Overview

Following the crisis in Ukraine, European nations are working to reduce dependency on Russian gas.  Greece is better positioned than many other nations, with a milder climate and shorter winters, and with many predeveloped projects based on the nation’s 2010 decision to become an energy hub for the region. The Trans Adriatic Pipeline was completed in 2020 and the Greece-Bulgaria Interconnector is set to be operational this year. Many projects will likely come online years ahead of other nations. The Alexandroupoli FSRU is expected to be completed by 2023, with many other FSRU projects to follow. The country is focusing on LNG as the mid-term, and renewables for the long-term solution. While original plans had been ambitious, including a phaseout of all lignite power plants by 2023, and ambitious renewable energy targets, the country is reevaluating a new path forward in response to rising electricity costs and geopolitical challenges.

In June 2022, Energy Minister Skrekas stated that 44 billion Euros would be dedicated to the structural transformation of Greece’s energy sector which would include increasing renewable energy capacity to 25 GW from the current 9 GW and tripling the volume for LNG storage. The phaseout of lignite plants was delayed until 2028. The Government also was one of the first in Europe to issue subsidies to consumers in the wake of increasing energy prices.

Following a long period of underinvestment, electricity transmission and distribution system operators are investing billions of Euros in grid infrastructure and smart technology to be able to accommodate more than 13 GW of renewable energy by 2030. An infusion of foreign investment into the high and low voltage grid operators and the natural gas distributor has created potential for greater growth and adoption of modern infrastructure. There are multiple high profile electricity interconnector projects in discussion, with two aiming to connect Greece with Egypt for the purpose of exporting renewable energy into Greece and beyond.

As Greece further develops these projects, it positions itself to become a net exporter of energy in the region.  Expected legislation for offshore wind, ambitious hydrogen projects, and cooperation with Egypt, Israel, and Cyprus will likely further strengthen Greece’s strategic position in the region.

Leading Sub-Sector: LNG

Greece has been making inroads into LNG infrastructure development for several years. The 2018 expansion of its LNG Terminal allowed for the nation to receive larger quantities of LNG.  This is coupled with another expansion, set to be completed this year. By 2020, nearly half of LNG exports to Greece where from the United States, and such trends continue to this day as the nation reduces dependency on Russian gas. There are several FSRU projects at various stages of development throughout the country.  One FSRU project, further expanding Revinthoussa’s plant (in central Greece) current LNG capacity, is expected to be operational within this year, while another FSRU in Alexandroupoli (northern Greece) is expected to come online in 2023.  Moreover, a sister project has also been approved for the same area. There are three more known FSRU projects either at planning or licensing  stages. These projects, one in northern Greece and two in central Greece, are setting Greece up to be able to receive larger shipments, and possibly utilize completed pipelines to send gas around the region. The Government is currently looking into long-term contracts for LNG, as all past purchases have been through spot sales.

Leading Sub-Sector: Electricity Infrastructure

U.S. firms face steep competition in the electricity infrastructure space but lead in offering software or system related solutions. Following the financial crisis, Greece’s grid infrastructure lost value in what can be classified as a disinvestment of 150 million Euros a year when there should have been an investment of about 300 to 400 million Euros a year. Greece’s target to shift from lignite towards renewable energy sources further propel such efforts. There is a lot of work to be done, given the lack of investment, which has led to a lack of smart meter  penetration. Only 200,000 customers out of the 8 million being served by Greek grid operator HEDNO currently have smart meters. Supported by foreign capital, grid infrastructure is  expected to continue modernization efforts through a series of major procurements.

Concurrently, major electricity interconnector projects are either in-progress or in planning status. Once fully approved, they would likely lead to the sale of U.S. products and services. The Cyclades interconnection is set to be finished this year, while the Adriane Interconnector which will connect Crete and the mainland is progressing. Larger more ambitious projects include the proposed Euro Asia Interconnector which would connect the grids of Greece, Cyprus, and Israel, and the two interconnector projects that would link excess renewable energy from Egypt to Greece.

Opportunities

For the LNG sector, there is a need for a range of U.S. products and solutions. Many of the projects could need a project delivery partner or consulting services. Products and services related to LNG infrastructure, including cybersecurity, will be needed. Firms interested in further exploring this subsector can connect with Energy Industry specialist Teresa Gile at Teresa.Gile@trade.gov to arrange a conference call.

For electricity infrastructure, the needs include systems, software, and equipment. Many of the upcoming tenders will be issued by public-private entities and registering to be eligible to participate in such opportunities would be key. For government projects, firms must have a local partner. Firms interested in further exploring this subsector can connect with Energy Industry specialist Teresa Gile (Teresa.Gile@trade.gov) or ICT Industry specialist Nikos Papachryssanthopoulos at (nikos.papachrys@trade.gov).

Resources

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