IEA praises Greece on energy market reforms, says more needs to be done

Greece has made significant progress in reforming its electricity and gas markets in recent years but it must step up efforts to boost competition and its use of wind and solar power generation, the International Energy Agency said on Thursday.

Greece, which has signed up to three international bailouts since 2010 and has been reliant on domestic coal and oil and gas imports to cover its energy needs, has been looking to open up its electricity and gas markets to help boost its economy.

Cutting the dominance of state-controlled utility Public Power Corp. (PPC) and selling a 66 percent stake in gas grid operator DESFA are two key requirements of its latest bailout.

“The country moved forward on plans to restructure state-owned companies and liberalize electricity and gas markets, an impressive program that will lead to more competitive and financially viable energy markets,” the IEA said in its latest report released on Thursday.

It also praised Greek efforts to strengthen energy security via investments in gas and electricity infrastructure.

“However, the government should allow gas and electricity markets to promptly react to price signals and assess supply adequacy in an integrated and regional manner,” the report said.

The agency said Athens needed to do more to improve energy efficiency by concluding a scheme to interconnect islands to the mainland’s grid and boost renewable generation capacity. 

The share of renewable energy in Greece’s energy supply has increased substantially to a new peak of 12.5 percent last year, the IEA said.

Greece is one of the biggest coal producers in Europe behind Germany, Poland and the Czech Republic and most of its islands currently rely on diesel oil for their energy supply.

“In terms of renewables … there is huge room to improve and in the context of the interconnections with the islands is very important,” IEA’s executive director Fatih Birol told reporters in Athens, presenting the report.  “To use diesel oil for generating electricity today is definitely not the best way to do it.”

Island interconnections to the main grid is expected to be completed by 2023. [Reuters]