ENERGY DEMOCRACY IN GREECE - SYRIZA's Program and the Transition to Renewable Power

ENERGY DEMOCRACY IN GREECE - SYRIZA's Program and the Transition to Renewable Power
Working Paper No. 3

SYRIZA’s Program and the Transition to Renewable Power
Table of Contents

     Energy Democracy in Greece
     SYRIZA’s Program and the Transition to Renewable Power...................................................1

     By Sean Sweeney
     		        SYRIZA’s Program and Energy Democracy..................................................................1
     		        Another Energy Is Possible ..........................................................................................2
       Greece         and the EU’s Neoliberal Energy Policy.........................................................................3
     		                Fossil Fuel Dependence and Greece’s Changing Climate..........................................3
     		                The EU’s Neoliberal Approach to Energy.....................................................................4
     		                Electricity Privatization in Greece................................................................................5
     		                Green Colonization........................................................................................................6
     		                EU policy at an Impasse ................................................................................................7
     		                Resisting “Resource Nationalism”.................................................................................7
       Developing and Implementing Energy Democracy...................................................................8
     		       Short- and long-term goals............................................................................................8
     		       1. Re-Establish Control over Energy.............................................................................9
     		       2. Develop and Implement a National Energy Transition Plan.................................10
     		       3. Promote Energy Independence..............................................................................11
     		       4. Decentralize Energy Production.............................................................................13
     		       The International Experience .....................................................................................14
     		       Energy Cooperatives ...................................................................................................17
     		       A Reformed and Restructured PPC...........................................................................18
     		       Centralized or Decentralized Renewables?...............................................................18
     		       Municipalization in Germany......................................................................................18
     		       Job Creation in Renewables........................................................................................20
     		       How to Finance the Transition?..................................................................................21

Published by Trade Unions for Energy Democracy (TUED), in cooperation with the Rosa Luxemburg
Stiftung—New York Office and the Global Labor Institute at Cornell University, January 2015

With support from the German Federal Ministry for Economic Cooperation and Development (BMZ).

Disclaimer: This paper represents the views of its author, Sean Sweeney. The opinions expressed here
may or may not be consistent with the policies and positions of unions participating in TUED. The
paper is offered for discussion and debate.

Trade Unions for Energy Democracy (TUED) is a global, multi-sector initiative to advance democratic
direction and control of energy in a way that promotes solutions to the climate crisis, energy poverty, the
degradation of both land and people, and responds to the attacks on workers’ rights and protections.

Energy Democracy in Greece
SYRIZA’s Program and the Transition to Renewable Power

By Sean Sweeney

Since the financial crisis of 2008 and the sub-         er and perhaps an exemplar for a new course?
sequent “Great Recession,” governments have             Can a SYRIZA or SYRIZA-led government break
mostly scaled back or deemphasized their cli-           new ground in terms of fusing a viable left-
mate protection and “green” commitments.1               green project in the face of crushing odds?
Lack of public funds and concerns about
growth, competitiveness, and unemployment
are frequently cited as explanations for this ap-       SYRIZA’s Program and Energy Demo-
parent loss of both ambition and urgency. The           cracy
“green growth” narrative that colored various
countercyclical “stimulus” spending packages            The paper is divided into two parts. Part One
from 2009-10 has been largely abandoned.                attempts to take stock of the present impasse
This has in turn slowed the deployment of re-           of the neoliberal approach to energy and cli-
newable energy and thrown the UN climate                mate protection being pushed by the Europe-
negotiations into paralysis. During the recent          an Union (EU). Part Two pays attention to pos-
talks in Lima (COP 20) it became clear that a           sible programmatic options for SYRIZA and the
global climate agreement seems very unlikely            Greek Left, offering ideas for a plan of action
to emerge from the “deadline COP” in Paris in           on energy and climate change that could pro-
late 2015.                                              vide the basis for a new approach anchored by
                                                        the concept energy democracy.
The goal of this paper is to show how economic
crisis and austerity, which today serves as the         Energy democracy is entirely consistent with
perfect cover for inaction and reversals on cli-        SYRIZA’s existing programmatic commitments,
mate protection and ecological sustainability,          in several important respects. The party aims
could actually spur a radical departure from            to work toward “the development of a new
the slow and stuttering progress of the recent          paradigm of social, environmental and eco-
past. 2 The paper looks at the opportunities for        nomic development.”4 SYRIZA’s program also
such a departure in Greece, a country mired in          acknowledges the challenge of climate change,
debt, high unemployment, and on the receiv-             and the need to pivot away from extractivist
ing end of a full-blown austerity program. But          energy policies that serve to make the problem
Greece is also a country where the radical Left         of climate change and ecological degradation
could soon be in power led by a party, SYRIZA,          worse than it already is. Importantly, it also
that’s committed to nothing less than the “eco-         commits to a “planned transition to renewable
logical transformation of the economy.” 3               energy.” SYRIZA has also pledged to “set the
                                                        banking system under public ownership and
But how can such a transformation be carried            control” and to “cancel the planned privatiza-
out? How can a country like Greece—facing               tions and the looting of the public wealth, re-
enormous challenges—be an ecological lead-              store public control on—but at the same time

