NEWSLETTER HAEE | FEBRUARY 2018

Editorial

The energy market enters a new phase in Greece, as the economy recovers and the sense of confidence returns. The Industry is preparing for new investments in order to meet the demands of the new facts: the opening of the gas market, the development of electric mobility, RES, the international infrastructure projects involving Greece, smart grids and hydrocarbon exploration. Business-level changes were also present during the Networking Event, held by HAEE in co-operation with the National Bank of Greece, aiming to connect the industry needs with the financial tools.

The role of the ΗΑΕΕ is, in fact to link the real economy, industry, the energy market and the academic community. We could not have had a better partner in this effort than the National Bank of Greece, in order to contribute to the transformation, not only of the energy market but also of the entire economy, which will enable Greek businesses to develop according to their capabilities, without barriers and obstacles. And our actions for Energy do not stop here. The 1st EcoMobility Conference 2018, on the 22nd of March 2018, at Aegli Zappiou and the 3rd HAEE International Conference, on 3-5 May 2018, in Wyndham Grand Athens are our future actions to strengthen the energy sector in Greece.

Energy news from ΗΑΕΕ

Great development in the electric vehicle sector

The electric vehicle sector is growing rapidly after years of stagnation. The market and the institutions are adapting their development models according to the EU requirements. Countries all around the world are increasingly acknowledging the shift that is needed from a fossil fuel-driven economy to one that is sustainable, green and attempts to mitigate climate change. One area where this shift will be needed is transportation. Non-liquid fuels, which include electricity and natural gas, will become increasingly important in the forthcoming decades.

The EU's dependence on gas imports will increase

The EU's dependence on gas imports will increase to 83% in 2040 compared to the current 70%. This was stated by EU Commissioner for Energy and Climate, Miguel Arias Cañete, in the European Parliament's plenary session in Strasbourg on February. "Gas remains a significant source of energy for the EU, Europe is increasingly dependent on gas imports and the EU is now importing 70 percent of its gas", Miguel Arias Cañete stated, quoted by TASS. The EU Commissioner noted that gas production in Europe is declining. "Our dependence on gas imports, as expected, will continue to grow and will reach more than 83% by 2040", as Cañete mentioned.

DEPA will remain among the players

"Depa, the Public Gas Corporation, will remain the leading actor of the sector", stated, the Minister of Environment & Energy of the Hellenic Republic, George Stathakis, speaking at the Athens Energy Forum on February.

DEPA, due to its long presence in the Greek market, is a modern and competitive group of companies with a dynamic presence in the energy sector and substantial contribution to the development of the Greek economy, the protection of the environment and the improvement of the quality of life of local communities.

The continuous natural gas supply at competitive prices is among the strategic objectives of DEPA, maintaining its leading position in the domestic market, while enhancing its presence inside and outside of the Greek territory by developing new applications and natural gas services.

DEPA is the main importer of natural gas pipeline and liquefied natural gas (LNG) in Greece. The company’s experience in the domestic market, which exceeds the 15-years, ensures the optimal link between international supply and indigenous demand.

DEPA’s strategic goal is to provide to its customers sufficient natural gas volumes from reliable and diversified resources in competitive prices, ensuring the country’s supply security. DEPA is the only company in Greece that has signed long term contracts with the Russian Gazprom, the Turkish BOTAS and the Algerian Sonatrach.

New energy and climate change committee met on February 21st

The newly formed National Committee for Energy and Climate Change, whose establishment was made official through a recent government gazette announcement by the Minister of Environment & Energy of the Hellenic Republic, George Stathakis, met for the first time on February the 21^st.

Established as a 20-member committee featuring the heads of all the country’s energy sector authorities, the group will be led by the Secretary General of Energy & Mineral Raw Material, Ministry of Environment & Energy, Michalis Verriopoulos.

