Subscriber Login

Features

Greece’s Grid Expansion Plan: Economic recovery to push investments [free access]

September 13, 2018

Greece has made noticeable progress with energy sector reforms by restructuring state-owned companies and transposing provisions of the third European Union (EU) Energy Package for the liberalisation of electricity markets. According to the International Energy Agency (IEA), the country is also expected to achieve the 2020 emissions reduction and energy efficiency targets agreed with the EU, mainly due to the targeted policies put in place by the government. This is also partly due to lower energy demand resulting from the economic crisis since 2010.

 

However, as the economy emerges from the EU debt bailout, the current policies will need further strengthening to guide the Greek energy sector towards the long-term energy transition. The country is expected to use the economic recovery as an opportunity to get ahead by pursuing initiatives for grid expansion, renewable integration and energy efficiency.

 

To support these goals, the country’s transmission system operator (TSO) Anexartitos Diacheiristis Metaforas Ilektrikis Energeias (ADMIE) is planning to invest EUR2.3 billion between 2018 and 2028. The main drivers for these investments are interconnection of Greek islands to ensure security of supply, reduce the energy cost, and environmental issues; accommodation of future renewable energy sources (RES) generation; connection of conventional (thermal) generation; and new interconnections with neighbouring systems.

 

Recent developments

As a result of the financial crisis, which began in 2009, the Greek government agreed to an economic adjustment programme (EAP) with the EU, the International Monetary Fund (IMF), and the European Central Bank in 2010. The liberalisation of product markets and the increase of competition in the energy sector are some of the key aspects of the EAP that contribute to making the energy sector more competitive.

 

In line with this, in June 2017, the Greek government allowed the State Grid International Development Limited (SGID) of China—a subsidiary of state-owned State Grid Corporation of China (SGCC)—to acquire a 24 per cent equity stake in ADMIE. The Chinese utility placed the highest offer of EUR320 million for acquiring the stake in the company. The move is likely to help ADMIE in implementing the EUR2 billion plus 10-year investment plan, which also includes connection of the island of Crete to mainland Greece via undersea cables.

 

Overall, Greece has been making considerable progress towards reforming the energy sector compared to the situation before the first EAP. The Ministry of Environment and Energy has prepared, and the parliament has passed, laws that provide an umbrella framework for the necessary reforms. These reforms include increasing competition in the electricity wholesale and retail sectors. Going forward, divestment and eventual privatisation of energy sector companies is expected to proceed in phases entailing the sale of defined business units such as the power transmission segment, which allow for proper valuation and effective unbundling in the sector.

 

Existing network

As of 2017, Greece’s transmission network comprised about 11,576 km of line length, 49,693 MVA of transformer capacity and 317 substations. The majority of the network, or about 74 per cent of the total line length, comprised 150 kV transmission lines, followed by 24 per cent of 400 kV alternating current (AC) lines and 2 per cent of 400 kV direct current (DC) lines.

 

Since 2013, the transmission line length has grown at a compound annual growth rate (CAGR) of 0.70 per cent while the transformer capacity grew at a CAGR of 1.32 per cent.

 

Table 1: Existing transmission network in Greece

 

2013

2014

2015

2016

2017

Line length (km)

11,257

11,293

11,391

11,533

11,576

—400 kV AC

2,677

2,678

2,678

2,788

2,816

—400 kV DC

187

187

187

187

187

—150 kV

8,393

8,428

8,526

8,559

8,573

Transformer capacity (MVA)

47,157

48,612

48,762

49,042

49,693

—400 kV

21,075

22,195

22,195

22,475

22,962

—150/66/20 kV

26,082

26,417

26,567

26,567

26,731

Substations

313

313

313

317

317

Source: ADMIE; Public Power Corporation

 

Future investments

As per ADMIE’s ten-year network development plan (TYNDP) 2019-28, about EUR2.3 billion is likely to be invested in the country’s transmission sector during the period 2018-28. Of this, 69 per cent will be invested in new projects, 18 per cent will be directed to network reinforcements, 10 per cent will be spent on expansion projects and the remaining 2 per cent on projects connecting new users.

