The July 12 blackout that affected southern mainland Greece was a blow to the credibility of the country’s power system at a critical moment, when the international community is skeptical of Greece’s ability to organize an effective Olympic Games. Only 15 days earlier, Development Minister Dimitris Sioufas assured Prime Minister Costas Karamanlis that there was no problem with the adequate provision of electricity during the summer, backing his view with details of the measures taken to make certain there would be no problems, including an emergency plan designed by the Public Power Corporation (PPC). The PPC management had given similar reassurances. The events of July 12 showed that the minister’s, and PPC’s, reassurances were false. However, it is not they who were to blame for the event, but DESMIE, the independent authority in charge of managing electricity flows through Greece’s power grid. DESMIE was created in 1999 as part of the partial deregulation of the electricity market and its role was to take over from PPC as the system’s manager. It decides, on the basis of demand estimates, which power-producing units will enter the system and ensures the uninterrupted flow of electricity. According to information from the ongoing internal investigation on the cause of the power cut, the event was caused by a series of mistakes and omissions by DESMIE. First of all, the automatic transformers at the high-tension nodes had not been set to match the demand level of that particularly hot day. Second, DESMIE failed to act decisively by cutting local electricity transfers and tried instead to shirk responsibility by asking Deputy Development Minister Giorgos Salagoudis to approve any course of action. However, even if DESMIE had acted promptly, there would still be some rolling power cuts in small areas as it struggled to bring the power system into equilibrium and compensate for the big increase in demand by consumers who had turned on their air-conditioning systems. The internal investigation is expected to finish next week. One finding it is certain to repeat is the imbalance in the national power grid, with most of the production taking place in the north and most of consumption in the south, and the fact that previous development ministers did little to address the problem, despite knowing about it. The North-South issue This imbalance is the main feature of Greece’s power grid. A great deal of production is concentrated in the north, mainly in Western Macedonia, while the main center of consumption – the Athens area with its 4-million-plus residents in a country of 11 million – is in the south. Former Socialist Development Minister Nikos Christodoulakis had ordered DESMIE and the semi-independent Energy Regulatory Authority (RAE) to draw up a plan to insure the uninterrupted supply of power during the Athens Olympics. The report given to the minister pointed out the regional imbalance of the system and recommended building new power production units «near the major consumption centers.» It estimated the extra needs at 600 megawatts. However, both Christodoulakis and his successor, Akis Tsochadzopoulos, left the need to be filled by the private sector. The demand by state-controlled PPC to build a 400MW unit at Lavrion, southeast of Athens, was rejected by the regulatory authority and only revived in the summer of 2003 when it became obvious that no private investment was yet forthcoming. If the Lavrion unit had been built, the July 12 blackout would have been avoided, experts now agree.