                                                                         ENERGY DEMOCRACY IN GREECE

reconstruct fully—strategically important en-            of Greece, which has ample supplies of coal
terprises that have been privatized or are un-           in the form of lignite, the task is to move in a
der privatization” and to build a public sector          carefully planned and democratic way to a re-
of a “new type.”5                                        newables-based system over a period of two
                                                         to three decades.
These commitments have set the stage for en-
ergy democracy in Greece, and with it the need           Not everyone on the Left, in Greece or inter-
to chart a clear path, which can take Greece to-         nationally, realizes that renewable energy
wards a renewables-based energy economy                  technologies—particularly solar PV—have the
that is under the direction and control of the           potential to completely transform the global
Greek people, one that is designed in a way              energy system by 2030 and also change the
that puts human, societal, and environmental             political and class relations around energy
needs before private profit. Such an approach            production and consumption. But if left to the
will begin to address seriously Greece’s depen-          corporations and their political allies, such a
dence on fossil fuels and its disproportionately         transformation is not going to happen in the
large contribution to air pollution and global           time frame required by climate science as es-
warming and to create more resilient commu-              tablished by the Intergovernmental Panel on
nities.                                                  Climate Change (IPCC). It has stated that an
                                                         85% reduction in greenhouse gases (GHGs)
                                                         is necessary by 2050 (below year 2000 levels)
Another Energy Is Possible                               to stay below 2-2.4 degrees Celsius of global
The approach to energy and climate suggest-
ed here does two things: first, it steers clear of       Consistent with the neoliberal model, renew-
the neoliberal framework being driven by the             able energy is deployed in ways that are ex-
EU and, second, it pivots away from the cen-             ploitative, chaotic, and wasteful and that sim-
tralized power generation model that was built           ply reinforce the class and other inequalities of
around fossil fuels several decades ago. This            the present system. The neoliberal approach
approach can be called energy democracy.                 to energy transition and climate protection has
                                                         been a monumental failure both in Greece and
Energy Democracy is a public sector approach.            internationally. It has reinforced the inequali-
It can lead to a rapid development of renew-             ties and injustices of capitalism and failed to
able sources of power in Greece, primarily               make significant progress in terms of the re-
wind and solar (but perhaps also geothermal              quired decarbonization of the energy system.
and small hydro) 6 while gradually and equitably
phasing out fossil fuels for the production of           Another energy system is not only possible, it
electrical power. It allows space for generation         is crucial to civilizational survival. And Greece
that is community-owned and/or operated,                 can be on the cutting edge of the renewable
decentralized, or “on site.” Energy democracy            energy revolution and the fight against climate
can demonstrate the true potential of renew-             instability, a fight that is driven by the public sec-
able energy when it is liberated from the con-           tor in partnership with communities, unions,
straints of price competition and when “return           and small companies.
on investment” (profit) is no longer the prima-
ry concern.7 Energy democracy is grounded                A program of energy democracy does not, how-
in energy sovereignty and self-determination             ever, possess magical powers. The transition
but it is transformative, not static. In the case        from the ageing, centralized, and fossil-based

                                                                       ENERGY DEMOCRACY IN GREECE

power generation system that presently exists           remain unanswered. Charting a pathway and
to a new system that is mainly decentralized,           developing a political process to oversee the
low-carbon, equitable, and truly democratic             transition leaves little space for naïve assump-
will confront many obstacles and take two or            tions and misconceptions. A rigorous and
three decades to complete. Many questions               facts-based approach is therefore essential.

Greece and the EU’s Neoliberal Energy Policy

Austerity and liberalization has set in motion          energy sector, and to move steadily towards a
powerful forces that could result in Greece             democratic, renewables-based system that is
completely losing control of its energy future.         friendly to people and the climate.
The proposed dismantling and sell-off of 30%
of the assets of the Public Power Corporation
(PPC), which controls 75% of Greece’s energy            Fossil Fuel Dependence and Greece’s
generation and almost all of its electricity gen-       Changing Climate
eration, is proceeding at considerable speed
in accordance with the conditions laid down             Two things will need to be addressed by a
by the Troika.9 This includes the privatization         SYRIZA-led government more or less simul-
of the electricity grid. Upon completion of this        taneously: Greece’s dependence on fossil fu-
phase, the government proposes to sell 17%              els, both domestic and imported, and the un-
of what will remain of the PPC to private inter-        developed state of the country’s capacity to
ests by 2016. Of course, regaining energy sov-          generate renewable sources of power. Greece
ereignty—or national economic sovereignty in            is a country that is highly dependent on fossil
general—will be difficult because of Greece’s           fuels and has a relatively weak (and privately
relations with the EU. Meanwhile, energy costs          owned) renewable energy industry. Presently
are rising faster in Greece than in any other EU        about 64% of the energy consumed is import-
country (a 21% increase in 2012), a situation           ed (considerably higher than the EU average of
that is leading to growing fuel poverty and se-         46%). Greece imports gas from Algeria, Turkey,
rious hardship. An increase in energy costs of          and Russia, as well as oil and other petroleum
over 60% has been recorded in Greece during             products to serve its rapidly expanding fleet of
the last six years of the financial crisis (2008-       motor vehicles. Roughly 93% of Greece’s ener-
2013).10                                                gy consumption comes from fossil fuels while
                                                        the corresponding average in the EU countries
SYRIZA and its supporters, along with the               is 75%. For electricity generation, 27% of power
workers in the sector, have led the resistance          generated comes from imported oil and gas.
to the privatization of the PPC and are also ful-
ly aware of the impact of fuel poverty on the           Domestic lignite (or “brown coal”) produces
lives of ordinary people.11 But a SYRIZA-led            70% of Greece’s electricity.12 Lignite is a partic-
government could do more than merely pro-               ularly dirty form of coal. A typical power sta-
tect energy sovereignty. Consistent with SYRI-          tion using lignite emits 37% more carbon diox-
ZA’s program, such a government could begin             ide per unit of power output than a power sta-
the process of a planned restructuring of the           tion using black coal. Lignite use is one of the

                                                                            ENERGY DEMOCRACY IN GREECE

main causes of Greece’s disproportionately                   cade, but it remains on the margins in terms
large contribution to global warming.                        of electrical power generation (around 7%) and
                                                             overall consumption. Greece is rich in wind and
Greece emits more GHGs per capita than the                   solar “resources” but if the present policies are
European Union average, 11.3 tons carbon di-                 allowed to continue, wind and solar energy
oxide equivalent (CO2 Eq.) per capita, per year,             will either be underutilized or utilized in a way
compared to 10.1 tons for the EU15 average,                  that benefits mostly non-Greek private corpo-
according to the European Environment Agen-                  rations. Consistent with SYRIZA’s program, the
cy (2008 figures).13 In terms of carbon intensity,           task is to turn these resources into abundant
Greece (along with Malta) is the highest in the              and clean energy for the benefit of all—under
EU27.14 Greece’s use of lignite and its fast grow-           public and community control.
ing vehicle fleet are major contributors to both
Greece’s emissions and carbon intensity. Fully
41% of Greece’s CO2 emissions come from the                  The EU’s Neoliberal Approach to
generation of electrical power.                              Energy

