What is the role of Russian gas in the country’s energy system?

Of Thanks to Floudopoulos

The next payment from DEPA to Russia’s Gazprom is scheduled for the last ten days of April, and what remains to be seen until then is whether Moscow is really willing to put an end to its threat of repayment in rubles.

The day before yesterday, the Greek customers of Gazprom, DEPA, Mytilineos and the Kopelouzos group received the notices for the change of the payment method of the Russian gas. The Russian company, based on the new mechanism, invites its customers to open 2 accounts in Gazprombank, one where they will deposit the amounts in euros and one to which the Russian bank will transfer the amounts after converting them into rubles. The Russian company provides an adjustment period of 15 days and claims that the terms of the contract do not change by calling on its customers to comply otherwise it will stop delivering gas.

Of course, the whole issue is extremely complex and complicated as the Greek side emphasizes, the repayment of the Russian company in euros is an explicit provision of the bilateral long-term supply contract and therefore can not be modified without the agreement of both parties. This does not exist, so a unilateral amendment to the contract may open a time-consuming and painful cycle of claims, which in fact leads both sides to the solution of the international arbitration.

In any case, it has become clear that Greece, like all other EU countries, launches process for its medium-term complete independence from Russian gas, a goal that goes through increasing imports of liquefied natural gas LNG, enhancing RES, saving energy and exploiting other alternative fuels such as biogas and hydrogen.

How easy is such a process? Given the dependence of the domestic energy system on Russian gas, the project presents serious difficulties.

According to the latest data of the gas system operator, gas imports from Russia represent about 50% of the total fuel demand in our country. Indicatively for daily demand in April at 230GWh, about 115GWh came from the Sidirokastro station from where Russian natural gas is imported. What does this volume mean in terms of the overall dependence of the domestic energy system on Russia? In the electricity system, gas units accounted for 71% of total electricity production in April, with lignites accounting for 20% and hydroelectric plants for 2%. This practically means that the electricity system relies to a significant extent, more than 30%, on gas imports from Russia.

It is worth noting that last year significant steps were taken to diversify the mix of gas imports as 51.36% of total imports were liquefied natural gas LNG, with 49 landings from eight countries unloading, of which 48% came from from the USA, followed by Qatar, Algeria and Nigeria. In terms of Russian gas, imports from the Sidirokastro station reached 38.97% of total gas demand in Greece.

It is noted that according to official Eurostat data for 2020, our country was highly dependent on Russian energy imports (both gas and oil). In particular, imports from Russia accounted for 46.5% of available energy in 2020 compared to 24.4% in the EU. More specifically, at the pan-European level, Russia is the EU main energy products of the EU energy mix.

Finally, it is recalled that in order to deal with the possibility of an unexpected interruption of the flow of Russian gas, the government is considering a series of measures such as increasing LNG imports, converting gas units to use natural gas fuel (for 5 units of the Greek system that have this possibility), increasing the use of lignite plants and the utilization of hydroelectric plants. Medium-term measures under consideration are the installation of a floating LNG depot (FSU) in Revythousa as well as the storage of quantities of gas in the depots of neighboring Italy.