Discussion Overview – Sustainable Future II: Prospects and Challenges of the Energy Sector

Panel 1: “The European and Greek energy market model. The impact of geopolitical advances on social welfare”

On May 5th, 2023, the scientific seminar “Sustainable Future II: Prospects and Challenges of the Energy sector” took place in Technopolis, Athens. This event is a continuation of the various initiatives of Get Involved on the topics of the Sustainable Future, which include the publication of the monthly newsletter ESG Insights and the organization of scientific seminars on the issues of the Green Transition. For this seminar, we collaborated with the Law students’ team Just In Case to highlight the challenges and role of the energy market in sustainable development through an interactive discussion that involved presentations and dialogues with the participants, who were mainly university students. The event was honored by the presence of 12 distinguished representatives from academia, institutions, the market and an audience of 209 participants with diverse scientific backgrounds.
The main positions presented during the event are summarized below:

The speakers for the first panel were, Mr. Stamtsis George, General Manager of Hellenic Association of Independent Power Producers (HAIPP), and Mr. Doukas Harris, Associate Professor at the School of Electrical & Computer Engineering (ECE) of the National Technical University of Athens (NTUA). The speakers presented the developments in the energy market in the EU and Greece, and in particular the impact that the geopolitical developments had on social welfare in the EU.
Mr. Stamtsis in his speech presented the Hellenic Association of Independent Power Producers (HAIPP) and the Greek electricity market. He began by explaining the role of HAIPP, whose responsibilities include regulatory efforts and energy policies for both Greece and the European Union, and the effective operation of the Energy Exchange Market. Also, he described the energy crisis of the past few years, analyzing its causes, the crisis on the demand side, as well as the legislative response of Greece to mitigate its impact. Moreover, he brought forth the discussions that are conducted on the European level about the electricity market. Lastly, Mr. Stamtsis proposed an adaptation of the current European energy market that will enable the restoration of normality, highlighting the utilization of the hydro-electrical system, and the adaptability in an era characterized by constant changes.
Mr. Doukas, in his speech, emphasized the connection and impact of the energy market on social welfare. He began by presenting some statistics that show the disproportionate burden on citizens, especially households and young people that face energy poverty. Moreover, he expressed concern about the energy future of Greece and stressed the need for adopting a model of energy self-production that could strengthen the nation’s energy security and social welfare. As for the fiscal footprint on supporting consumers Mr. Doukas highlighted the existence of a structured investment plan that places emphasis on the energy networks and the production of energy by households could have a significant impact on future pressures. Lastly, Mr. Doukas presented the current state of electric networks and pointed out the need for energy democracy with the development of a solar energy social strategy, and the need to create value for local communities from big energy-related projects.

Panel 2: “Presenting the Greek and European regulatory framework of the energy market and the role of the independent authorities”