The need for an energy transition of this nature             The EU’s neoliberal approach to energy and cli-
is reinforced by climate change. Projections for             mate protection has been shaped by two poli-
changes in temperature and precipitation over                cy priorities. The first priority is energy market
the next 50 years in the Greek territory show a              liberalization—ostensibly to promote “choice”
temperature increase of 3-4.5 degrees Celsius                and “efficiency.” This priority was expressed in
and a decrease in rainfall of 5-19%. According               the Internal Market in Energy directive passed
to the Greek government’s national submis-                   down to member states in 1996. The second
sion to the UNFCCC in 2007:                                  “climate” priority are the “20-20-20” targets un-
                                                             der the 2009 EU Directive that mandate a 20%
  The long-term predictions of climatic models for           reduction of GHG emissions, a 20% share of re-
  the Mediterranean region are alarming. All model           newable energy sources, and a 20% savings in
  simulations agree that the temperature in Greece
                                                             energy consumption by the year 2020 (based
  will increase in the range of 1 C to 2 C by the year
  2030, despite the conflicting estimates of the             on 2005 levels). Under this directive, member
  magnitude of this increase. Concerning the future          states were required to develop a National Re-
  precipitation regime most of model estimations             newable Energy Action Plan (NREAP) that would
  offer conflicting evidence over how precipitation          include information on sectoral targets.17 The
  may change over the area. There are serious indi-
                                                             targets are also designed to “pro­vide certainty”
  cations, however, for a remarkably severe decline
  in summer precipitation over the Mediterranean             for private investors and to encourage continu-
  region as a whole.15                                       ous development of technologies that generate
                                                             energy from all types of renewable sources.
The economic impact of this level of warming
on Greece will be serious. Rising temperatures               In the eyes of neoliberal policymakers, the first
will result in an increase in energy needs for               two priorities—liberalization and climate pro-
cooling, the reduction of tourism due to the                 tection—both complement each other and are
increase of extremely high temperatures, re-                 inseparable from each other. The dominant
duced biodiversity, and an increased risk of                 EU policy discourse (broadly consistent with
forest fires.16                                              that of the World Bank and the IMF) asserts
                                                             that liberalization and market competition
Renewable energy—mostly wind and solar—                      are the pre-requisites for an energy transi-
has made some headway during the past de-                    tion to a low-carbon future. Because the old

                                                                     ENERGY DEMOCRACY IN GREECE

fossil-based centralized systems were often            tion and to 40% electricity generation from
publicly owned, regulated, and monopolistic,           renewable sources by 2020.20 According to the
the public ownership and high levels of emis-          NREAP for Greece, the installed wind energy
sions are (conveniently) presented as part of          capacity will reach 7.5 GW by 2020, which trans-
the same problem. Reducing greenhouse gas              lates into annual installations of approximately
emissions and promoting renewable energy               600 MW between 2011 and 2020. This amounts
is thus viewed to be synonymous with, and              to a six-fold increase in wind generation and a
therefore inseparable from, a “contestable”            twenty-fold increase in solar by 2020.21
market for electricity and privatization.18
                                                       The energy market liberalization that began
                                                       in the late 1990s led to an array of subsidies
Electricity Privatization in Greece                    and incentives to help renewable energy com-
                                                       panies gain a significant foothold in the EU
The liberalization of Greece’s electricity sec-        energy market. This combination of liberal-
tor has thus far been a 16-year process. Lib-          ization and subsidies saw the wind and solar
eralization started with the enactment of Law          industries make some headway over the past
2733/199919 when the process of privatizing            decade across the EU. Member states’ wind
Greece’s Public Power Corporation (PPC) was            power’s share of installed power capacity had
initiated. In accordance with Presidential De-         increased five-fold since 2000 to 11.3% in 2012,
cree 333/2000, the PPC became a public lim-            although Germany (31.3 GW) and Spain (22.8
ited company in January 2001. The electricity          GW) have the largest cumulative installed
transmission system was “unbundled” under              wind energy capacity in Europe, and these two
the provisions of 2733/1999, which transferred         countries represented 52% of the EU’s wind ca-
the responsibility for operating the electricity       pacity in 2012. Solar power has grown also, but
transmission system to a new independent               Germany’s progress is exceptional—and can
company called the Hellenic Transmission Sys-          be attributed largely to the process of remu-
tem Operator (HTSO). The early 2001 liberaliza-        nicipalization of power generation taking place
tion of the Greek electricity market opened the        there (see below).
door to any company (or individual) to produce
electricity. In 2007 individual consumers were         Greece’s progress can be measured by a four-
gradually granted full “rights” to choose their        fold increase in wind capacity (1.8 GW in the
energy supplier. These changes were followed           decade to May 2013). The Greek Association
by a law (3468/2006) giving renewable energy           of Photovoltaic Energy Producers (SPEF) esti-
companies special access to distribution and           mates that 950 MW of solar PV capacity had
transmission systems. New feed-in tariffs (FITs)       been installed by 2012 under the country’s
were defined and introduced in 2007 and per-           Feed in Tariff (FIT) introduced in 2007, includ-
mits for offshore wind parks became possible.          ing 200 MW on the Greek islands. 22 This was
                                                       sustained in the first half of 2012, when Greece
If these were the main measures designed to            added 243MW. But governments across the
advance liberalization, the EU’s 20-20-20 cli-         EU were soon to withdraw their support for re-
mate protection directive required Greece to in-       newable energy, due in part to the falling pric-
crease its share of renewable energy use from          es in solar PV manufacturing and wind installa-
6.9% in 2005 to 18% by 2020. In June 2010 both         tion costs, the marked shift in manufacturing
the directive and the NREAP became national            capacity towards China, and a sense that in
law, raising the country’s renewable energy            times of austerity and falling costs, generous
commitments to 20% of final energy consump-            FiTs were no longer necessary.