 

In the short run, between 2018 and 2021, EUR1 billion will be invested in new and expansion projects. According to Global Transmission Research, 1,907 km of line length will be added to the Greek transmission grid in the next four years between 2018 and 2021.

 

Domestic projects

Greece is undertaking several projects to strengthen the domestic grid as well as cross-border electricity ties. The major projects in the pipeline are the Crete interconnection (Phase I), Crete interconnection (Phase II), Cycladic Islands interconnection (Phases A, B, C and D), the first 400 kV branch to Peloponnese (overhead line from Megalopoli–Patras–Acheloos) and the second 400 kV branch to Peloponnese (overhead line from Megalopoli–Korinthos–Koumoundouros).

 

Phase I of the Crete interconnection project involves one 400 MVA, 132-km-long AC submarine link from Peloponnese to Crete. The link, requiring and investment of EUR324 million, was launched in April 2018 with the publication of the tender documents for the construction of the undersea cable. It is expected to be commissioned in 2020. Phase II of the Crete interconnection project involves one 1,000 MW DC submarine link connecting Attica to Crete. The link, requiring and investment of EUR713 million, is expected to be commissioned in 2023.

 

The Cyclades project entails the construction of a 150 kV cable connecting the island of Syros to the Attica port of Lavrio, which is intended to bolster the existing cable connection to the mainland. The Cyclades interconnection project involves the development of an offshore transmission grid to interconnect the main Cycladic islands—Syros, Paros, Naxos, Mykonos, Tinos and Andros—with the mainland electricity system. This is expected to improve the reliability of supply on the islands as well as enable the state-owned power utility ADMIE to exploit the economies of scale of the interconnected system. ADMIE plans to invest EUR424 million for the first three phases of the project, to be completed by 2020, and another EUR386 million for the fourth phase, to be completed by 2024.

 

The first 400 kV branch from Peloponnese will stretch from Megalopoli to Acheloos. The project, worth EUR83.1 million, is expected to be commissioned in 2019. Meanwhile, the second 400 kV branch to Peloponnese will stretch from Megalopoli to Koumoundouros. The overhead line, worth EUR111.6 million, is expected to be commissioned in 2024.

 

The main objectives behind the interconnection of the islands include system stability with improved security of supply for the islands’ electricity system; drastic reduction of electricity generation costs in the islands; substitution of oil units with RES plants and imports from the mainland; several environmental benefits and RES enhancement as majority of the energy needs will be met by RES, while the rest will be imported from the mainland.

 

Cross-border projects

Apart from these, Greece is also involved in developing interconnection projects with its neighbouring countries. Some of the cross-border projects under various stages of development are  the 130-km-long,  400 kV AC Bulgaria−Greece third interconnector; the 1,518-km-long, ±500 kV high voltage direct current (HVDC) EuroAsia interconnector project; the over 347-km-long, LEG (Libya, Egypt and Greece) 1 power submarine cable project; and the 130-km-long, 400 kV AC Maritsa East 1 (Bulgaria)−Nea Santa (Greece) line.

 

The 400 kV AC Bulgaria−Greece third interconnector involves the construction of a second 400 kV line between the Maritsa East 1 substation (Bulgaria) and the Nea Santa substation (Greece). The project is necessary to increase the transfer capacity between Greece and Bulgaria in order to accommodate the connection of renewable energy sources and improve market integration. It is expected to increase transmission capacity in the long term by 440 MW for the dominant direction from north (Bulgaria and Romania) to south (Greece), which corresponds to an approximately 30 per cent increase in the total capacity at the Bulgaria-Greece border. In the opposite direction, transfer capacity will increase by about 240 MW, which corresponds to an approximately 23 per cent increase in the total capacity at the Bulgaria-Greece border. It is expected to be commissioned by 2030.

