Lignite has been exploited for electricity generation in Greece since the early 1950s and has been a major socioeconomic growth driver for decades since. But, during the last decade, lignite production and use has been dropping in the country, even marking a sharp decline during the COVID-19 pandemic.
According to the country’s National Energy and Climate Plan (NECP), lignite is to be completely phased out of the Greek energy system in the coming years. In particular, despite social challenges to further diffusing renewables in the country, the Greek government aspires to accelerate lignite phase-out, shutting down its lignite-fired power plants by 2023—except for the newest Ptolemaida V coal plant, to be decommissioned by 2028.
Although the long-term macroeconomic impact of decarbonisation has been found beneficial for countries that, like Greece, base their energy production on coal, thoroughly examining its social, economic, and energy security impacts in the near-to-long-term becomes critical, especially when this transition is performed drastically.
In our latest policy brief, we seek to address this question: What is the impact of delignitisation and its pace in Greece, both in the short term and in the longer run?
Our findings suggest that delignitisation, irrespective of the speed in which it is attempted, is beneficial for the wider Greek economy in the long run—i.e., by the middle of the century.
However, depending on the pace of the envisaged transition, phasing out lignite may have adverse effects in the near (2030) and medium term (2040), which need to be addressed to ensure social cohesion and achieve a just transition.
You may access the entire policy brief and read more here.