The second panel of the seminar consisted of Mr. Karagiannis Vassilis, Partner at KLC Law Firm, Mr. Omran Orestis, Partner at DLA Piper Law Firm and Head of the Greece Country Group, Ms. Psalti Maria, Lawyer, Specialized Scientist and Head of the “Legal Support and Decision Verification” Department at the Legal service of the Greek Independent Regulatory Authority of Energy, Ms. Stazilova Eleni, Senior Associate at Bernitsas Law Firm’ and Ms. Mastrokoukou Argyro, Associate at Metaxas and Partners Law Firm. The speakers analyzed the Greek and European regulations that govern the energy market and how the latter is affected by the independent authorities.
Mr. Karagiannis thoroughly explained the role of the competition authorities in the energy sector and underlined the position of the Competition Committee and the European Commission. He began by referring to the application criteria needed to implement the provisions on competition and expanded on the possibility of allowing businesses to act to a certain extent, by their own volition. More specifically, he clarified the responsibilities of the Competition Committee and the Independent Regulatory Authority of the Energy [RAE], where the former manages the “ex post” execution of the regulations, and the latter focuses on the “ex ante” application. Moving on, he analyzed the regulations concerning the control of the state funds (article 107-109 of the European Convention) and presented the Foreign Subsidies Regulation, which aids the European Committee to face foreign government funding, which distorts the equivalence of the market. Finally, he highlighted the inherent difficulties during the “ex post” application of the regulations and stressed the need for explicitly delimiting the responsibilities and the need for cooperation among the independent Greek and European authorities.
Mr. Omran presented on the issue of government subsidies in the energy sector. He started by going through the directions for 2022, which define the compatibility criteria of state funding, based on article 107 paragraph 3(c) of the Convention. Moreover, he referred to measures to reinforce these exact directions. Moving on, he emphasized the importance of state funds, regarding the trade of the greenhouse gas-emitting rights and how these funds can be increased. Furthermore, Mr. Omran pointed out the General Regulation of Dischargement that determines the compatibility conditions, which are used by the states, so they can apply subsidies with neither previous notice nor approval from the Committee. He closed his speech by mentioning the 4414/2016 legislature and underlined that the European Committee is not yet fully prepared to manage green-transitioning investments.
Ms. Psalti, introduced the role of the Independent Regulatory Authority of Energy (RAE). She began by highlighting the -peculiar and discernible from other private and public entities- legal character of the authority and highlighted its economic, personal, institutional and functional independence. Ms. Psalti continued by listing the exclusive responsibilities the authority is assigned directly by the European legislature, which include the management, supervision and control of the energy markets. More specifically, these responsibilities are regulatory, judicial and sanctioning as well as recommendations that are marked as either “soft law” or “amendments”. It is important to mention that the authority has no jurisdiction and barely intervenes when it comes to the retail market of electricity and natural gas. Ms. Psalti added that the national legislature assigns the authority extra responsibilities, due to its discretion, such as the assurance of energy supply, the licensing and the relative supervision. Lastly, she concluded by emphasizing the need for evaluating and supervising the competition and underlined the necessity for cooperation between the authority and the Competition Committee.
Ms. Mastrokoukou in her speech talked about zoning the boundaries of the responsibilities of the regulatory authorities. More specifically, she explained the institutional and legal context that established the Regulatory Authority of Energy, Waste and Groundwater and explained its objectives, such as the publication of the yearly assessment that evaluates the compliance of the supplier prices with their obligation to provide services for the greater common benefit. She highlighted that the regulatory framework strives for transparency, assurance of the energy supply and management of the licensing process. She then continued by stating the main goal of the Competition Committee; the protection of the consumers and the unadulterated operation of the market and the businesses. In addition, Ms. Mastrokoukou analyzed the legal framework that defines the cooperation between the two mentioned authorities and specifically highlighted their obligation for mutual briefing and supervision. In other words, the regulatory authority of Energy, Waste and Groundwater is marked as a determining factor of the market and takes precautions if distortions are found. The Competition Committee, on the other hand, handles every issue by restraining and controlling it afterwards, as it has exclusive jurisdiction. In conclusion, she described the cooperation as a form of intersection.
Ms. Stazilova explained the reasons why Hydrogen is the ultimate fuel for the future. She began her speech by justifying the use of green Hydrogen especially in the transportation and industry sector, where the need for fuel is immense and cannot be solely covered by green electricity. Green Hydrogen is abundant and its production, transfer and storage are extremely easy. She also pointed out the opportunity for the European Union and especially for Greece to finally produce and obtain their own fuel and noted that Europe has already developed more than 300 projects, based on hydrogen. She then introduced the concept of “Hydrogen Valleys”, which are autonomous regional green ecosystems and mentioned that there is already an existing legal framework in the European Union for these ecosystems. Ms. Stazilova underlined the necessity for creating a European Hydrogen Bank in order to fund regularly related attempts. Moreover, while focusing on Greece, she particularly mentioned the need for combining this project with the national energy policy. In conclusion, she mentioned that important updates related to the inclusion of Hydrogen in the legal framework are expected in the near future.

Panel 3: “Climate Change, Green Transition of the Economy, and Energy Market Transformation”