Dr. Theodoros Tsakiris, Assistant Professor for Energy Policy & Geopolitics at the University of Nicosia and Member of the Executive Board, HAEE took part at the on-line Forum of international experts on the export of Leviathan’s gas reserves

The monetization of Leviathan’s gas reserves, relating to their potential export to Europe, is a matter of strategic significance for Israeli industry executives and the nation’s leaders, who often compete on how to reach EU markets. It needs to be first clarified that the possibility of exporting to Europe is not an issue of immediate concern for decision makers.

After more than three years of regulatory impasse and political infighting, triggered by the decision of David Gilo, the frm. Head of the Antitrust Authority, to cancel the export license of the Leviathan consortium in December 2014, the developers of the field took their Final Investment Decision on the first phase of Leviathan’s development. Most of the 12 bcm/y of the prospective production from Leviathan’s Phase 1 will be directed to the domestic market with a mere 3 bcm/y available for export, most likely to Jordan, where the necessary permit has been secured from the Cabinet.

A preliminary agreement to export 3 bcm/y to Jordan, in order to cover nearly the total amount of the country’s gas demand, has been signed since September 2016, but the contract has not been yet finalized. This is primarily due to political reasons, linked in some part to the Arab reaction to the decision of the President of the United States, Donald Trump to move the US Embassy from Tel Aviv to Jerusalem.

Gas from Leviathan’s Phase 1 will not be available before 2020, so a second production phase that could be exported to the EU is unlikely to be available prior to late 2022 or early 2023.

On the question of what is the optimal export option, there are three potential answers: (a) a pipeline to Turkey and then to Europe, (b) a pipeline to one or both of the Egyptian LNG terminals for liquefaction, and (c) the East Med Gas pipeline (EMGP).

From this angle, if new significant discoveries are not made in the Cypriot EEZ (we will find out in 2018), it would be rather difficult to support the EMGP exclusively with Israeli reserves from Leviathan. The endeavor is too ambitious and risky for only one exporter, especially if this exporter is not an EU state and the prices of gas in the EU markets remain at record low levels, despite the fact that after 2017-2018 they will start to rebound. In the absence of a solution on the Cypriot problem, a pipeline to Turkey that crosses the semi-occupied Exclusive Economic Zone of Cyprus would pitch Israel against Cyprus and Greece and in extension the EU Council. If Israel builds such a pipeline in conflict with and in opposition to Nicosia and Athens, it would seriously endanger their ongoing trilateral cooperation and more importantly would not reach Europe. Turkey does not have the capacity to even transport the gas from its southern provinces to its EU border, let alone export it further afield. If Leviathan gas reaches Turkey, then it will be absorbed in Turkey!

The only viable option to reach the EU, and not without difficulty, is to reach the idle LNG terminals in Egypt that can accommodate the entire production capacity of Leviathan’s Phase 2 and leave space for the liquefaction of some Cypriot gas from Aphrodite. A joint development plan between Leviathan and Aphrodite, which are a mere 20 km apart, is a sensible option to avoid duplicating costs, especially since there is a strong presence by Delek and Noble in Aphrodite.

Events of ΗΑΕΕ

1st EcoMobility Conference

The 1^st EcoMobility Conference 2018 enables the union of national actors and industry representatives by a shared interest in sustainable transportation in order to share best practices and synergies in a setting that promotes creative collaboration, local and international initiatives.

Emmanouil Panagiotakis, Chairman & CEO, PPC, Stephanos Economides, Deputy Director of Strategic & Corporate Development Activities, DEPA and many other representatives from the industry will participate at the Conference, on the 22^nd of March 2018, in Aegli Zappeiou, Athens, Greece.

3rd HAEE International Conference: Energy Transition: European and Global Perspectives

Hellenic Association for Energy Economics is organizing the 3^rd HAEE International Conference, that will take place in Athens, Greece, between 3-5 May 2018, at Wyndham Grand Athens. The event will focus on challenging energy, economic and environmental issues and it aims at providing an international forum for the exchange of ideas, research results and experiences among experts and professionals engaged in academic, business, government, national and international organizations, working in all areas related to energy, environment and economy.