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Syriza Faces a Painful Dilemma: Should Coal Fuel Greece's Economic Recovery?

23/02/2015 16:05 | Updated 25 April 2015

Prometheus, according to mythology, gave fire to humankind only to suffer in perpetuity. Today in Greece, the new Syriza government must confront the modern equivalent of this ancient dilemma: whether to burn fossil fuels to ignite financial recovery.

Alexis Tsipras and his radical left coalition were elected to oppose neoliberalism: the austerity, market liberalisation and privatisation imposed by the ‘Troika’ as conditions of loans needed because of the 2008 banking crisis and ongoing recession. 

The fledgling left party has won the support of millions of people across Greece in part because the neoliberal privatisation of the energy sector across the country has proven an expensive and inhumane experiment.

Escalating Fuel Costs

Thousands of families – often the poorest and most in need – had their power cut off when they could not afford escalating fuel costs. Energy prices rose by 21 percent in 2012 alone – the highest in Europe. The following year, a third of Greek residents were behind on their bills.

Syriza has promised to return power to the people – with free electricity for 300,000 households that cannot afford to cook and heat their homes. But how is this practicable? 

An obvious solution is to increase the country’s dependence on cheap, domestic lignite – brown coal. 

The Greek government currently owns 51 percent of the Public Power Corporation, which in turn delivers 75 percent of energy generation. The PCC runs 98 power plants, fuelled predominately by lignite, oil and natural gas. It owns lignite mines at Ptolemais and Megalopolis.

Privatisation Programme

Around 93 percent of Greece’s energy comes from burning fossil fuels, compared to the European average of 75 percent. Domestic lignite produces 70 percent of the country’s electricity.

But what will Syriza do now it controls much of the country’s energy industry?

The new government is committed to stopping the energy privatisation programme. Panagiotis Lafazanis, the new energy minister, said hours before taking office: “We will halt immediately any privatization of PPC … There will be a new PPC which will help considerably the restoration of the country’s productive activities.”

But Lafazanis must address an even greater crisis than the economic spectre haunting Europe: climate change.

The Intergovernmental Panel on Climate Change has long made clear an 85 percent reduction in greenhouse gases is needed by 2050 to prevent global warming above 2.4 degrees.

Athens can expect a scorching seven-degree temperature increase by the end of the century.

Pollution Crisis

The farming and tourism industry will have to survive droughts and flash flooding. More immediately, the economic crisis has forced people to turn to cheaper fuels, causing an air pollution crisis.

The party had promised “a new, sustainable, just and ecologically sound paradigm of development”. This included an “ecological transformation in development of energy production.”

Yet Tsipras admits the future of the planet has fallen from the agenda. “We were a party that had the environment and climate change in the centre of our interest,” he told Naomi Klein, author of climate change bestseller This Changes Everything. “But after these years of depression in Greece, we forgot climate change.”

The party already faces the decision of whether or not to press ahead and build a new 660MW lignite-fuelled power station. Syriza is also negotiating Greece’s part in the largest gas pipeline in the world, carrying supplies from Cyprus and Israel into mainland Europe. 

While the state controls old coal and gas, new renewables are mostly in private hands. The picture is more complex because the renewable energy industry has been a Trojan horse for neoliberal reform.

Yet renewables have also been dependent on state subsidies. The feed in tariffs resulted in debts of €301.7 million by February 2013 for the Greek government, and a 44.7 percent cut in state payments was announced a few months later. 

Renewable Energy

Many small firms inevitably went bust or were bought out by foreign energy multinationals. Liberalisation here, as elsewhere, has led to monopoly ownership. Meanwhile, the neoliberal EU Emissions Trading Scheme has been a disaster

Conversely, a state-led transition to a renewable energy infrastructure in Greece has the prospect of creating hundreds of thousands of jobs, ensuring the country becomes less dependent on oil and gas imports from Russia, and making possible a future where energy is almost too cheap to measure. And money not spent on energy bills can be spent in shops, reviving the economy. 

James Meadway, a senior economist at the New Economics Foundation, thinks the costs for depressed Greece would be relatively low. “With 25 percent unemployment, there’s plenty of people looking for work.” 

Enormous Potential

“And Greece’s renewable potential, in solar, wind and tidal energy is enormous. Solar, especially, has expanded enormously in the last three years but really serious investment would get it to the next level.”

Syriza has a once–in-a-lifetime opportunity to use the state to deliver a low-carbon economy where the European Union free market agenda has failed.

The radical left in Greece could undermine once and for all the argument that there is no alternative to using dirty fossil fuels – at the same time proving there is an alternative to the neoliberal economic policies that have brought Europe to the very precipice of financial ruin. 

We are now paying the price for the white heat of fossil fuel use and deregulated markets. Today, the people of Greece must be more mindful of the lessons of Prometheus than during any epoch in the country’s history.

Brendan Montague is editor of DeSmog UK and founder of the Request Initiative, which boasts Greenpeace, Friends of the Earth and Platform among others as clients.