In a letter addressed to the representatives of the creditor institutions in Greece Delia Velculescu (IMF), Declan Costello (EC) and Rasmus Rüffer (ECB), the environmental organisation WWF Greece sheds light on the environmental rollback, intransparency and bad law-making, which plague the country and have worsened during the crisis.

In the letter, which presents the English version of WWF’s 2015 environmental law review, WWF Greece’s Director Demetres Karavellas states inter alia that:

“The findings of this year’s report are indeed alarming: dramatic decline in the quality of legislation and the transparency of the law making process; torrential loss of critical environmental safeguards, particularly in the domain of forest protection and environmental impact assessment; paralysis of the national system of protected areas; threats to valuable natural habitats by unsustainable development projects; continued downgrading and undermining of the environmental inspectorate; utter contempt for EU law in the environmental licensing and the operation of lignite power plants; licencing of a new, heavily polluting lignite power plant in Ptolemaida, which will cost at least 1,4 billion euros and will be financially unsustainable in the framework of EU climate policy; increasing lack of transparency in the Green Fund; never ending legalisation of illegal buildings and land uses, at the expense of legal certainty and equality, and with a huge environmental cost and an incalculable loss of revenues from the uncollected financial penalties.”

Read the letter.

Read WWF Greece’s 2015 environmental law review, focusing on 1) Greece’s economic adjustment programmes, 2) energy and climate change, and 3) nature and biodiversity.

Two consecutive governments share the same disregard for Greece’s environment and the potential for the development of a sustainable economy. Dramatic increase in EU environmental law infringement cases, new rulings by the Court of Justice of the European Union, and paralysis of the national parks, are the main features of a disappointing year filled with environmental deficit.

WWF Greece’s annual review of environmental and energy law, which was publicly announced on October 1^st (in Greek), analyses the state of environment and energy law, case law and policy during the period from July 2014 to July 2015. The policy fields analysed in the review include access to information, environmental impact assessment, nature conservation, energy and climate change, waste treatment, air pollution, control of environmental crime, spatial planning, water resource management, and the operation of a national Green Fund.

by Theodota Nantsou

In the current dismal economic setting, the construction of the new lignite power plant by Greece's Public Power Corporation constitutes a completely irrational move: the public energy utility will need to disburse 400 million euros for a project that has been proven to be economically non-viable. By insisting stubbornly on the construction of Ptolemaida V, the PPC threatens to entrap Greece in an outdated energy model, at a time when technological progress renders clean energy a cost-competitive basis for the reconstruction of the country’s production model.

The construction of Ptolemaida V is currently at an advanced licensing stage. However, the start of the actual work requires a deposit of 400 million euros within 2015, which will come from PPC’s own funds, at a time when the company is in the worst possible financial state.

WWF Greece addressed the new Minister of Reconstruction of Production, Environment and Energy, Panos Skourletis, and the Executive Board of the German bank KfW, which co-finances the construction of PPC’s mega-lignite plant “Ptolemaida V”.

The decision to construct Ptolemaida V was taken several years ago, when the status of the Greek economy, as well as that of the European and global climate and energy policy, were very different. During the last year and a half though, the data have changed dramatically, and hence the decision to construct Ptolemaida V requires careful reconsideration.

If finally built, Ptolemaida V will be the country's largest lignite-fired plant, with a capacity of 660 MW and an installation cost of at least 1,4 billion euros. Approximately one half of this amount will be provided by a syndicated bond loan to PPC under the guidance of the German government-owned KfW-IPEX Bank and guaranteed by the German Export Credit Agency, Euler Hermes. This money will be used to purchase German-made equipment for the new plant. PPC has already commissioned the construction of Ptolemaida V to a consortium led by TERNA.

