The first address of the new Greek Minister for Productive Reconstruction, Environment and Energy, Panayiotis Lafazanis, to the industry and international stakeholders took place at the Athens Energy Forum on the 11th of March, prompted mixed reaction amongst the audience.
During his speech, Minister Lafazanis reiterated the engrained positions of the European Left with regards to energy policy, prioritising its social aspect over commercial interests. He reiterated the strong statist pivot he envisages for the entire Greek energy sector, from a strong national energy champion(s) to a unilateral energy policy outside the 'constraints' of the European energy framework. In this regard, he also maintained a hard-line on the non-privatization of state-owned energy assets in Greece and questioned the neoliberal logic behind equating reform with privatisations.
On the formation of energy corridors, Lafazanis underlined that their benefits are not limited to their utility as infrastructure assets; but that they are tools to be used for the promotion of peace and prosperity, contributing to sustainable growth.
While Lafazanis expressed the Greek government's support for the Trans Adriatic Pipeline (TAP) and the Interconnector Greece-Bulgaria (IGB), recognising both projects as key parts of the Southern Gas Corridor, he also stressed that it is the government's desire to secure additional, compensatory benefits for Greece through a retroactive negotiation of the TAP agreement. In turn, Lafazanis highlighted Greece’s position as an important transit country and a major junction for energy interconnectors in South East Europe.
In a highly polemic tone, the Minister also called for the independence of Greece from any 'hegemonic influences' or ‘superpowers’ that play on the international energy chessboard. A provocative statement, which was not overlooked by the international audience and further stokes the flames of disagreement between the European energy community and the Greek government.
Even though such remarks are aligned with the rhetoric of Syriza’s extreme left wing faction, which Lafazanis spearheads, and are primarily, though not exclusively, meant for domestic consumption; the administration ought to be more aware that Greece is under intense international scrutiny, not just because of its financial difficulties but also because of Greece’s perceived pivot to Eurasia, specifically rekindling its ties with Russia.
Beyond anti-establishment rhetoric, Lafazanis, like many of his EU colleagues, expressed strong resistance to the European Commission’s intentions for more oversight of energy contracts with external third parties, itself part of the broader framework towards the development of the Energy Union. The aim is to limit the leverage companies like Russia's gas monopoly Gazprom have over EU-member states' supplies. This runs contrary to the government's open energy rapprochement with Russia.
Greece’s government need not be reminded though that until recently it had been paying the highest gas prices in Europe. This is not the product of interference or 'chess moves' on the part of any Western superpower, but purely down to the simple economic fact that Greece is dependent on a single supplier for more than 70% of its gas demand; a monopoly that has underpinned the persistently high gas prices in Greece in recent years.
Further, Minister Lafazanis stressed that Greece cannot deliberate on security and fair exploitation of energy resources in the region, without first ensuring the delineation of the Exclusive Economic Zones (EEZs) according to international law - a Greek position that has been adopted by the European Parliament through the Energy Roadmap 2050 in March 2013. His point about EEZ delineations stem from earlier comments he had made stating that, thus far, energy has become a pretext for intense confrontations; on the contrary energy should be used to unite peoples.
In today’s dynamic and unpredictable geopolitical landscape in South East Europe and the broader East Mediterranean, Greece is in a position to develop a competitive and integrated energy market.
On the one hand Greece has managed to secure long-term Caspian gas resources via TAP, a project that will contribute to the diversification of Greece’s gas portfolio. The pursuit of a retroactive renegotiation of terms will yield few, if any, benefits for Greece, to the detriment of its standing as partner to one of the largest energy infrastructure projects in Europe.
Greece’s government should continue to proactively work with TAP to ensure the smooth and timely implementation of the project, while at the same time work very closely with its international partners to ensure the advancement of the IGB project, another one of the EC's Projects of Common Interest (PCI), due for priority EU funding.
On the other hand, LNG capacity expansion plans must not be overlooked; the expansion of the existing Revithousa plant as well as the proposed floating storage and regasification unit projects in the North of Greece, will add significant diversification capacity both for Greece and the region.
Beyond the benefits that Greece will provide to the fulfilment of EU energy security objectives (especially as expressed in the European Commission's Energy Security Strategy, published in May 2014), investments into the reinforcement of LNG capability fit with the EU’s future LNG strategy and should offer intriguing opportunities vis-à-vis the Greek shipping industry, international investors and key players in the global LNG market, including the United States.
The Minister's re-affirmation of support, albeit conditional, for a number of projects, which will be crucial for the energy future of both Greece and the EU, as well as the highlighting of issues which will be critical for the development of the industry in Greece, were the more positive notes of this speech.
However, Greece also owes itself a more open minded policy on privatizations and reforms in the energy space that will enable a more connected and better integrated energy community. An energy policy free from polemic ideological rhetoric, one that will allow Greece to not alienate itself in the international energy arena, and be able to attract investors which will assist in the development of its energy sector. Plans, which can support a social agenda, but only if they come into fruition.
Now is not necessarily the time for ideology; now is not the time to waiver.
Constantine Levoyannis is deputy head of Greek Energy Forum in Brussels.
Marina Petroleka is a member of the Greek Energy Forum in London.
Dr. Angelos Gkanoutas-Leventis is Vice Chairman of the Greek Energy Forum.
The opinions expressed in the article are personal and do not reflect the views of the entire Forum or the companies that employ them.
This article is part of the knowledge partnership between European Energy Review and the Greek Energy Forum a group of energy professionals sharing common interest in the broader energy industry in Greece and South-eastern Europe.
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Greek Energy: Now Is Not The Time To Waiver
March 19, 2015 | 00:00
The first address of the new Greek Minister for Productive Reconstruction, Environment and Energy, Panayiotis Lafazanis, to the industry and international stakeholders took place at the Athens Energy Forum on the 11th of March, prompted mixed reaction amongst the audience. During his speech, Minister Lafazanis reiterated the engrained positions of the European Left with regards to energy policy, prioritising its social aspect over commercial ...