                                                                         ENERGY DEMOCRACY IN GREECE

In tandem with Spain, Italy, and others, the              newable energy (mostly solar) by 2021, and
Greek government announced a 44.7% cut                    has unveiled a number of “fast track” schemes
in the FiT in June 2013, and the rush to solar            to develop solar parks. Asserting that the
in Greece ground to a halt. New wind instal-              sun and wind resources in Greece are key to
lations plummeted dramatically in Greece                  the nation’s economic recovery, the Samaras
during 2013, and industry sources believe this            government has unveiled high-profile plans
will continue for at least another 1-2 years.23           like Project Helios that would see the country
This policy reversal was triggered by the fact            expanding its solar power capacity to 10 GW
that the Renewable Energy Sources Fund                    by 2050 through financing by international in-
(which pays renewable energy companies and                vestors. The plan involves leasing out land to
small producers via the FiT) had run up sub-              investors to build solar installations as a way
stantial debts—€331.5 million at the end of               to generate revenue. This and similar projects
2012, which is expected to rise to €1.16 billion          face only one problem, namely “liquidity,” and
by the end of 2014, and up to €1.43 billion in            it is hoped that the private sector will come to
May 2015. 24 The PPC had committed to buying              the rescue. 29
renewable-source energy from independent
producers at five times its selling rate until            Such projects have indeed attracted the atten-
2034. 25 Moreover, in November 2012 the Greek             tion of EU companies and governments who
government introduced a retroactive tax on                may resort to importing renewable energy
revenues earned by solar companies, which                 from Greece as a means of meeting their own
has led to an industry complaint (led by SPEF)            renewable energy targets and a likely new set
to the European Commission (filed January                 of targets for 2030. This poses a possible win-
2013). 26 The government also stopped issuing             win situation for companies (profits) and gov-
building permits for PV power plants in 2013.27           ernments (reaching mandatory EU targets) but
                                                          the benefit to Greece is at best questionable.
The march to renewables across the EU has
also slowed, albeit less dramatically than in             Until the adjustment of the FiT, a proliferation
Greece. Countries like the UK and the Neth-               of small companies who import and install PV
erlands are way behind schedule in terms of               panels reinforced the “foreign” character of re-
meeting their renewable energy targets under              newable energy. These companies have been
the 20-20-20 directive. 28 In the case of wind, the       known to advertise German products (taking
NREAP forecasts for the 27 member states are              advantage of their reputation for quality and
not being reached. According to wind industry             reliability) but then proceed to install low-cost
sources, installed wind is trailing by 2 GW. Eigh-        Chinese panels which require more mainte-
teen of the 27 member states are behind on                nance work (happily performed by the installer
their wind energy trajectories—and Greece is              for a fee).
among a group of countries (along with Slova-
kia, the Czech Republic, Hungary, France, and             The withdrawal of the FiT in Greece has led to
Portugal) that are far behind.                            the bankruptcy of many small and medium-
                                                          sized companies—and these have become tar-
                                                          gets of larger foreign multinationals who can,
Green Colonization                                        so to speak, weather the immediate storm and
                                                          position themselves for the longer term. Non-
As the Greek government has withdrawn FiT                 Greek renewable energy companies, mostly
support, it has nevertheless continued to                 German (but also Spanish and Chinese) have
state that it will invest up to €20 billion in re-        opened offices in Greece in anticipation of €5

                                                                       ENERGY DEMOCRACY IN GREECE

billion in renewable energy investments in the           Meanwhile, the main policy mechanism to re-
coming years (according to an estimate made              duce emissions and promote renewable en-
by the Ministry of Development). 30                      ergy—the EU Emissions Trading Scheme (EU
                                                         ETS)—is not doing its job. The EU ETS was sup-
The sense of being colonized by multinationals           posed to make fossil fuel use, especially for
has been reinforced by Troika’s conditions and           power generation, more expensive, but the
the proposed privatization of the PPC and other          price of carbon is today too low—often less
public assets in order to meet debt repayment            than €5 per ton even at its highest point—to
obligations. The likely buyers for the most lu-          have even a minimal impact. The price had
crative parts of the PPC are foreign companies           been expected to reach around €30 per ton by
from Russia, China, and elsewhere.                       2012. 32 According to one assessment, “power
                                                         generation from coal even at currently high
                                                         prices and a cost of €40 per ton of emissions,
EU Policy at an Impasse                                  remains cheaper by 15% from any other fuel
                                                         for base units.” 33
Today it is clear that the neoliberal approach
to climate protection and the deployment of
renewable energy is not working in Greece                Resisting “Resource Nationalism”
and is facing major challenges across the EU.
The main message here is that it takes a large           SYRIZA’s programmatic commitments to devel-
amount of liberalization and, paradoxically,             op renewable energy and to a new ecological
subsidies and government intervention, to                and economic paradigm will therefore require
generate a relatively modest amount of renew-            a new course. However, the combined effect of
able energy. And in Germany, where renewable             the failure of the EU ETS to price carbon in a
energy has made real headway, it is unfolding            way that can change energy investments and
as a result of an explicit rejection of neoliberal       technologies, along with availability of cheap
energy policy and an expansion of municipal              lignite, poses a major challenge to the ener-
control and public investment (see below).               gy transition in Greece. In the context of eco-
                                                         nomic recession, rising prices of imported oil
Far from being mutually reinforcing and insep-           and gas, it may appear as though Greece has
arable, the EU’s dual priorities of energy mar-          no better option than to continue with lignite,
ket liberalization and climate protection are,           which is cheap, abundant, and still mostly pub-
in fact, incompatible with each other. Liberal-          licly owned. Greece still has a 51% stake in the
ization has led to an oligarchic situation where         PPC, but a 0% stake in German, Spanish, and
just five energy companies are dominant (EDF,            Chinese renewable energy companies.
RWE, EOn, GDF Suez, and ENEL), consumer
choice is mostly fictitious, and renewable ener-         For SYRIZA, the Greek Left and social move-
gy companies rely on power purchasing agree-             ments, the pressures of lignite-based “re-
ments, “capacity mechanisms,” and subsidies              source nationalism” will be considerable. Note
to survive. In the case of the UK (the flagship          the similar phenomena in Argentina, Bolivia,
of EU energy privatization), the government              Brazil, South Africa, and Venezuela where left
is attempting to re-introduce a “Single Buyer”           and center-left governments are in power, but
mechanism (read: government control over                 which all make the argument that domestic
prices) because of the failure of the liberalized        fossil fuels are needed to fight poverty and de-
market to either benefit consumers or reach              velop a strong economy, albeit to varying de-
renewable energy targets. 31                             grees and with accompanying qualifiers. Senti-

                                                                       ENERGY DEMOCRACY IN GREECE

ments towards resource nationalism are likely           grades and extensions that are required to
to be reinforced by the fact that private-sector        facilitate the deployment of renewables. As
renewable energy companies in Greece to-                militant neoliberals, renewable energy compa-
day demand more liberalization, deregulation,           nies can be cast in the role of a Fifth Column
privatization, and subsidies to make further            or Trojan horse, serving foreign interests in
progress (for the good of the environment,              the name of greening the economy. Such ar-
of course). They lament the fact that the PPC           guments and sentiments are understandable,
has only been partially privatized and that the         but they are ultimately grounded in a thinking
union (GENOP-DEH) is too militant. The in-              that is both simplistic and short term. Energy
dustry calls for “cost reflective rates” for fos-       democracy provides a framework in which
sil based power (read: higher prices) in order          SYRIZA can pursue and fulfill its programmatic
for renewables to yield better profits. These           commitments and chart a new course not just
companies are also calling on the government            for Greece, but for other countries in the re-
to pay for the transmission infrastructure up-          gion, and perhaps beyond.