WWF Greece informed the Minister and the KfW board about the recent developments in European legislation, which will impose a heavy burden on the finances of Ptolemaida V, thus rendering it an economically non-viable investment. In particular, drastic changes in the modus operandi of the EU’s Emissions Trading System, will lead to a significant increase in the price of CO2 emission allowances, which will in turn cause Ptolemaida V’s operating cost to skyrocket. Moreover, the need to comply with the revised emission limit values for other gaseous pollutants* (as determined by the “Seville” process) will require new, expensive anti-pollution technology even before the new plant begins its operation.

Finally, Ptolemaida V is neither unique nor the cheapest solution in terms of covering base load needs for Greece’s electricity system. WWF Greece’s recent scientific report shows that Ptolemaida V’s base load can alternatively be covered by hybrid combinations consisting of wind, PV and Pumped Hydro Energy Storage (PHES) stations. More importantly, the levelised cost of energy (LCOE) for several of these hybrid solutions is shown to be lower than that of Ptolemaida V. It is significant to note that the study proposes the conversion of seven pairs of existing PPC-owned hydropower stations to PHES units, thus minimizing the corresponding installation cost as well as the environmental impact.  Hence, the proposed solution is realistic, economically more favourable and clearly more sustainable, compared to Ptolemaida V, while its implementation will benefit PPC as well. 

Read more:

• WWF Greece's letter to the Greek Minister of Reconstruction of Production, Environment and Energy here (in Greek).
• WWF Greece's letter to the Executive Board of KfW here. 
• WWF Greece’s report “Clean Alternatives to Ptolemaida V” here. 

*nitrogen oxides (NOx), sulphur oxide (SO2), particulate matter (PM), mercury (Hg)

by Michalis Prodromou - According to the IEA’s latest “Energy Balances of OECD countries” report, 2013 saw significant reductions in the total final energy consumption for three Mediterranean countries: Greece (11%), Spain (4%) and Italy (4%). Specifically for Greece, this was the fifth consecutive decrease in gross inland energy consumption.

During the reporting period (2012-2013) the aforementioned countries have also suffered major decreases in GDP levels (3,9%, 1,2%, 1,7% respectively). In order to account for this decrease, energy intensity (i.e. amount of energy consumed relative to GDP) should be used to measure the actual energy efficiency of the national economies. EUROSTAT figures show that between 2003-2013 Greece and Italy –along with the Netherlands and Estonia- have had the smallest decreases, among their EU counterparts, of energy intensity.

A sectoral analysis demonstrates the different energy reduction patterns of each country. Final energy consumption in Greece’s residential sector has fallen by 25%, while in Spain and Italy it was the services and industry sectors that featured the highest decrease percentages (4,8% and 8,15% respectively). The economic crisis has had a huge impact on these developments. A living conditions index study performed in Greece revealed that, in 2012, a 29,4% of the Greek population could not meet adequately its heating needs. It has also led to an increase of overdue bills to the Public Power Corporation, that have now reached a total of 2 billion euros- the biggest share, 1.3 billion, belonging to households. Greece’s Energy Minister (until July 17th), Panagiotis Lafazanis, has reportedly noted that when dealing with energy poverty, investments in energy efficiency “mean absolutely nothing for citizens and households being totally deprived of energy sources”. 

1.     European Commission (ECFIN), Statement by the European Commission and the ECB following the second post-programme surveillance mission to Portugal (March 2015)

“Economic and financial conditions in Portugal have further improved since the conclusion of the first post-programme surveillance mission in autumn 2014. However, the economic recovery continues to be held back by the remaining macroeconomic imbalances. While the authorities reiterated their commitment to budgetary consolidation, efforts to reduce the underlying structural budget deficit need to continue. The structural reforms undertaken during the financial assistance programme are increasingly having an effect. Nevertheless, the reform agenda to further enhance medium-term growth prospects, job creation and competitiveness remains challenging.”

2.     European Commission (ECFIN), New Excessive Deficit Procedure steps published (18 May 2015)

3.     European Commission, Five Presidents' Report sets out plan for strengthening Europe's Economic and Monetary Union as of 1 July 2015 (22 June 2015)

“What’s in the Five Presidents’ Report concretely?

