies, consisting of Damco Energy SA and International Construction SA. The windfarms are owned and operated by the consortium which is currently developing a further 17.5 MW of wind capacity in the same location. The generated electricity is sold entirely to PPC at prices set by the Ministry of Development according to law 2244/94, which outlines the conditions for setting up and operating a windfarm in Greece. (PPC buys wind-generated electricity at about 6.2 cents per kWh on the mainland and at 7.4 cents per kWh on the islands.) In addition to the Damco windfarms, a few more are under way on Evia, Crete and in Thrace, where large Greek construction companies, including Terna SA and Rokas SA, are now constructing windfarms whose total capacity is likely to exceed 150 MW. Gradually, Greece is winning the lost ground in wind power but it remains unclear whether a satisfactory pace, in line with developments in other EU countries, can be set. Disincentives Greece’s Regulatory Energy Authority (RAE), which now bears the entire responsibility for licensing new wind installations, has so far issued 220 licenses corresponding to approximately 1,800 MW of wind capacity. But very few of these new installations are likely to be built over the next few years due to the problems created for most investors by Greek bureaucracy. As was recently pointed out in Kathimerini (see English Edition, April 1), several serious non-technical obstacles hinder progress in this field and dissuade potential investors from Greece and abroad. One of the most serious is government red tape and the endless number of permits, certificates and heavily stamped paperwork that must be obtained before even thinking about construction. One investor recently counted 41 signatures on 39 different documents. One of the latter-day Greek wonders is how a relatively simple and straightforward licensing process ballooned out of all proportion due to the habitual insecurity and evasion of responsibility permeating all tiers of present-day Greek society – not to mention public sector graft, where it is customary for civil servants to earn a double salary by doing favors, great and small, for whoever crosses their path. As though red tape were not enough, wind power investors have to face a mostly uncooperative PPC, which steadfastly refuses to extend its grid to suitable wind locations. In several instances, PPC has demanded that investors finance the construction of substations and cables by themselves. These then become the property of the electricity utility. To add insult to injury, lately there has been a trend for several local authorities near windfarm sites to demand, successfully in most cases, the blocking of windfarm construction on environmental grounds. Wind energy experts say Greece is capable of developing 3,000 to 4,000 MW of wind capacity and thus meet some 25 percent to 35 percent of its electricity needs, winning substantial environmental benefits. Despite the government’s clear renewable energy policy, several negative factors, stemming from personal or ill-conceived group interests, prevent the large-scale development of wind energy, thus depriving Greece of a native and limitless energy resource. (1) Costis Stambolis is director of Delos Communications.