 

The EuroAsia interconnector project aims to link the power grids of Cyprus, Greece and Israel using the world’s longest submarine power cable. The project is part of EU's Projects of Common Interest (PCI) list. The 1,500-km link will have the capacity to transmit 2,000 MW of electricity in both directions. In February 2017, the European Commission (EC) granted EUR14.5 million or 50 per cent of the total cost of EUR29 million for the final detailed studies prior to project implementation. The interconnection between Israel and Cyprus is planned to begin operation at the end of 2019 and the final connection to Greece will be completed in 2022.

 

LEG1 is an HVDC subsea cable project of at least 2,000 MW allowing for an electricity exchange between Europe and the south-eastern Mediterranean countries. The bi-directional interconnector will link Libya and Egypt, via Tobruk, to Crete (Greece), allowing Europe to interconnect with existing/planned regional networks, including the Egypt-Tunisia-Libya-Algeria-Morocco (ETLAM) interconnection, the Egypt-Iraq-Jordan-Lebanon-Libya-Syria-Turkey (EIJLLST) interconnection and the Gulf Cooperation Council (GCC) grid. LEG1 creates a new electricity exchange place enabling Europe to export production surpluses to a market serving over 500 million North African users with high electricity demand. The project, worth EUR1,015 million, is expected to be commissioned by 2021.

 

The 400 kV AC Maritsa East 1 project entails the construction of a new single-circuit 400 kV overhead line (OHL) aimed at strengthening the transmission network in southern Bulgaria. About 122 km of the 130-km line will be in Bulgarian territory. Once constructed, the line will facilitate market integration by increasing transfer capacity at the Bulgaria-Greece border and increase the volume of exchange between the continental Europe synchronous area and Turkey. It will also promote the safe evacuation of power from wind farms expected to be installed in northeast Greece and northeast Bulgaria, and from photovoltaic power plants in southern Bulgaria. This project is part of the PCI list. According to the European Network of Transmission System Operators (ENTSO-E), the project has been delayed due to lack of funding.

 

Table 2: Major projects under ADMIE’s TYNDP 2019-28

 

Project

Parameters

Commissioning

Cost

Domestic projects

Crete interconnection (Phase I and II)

Phase 1: 400 MVA, 132 km

Phase II: 1,000 MW, 30-km

Phase I: 2020

Phase II: 2023

Phase I: EUR324 million

Phase II: EUR713 million

Cyclades interconnection

150 kV

Phase I, II, III: 2020

Phase IV: 2024

Phase I, II, III: EUR24 million

Phase IV: EUR386 million

First 400 kV branch to Peloponnese (OHL

Megalopoli–Patras– Acheloos)

400 kV

2019

EUR83.1 million

Second 400 kV branch to Peloponnese (OHL

Megalopoli–Korinthos–Koumoundouros)

400 kV

2024

EUR111.6 million

Cross-border projects

LEG (Libya, Egypt and Greece) 1 project

NA; 345 km

2021

EUR1,015 million

Maritsa East 1 (Bulgaria)−Nea Santa (Greece) link

400 kV AC; 130 km

2021

EUR66.2 million

EuroAsia interconnector project

±500 kV HVDC; 1,518 km

2022

EUR4,247 million

Bulgaria−Greece third interconnector

400 kV AC; 130 km

2030

NA

Note: NA – not available; OHL – overhead line

Source: ADMIE; Public Power Corporation

 

 

Conclusion

Greece has made noticeable progress with its energy sector reforms in recent years. The country moved forward on plans to restructure state-owned companies and liberalise electricity and gas markets, which is expected to lead to a more competitive and financially viable energy market. The momentum of the energy sector reforms has to continue for Greece to achieve a sustainable and secure energy supply. With this background, it will be crucial for the grid operator to successfully execute the planned projects that are aimed at building the required capacity.