The third panel featured participants who provided scientifically rigorous analyses: Mr. Papandreou Andreas, Professor at the University of Athens, Ms. Athousaki Elena, Head of ESG, Sustainability, and Climate Change at Motor Oil, Ms. Leivadarou Evgenia, Energy Transition Advisor, Ms. Kioumourtzi Paschalia, Prinos Subsurface Lead at Energean and Mr. Panos Apostolos, Head of Energy Management at Enel Green Power Hellas.
Mr. Papandreou commenced his speech by acknowledging that “nature knows no borders,” highlighting the need for coordinated global action against climate change. Seeking to trace the historical trajectory of theoretical and practical foundations of international environmental agreements, he referred to the Framework Convention on Climate Change, signed in 1975, and its established annual Conference of the Parties for its renewal. He then proceeded to discuss the Kyoto Protocol, the Paris Agreement and the Fit for 55 milestones as consensus markers for most countries, with a clear objective to ideally limit the increase in Earth’s temperature below 1.5 degrees Celsius.
The pandemic, as highlighted by Mr. Papandreou, and the subsequent “closure” of the economy for a noteworthy period resulted in a decline of approximately 6% in greenhouse gas emissions globally. As he noted, comparable results need to be achieved to ensure compliance with environmental commitments, emphasizing the magnitude of the necessary transition.
Continuing the discussion, he referred to the European Green Deal of 2019, which provides the impetus for a series of legislations aimed at addressing climate change. The European Green Deal has an interdisciplinary and holistic approach, incorporating principles of a circular economy.
Mr. Papandreou noted that despite the invasion of Ukraine and the energy security issues that have arisen, there has been no significant retreat from the goals set for the transition to new technologies and new forms of energy. The messages from Europe are mixed, as there are announcements both for the continued use of hydrocarbons and for direct disengagement from Russia through renewable energy sources. Concurrently, the battle of interests between the United States, China and Europe will boost the development of new technologies, as dominance in the emerging field of the new economy is at stake. Those who do not progress rapidly will face a serious competitive disadvantage.
Finally, he emphasized that smaller countries like Greece can boost their development and increase their competitiveness through the green transition.
Next, Ms. Athousaki took the floor and provided an overview of the functioning framework and duties of her department at Motor Oil. The department is responsible for numerous functions namely legislation, reports, communications, corporate governance, strategy, development, creation, and implementation of a sustainable development plan. Its role is not only supervisory but also advisory, with a primary focus on guiding the management. As Ms. Athousaki pointed out, the Motor Oil Group has made significant progress in climate change-related matters.
When asked about future challenges, she referred to the fundamental “trilemma”. Energy must be simultaneously secure, contribute to sustainable development, and be affordable for all. The Motor Oil Group’s goal to reduce direct emissions (Scope 1) by 30% and indirect emissions (Scope 2) by 30% by 2030 is moving forward with a hybrid model that combines traditional refining with a bio-refinery. This hybrid model ensures economic viability, and the profits will be invested both in the maintenance and digitalization of the refinery and in new energy technologies. The Motor Oil Group is already collaborating with Public Power Corp. (PPC) and the Ellaktor Group in the fields of hydrogen and wind energy, respectively, while placing particular emphasis on waste management.
Ms. Athousaki emphasized that the Motor Oil Group is a “multi-energy company”.
Referring to another significant challenge, she mentioned the EU Taxonomy and its strict criteria, which somewhat hinder the rapid transition.
She mentioned that there are two categories of investors with different sensitivities to ESG issues. However, due to European legislation, the EU Taxonomy and institutional evaluations, investors are encouraged to invest in companies that meet sustainability requirements.
Concluding, Ms. Athousaki stressed the need for ESG topics to be incorporated into all universities and urged young people to stay informed about new developments and constantly acquire new skills from various fields, including economics, technology, law, and human management.
Ms. Leivadarou focused her speech on the field of infrastructure and provided a clear picture of the reality by commenting on the geopolitical as well as the European and domestic framework. Following the pandemic and the energy crisis, which led to an increase in energy prices, the rise in commodity prices and the disruption of the supply chain due to a lack of raw materials, a significant change occurred in the estimated cost of infrastructure projects. She emphasized the need to strengthen the country’s energy security and independence, highlighting the fact that energy transition comes with costs associated with modernization and new infrastructure. Additionally, she underlined the need for energy production at a national level with a fully predictable cost.
According to Ms. Leivadarou, the future lies in energy hubs that will make entire regions self-sufficient and independent. The size of these regions will depend on the quality of the infrastructure. In order for such a vision to be feasible in Greece, it is imperative that the EU’s objectives be transformed into a legal framework with clear spatial planning and the existence of systems that will control the licensing, construction, operation, and maintenance of these projects.
In this endeavor, Ms. Leivadarou emphasized that, through the integration of households into the new projects, society must be an ally. Examples of this are energy parks and energy cooperatives that operate on the basis of balancing consumption and production and which have experienced significant growth throughout Europe. Finally, Ms. Leivadarou supported the notion that the RRF (Recovery and Resilience Facility) provides assurance for the support of “green” initiatives from the European mechanism.
In her speech, Ms. Kiοumourtzi presented the Prinos program of Energean, which is currently in the planning stage. The central objective of the program is the storage of carbon dioxide emissions. The main responsibility of the team led by Ms. Kiοumourtzi is the study of the subsoil. The Prinos program represents one of the most significant projects of Energean in order to achieve the net-zero target by 2050. To accomplish this goal, the company has undertaken a series of actions, such as transitioning production from oil to gas, focusing on the development of programs that address carbon dioxide emission reduction, and investing in programs based on finding natural ways to achieve the aforementioned goal. Subsequently, emphasis was placed on the challenges encountered by the program, both regarding technical and legal aspects. Finally, it was noted that significant progress is observed in the market regarding the development of a mature environment that will enhance the implementation of projects aimed at carbon dioxide storage, just like the Prinos program.
The panel discussion concluded with Mr. Panos’ statement. At the beginning of his remarks, Mr. Panos emphasized that energy possesses inherently social characteristics. He then referred to the 24-hour simulation program of the electricity market developed by Enel Green Power Hellas. This program consists of a forecasting system for price movements and overall energy mix configuration, which plays a crucial role in making investment decisions. He highlighted the need for faster progress in promoting renewable energy sources (RES) in the EU, coupled with storage units, as they can provide sustainable solutions to the energy independence challenge. Closing his speech, he underscored the necessity to change our perception of energy, emphasizing the importance of energy conservation as an immediate response to the energy problem, as well as the significance of shaping a culture among consumers around models that offer choice to end-users, to make renewable energy competitive and appealing.

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May 15, 2023