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31/05/2006 «State grants to boost private energy investment»

Speech by the Special Secretary for Competitiveness, Mr Spiros Efstathopoulos, on state grants to boost private energy investment, delivered at the meeting of the Hellenic-French Chamber of Commerce and Industry

Zappeion Aigli, 31 May 2006


Ladies and gentlemen,

I would first of all like to thank the President of the Hellenic-French Chamber of Commerce and Industry, Mr Konstantinidis, for his invitation to attend and speak at today’s meeting about opportunities and challenges in the energy sector.

In addition, I would like to congratulate Mr Konstantinidis and all the members of the Chamber for the very real contribution they have made in promoting the bilateral economic and diplomatic relations of Greece and France.

The importance of the energy sector for Europe and the emphasis now placed on it by the European Union were made clear in the European Commission’s Annual Progress Report on the Lisbon Strategy, entitled “Time to move up a gear”, which highlighted four basic priorities for the years ahead, including an efficient, secure and sustainable energy supply. Furthermore, according to a recent Eurobarometer study, Europe’s citizens consider the development of renewable energy sources the chief means of reducing energy dependence at a national level. The study also found that the role of energy is seen as particularly crucial with regard to the competitiveness of Europe’s economy.

To boost investment in the field of renewable energy sources, the Ministry of Development has at its disposal an important tool, the Operational Programme for Competitiveness, which I have the honour of administrating. In terms of resources, the Programme is the second largest Sectoral Programme in the Third Community Support Framework, with a total budget of €6.52 billion.

The Programme’s Measures and Actions promote the development of renewable energy sources (RES) with the objective of meeting concrete environmental commitments made by Greece, and increasing the share of RES and combined heat and power generation in the national energy balance by 2010.

The Programme’s most important and best-known Action to support RES is Action 2.1.3 (“Financial incentives to support individual private energy investments”).

With a total budget of €870 million and public expenditure of €325 million, the Action accounts for 13.34% of the total budget of the Operational Programme for Competitiveness, and covers 70% of its Actions promoting the use of RES.

Under the Actions, between 30% and 50% financing is available for energy investment concerning mature technological categories such as:

  • Wind electricity generation systems.l applications.
  • Small hydroelectric projects.
  • Central solar energy systems.
  • Use of biomass to produce biofuels.
  • Photovoltaic systems.
  • Passive heating, cooling and lighting systems.
  • Geotherma

Moreover, in addition to RES, financing is also provided through the Action for investment in energy saving, combined heating/cooling and power generation, and substitution of electricity or other conventional fuels with natural gas in existing businesses.

In the framework of the Third Community Support Framework two different calls for proposals were made under the Action: In response to the first, 223 RES proposals were received, with a total budget of €1.5 billion, while the second, which took place in four different rounds, resulted in 157 RES proposals with a total budget of €575 million.

Under the two calls for proposals, 380 RES proposals have thus been submitted, with a budget of 2 billion euros. Of these, 116 proposals concern wind power projects, 77 are for small hydroelectric projects, 67 are for central solar energy systems, 48 are for biomass use, 40 are for photovoltaic systems, and 27 are for passive solar systems. The remaining five are for the development of geothermy.

Of the proposals received, 180 (47%) were approved, with a budget of €802 million. Of the approved investment plans, 54% concerned the building of wind parks and small hydroelectric projects.

The majority of the projects are concentrated in Western Macedonia (principally hydroelectric and biomass projects), Crete (principally solar and wind power projects), the Peloponnese (solar and wind power projects) and Continental Greece (wind power and hydroelectric projects).

Based on the latest data, the total power from RES systems that are to be installed comes to 543 MW. Wind power projects account for 452 MW of this, small hydroelectric projects for 79.60 ΜW and photovoltaic systems for 2.47 MW.

At the same time, Action 6.5.1 (“Promotion of RES systems, combined generation in the country’s energy system – Energy Saving”) finances the connection of Action 2.1.3 RES electricity generation projects to the national grid. Furthermore, the same Action finances the increased contribution of RES and combined generation systems to the country’s energy system, as well as investment in energy saving. The Action’s call for proposals, which closed on 30 January 2006, resulted in 240 proposals, with a total budget of €495 million. Of these, 150 concern RES projects, with a total budget of €335 million.

The operation of RES systems in the framework of these two Actions is expected to result in:

  • The increased involvement of RES in the country’s energy balance.
  • Protection of the environment and adherence to the country’s environmental commitments.
    Signed contracts for RES projects are expected to reduce greenhouse gas emissions by 700,000 tonnes of carbon dioxide a year. And finally,
  • Reduced dependence on imported forms of primary energy. As a result of signed contracts for RES projects, 120,000 “tonnes of oil equivalent” are expected to be substituted each year.

Apart from the two Actions I have already spoken about, the Operational Programme for Competitiveness finances others that promote and support RES.

In the framework of the Programme:

  • Financing is provided for the implementation of demonstration projects using innovative technologies in the sectors of RES, natural gas etc, and the promotion of innovative solutions to meet energy needs on the islands.
  • Operations are being implemented which aim to streamline administrative procedures, thus improving the investment environment and facilitating investment initiatives in the sector of RES, and finally
  • Information and support operations are being implemented to promote/spread RES.

Ladies and gentlemen,

For the last two years, the Ministry of Development has been implementing an integrated energy strategy with the objective of transforming the country into an energy hub for South East Europe. This is something that Mr Stefanou has of course spoken to you about. Initiatives and operations such as the political agreement with Russia and Bulgaria to build the Burgas-Alexandroupoli oil pipeline, the building of the Greek-Turkish gas pipeline (which is expected to be complete by the end of this year), the agreement with Italy to build the Greek-Italian gas pipeline, the signing of the South East Europe Energy Community Treaty, the law on the import of biofuels, the RES land use plan, and the new framework for the development of RES which was recently tabled before Parliament, place Greece at the centre of developments and turn our country from an observer into a leading player in developments in the sector throughout South East Europe. In the wake of increased oil prices, the energy sector has come to be of utmost importance throughout Europe. By exploiting its strategic position (new roads for transporting gas from the Caspian Sea to Europe) and its wealth of natural “stocks” in renewable energy sources such as the sun and the wind, Greece can only benefit from the new energy strategy being planned by the European Union. Supporting RES is a fundamental political priority in view of the next Programming Period (2007-2013). We are already planning the necessary interventions (legislative and financial) for their further use and contribution to Greece’s energy balance, and believe that the vision of the Minister for Development, Dimitris Sioufas, will soon be a reality. For the Greek and French business community, a great opportunity is opening up.

The message to you all, then, is to make the most of it and to waste not a moment.

Thank you very much. .

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The O.P. "Competitiveness" is co-funded by the European Regional Development Fund (ERDF), the European Social Fund (ESF), the Greek Government and private funds.
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