1. Greece’s lignite reserves and share in the power system

The geologic lignite reserves in Greece that can be exploited for energy purposes, based on the most recent techno-economic available data, reach approximately 3.1 billion tonnes, their energy being equivalent to 450 million tonnes of oil. The most important of them are located on the Kozani – Ptolemaida – Amyntaio – Florina axis, i.e. in the Western Macedonia Region (WMR), with an estimated deposit of 1.8 billion tonnes. The second most important area of lignite mining is in the Megalopolis region, in Peloponnese, with a reserve of around 225 million tonnes. There are also two important charted, yet unexploited, lignite deposits in the Drama region (900 million tonnes), and in the Elassona area (170 million tonnes).

In 2010, lignite production amounted to 56.5 million tonnes, mostly mined by the Public Power Corporation (PPC), with 43.3 million tonnes extracted by the company at the West Macedonia Lignite Centre (WMLC) and 10.4 million tonnes at the Megalopolis Lignite Centre (MLC). The few privately operated mines in the Florina area (in Western Macedonia also) produced a total of 2.8 million tonnes of lignite. It is further important to mention that, until June 2010, 22 lignite units of total capacity of 5,288 MW operated in 8 Steam Power Plants of PPC, 6 of which in the Region of Western Macedonia (18 units), and 2 in Megalopolis, in the Peloponnese (4 units).

Under pressure from European environmental legislation, 8 lignite units with a total capacity of 913 MW (6 in WM and 2 in Peloponnese) were shut down since June 2010. In addition, due to the need to comply with the new, stricter EU Directive on industrial emissions (2010/75/EC), PPC had to put 6 lignite units of a total capacity of 1,850 MW (all located at WMR) under restricted operation. Thus, from January 2016, these units operate around a third of the time they used to, before completely withdrawing at some point until 2023 at the latest. From the remaining 8 units with a total capacity of 2,525 MW that operate at full power, the 6 are located in WMR.

2. Geographical and population characteristics of WMR

The WMR is located in the Northwest part of Greece, bordering Albania to the west and FYRoM to the north, and is the only Greek region not bordering the sea. It consists of the Regional Units (RU) of Kozani, Grevena, Kastoria and Florina. It covers an area of 9,451 km² (7.16% of the country’s total area), and comprises mostly mountainous and semi- mountainous land (82%). WMR is well-known for its rich natural resources, such as fossil fuels (lignite), ores (asbestos, chromite, marble etc.), forests (50% of its total land) that form ecosystems defined by rich biodiversity, as well as pastures, while it also has the greatest surface water potential in Greece (approximately 65% of the country).

Furthermore, WMR is one of the less populated regions in the country. The population of WMR has been significantly reduced over the past 50 years, as, according to the official population census, it has dropped by 9.7% between 1961 and 2011. According to the latest Eurostat figures, the population of the area was estimated at 278,706 in 2014, i.e. there is an additional 1.8% drop between 2011 and 2014. The age 65+ category is by far the largest population group in WMR, followed by the groups of 35-44 and 45-54 (with equal shares), and the one of 1-14.

3. Economic activities and employment

WMR produced 2.43% of Greece’s GDP in 2013. According to Eurostat, WMR’s GDP in 2013 was estimated at €3.97 billion (current rates), and its distribution per sector was: (1) 45%from mines, quarries, industry, electricity supply, etc., (2) 17% from public administration, social insurance, education, human health, social care, etc., (3) 11% from wholesale and retail trade, transportations, accommodation & catering services, (4) 10% from Real estate, (5) 6% from agriculture, forestry and fishery, (6) 4% from the Construction sector, while all the rest (ICT, scientific, technical, administrative activities, entertainment & recreation, arts, finance & insurance, etc.) show percentages of 1-2%.

Similarly, as regards the gross added value per production sector, the mining, industry,power production etc. sector contributes the largest share, €1.45 billion at current rates (2013). The energy production sector (electricity production through lignite combustion and hydroelectric energy) is the main economic activity of the regional economy, rendering WMR as the Greece’s “energy centre”. As 49% of the production occurs in the secondary sector, and the primary sector is limited to very low production rates, WMR can be described as an industrial region of limited job sectors. This structure, which reveals theregion’s huge dependence on PPC’s activities, is unique throughout Greece.

