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What are the prospects for coal in Greece?

Greece depends on energy imports – nearly two thirds of its gross inland energy consumption is supplied from imported oil and gas. This is expensive (currently ~US$20 billion/y) and raises issues of  security of supply The Greek energy mix is not very diverse – fossil fuels supply more than 93% of the country’s energy, well above the European average of 75%.

Lignite

Greece’s major energy resource is lignite, which is abundant in several regions. Proved reserves lie between 3.9 – 5 Gt, according to Dr Stephen Mills in his new report for the IEA Clean Coal Centre Prospects for coal and clean coal technologies in Greece. Lignite is of strategic importance and used almost exclusively for power generation. Within the EU, Greek lignite production ranks 3rd after Germany and Poland, and 6th in the world. The quality of most deposits is poor. However, productivity levels are high and extraction costs low, helping keep down the cost of electricity. It is also instrumental in avoiding additional energy imports.

The state-owned energy company Public Power Corporation S.A. (PPC) is the largest producer of lignite with significant operations in Western Macedonia and the Peloponnese region. It has rights to exploit almost two-thirds of the country’s known reserves. In 2012, total Greek production was 61.9 Mt (most of which came from PPC mines) although a small amount also came from the private sector.

PPC is also Greece’s largest power generator and electricity supplier, with a portfolio of conventional thermal, hydroelectric and other renewables-based power plants; combined, these make up about two-thirds of Greek installed capacity. Seven major lignite-fired power plants (belonging to PPC) represent 24% of the country’s total capacity and generate almost half of its electricity. In the past few years, their contribution to the country’s electricity generation has fallen slightly from 51% to 48%.

Total Greek installed generating capacity is ~19.6 GW (61% thermal power plants, 15% large hydropower plants, and 24% other renewables). The Hellenic Electricity Transmission System (the ‘Interconnected System’) covers much of mainland Greece and some of the islands. This has a capacity of ~18 GW, comprising ~5 GW of lignite-fired plants, 4.9 GW fired on natural gas, 700 MW based on oil, plus 3 GW of large hydropower and 4.3 GW based on other renewables. On the non-interconnected islands, the installed capacity consists of 1.78 GW of oil-fired generators plus 448 MW of renewables. Overall, the Greek energy sector needs significant investment – estimates suggest that €22-30 billion could be required in the period up to 2020.

Natural gas

During the past decade, natural gas has been used increasingly for power generation. The appearance of independent power producers has reduced PPC’s market share from nearly 100% pre-2009, to the current level of ~72%. Private sector generating capacity is now 2.2 GW. Compared to lignite-fired power plants, the output from gas-fired units has fluctuated more widely. In 2014, Greece experienced a steep decline in electricity demand, with gas-fired plants most affected. In some situations, this reduced output was replaced by electricity imports; these increased from the usual level of ~4%, to 16%.

With a view to minimising energy imports, the Greek government previously announced its intention to boost the uptake of renewables. Alongside this, the use of indigenous lignite for power generation was also to be increased. However, following the latest election, this position appears to have softened, with the focus shifting more towards renewables. But incentives paid to some renewables-based projects are being reduced – this could result in the delay or cancellation of some proposals. Currently, only one new lignite-fired power project (the 660 MWe Ptolemais Unit V) is under construction.

Air pollution abatement

Greek environmental policy in general is based largely on EU regulations and directives, a number of which have been transposed into national law. The Greek energy sector is a major source of air pollutants. In particular, the widespread use of poor quality lignite in thermal power plants is responsible for a significant proportion of the country’s emissions of SO2, NOx, particulates, and CO2.

For some years, though an on-going investment programme, PPC has been reducing the environmental impact and improving the efficiency of its power plants.  As a result, CO2 emissions from the company’s generating fleet have declined – between 1990 and 2011, CO2 emissions from lignite-fired plants fell by nearly 30% (per unit of electricity generated). This was achieved through plant improvements (sometimes coupled with restricted hours of operation), retirement of some older generating capacity, plus the increased use of natural gas and renewables in the generation mix.

Several forms of clean coal technology (CCT) are in operation or have been considered for application to Greek lignites. They include supercritical (SC) pulverised coal combustion, fluidised bed combustion, gasification and IGCC, cocombustion and cogasification of lignite with biomass/wastes, and underground coal gasification coupled with CO2 injection and storage. Of these, only SC technology is currently applied in Greece on a commercial scale.

With regard to greenhouse gas emissions – within the EU, the energy and carbon intensity of the Greek economy is not considered to be exceptional. However, the carbon intensity of energy production is one of the highest, due in particular to the heavy reliance on lignite. Various Greek organisations remain active in carbon capture and storage (CCS), sometimes via involvement in international multi-partner projects. No major CCS projects are in place although organisations such as PPC maintain an interest in the technology and it’s potential. Reportedly, with this in mind, the new lignite-fired Ptolemais V will be built CCS-ready.

The report Prospects for coal and clean coal technologies in Greece, CCC/261, by Dr Stephen Mills ISBN 978-92-9029, 122 pp, December 2015 is available for download from the IEA Clean Coal Centre Bookshop http://bookshop.iea-coal.org.uk/site/uk/clean-coal-technology-research-reports

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