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Analysis
Solar energy in Europe’s south

Solar energy in Europe’s south

Lessons from Greece’s Project Helios

by George Papaconstantinou in Athens

Tue 18 Jul 2017

If Greece is to overcome its economic crisis it has to abandon the borrow-and-import model of past decades and find a new economic paradigm that allows it to achieve a sustainable recovery. Resources need to be redirected to new sources of growth and account has to be taken of changing patterns in international trade and investment.

A promising source of growth, and exports, is solar energy. Greece has 300 days of sunshine a year and 50% higher solar radiation – which converts into power – than central European countries. The use of solar energy is rapidly rising within Greece but, more broadly, it’s the export potential that is of interest. This could bring in foreign investment and create revenue for the country.

In recognition of this, Project Helios, an ambitious solar scheme, was conceived by the Greek government in 2011. The plan was to install gradually a total of 10GW of solar energy capacity, and sell the energy produced to central and northern Europe. To put this in perspective, one gigawatt of solar energy can power around 750,000 homes.

Electricity grid infrastructure was another issue: the existing network could carry up to 3GW of energy to central and northern Europe, so the remainder would need to be phased in gradually. This was in line with European Union plans for a more integrated European energy system. Transit through other countries was another consideration, which would require complex international agreements.

This left one crucial issue: finding clients and ensuring that the project was economically viable. An obvious place to seek support was Germany. As the biggest contributor to Greece’s support mechanism, the German government had discussed the need for Greece to define its own ‘growth projects’ and had talked of solar energy exports. More importantly it had announced a move away from nuclear power and set ambitious targets for achieving a low carbon economy. Project Helios had the potential to be a cost-effective way for it to reach renewable energy targets by importing solar energy from Greece.

There seemed to be benefits all round. Europe could back a growth project at a time of austerity, and the scheme could act as a catalyst for the EU interconnection strategy, and for integrating a fragmented European energy market.

To many of its detractors, Project Helios was never realistic to begin with. Some pointed to difficult technical issues related to the size of the infrastructure needed and to interconnection and transmission. Others expressed doubts about economic viability and pointed to the resistance from German domestic solar energy producers. However, the project was not abandoned because technical and financial considerations showed it was not feasible; on the contrary all parties were working towards a pilot project while recognising the big challenges.

It was quietly shelved because of the lack of institutional continuity that bedevils Greek politics, as well as because successive energy and environment ministers and governments preferred to put an emphasis on oil and gas exploration, which proved more popular and easier to sell to the public than a complicated plan to export solar power.

Nevertheless, the exporting of solar energy from the south to Europe’s north remains an ambition. Solar energy technology costs continue to drop, sustainability is ever more important and moves to integrate European transmission grids continue to advance. For Greece, bold initiatives are required today more than ever to unlock its growth potential – the country needs concrete projects that bring in foreign investment on a large scale. Perhaps Project Helios has not died yet.

George Papaconstantinou was Greek Minister of Environment, Energy and Climate Change 2011-12, and Greek Finance Minister 2009-11.

 

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