Developing and Implementing Energy Democracy

Part One showed how EU policy offers nothing            2.   Develop and implement a national energy
in terms of a serious and equitable approach                 transition plan: The transition to a new re-
to climate protection or renewable energy de-                newables-based energy system will pres-
ployment. Part Two attempts to take the dis-                 ent both challenges and opportunities.
cussion forward in two distinct ways. First, it              The Greek people must be in charge of
offers some potential programmatic guidelines                the process in order to ensure flexibility,
or options for discussion and, second, it iden-              diversity, resilience, and equity;
tifies and begins to address some important             3.   Promote energy independence: Fuel costs
issues with respect to navigating the transition             for renewable energy are zero. Climate
to a renewables-based energy system.                         change and the rising social and environ-
                                                             mental costs of the continued use of coal,
                                                             oil, and gas make a transition to a renew-
Short- and Long-Term Goals                                   ables-based energy system an impera-
                                                             tive. Greece has the potential to produce
Regarding energy democracy proposals for                     enough renewable power to meet its needs
Greece, four broad and overlapping political                 from within its own borders, and to do so
goals can be identified. Greece must take ac-                in a way that will generate jobs and savings.
tions to:                                               4.   Decentralize Energy Production: The pub-
                                                             lic sector must drive the development
1.   Re-establish control over energy (energy                of renewable energy. Renewable ener-
     self-determination): The privatization of               gy technologies (RETs) open the door to
     the PPC must be stopped and the neolib-                 community-based municipal control over
     eral approach to renewable energy de-                   electrical power generation and signal
     ployment soundly rejected. Greece needs                 the end of an over-reliance on centralized
     to follow its own path—based on energy                  generation. Greece’s next energy system
     democracy;                                              can be a pillar of popular power.

                                                                        ENERGY DEMOCRACY IN GREECE

The first goal (re-establishing control) is a            broader public are less pronounced and may
short-term political challenge, an essential             be erased altogether. Science-based emissions
first step that provides the foundation for              reductions targets are seldom if ever achieved.
pursuing and reaching the other three goals.
The second goal involves establishing a polit-           Given the importance of lignite and the avail-
ical process for driving an energy transition, a         ability of solar resources (300 days of sunshine
process grounded in and informed by democ-               per year, on average), Greece has the poten-
racy, transparency, and accountability. The              tial to establish a considerable level of control
third and fourth goals are the main planks of a          fairly quickly. But total control is out of the
multi-decade transition that can bring Greece            question in the short to medium term. Oil de-
to a point where 100% of its energy comes                pendence is a particularly large challenge, and
from renewable sources of power by 2040-                 one that can only be addressed over the longer
2050 and where its carbon emissions have                 term with vehicle electrification, fuel efficien-
been reduced according to a science-based                cy standards, “modal shifts” in transportation,
pathway. Even though goals three and four are            and an overall reduction of vehicle miles trav-
necessarily long term, there is some value in            elled (VMTs). Furthermore, any transition to
SYRIZA endorsing these goals immediately as a            renewable energy for electrical power genera-
declaration of both principle and intent.                tion must deal with the fact that today many of
                                                         the products essential for wind and solar gen-
                                                         eration are being manufactured in just a hand-
1. Re-Establish Control over Energy                      ful of countries, and Greece is not one of them.
                                                         This issue is revisited below. Greece’s level of
Re-establishing control over energy will re-             control can thus be considerable in the short
quire an intense political and legal struggle            term, but it will not be complete for obvious
that will begin almost immediately after SYR-            reasons.
IZA has formed a government. It is important
to emphasize energy sovereignty and self-deter-          SYRIZA’s actions regarding the PPC are crucial
mination as key SYRIZA commitments: Greece               to Greece’s capacity to control its own energy
has the right to control its energy future and           future and the transition to renewable energy.
reduce its dependence on imported energy                 The PPC remains by far the largest company in
and thus its vulnerability to the effects of deci-       Greece. It owns 93% of the country’s installed
sions made outside of Greece. Sovereignty and            power capacity (generated by lignite, oil, hy-
self-determination will help ensure that many            droelectric, and natural gas power plants.)
of the benefits of a renewables-based system             The total installed capacity of PPC’s 98 pow-
will be directed towards the Greek people, not           er plants is estimated at 12,760 MW. The PPC
private multinationals.                                  also runs solar energy parks. At the same time,
                                                         PPC owns the country’s two large lignite mines
Re-establishing control is therefore an essen-           in Ptolemais and Megalopolis, generating ap-
tial first step. Without domestic governmen-             proximately 56% of the required power supply.
tal and popular control the other goals will             Regarding the PPC, SYRIZA needs to take the
be much harder and perhaps impossible to                 following actions:
achieve. As the broader EU and global experi-
ence has shown, when governments are forced              ⇒⇒ Stop further privatization of the PPC’s as-
to give guarantees to the private sector—or                 sets;
to rely on incentives—then the transition is at          ⇒⇒ Revisit and selectively repeal the liberaliza-
best slow and uneven and the benefits to the                tion measures and laws introduced over

