Energy crisis, Emissions Trading System and Renewables

Nikos Mantzaris, Senior Policy Analyst at The Green Tank, gave an interview to the radio show of G. Psaltis – P. Chatzidimitriou on Real FM regarding Greece’s energy policy, the EU Emissions Trading System and renewables.

Commenting on Greece’s potential to cover its energy needs through renewables, Nikos Mantzaris stressed the country’s privileged potential compared to other EU member states, mainly in solar energy production.

Referring to the current circumstances and the decoupling from Russian gas, he mentioned the recent Green Tank’s report which shows that the shift to renewables is the most appropriate solution, compared to other options such as the return to lignite. Reiterating that lignite is not a sustainable solution neither in climate nor in economic terms, Nikos Mantzaris explained the function of the Emissions Trading System – a key energy policy tool in the EU – which puts a price on emissions, increasing the cost of lignite-based electricity production.

He also stressed that apart from the reduction in greenhouse gas emissions that has been achieved due to the operation of ETS across Europe and Greece in particular, it has also greatly benefited consumers. In particular, in the midst of the energy crisis, 75% of the public revenues from the ETS in Greece are used to support consumers by subsidising their electricity and gas bills. While until 2020, the Ministry of Environment and Energy used most of the revenues – over 80% – for the development of renewables, it now re-allocates large amounts (2 billion in 2021-2022) into such financial aid.

While this re-allocation covers urgent social needs, in effect it constitutes a fossil fuel subsidy, since the revenues are not used for structural changes that would reduce, for example, energy consumption through the installation of solar panels on building roofs or improve the energy efficiency of buildings. It is rather a short-term response to the crisis, an emergency solution.

Answering the question whether Greece can cover 100% of its energy needs from RES, Nikos Mantzaris replied that this is a matter of policy targets, given that the technological resources are already available. He mentioned the examples of Germany and Austria, which have set the target to cover their electricity demands 100% from RES by 2035 and 2030 respectively. Importantly, the RePowerEU, i.e. the EU’s plan to address the immediate energy crisis, provides that the immediate decoupling from Russian fossil gas will rely by 40% on renewables and the promotion of energy savings, already in 2022.

Focusing on the Greek case, he pointed out that the country has increased its target for RES acceleration to 70% by 2030 and that there are mature and low-cost technologies for electricity storage – with pump hydro energy storage being the main one. What is still missing is the institutional framework and the political will – at least to date – to support and promote energy storage projects.

Commenting on the RES siting, Nikos Mantzaris argued that there is no question of space availability but of proper siting, which in Greece is based on an outdated spatial plan. Similar delays occur also in the special environmental studies for the protection of Natura sites.

Finally, referring to the production and life span of wind turbines, he argued that most of their parts, like photovoltaics, can be recycled and that more recycling solutions are currently being rapidly developed throughout Europe.

The Green Tank’s recent report titled “Electricity production and independence from Russian gas in Greece” is available here.

The interview was broadcast live on May 3, 2022. It is available here (in Greek):