Energy transition for nature, the country, the citizens

The climate crisis is indisputable and directly linked to the use of energy resources.

The claim is often heard that: “are we going to save the climate?” a small country with a population of only 1.3% of humanity”

But let’s start from the beginning:

Man threatens the globe with his activity. His arrogance, that he has the power to mess with nature, constitutes “insult”, which causes nature to fight back and destroy the life of man himself. Mercury, on the other hand, will withstand climate change and continue to exist, but without us. In recent years, this “infamy” has caused an unprecedented global climate and energy crisis, generalized geopolitical tensions and wars, – three “communicating” events”, which have as a common denominator the dependence on fossil fuels of all humanity, the EU and the country us.

Climate change is creating food crises and mass impoverishment in many regions of the globe, triggering inevitable conflicts and distribution wars, not only for these fuels themselves, but also for land, water and food.

In this international environment, maintaining our country’s existing energy footprint is tantamount to suicide.

And this is because, as we will see below, even if there was no overriding need to protect the climate, the country’s energy footprint would urgently need the green transition for both national and economic reasons.

According to the new ESEK, Gross Domestic Consumption amounted (before the 2021 crisis) to 21.1 Mtoe in primary form and to 15.2 Mtoe as Gross Final Consumption***, which absorbed 14%-20% of the national income* ( AD EU 11%, Germany 9%).

These figures alone prove that even without the climate crisis, energy constitutes the most important economic challenge for the next generations.

Strong dependence and energy intensity

• 78% imported, (polluting, expensive fossil fuels) and only 22% domestic sources (3% Lignite 19% RES)
• High energy intensity of the Greek economy with 126 toe/1M$ of RPA (EU m.o.73 toe/M$), that is, all our products face a huge competitive disadvantage.

Excessive cost to the national economy and heavy taxation

According to the data of the new ESEK, in 2021 the Greek people paid directly or indirectly 35.7 billion euros* (20% of GDP), of which 23.83 billion for the purchase of energy products and variable costs (including 7.5 billion** in energy taxes, (VAT, ETMEAR, YKO, etc.) and 11.8 billion for investment capital service costs*.

Energy taxation (with YKO, ETMEAR and VAT fees) already exceeds 12 billion euros a year, an amount that corresponds to 50% of the costs of buying energy products, making energy a brake instead of a competitive lever for the development of our national economy. In fact, the existing taxation of imported liquid fuels (EFK) is in no way used to finance the energy transition, since the cost of financing it comes exclusively from excessive taxation and additional fees (ETMEAR, YKO, etc.) on the consumption of electricity. According to the new ESEK, out of the 7.5 billion in energy taxation in 2020, only 0.83 billion was allocated for the energy transition**.

Low degree of electrification and expensive electricity

• only 29% use electricity, while 71% use fossil fuels.
• disproportionately more expensive electricity than other forms of energy. From the data of the new ESEK and calculations **** it follows that the relevant Unit Cost of electricity amounts to 2.175 billion / Mtoe, disproportionately more expensive than other forms of energy that cost only 1.275 billion / Mtoe.

The country’s Energy is a pollutant, a threat to nature and people, a brake on the national economy, a source of foreign exchange bleeding, national dependence and extortion.

It is obvious that this whole context adversely affects not only the well-being of citizens, but also shakes the foundations of Greek entrepreneurship. For this reason, the Greek economy, especially the manufacturing industry which has a high energy dependence, must invest quickly in energy saving and efficiency, in order to reduce the energy intensity of the economy, i.e. the ratio between gross primary energy consumption and gross domestic product (GDP). Of course, this can also be achieved in another way, as was necessarily done in Greece through deindustrialization, i.e. with the “migration” from manufacturing to the service sector and as it seems continues today, since Greek businesses cannot withstand international competition with 70 % more energy intensity compared to the European AD This is also the main cause of the dramatic deterioration of the import/export balance.

It thus becomes obvious that if Greece does not take immediate and strong measures to improve energy efficiency, the energy intensity will deviate even more from the European average. and therefore the competitiveness of our businesses.

We need a green, climate strategy to wean ourselves off imported and polluting fuels.

Saving and saving

By limiting energy intensity, increasing efficiency, with actions and measures to save and deal with waste, where the margins are estimated at over 50%, i.e. savings of 12 billion Euros or 6% of GDP/year.

Electrification everywhere with RES

With the shift towards domestic sources, and if possible exclusively with the fastest penetration of RES into the country’s energy mix.

RES are already competitive technologies to fossil fuels, economically viable and increasingly affordable even for ordinary consumers. Today’s excessive energy costs have not soared because of RES, but precisely because of their limited development. For example, only the additional annual energy costs paid by the national economy in 2022/2023 would be sufficient to finance the entire transition by 2030.

Faster Transition with energy tax reform

An energy transition with 80% more expensive electricity compared to fossil fuels cannot be guaranteed The time has come to reform energy taxation both for revenues and for their disposal, that is, we need a more rational and gentle energy taxation that will make more attractive domestic RES and electricity over imported fossil fuels.

Fiscal promotion with domestic green surplus value

With all this, it becomes obvious that the interests of our country are perfectly aligned with the needs of dealing with the climate crisis and are best served by a rapid green energy transformation, which will be self-financed, by means of a strong improvement in the trade balance due to the limitation of imported, polluting and expensive fuel, and will thus create a huge domestic surplus through the green economy and thousands of well-paying new jobs.

Now is the time to specialize this path ambitiously and realistically. To undertake coordinated actions to mobilize the productive forces, the citizens, the youth.

*(ESEC, CONSOLIDATED PLAN – PROPOSAL – ATHENS, 2023, Table 13: Summary of cost calculation to the economy for useful energy services. Total annual (2021) expenditure of final consumers on energy services (with ETS payments) = 35.719 billion Euro , of which the costs of buying energy products (fuel & Electricity) = 24 billion Euros (without VAT).

**Figure 3: Fiscal revenues, expenses and balance related to energy and the transition to climate neutrality. 2020 Revenue: 7.5 billion – expenses 0.83 billion = balance: 6.7 billion Euro, Forecast 2025 Revenue: 8.15 billion – expenses 2.75 billion = balance: 5.4 billion Euro

***Table 4 ESEK targets for primary and final energy consumption. ATEK 15.2 Mtoe

**** The average EU consumer price in 2021 (before consumption taxes and VAT) was 187.1 Euro / MWh *** multiplied by the total demand of 52,500,000 MWh = 9.82 billion Euros in the same year for EU which is equivalent to 2.175 billion / Mtoe (1 million MWh = 0.086 Mtoe) If from the total ATKE which amounted to 15.2 Mtoe*** we subtract the HE which was 4.515 Mtoe (the 29.7 %) the remaining ATKE (Liquids, gases , solid etc. fuels) amounts to 10.685 Mtoe (70.03%) and cost 14.01 billion Euro (total 23.83 billion* minus 9.82 billion EU) which is equivalent to 1.275 billion / Mtoe.

Vassilis Tsolakidis is a Bio-Architect, Strategic Planning consultant for the Environment, Energy and Climate, former President of the Center for Renewable Energy Sources (CRES).