                                                                         ENERGY DEMOCRACY IN GREECE

   the last decade. The PPC needs to be fully             inevitably be scrutinized and challenged by en-
   reclaimed by the Greek people.                         ergy companies and the political Right.
⇒⇒ Reform and restructure the PPC, along
   with the majority state-owned gas compa-               The main aspects of the process for developing
   ny DEPA. Its role will need to be redefined            a national energy transition plan will require
   in accordance with a national energy tran-             careful thought and a broad and inclusive con-
   sition plan.                                           sultation process, but a first step might involve
                                                          identifying who should be at the table and
                                                          what their role might be. Unions, small busi-
2. Develop and Implement a National                       nesses presently engaged in renewable power,
Energy Transition Plan                                    representatives of social movements, and pro-
                                                          gressive research institutions might constitute
The fight to keep the PPC under public own-               the core of a commission of representative
ership, and the struggle for energy self-                 groups convened to develop the plan.
determination more generally, will require
mass popular engagement. The privatization                Engaging the union GENOP-DEH in the ener-
of the PPC has not gone smoothly. Potential               gy transition and the restructuring of the PPC
buyers (large Russian, Czech, and Chinese                 is clearly important, as concerns about jobs
companies are known to be interested in parts             will be uppermost. However, the privatization
of the PPC) do not want to take on pension pay-           scenario that is presently unfolding is hardly
ments of retired workers that amount to €710              a better option for workers in the industry. As
million per year. 34 Worker resistance has also           has been documented in numerous studies,
been quite determined.                                    energy privatization has almost invariably led
                                                          to underinvestment and falling quality of ser-
A SYRIZA government could quickly begin a                 vice. It has also led to a loss of jobs, reductions
broad-based and inclusive process for both                in wages and union coverage, and worsening
developing and implementing a national ener-              working conditions. And where privatizations
gy transition plan. Preliminary proposals for the         have taken place, public control has normal-
fossil-to-renewables transition can be offered            ly been replaced by oligarchies. In the UK, six
as a starting point for a national debate and             private corporations—just one of them Brit-
discussion around broad goals, fully aware                ish—dominate the power generation sector,
that the transition to a new renewables-based             and 57% of fuel used to generate electricity is
energy system will present many technical and             imported. 35
political challenges.
                                                          The workers in the industry can be integrated
A program for energy democracy must strive to             into the new ownership and oversight struc-
be as specific as possible in terms of the short-         tures and can be given a large degree of re-
and longer-term benefits of such a transition             sponsibility for operating and maintaining the
(cleaner air, improved public health, lower               systems, something they do every day. Sec-
costs for energy over time, less dependence               tions of middle management can also be con-
on fuels from abroad, climate stability and re-           structively engaged.
silience, significant job creation, etc.). It must
also attempt to show how such a plan could                The full legal implications (namely Greek law,
strengthen community-based control and con-               the EU, WTO, etc.) of moving to build energy
structive autonomy. A facts-based approach is             democracy by first restoring energy sovereign-
always better than vague statements that will             ty and self-determination will need to be con-

                                                                       ENERGY DEMOCRACY IN GREECE

sidered. It is well known that the entire legal         wrestling with the pros and cons of various en-
architecture pertaining to international trade          ergy options, but SYRIZA can also make its own
and investment that has emerged since the               proposals and play a leadership role in terms
early 1990s favors and protects the private             of shaping the debate. These proposals might
sector’s assets and profits. Therefore it seems         include the following:
inconceivable that a government committed to
a new economic and ecological paradigm will             Reduce Levels of Imported Gas and Oil for Power
be able to avoid clashing with this architecture        Generation
sooner if not later.
                                                        Greece must consider ways to decrease the
A national transition plan will nevertheless            amount of electrical power generated by im-
need a legal framework to facilitate and consol-        ported natural gas (and also oil) by expand-
idate its development. A number of domestic             ing the levels of electricity generated from
laws (for example, Law 2773/1999) have been             renewable sources of power. Greece present-
passed in order to comply with the EU’s 1999            ly imports large volumes of gas from Russia,
directive on developing a free and “contest-            Turkey, and Algeria. Greece’s current contract
able” energy market. As noted above, these              with Russia’s Gazprom expires in 2016, and the
laws will need to be repealed, and new laws             Samaras government has already complained
introduced that can democratize the energy              that Greece pays the highest price for Russian
system and help drive the transition. 36                gas in Europe—at roughly 35 Euros per mega-
                                                        watt hour (December 2013 prices). 37
Similarly, laws have been passed to comply
with the EU’s 2009 20-20-20 commitments. The            In 2010, Greece consumed a total of an esti-
liberalization laws and the 20-20-20 climate            mated 3,809 million cubic meters (mcm) of
protection laws have one thing in common:               natural gas, 8% more than the previous year.
they assume a larger role for private compa-            In 2009, Germany (several times bigger than
nies and a smaller role for the public sector.          Greece in both GDP and population size) con-
But these two sets of laws can be handled dif-          sumed a smaller amount, 3,528 mcm. In 2009,
ferently. There is no obvious reason why SYR-           Greece used 2,181 mcm for electricity gener-
IZA will need to renege on existing 20-20-20            ation, covering 15% of electricity generation. 38
commitments, but the NREAP will need to be              Gas makes up roughly 9% to Greece’s total en-
amended in order to provide a different road            ergy use. 39 Reducing gas imports would allow
to these targets.                                       Greece to take important steps towards ener-
                                                        gy sovereignty and self-determination.

3. Promote Energy Independence                          An energy transition plan must therefore ex-
                                                        amine the role of the mostly state-run gas
As is well known, Greece is today dependent             company, DEPA, and the projects it is presently
on fossil fuels both domestic (lignite or brown         developing (usually with foreign multination-
coal) and foreign (oil and gas). Its renewables         als). The Greek government has a 65% share of
sector is small and presently privately owned.          the company, with the remainder controlled by
To embark on a road towards ecological and              the Hellenic Petroleum Group. In recent years,
economic sustainability, fossil fuel use must be        DEPA has committed large sums of money to
reduced and eventually phased out altogether.           upgrade its Liquid Natural Gas import facil-
The development of a national energy transi-            ities. DEPA has also partnered with Russia’s
tion plan will involve different stakeholders           Gazprom and the Italian ENI around the “South

                                                                          ENERGY DEMOCRACY IN GREECE

Stream” project that is expected to transport              er the deployment of renewables, the faster
gas from Russia to Italy via Greece.40                     Greece’s bill for imported gas will be reduced.

