A review of the energy policy in Greece in the last 50 years and its implications for prosperity

This paper elucidates the development of electricity production and distribution in Greece from the 1950s to date, in correlation with national and European energy policy. During this period, Greece experienced a multifaceted energy transition, including both the transition of ownership of energy generation companies from public to private and a transition from an energy mix in which coal (lignite) served as a major and inexpensive resource to a mix in which wind power, solar power and natural gas gained a primary role, but with high costs for energy generation. The correlation between electrical energy consumption and economic growth is explored in this context, revealing an increase in consumption before the 2009 recession and a decline thereafter. The study investigates the correlation between escalating electricity prices and legislative dependencies that mandated the purchase of wind- and solar-generated electricity at exorbitant rates, the closure of cost-effective lignite units, and the reliance on natural gas—a commodity susceptible to geopolitical shifts. It also shows that, given the structure of the Greek energy mix, the increase in the share of wind and solar energy in the mix is directly related to the increase in the price of electricity. Highlighting the importance of energy costs for prosperity, this paper underscores, through the detailed review of the Greek energy “landscape”, that the major determinants of electricity prices are both the accessibility to natural resources but also their proper and judicious management.