How fossil gas use drives up costs in Greece’s wholesale electricity market
Despite the positive trade balance generated by electricity exports, additional electricity generation from fossil gas to cover these exports increases costs for Greek consumers, as well as the carbon footprint of power generation. According to a new analysis by The Green Tank, additional electricity generation from fossil gas for exports added €914.4 million to Greece’s domestic wholesale electricity market between January 2024 and July 2026 and was responsible for an additional 2.6 million tonnes of CO₂ emissions.
Electricity exports have a clearly positive impact on Greece’s electricity trade balance. However, when they are powered by the combustion of additional volumes of fossil gas, they push up prices in the domestic wholesale electricity market (Day-Ahead Market – DAM). Since DAM prices are strongly correlated with retail electricity prices, this additional gas-fired generation for exports ultimately feeds through to electricity bills paid by consumers in Greece.
The Green Tank’s new analysis [in Greek], titled “Electricity exports from fossil gas: the cost to the Greek market and the climate”, quantitatively examines the impact of this additional use of fossil gas for electricity exports on Greece’s wholesale electricity market and on emissions from the power sector.
The analysis is based on a machine-learning model trained on actual DAM price data and 14 other independent variables. As Greece became a net electricity exporter in 2024, the model was used to examine two hypothetical scenarios for the period from January 2024 to July 2026 (31 months). In Scenario 1, fossil gas use was assumed to be limited to meeting domestic demand and downward reserve requirements, resulting in lower electricity exports. In Scenario 2, exports were assumed to remain at their actual levels, but the electricity generated from gas for export was assumed to be replaced by an equal amount of additional generation from clean sources.
Key findings
- Fossil gas generation could have been 6.56 TWh, or 11.4% lower than actual levels, if gas had been used only to meet domestic demand. The average share of gas in Greece’s domestic power generation mix during hours when the country was a net exporter reached 35.8%.
- This hypothetical reduction in gas-fired generation would have cut emissions by an estimated 2.6 million tonnes of CO₂.
- Additional gas use for electricity exports increased the DAM price by an average of €6.23/MWh, adding €914.4 million to Greece’s wholesale electricity market. This amount exceeded the cumulative benefit from the positive electricity trade balance, which stood at €821.2 million through June 2026, the latest month for which complete data from the Hellenic Statistical Authority (ELSTAT) are available.
- If electricity exports had instead been covered by an equivalent amount of additional renewable generation:
- the DAM price would have fallen even further*, by an average of €7.24/MWh;
- Greece’s domestic wholesale electricity market would have benefited by €1.065 billion;
- the electricity trade balance would have generated cumulative benefits of €605.4 million through June 2026.
“The strategy of continuously expanding fossil gas generation capacity with an export-oriented focus, in the name of strengthening Greece’s role in regional energy security in Southeast Europe, is not sustainable — either economically or environmentally. By contrast, further development of renewables and energy storage can keep the trade balance positive and, most importantly, lower the DAM price, benefiting the national economy and consumers,” said Nikos Mantzaris, Lead Policy Analyst at The Green Tank.
Notes to editors
- Read the full analysis [in Greek], “Electricity exports from fossil gas: the cost to the Greek market and the climate”, here.
- Learn more about trends in Greece’s power generation through The Green Tank’s monthly analyses, here.
* Compared with the scenario in which electricity exports generated from fossil gas are avoided, where the average reduction in the DAM price would be €6.23/MWh.