From the perspective of reducing GHG emis-                 However, gas-fired power stations will be im-
sions, it would of course be better to first sub-          pacted, and the new renewable energy coming
stitute renewables for domestic lignite and                into the system must therefore be situated in
then reduce natural gas use later on. This is              locations that can compensate for this loss of
due to the fact that “burner tip” emissions from           generation. This could pose a series of second-
gas are much less than those generated from                ary challenges—and this may require modifica-
lignite or black coal.                                     tions and deviations from time to time, without
                                                           compromising the overall goal of substituting
The EU’s troubled Emissions Trading System                 gas-fired generation with renewable energy.
has been deployed as an incentive to switch
from coal-fired generation to gas, but this fuel           Greece also uses imported oil—diesel and
switching in Greece may not be the best option             crude—for around 5% of the country’s elec-
politically or economically in the short term.             tricity generation. However, oil-based gener-
Importantly, gas-fired power generation is the             ation has thus far served island communities
domain of a handful private Independent Pow-               or thermal power stations near Athens as a
er Producers (IPPs) that have become present               means of avoiding lignite-related air pollution.
in Greece during the liberalization period. The            Therefore any reduction in oil-based electricity
IPPs presently advocate for more privatization             generation will need to address these specific
and liberalization.41 Reducing gas imports will            challenges.45
therefore increase the portion of Greece’s en-
ergy that is under public control. And a fully             The renewables-for-gas (and oil) option needs
“reclaimed” PPC will ensure that the benefits              to be fully explored, and there are many fac-
of domestic lignite use are at least retained in           tors to consider. But when energy is generated
Greece, rather than distributed as a source of             for public need and not simply private profit,
profits for what is likely to be a Chinese, Czech,         then social and environmental considerations
or Russian corporation. 42                                 can be fully examined and decisions made that
                                                           best serve the people and the planet.
As noted above, domestic lignite produces 70%
of Greece’s electricity (2008 figures).43 Further-         Cap Levels of Lignite Use for Power Generation
more, Greece has plentiful supplies of domes-
tic lignite and the infrastructure in place to con-        Lignite is important to Greece. And although
tinue using it for the foreseeable future. There-          the unimpeded use of lignite for power gen-
fore during the first phase of Greece’s energy             eration may be consistent with energy sover-
transition (perhaps a decade or so) the strate-            eignty and self-determination, it is certainly
gy should, as far as possible, entail a straight           not consistent with any serious commitment
swap: domestic renewable energy should                     to a new economic and ecological paradigm.
replace imported natural gas (and oil, which               The ecological effects of lignite use are deeply
generated 5% of Greece’s electricity). If renew-           negative. Lignite is a particularly dirty form of
able energy generation can increase at a level             coal. A typical power station using lignite emits
of several GWs per year (Germany installed 7.6             37% more carbon dioxide per unit of power
GW of new solar capacity in 2012 alone 44) then            output than a power station using black coal.
the annual reductions in gas-based generation              Lignite use has made a major contribution to
should be more or less comparable. The fast-               Greece’s disproportionately large contribu-

                                                                         ENERGY DEMOCRACY IN GREECE

tion to global warming and negatively impacts             coal-fired unit to be installed in Aliveri, and a
public health.                                            700-800MW hard-coal-fired unit to be installed
                                                          in Larymna.47
During the first phase of the energy transition
it is therefore important to announce a cap on            Establish a Timeframe to Phase-out Lignite Use
lignite use in order to protect against the temp-
tation to replace imported gas with more lig-             Lignite reserves in Greece are plentiful and
nite production and lignite-fired generation. A           could last many decades, but the existing lig-
supplementary cap on GHGs from lignite could              nite-powered generation facilities presently
also serve a purpose, and retiring the oldest             operational in Greece will not last forever and
lignite-fueled power plants and introducing               an effective moratorium on new construction
pollution control technologies where appropri-            will mean that the fleet of lignite-fired facilities
ate could complement such a policy.                       will eventually become dilapidated and will
                                                          have to be decommissioned. The trajectories
Declare a Moratorium on New Lignite-Fired Power           for the phase-out of lignite use will, however,
Plants                                                    depend on how fast renewable energy can be
                                                          scaled up in Greece, and how technical and fi-
Greece must also take care to avoid “carbon               nancial challenges are met and obstacles ne-
lock in,” where new lignite-powered generation            gotiated.
is built in order “to meet demand.” The Inter-
national Energy Agency has issued dire warn-              Given the significant number of workers en-
ings regarding the dangers of building the in-            gaged in lignite mining, transportation, and
frastructure for more coal-fired and gas-fired            power generation, workers and communities
generation. Globally, there are approximately             that depend on lignite need to be reassured
280 GW of new coal-fired generation under                 that the transition away from lignite is not tak-
construction at the present time.46 Greece is             ing place without their active involvement and
not currently in a position to do much about              that it will not happen soon. Firing workers is
this alarming level of coal-driven carbon lock            not on the agenda, under any circumstances.
in, but it can officially declare its intention to        No worker or community will be asked to pay
separate itself from the global coal rush and             a disproportionate price for the energy tran-
thus signal a strong commitment to a new eco-             sition while others in Greece (and globally in
nomic and environmental paradigm. This can                the form of reduced emissions) reap the ben-
be accomplished by announcing a moratorium                efits. A set of robust protections and guaran-
on the construction of any new lignite-fired              tees need to be given priority in order to avoid
power plants.                                             alienating the workers and communities likely
                                                          to be affected by a shift away from lignite—
Clearly, this will require a careful assessment           however far in the future that shift may actu-
of the environmental, social, and economic                ally be.
implications of projects presently approved
or under construction. These include five ma-
jor PPC-led developments, among them a 800                4. Decentralize Energy Production
MW natural-gas fired unit to be installed in
Megalopolis, a 450 MW lignite-fire unit to be             The proposals outlined above amount to a
installed in Meliti, a 450 MW lignite-fired unit          steady phasing out of fossil fuels between
using fluidized bed technology to be installed            now and 2040 to 2050, first by prioritizing re-
in Kozani-Ptolemaida, a 700-800 MW hard-                  ductions in imported gas and then (over time)

