Minister G. Stathakis: New Challenges In Energy For Greece

Greece's Εnergy and Environment Minister, Giorgos Stathakis, was in New York recently in order to present investment opportunities in his country's energy sector during his participation in the "Capital Link: Invest in Greece" forum.

Stathakis' New York visit was part of a 10-day tour that also included stops in Rome, Brussels and Jerusalem with the aim of these international forays being to create the conditions promoting Greece as an energy hub in the region by attracting interest in its environmental and energy infrastructure.

During his stay in New York, Minister Stathakis had the chance to answer some poignant questions concerning his ministry and about Greece's challenges in the field of energy. At the same time, he was able to demonstrate his optimism with respect to Greece's financial recovery.

Mr. Stathakis, as newly appointed minister of energy and the environment, normally two diametrically opposed departments, how do you perceive yourself combining the two roles? "Although the two sectors may be contradictory in many respects, still Greece is already committed in applying both the Paris Agreement on Climate Change and the 2030 Agenda for Sustainable Development. Such commitments indicate that a lot has to be done in our energy model, both in terms of production and in terms of consumption, which opens up space for significant investments in energy saving, renewable energy and the cyclical economy.

On top of this, Greece is an environmentally sensitive area, with almost 30% of its land belonging to the "natura" regime, which is the European framework for the highest environmental protection. So this ministry combines environment, spatial planning and energy and in many respects it comes to combine three major areas of a sustainable approach to development."

Where have the major gains come from over the last decade? From wind, solar or electric power generated from renewable sources? "Already there is significant progress in terms of energy production. The Energy Union 2020 is asking member-states to have 20% of energy requirements from renewable sources in 2020. In 2015 more than 24% of our energy production came from renewable sources and big hydroelectric plants. Actually in 2015 renewable sources produced energy of 13.84 TWh or almost the one fourth of consumption, which totals to 56.7 TWh. In mainland Greece, there are 17 large hydroelectric plants with a potential production power 3173 MW, while an additional 4594 MW comes from other renewable sources (1775 MW wind, 2444 MW solar, 223.5 MW small hydro plants, 51.6 MW bioenergy). On the islands potential production power is 483 MW, which is mainly wind (322.7 MW) and solar (160 MW)."

Have the difficulties regarding state subsidies for solar power been overcome? "During last summer we adopted a new institutional framework, following corresponding EU directives. From 1.1.2017 subsidies will be determined through special auctions. On Monday actually happened the first, test auction, about solar production of 40MW, which proved to be a success. We also plan public tender for new projects in solar power, producing more than 1,5GW."

One of your first acts as Minister was to unblock the construction study for the enrichment facility at Skouries, something which your predecessor staunchly refused to do. What does the future hold for this controversial project and how important is it to Greece's economic recovery?

"Regarding any foreign direct investment, the government is committed to safeguarding the legitimacy of activities, implementing decisions by judicial institutions, such as the State Council, and applying rules and contractual obligations. This obviously applies also to the case of Skouries. The decision you are referring to was an approval of a part of the licensing process that there was in full agreement with the ministry. On no account should it be understood as a change of course, concerning other decisions of the Ministry which concern the specific requirements that this investment has to meet in terms of environmental rules."

What is your view on the often discussed potential for oil exploration in Greece? Should a country like yours, with its pristine beaches and coastline, ever undertake such endeavors? "Greece has already launched two international licensing rounds for offshore hydrocarbons exploration in Western Greece and South of Crete. Two oilfields have proved very promising and we intend in the near future to re-launch a third round for the rest 18 fields. The gas field of Prinos is up and running and its overall capacity has skyrocketed to 129 million barrels. In Katakolo drilling is about to begin in 2018 and production is scheduled in 2019 with a total capacity of 10 million barrels. Of course environmental protection is our primary concern.

We recently adopted a related EU directive, setting high protective standards for workers and the environment. Companies involved are well aware of that and they focus on modern, environmental-friendly extraction technologies. By doing so, they also gain important technological advantage at the international competitive arena."

Your training and previous ministerial experience is in economics. Tell us, Mr. Minister, has Greece finally turned the corner? "According to the latest available data, Greek economy exhibited a surprisingly strong performance during the summer quarter, confirming the most optimistic forecasts. On the third quarter the Greek GDP grew 1.8% on a yearly basis and it seems highly probable that it will stay unchanged for the full year or even grow by a small percentage. For 2017 international institutions (i.e. European Commission) forecast a growth rate higher than 2.5%, while in the medium term Greek economy appears set to achieve an average growth rate close to 3%. It is rather important that growth's main driving force is private investment, growing in the third quarter by 12.6%. Moreover, exports are recovering, increasing by 10.2% in the third quarter.

There is also an encouraging continuous decline of the unemployment rate, which on September was 23.1%, a level not seen after the spring of 2012. Of course it is still an unacceptably high level; however the decline by almost 5 percentage points during the last 3 years and by 1.2 points during the last 9 months is rather encouraging."

You continue to be an important member of the team negotiating with Greece's creditors. Are further measures in the works as rumors suggest? "The recent Eurogroup meeting was rather constructive and I believe all sides involved share the strong will to successfully complete the second review of the Program's progress, as soon as possible. I am convinced that everyone will eventually agree that there is neither the need nor the room for any additional austerity measures."

Is there a potential return to the markets for the country in the foreseeable future? "Nowadays it is clear to all sides that there is a roadmap for Greece to return to the markets: It includes a successful second review of Program's implementation, application of the short term debt-relief measures and a positive Debt Sustainability Analysis from the ECB, which is required to include Greek bonds in ECB's Quantitative Easing program."

What is the outcome of your recent trip to Israel? "It was not just Jerusalem. In the past couple of weeks I also travelled to Brussels and Rome, having rather constructive meetings with my counterparts at Italy, Cyprus, Israel and the EU Commissioner for the Energy Sector. The clear message I got in those travels was that Greece is becoming integral part of what we can now call South-Eastern Energy Crossroad, which is made out of two Corridors. The first is the Vertical Corridor starting from Greece and stretching over the Balkans up to the heart of Eastern Europe. The second Corridor is that of Eastern Mediterranean that will link the European Energy Market straight with the gas fields in the Levant Basin. We intent foster necessary economic and political environment, so as to attract investors willing to position themselves on that Crossroad. "