1. Towards an Economic Union of convergence, growth and jobs

2. Towards Financial Union

3. Towards Fiscal Union

4. Strengthening Democratic Accountability, Legitimacy and Institutions: From Rules to Institutions

5. The Social dimension of EMU

Next Steps: This report has put forward the principal steps necessary to complete EMU at the latest by 2025. The first initiatives should be launched by the EU institutions as of 1 July 2015. To prepare the transition between Stages 1 and 2, the Commission – in consultation with the Presidents of the other EU institutions – will present a "White Paper" in Spring 2017, assessing progress made in Stage 1 and outlining next steps needed. It will discuss the legal, economic and political preconditions of the more far-reaching measures necessary to complete EMU in Stage 2, and will draw on analytical input from an expert consultation group. Translating the Five Presidents’ report into laws and institutions should begin without delay.”

by This email address is being protected from spambots. You need JavaScript enabled to view it. - During his recent visit to the region of Western Macedonia Greece’s new minister for energy Panayiotis Lafazanis declared his support for the construction of the new lignite plant “Ptolemaida V”. He also emphasized that he will re-negotiate the construction cost in order to reduce the burden for the Public Power Corporation (PPC) and Greek citizens. According to the contract agreement, signed two years ago, the construction of the new 660 MW lignite plant will cost 1.4 billion euro. With the exception of the 739 million euro bond loan, supported by the German Export Credit Agency Euler Hermes and arranged by the KfW IPEX Bank in 2013, PPC has been unable to secure additional funding. Recent articles in the press also mention the need for payments of 400 million euro in the first 6 months after construction begins. The situation is further complicated by the decision of the new minister to freeze the privatisation of part of the PPC and the Independent Power Transmission Operator (IPTO), which would offer the PPC funds for the construction of the new plant.

In addition to financing problems, WWF Greece in its recent report, argued that the new lignite plant will see its income shrink due to the recently adopted changes in the ETS (MSR, increase in the linear reduction factor) which will greatly increase the production cost. The argument is based on the PPC’s own calculations, which show that at the CO2 prices of approximately €30/tn (predicted for 2025-2030), Ptolemaida V will be displaced in the electricity market by natural gas plants. More importantly, the new report has shown that hybrid systems consisting of RES (wind- PV) and pumped hydro energy storage (PHES) are capable of covering the same base load as Ptolemaida V while also having lower levelised cost of energy (LCOE). Key in all this is the conversion of existing PPC-owned pairs of hydropower stations into PHES.

The Ptolemaida V case bears a striking resemblance to the 600 MW TES6 unit in Sostanj Slovenia, which was also declared to be the “Slovene energy future”. The new lignite unit which started test operation in 2014, although significantly more efficient compared to Ptolemaida V (46% vs 41,5%) is expected to have €70-80m annual losses that will burden Slovenian citizens, 226 jobs less than those promised, and a total €1.4b of installation costs compared to €690 million that was initially budgeted. 

In addition to Ptolemaida V, Panagiotis Lafazanis also promised that he will re-open the old Ptolemaida III lignite unit and extend its operation beyond 2015. The 125 MW lignite unit which started its operation back in 1965 (the oldest one still not officially retired) caught fire last November. A prerequisite for issuing its environmental permit 4 years ago was that it will be retired by the end of 2015 at the latest as part of the entire thermal power station (TPS) of Ptolemaida consisting of 4 units. The “excuse” for this is that the Ptolemaida III unit will complement Kardia III and IV in providing district heating to the city of Ptolemaida. The entire TPS Kardia consisting of 4 lignite units is scheduled to enter the Limited Lifetime Derogation (LLD, article 33 of the Industrial Emissions Directive) starting 1/1/2016. Hence, the idea is for Ptolemaida III to join them in this derogation and continue to operate beyond 2015. 

