Friday, 27 June 2008

Put your money where your mouth is

In 1997, the Danish island of Samso won an energy ministry competition to see if it could become self-sufficient with renewable energy within 10 years. Samso managed it in six. The North Sea winds quickly blew not merely self-sufficiency but also prosperity into the blades of its enormous wind turbines, giving it an export industry in electricity.

The experiment is now giving the 4,100 people of Samso all of its power and 70 percent of its heat, which includes solar panels on roofs. What oil the islanders do burn, mostly for transport purposes, is more than offset through sales of clean energy, making Samso carbon-negative.

It is a model that stands in stark contrast to the Greek experience. The Samso project was based on the willing participation of the local population, whereas here locals have been alienated. The Mytilinaios group received a sharp rebuff from the island of Serifos in April 2007 when it proposed installing 87 wind turbines capable of generating 260 megawatts - about a third again of Greece's current wind generating capacity. A thousand permanent residents saw no point in jeopardising their income from about 80,000 visitors a year.

Similarly last summer the island of Skyros rejected the idea of installing 111 wind turbines capable of producing 333MW. The project would have been 95 percent owned by the monastery of Megisti Lavra on Mount Athos, which is the parent institution of the monastery of St George on Skyros, owner of vast tracts of land in the barren south of the island.

Both of these projects suffer from the same dilemma. Most of Greece's wind potential lies offshore, but wind farms are only financially feasible if they can sell power to the grid, and the cost of laying undersea cable to connect a remote island is high.

This is where the public sector can play a role. The Danish government helped Samso raise 58 million euros in loans to install its wind generating capacity by offering an above-market purchase rate per kilowatt-hour for five years. The Greek government could subsidise the undersea cabling as its part of Greece's commitment to Kyoto.

Laying that infrastructure would appease the Public Power Corporation, jealous of its status as a dirty generator of almost all of Greece's 12,500 MW of installed capacity and known for its resistance to connecting private wind farms to the grid; but more importantly, it would lay the foundation for an industry Greece could become a leader in. It is no less legitimate to lay cabling for a private power industry than to build roads for private trucking companies or broadband fibre optic to attract businesses.

There is an alternative method, though. Private investors can approach island municipalities with joint ownership business plans that would at first be limited to generating only as much power as the local population consumes. By virtue of their municipal shareholding, the islanders would enjoy subsidised power. In a second stage, and once naysayers had been silenced, the island could proceed to a second phase of expansion and cabling to turn wind power into an export. Even if phase two were never completed, Greece would be the winner from the gradual weaning of islands off diesel generators.

The likelihood is, however, that municipalities will embrace renewable power once they see the benefits. Such is the case in the small municipality of Skyritidas, in Arcadia. Its mayor backed the installation of 60MW in wind turbines and hopes to acquire 500MW. The reason is simple. Skyritidas is a mere 20 kilometres away from the lignite-burning power station of Megalopoli, and would rather have a skyline of virtually noiseless turbines than a carcinogenic plume on the horizon. The mere three percent of revenues given to the municipality for accepting the turbines was estimated at 600,000 euros a year on the basis of 100MW of capacity.

Greece is bound by the Kyoto Protocol and the European Union to produce a fifth of its power through renewables by 2010, and a fifth of all energy by 2020. We currently manage to produce 12 percent of our power through renewables, and that is mostly thanks to decades-old investments in hydro-electric dams, now on the wane due to reduced rainfall. Even worse, the European Environmental Agency has found that Greece has increased its carbon emissions by 32 percent between 1990 and 2005. If that trend continues, we shall greatly overshoot our Kyoto allowances.

Public-private collaborations on Aegean islands are one way to step up our renewable generating capacity. The beauty of renewables is that they do not require centralised production. A coal-fired power station must be built near the source of fuel and be of a certain size in order to service an area and repay its investors, but wind and solar energy are ubiquitous, and a single turbine or solar panel is as efficient as many clustered together. There is no economy of scale. That kind of technology opens the door to micro-generation, which is perhaps the ultimate answer to Greece's power needs.

Greece could offer an incentive in the form of, say, an 80% tax deduction for household installations of solar panels and small wind turbines. Such combined units can be paid off within a decade - and probably sooner given that Greece's unrealistically low power rates must inevitably rise as the PPC pays to pollute. (Such tax deductions have been offered in the 1970s for solar water heaters and natural gas connections in the early 2000s). In the case of apartment buildings, where roof space is jointly owned, solar panels could pay for communal lighting in stairwells and the power that drives heating boilers. Building fees (koinohrista) would drop.

The small scale need not be limited to homes. Individual street lamps can carry their own solar panels, as can kiosks. The real obstacle to achieving this widespread use of renewable technology is neither financial (the government could underwrite public renewable projects without fear of default) nor a question of individual will (the Regulatory Authority for Energy, RAE, says it is sitting on approximately 35,000 megawatts' worth of applications). The obstacles are put in place by the state, both through indifference and through active discouragement. The finance ministry demands that any individual selling power to the grid - which home systems do during off-peak consumption hours - must pay social security contributions to the businesspeople's pension fund, TEVE, because they are engaging in enterprise.

This is clearly nonsense. Our carbon footprint is costing us millions of euros in carbon credits every year, and leaving renewable natural resources untapped. Any private individual willing to risk their own money to switch to clean energy ought to be rewarded with a tax rebate and the permission to do so. That the state-owned PPC refuses to make the switch, long after people have realised it is necessary, and that the government effectively prohibits them from doing so, is not mere negligence; it is bad governance for Greece, for Europe and for the planet.

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