                                                                        ENERGY DEMOCRACY IN GREECE

domestic lignite. This will require the rapid de-        try is expected to install another 100 GW, near-
ployment of renewable sources of power, prin-            ly doubling today’s global capacity. These im-
cipally solar and wind, to replace lost capacity.        pressive levels of deployment are nevertheless
Energy conservation can also play a role—and             inadequate from the perspective of climate
needs to be given serious attention both for its         stabilization. According to the IPCC, in order to
capacity to create jobs, reduce costs, and avoid         reach the required levels of emissions reduc-
the development of unnecessary generation                tions in power generation, the deployment of
capacity in the future.                                  renewable energy needs to proceed at a much
                                                         faster pace.48
The remainder of this paper will focus on offer-
ing for discussion some options and strategies           Feed-in Tariffs / “Prosumer” Approaches
for developing renewable power in Greece in
the “public sphere.” The public sphere includes          Among regulatory policy instruments, feed-in
“prosumers,” cooperatives, municipal-level               tariffs (FiTs) are the most popular type of pol-
entities, as well as a reformed and perhaps re-          icy, though particularly so in high-income and
structured PPC.                                          upper-middle income countries.49 FiTs provide
                                                         incentives for property owners and small and
The international experience of developing               large businesses to invest in solar PV. These
renewable energy shows the limits of private             consumers use the power of installed PV sys-
markets and the importance of government                 tems for their own use, but the surplus power
actions and interventions, but it is nonetheless         generated is then purchased by the utility at a
important to know why the dominant policy                favorable and stable rate, thus generating in-
choices are incompatible with either energy              come for those who participate in the FiT pro-
democracy or SYRIZA’s commitments.                       grams. The idea of individuals and businesses
                                                         playing a dual role—as energy consumers, but
                                                         also producers—has led to the emergence of
The International Experience                             the term “prosumers.”

What can be learned from the efforts of other            FiTs produced 61% of all solar PV capacity in-
countries to develop renewable energy? Coun-             stalled in 2012 and accounted for nearly 72%
tries that have made the most significant gains          of all solar PV installed worldwide.50 Under a
have established a robust set of regulations             FiT policy, eligible renewable electricity gen-
to incentivize renewable energy. Two policy              erators are guaranteed a standard purchas-
options stand out: the Feed in Tariff (FiT) and          ing price for the electricity they produce, and
the Renewable Energy (or Portfolio) Standard             electric utilities are required to purchase all
(RES/RPS). The international experience sug-             available electricity from renewable energy
gests that these policies can drive renewables,          sources. FiTs have been adopted in a total of
but there are problems with respect to the               99 jurisdictions worldwide as of early 2013.51
speed and scale of the deployment—and the
fact that the benefits of renewable energy are           As noted in Part One, in Greece and elsewhere
not shared equally by all.                               government support for FiT programs has
                                                         been scaled back significantly in the last year
Nevertheless, renewable energy is growing                or two. This has slowed the growth of both
rapidly on a global scale. Fully two-thirds of           wind and solar power. In Greece, solar PV in-
current global solar PV capacity have been in-           stallations essentially stopped in late 2013 af-
stalled since January 2011. By 2015, the indus-          ter several years of impressive growth. 52 As of

                                                                        ENERGY DEMOCRACY IN GREECE

this writing, the future of FiTs is in question—         or P3s, and thus more IPPs and Power Pur-
but falling costs in solar PV in particular means        chase Agreements (PPAs) that protect private
that solar could grow quickly without the sup-           companies from risk (unloading the risk on to
port of FiTs.                                            the public) and a bias towards large-scale re-
                                                         newable energy projects. It will also leave the
Renewable Portfolio/Energy Standards                     major decisions on how to grow renewable
                                                         energy to the PPC. Indeed, news sources (De-
A national Renewable Portfolio Standard (RPS),           cember 2013) have speculated that the Greek
sometimes referred to as a Renewable Energy              Ministry of Environment, Energy, and Climate
Standard (or RES), is another policy option. An          Change (MEECC) will propose a “new deal” be-
RPS/RES obliges power companies to produce               tween renewables producers and the state to
a specified fraction of their output from re-            further cut project FiTs in exchange for bene-
newable energy sources by a given target year.           fits such as longer PPAs.54 Such a policy would
Such policies have been introduced, either at            halt the growth of Greek “prosumers” while
the national or the state/provincial level, in           delivering guaranteed profits to private energy
76 jurisdictions, though most prominently in             companies.
high-income countries. RPS/RES policies are
more prominent on the sub-national level, and            Regarding the FiT, the problems are more com-
their numbers were boosted in 2004, when a               plex. FiTs are considered to be a good mecha-
significant number of U.S. states and Indian             nism for getting solar PV off the ground, and
provinces adopted such standards and quotas.             for engaging ordinary people—homeowners
The years since 2008, however, have seen only            and small businesspeople—in the transition to
limited additional momentum.53                           renewable energy. FiTs have also “seeded” the
                                                         market and allowed small companies and their
Problems with FiTs and RPS/RES                           suppliers to develop. This can broaden the
                                                         base of support for renewable energy among
It is important to be fully aware of the prob-           a certain layer of people who benefit from the
lems inherent in these two presently most uti-           tariffs directly and also indirectly (such as in-
lized policy options, FiTs and RPS/RES, so that          stallers and the companies making basic com-
Greece can try to avoid these problems either            ponents used in installations).
by changing the design of these policies or by
avoiding them altogether.                                However, FiTs remain problematic in a number
                                                         of respects. FiTs are known to benefit proper-
Regarding an RPS/RES for Greece, if this were            ty owners and small to medium businesses,
adopted in the same way as it has in other               but most people—the propertyless and low-
countries, it would require the PPC to generate          income people—fall outside these categories
a growing share of its electricity from renew-           and therefore neither see nor receive any im-
able sources, such as 20% renewable energy               mediate or obvious economic gain. This prob-
by 2020, or some similar target. This option             lem has been partially addressed in Germany
could sustain the PPC as the main actor in               and a number of other countries where there
Greece’s electricity system, but perhaps to the          have been efforts to build energy cooperatives
exclusion of others—including unions, com-               that can pool both the capital and commit-
munities, and local decision makers. Absent              ment of a group of individuals to develop solar
strict conditions regarding the actual sourcing          PV generation in public or other spaces so that
of renewable power, an RPS/RES will probably             people without either property or substan-
open the door to public-private partnerships,            tial amounts of personal capital to invest can

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