However, things are not that simple. The operation cost of TPS Ptolemaida is high and it will get even higher if Ptolemaida III operates without Ptolemaida IV. More importantly, the deadline for declaring a TPS in the Limited Lifetime Derogation is surpassed by more than 16 months. Thus, the Ptolemaida III were to operate beyond 2015, it would have to comply with the stricter emission limit values of the Industrial Emissions Directive. This would in turn mean expensive and extensive retrofits, since TPS Ptolemaida as a total is in violation of its own environmental permit in terms of SO2 emissions and its dust emissions are on average more than 4 times higher than the current limit of the Large Combustion Plants Directive (2001/80/EC). Unit III in particular has exceeded the limit corresponding to it for dust emissions according to Greece’s National Emissions Reduction Plan (NERP) every year since 2009, by at least a factor of 2. 

This may be the right time for Greece's energy ministry to discover renewables-based solutions for district heating. 

Read more: WWF Greece - announcement, WWF Greece - report on Ptolemaida V, Bankwatch on Sostanj, PPC-announcement on Ptolemaida V bond loan (in Greek)

Highlighting the most urgent actions and reforms for the protection of the environment and the development of a living economy that will safely lead Greece out of the economic crisis, WWF Greece addressed PM Alexis Tsipras, Minister of Economy George Stathakis, Minister for Productive Reconstruction & Environment Panayiotis Lafazanis and Alternate Minister Yiannis Tsironis. In the statement, WWF identifies a series of priority actions in the areas of environmental law, governance & living economy, and urgent measures for the conservation of significant protected areas and the development of clean energy. 

The new government of Greece is called by WWF to urgently halt the unprecedented rollback on environmental policies and legislation that unfolded in previous years, in order to avoid entitlement to rights stemming from specific new laws that seriously undermine environmental protection and legal certainty. Recent examples of legal provisions that need to be abolished are the anti-forest law 4315/2014 that was voted by the Hellenic Parliament in December 2014, legislation undermining the conservation status of protected areas, acts for the sanctioning of illegal buildings on the coastline, and a ministerial decision doubling the limits of allowable pollutant concentrations in the heavily polluted Asopos river. 

In the crucial domain of sustainable economic policies and good governance, WWF Greece calls for the establishment of a robust independent authority for environmental inspections, under parliamentary supervision, which will be granted the power to impose sanctions and effectively combat environmental crime. WWF also focuses on the importance of incentives for the development of the social economy sector and the reorientation of the Investment Law towards the support of living economy business plans, under strict sustainability and innovation criteria. The need for an increase in the Green Fund’s ceiling for allowable annual spending of just 2.5% of its total revenues is also stressed, for the implementation of the Fund’s legal commitment to allocate the revenues from illegal buildings to nature conservation and urban environment improvements. 

The front of protecting Greece’s natural treasury has become very demanding since the wake of the crisis, due to pressures for all types of developments regardless of their impact, even within legally protected areas. Flagship cases raised by WWF Greece are the sea turtle nesting habitat in Kyparissia, the Prespa Park, the diversion schemes of the rivers Aoos and Acheloos, and Kitros (Korinos) lagoons. 

Highlighting the appeal for cancellation of the planned construction of a new 660MW lignite power plant Ptolemaida V by the Public Power Corporation (PPC), WWF also points out as scandalous the single production and operation permit covering horizontally many of the PPC’s fossil fuelled power stations: a favourable status that allows the operation of stations lacking environmental permits. The shift towards a clean energy economy is one of the major challenges for the new government, given its pre-election commitments for “economic transformation with social and ecological criteria”, hence the formulation of a 2030 national energy plan leading to the gradual independence from fossil fuels is seen as an imperative.

Read more: WWF Greece (in Greek)

The announcement of Greece’s new Government was followed by the surprising abolition of the Ministry for Environment, Energy and Climate Change and its merger with agriculture and industry under the title “Ministry for Productive Restructuring, Environment and Energy”. Panayiotis Lafazanis, an experienced MP, will head the ministry as Minister. Yiannis Tsironis, a member of the Ecologists-Greens party, was appointed as Alternate Minister in charge of the environmental sector of the new ministry.

