Caspian Report - Issue: 08 - Fall 2014

GREECE’S NATURAL GAS
MARKET: FINANCIAL AND
STRATEGIC CONSIDERATIONS
In order to understand the impact of
TAP for the Greek energy strategy, it
is necessary to first summarise the
main challenges and characteristics
of the domestic natural gas market,
its main players and the way in
which TAP connects to the country’s
broader foreign energy policy of
Greece, and in particular its ambitious
“pipeline diplomacy.”
Greece is one of Europe’s most import
dependent countries, with
virtually no domestic oil or natural
gas production. Although oil (52%)
and gas (12%) correspond to almost
2/3 of the country’s Total Primary
Energy Supply (TPES), oil and gas
imports cover around 99% of final
demand. 6
Despite significant reserves of coal/
lignite, which support the bulk of
national electricity production,
there has not been any substantial
new investment in increasing domestic
reserves. This is no accident.
Pushed by successive EU Environmental
Regulations and Directives
including the ECTS (European Carbon
Trading System) since the mid-
1990s, Greece has been forced to
move away from its most abundant,
affordable and readily available domestic
energy resource.
As a result, the country remained
a net importer of electricity for
around 3.5% of its needs in 2012,
although imports dramatically increased
during the first 7 months
of 2014 in comparison to the same
period the previous year. In July
2014, imports covered around 20%
of Greece’s electricity demand. According
to ADMIE, the Independent
Transmission System Operator
(TSO), the rise in imports replaced
a sharp decline in lignite production
105
CASPIAN REPORT, FALL 2014
6.
All energy graphs have been created based on data from the latest IEA Review of Greece’s energy
policy. International Energy Agency, Energy Policies of IEA Countries: Greece 2011 Review, Paris
(OECD: 2011).