The main characteristics of each economic activity sector in WMR, as described in detail in the RIS3 plan, are the following:

  • The primary sector has been gradually shrinking over the past years. However, WMR has the ability and potential to increase the contribution of the primary sector to the regional GDP and to job creation.
  • The secondary sector is dominated by lignite mining – electricity production activities, which share all the characteristics of a “monoculture” (the fur processing and fur-bearing animal breeding constitute the 2nd most important activity in the secondary sector).
  • The tertiary sector is defined by an important reduction in trade since 2009, as a result of the economic crisis. Moreover, the insufficient exploitation of the natural capital and the cultural assets keeps the contribution of the tourism sector at particularly low levels.

Based on the distribution of employment per sector within the WM Region, 16.53% of the active population is employed in the primary sector, 23.85% in the secondary sector and 59.61% in the tertiary sector. The jobs created by PPC in WMR are examined separately, given the fact that the company is the largest employer in the area. According to theemployment data provided by PPC’s Human Resources Department, in 2014 the permanentpersonnel in all TPPs reached 1,628 employees and the temporary 346. Similarly, the permanent workforce in the mines accounted for 2,571 employees and the temporary 977.

Therefore, the total permanent and temporary personnel employed by the PPC in WMR were 5,522 employees (2014), 4,199 out of which were permanently employed. Based on the data presented above, it is estimated that PPC creates approximately 45.9% of the direct job opportunities in the secondary sector. PPC provides 6.3% of all the jobs in WMR, without taking into account the indirect employment created. Finally, according to Eurostat (2014), WMR ranks 9th in unemployment amongst all European Regions, with an unemployment rate of 27.6% (22.4% for men and 34.6% for women, respectively).

4. Stakeholders interested for the transition of WMR to a post-lignite era

At first, the Western Macedonia Administrative Region (WMAR) should be mentioned, whose strategic economic-development planning coincides with the general development framework that was set out for the 5th programming period (2014-2020) by the national priorities and the national co-funded programmes. The Regional Operational Programme 2014-2020 (ROP) makes no direct reference to the need for devising an operational plan for the transition of WMR to a post-lignite future. However, the current status and the sectors of priority of the new ROP-WM indirectly acknowledge the need for economic restructuring in WMR – which is necessary for a successful transition.

The Energy/RES-District Heating sector is pivotal in ROP-WM’s strategy, while the Integrated Waste Management sector, research and innovation, the development of traditional sectors of Rural Development and Production, and the development of the Tourism sector (ecotourism – industrial tourism) constitute important strategic targets that are compatible and fundamental in the operational planning of the transition to a post-lignite era.

On the other hand, apart from the plan to restore the mines of the Lignite Centre of Western Macedonia (WMLC), the realised and scheduled relocations of the afflicted settlements and the cooperation agreement signed with the Kozani Regional Authority, PPC has made no other long-term plan for WMR regarding the post-lignite era. Of course, in the long-term planning of PPC it is foreseen the construction of another (the 5th) lignite unit in Ptolemaida(the Ptolemaida V, of 660 MW gross nominal capacity) and a second unit in Meliti – Florina (Meliti II, of 450 MW gross nominal capacity).

The Regional Development Agency of Western Macedonia – Kozani S.A. – (ANKO) has been developing since 2010 a relevant operational plan for the Kozani – Ptolemaida – Amyntaio – Florina axis. The Technical Chamber of Greece, Department of Westerm Macedonia (TCG- WM) is constantly contributing to the dialogue regarding the challenges anticipated in the lignite electricity production sector in Greece and the Western Macedonia Region.

Interest in this field is also shown by NGOs, such as the Ecological Group of Kozani, WWF Greece, and Greenpeace. Of course, local authorities are in the forefront, as is the case for example of the Kozani municipality, while there is a number of educational and research institutes that are active in the WMR and are interested on the future of the region, as is the Centre for Research & Technology Hellas (CERTH) and the University of Western Macedonia.