Environmental groups reacted with disappointment at what they called a signal that the environment agenda will be further downgraded. They also stated that sustainable development requires checks and balances that ensure the clear distinction between environmental policy and administration and heavy footprint sectors, such as agriculture and industry. After years of campaigning for the separation of the policy domains of environment and public infrastructures, whose cohabitation led to the constant sidelining of the environment for over twenty years, the establishment in 2009 of the Ministry of Environment, Energy and Climate Change was cautiously welcomed as a positive step towards the modernisation of Greece’s environmental performance. However, an obvious lack of political will, accompanied by an unprecedented rollback in important laws and policies and weakening of its administrative capacity over the last three years, made the need for a robust and effective environmental ministry even stronger.

In a joint statement, the environmental groups ANIMA, Archelon, Arcturos, Mediterranean SOS Network, Hellenic Society for the Protection of Nature, HOS/Birdlife Greece, Callisto, MEDASSET and WWF Greece stated that they “would like to be in the pleasant position of simply offering their congratulations to the new Prime Minister Alexis Tsipras and wishing him a term that will be positive for the environment, quality of life and the commons”, but instead they find themselves in the difficult position of asking the new government to reconsider the abolition of the environmental ministry.

In relation to specific construction plans that threaten ecologically sensitive areas, SYRIZA has on many occasions held a positive position. A few days before the January 25th national elections, SYRIZA tweeted to WWF Greece that it stands clearly against the “useless pharaonic project” of the Acheloos River diversion. The party has also taken a clear position against the controversial and environmentally harmful gold mining investment in Halkidiki. In addition, during the election campaign, Alexis Tsipras publicly reconfirmed the intentions of SYRIZA to abolish the Hellenic Republic Asset Development Fund, whose portfolio includes the privatisation of lands protected under nature conservation law.

On the energy policy front, SYRIZA faces a crucial and urgent dilemma right from the start, as the construction of the new 660 MW lignite plant Ptolemaida V is scheduled to start in early 2015. On the one hand, soaring unemployment rates in the lignite centre of Western Macedonia (which increased when two lignite plants were destroyed by fire in early November and were closed down) is creating pressure to proceed with the construction. On the other hand, SYRIZA has expressed its commitment to an ‘ecological transformation’ of the energy model. Clearly, such a commitment cannot be met if Ptolemaida V, which is scheduled to operate between 2020-2050 (at least), is constructed, since it will maintain the dependence of Greece’s energy system on coal.

Read more: Joint NGO statement (in Greek), The Times of Change, The Guardian, Reporterre (in French).

As environmental rollback on the pretence of economic development has become political routine in Greece, a new bill submitted to Parliament in early December aimed to sanction a new set of illegal land uses and buildings, declassify burnt forest lands from special reforestation status and essentially abolish the forest maps (currently most important forest protection legal tool). 

The bill titled “Acts for contribution in land and cash – Land expropriation and other provisions” was submitted to the Parliament by Alternate Environment Minister Nikos Tagaras just four months after the voting of the controversial Law 4280/2014 on housing development within forests and woodlands. According to WWF Greece, the bill constituted the latest in a series of blows to legal certainty and clarity, as it is filled with tailor-made provisions that serve particular interests and sanction illegal land developments, whereas at the same time it contravenes settled case-law by the Council of State. An avalanche of last-minute amendments completed the picture of a cronyistic and legally insecure bill that was loaded with favours and ignored the rights of all law-abiding citizens who respect the environmental commons. One specific amendment caused a storm of angry comments: three MPs from the region of Attica proposed the freezing of financial penalties and demolition acts for illegal buildings within forests. 

Four months after the voting of the controversial Law 4280/2014 on housing development in forests and woodlands, Greece’s Ministry of Environment, Energy and Climate Change submitted to the Parliament a new bill, which further undermines the conservation value and clarity of forest legislation. Titled “Acts for contribution in land and cash – Land expropriation and other provisions” and submitted by Alternate Environment Minister Nikos Tagaras, it is expected to be voted before the December 17th parliamentary election for Greece’s new President of the Republic.