IEA urges Greece to reform its energy market and boost economy

Increasing competition and reducing the role of the state in Greece’s energy sector could make a significant contribution to the country’s economic recovery, according to a review of Greek energy policies published today by the International Energy Agency (IEA).

“Reforming Greece’s electricity and gas markets is a policy imperative that should add efficiency and dynamism to the Greek economy. This, in turn, should help generate self-sustained employment and prosperity for the country,” IEA Executive Director Maria van der Hoeven said as she presented the new study, Energy Policies of IEA Countries – Greece 2011.

The report says regulatory authorities must be given the necessary power and independence to reduce the market power of dominant firms. Commendably, Greece adopted a law to this end in August 2011. “The envisaged reforms are fundamentally sound and can help the economy grow. The government’s key focus should now be on implementing this law in full without delay,” Ms. Van der Hoeven stated.

The report also notes that Greece has a large potential for wind and solar energy and is rightly determined to fulfill this potential. The renewable energy sector also provides opportunities for new industrial development, in particular if linked with R&D activities. To facilitate renewable energy projects, the government has recently increased feed-in tariffs, shortened and simplified the licensing procedures and introduced stronger incentives for local acceptance. “These changes are very welcome, as they significantly improve investment conditions in the sector,” Ms. Van der Hoeven said. In addition, it will be crucial that framework conditions to investment remain stable.

Energy Policies of IEA Countries – Greece 2011 Review acknowledges that Greece has improved its oil and gas security in recent years and that the sources and import routes for these fuels are already well diversified. However, gas use is projected to increase, as the country moves to decarbonise its coal-dominated power sector. Experience from IEA member countries has shown that enhancing energy efficiency can help improve energy security in a cost-effective way. This, in turn, can help mitigate climate change and deliver economic benefits. “The IEA encourages Greece to further tap into this low-cost potential, for example in the building and transport sectors,” concluded Ms. Van der Hoeven.

Energy Policies of IEA Countries – Greece 2011 Review is available for free download.