The Context for the project entitled «Applying European Emissions Trading & Renewable Energy Support Mechanisms in the Greek Electricity Sector» (ETRES, LIFE03 ENV/Gr/000219) co-funded by the LIFE III-ENVIRONMENT PROGRAMME of the European Commission is outlined below.

The Greek electricity industry will enter a period of intense change in the near future, from 2005 onwards in particular. A number of significant domestic and international developments will take place and have major impacts on the future structure and operation of the sector. Developments include:

  Full liberalisation of the Greek electricity market and participation of the first IPPs (with gas-fired power plants) in this (daily) market.

  The European Directive 2003/87/EC lays out the basis for an EU-wide emissions trading scheme . This will be mandatory for Europe 's largest industrial installations including utilities - an estimated 5000 sites.

  Greek commitment under the European Kyoto Burden Sharing Agreement (1998) is to increase its GHG emissions by 25% over the first commitment period 2008 to 2012, compared to 1990 levels. Greek national emissions are currently (2002) 26,5% above 1990 levels and considerable action is required if targets are to be met. The electricity sector produces 50% of the greenhouse gases (GHG) emissions in Greece and must play a major role in the achievement of the Greek commitment.

  The expiry of the Third Community Support Framework (CSF III) at the end of 2006 in Greece and, specifically, Measure 2.1 of its Operational Programme for Competitiveness (“EPAN”) that provides generous subsidies (30-50%) to investments in renewable electricity plants. The prospect of a post-2006 successor to this Programme and continuation of subsidies to RES plants, are uncertain.

  The maturation of, and the gathering of operational experience from certain market-based support schemes for renewable electricity, such as the Green Certificates or the Renewables Obligation mechanisms, which are now being introduced in certain EU countries (Italy, Belgium, UK, etc.).

Thus a new framework for the international electricity industry is developing and the Greek electricity industry must adapt. This is a serious challenge, made more difficult by the fact that Greece is moving slowly in its steps to achieve its international commitments and, specifically, the electricity industry is falling behind its counterparts in other European member states. There is an urgent need to develop a vision for Greek electricity sector participation in environmental market instruments, to determine the framework for participation, to establish a strategy, and for the first steps to be taken.

The aim of the ETRES project is to apply European Emissions Trading & Renewable Energy Support mechanisms in the Greek electricity sector.

The overall project objectives are to:

  make significant steps in the application of EU climate change & Renewable Energy (RE) policies & measures (particularly market instruments) in the Greek electricity sector.

  gain experience that is transferable to other Greek industry sectors & similar economies in EU & accession countries.

Specific objectives are to:

  assess the integration of emissions trading (ET) & alternative RE support mechanisms in the Greek electricity sector.

  assess the role & impact of ET & alternative RE support mechanisms in the Greek electricity sector.

  develop a combined vision for the Greek electricity sector participation in ET & RE support.

  establish a framework for ET & RE support, including salient market features, & determine the strategy – i.e. the appropriate steps – to achieve this.

  transfer relevant experience from other EU member states.

  demonstrate opportunities & threats & encourage “learning by doing” steps by the Greek electricity sector & its stakeholders.

  disseminate to, & consult with, the Greek electricity industry and its stakeholders, especially governing authorities, & wider afield.