SUMMARY

For more than two decades, the net annual increase rate of the installed coal and lignite power worldwide ranged between 20-25GW. However, since 2010, the fuel that has supported the growth of the global economy for decades fell out of favour. This trend is expected to accelerate in the years to come, particularly following the historic agreement of the 2015 United Nations Climate Change Conference in Paris (COP21).

The future of lignite in Greece appears to be even more ominous, given its particularly low quality, the turn of big international finance institutions away from coal, the recent changes in the EU ETS, the tightening up of the European environmental legislation regarding the rest of the air pollutants, as well as the competition with renewables. In the Western Macedonia Region (WMR) in particular, where almost all of the country’s lignite units are located, lignite capacity is expected to decrease by 3,495MW between 2014 and 2030. It’s obvious that the impacts of such developments on the economy of Western Macedonia, which for decades has been relying almost exclusively on lignite, will be dire.

In the midst of these developments, the government and the Public Power Corporation (PPC) seem dedicated to the prolongation of Greece’s lignite-based model for electricity production. They are moving forward with the construction of the new, lignite unit “Ptolemaida V” and also planning to construct a second lignite unit, “Meliti II” in Florina, while PPC has revealed publicly its plans to extensively upgrade the Amyntaio TPS (Thermal Power Station) in order to extend its operation beyond 2023. The lack of institutional initiatives aimed at preparing the transition to a post-lignite era, indicates that the aforementioned actions are considered as the only solution to tackle unemployment in W. Macedonia. This is also illustrated by the fact that a recent request by the five “energy municipalities” of the country, which called for a share of the revenue generated by auctioning of CO2 allowances to be used to create jobs in the three “lignite Regional Units” of Greece, was rejected.

At a first stage, the present study examined the local added value and the jobs that will be lost as a result of the expected shut-down of lignite units in W. Macedonia over the next 15 years (“Inaction Scenario”). It then examined the extent at which constructing new lignite units can make up for this loss. The results of the economic assessment were negative:

Ptolemaida V and Meliti II can reinstate only 30% of the jobs and the local income that inevitably will be lost, despite the fact that their construction will require investments in the order of €2.5 billion. It is therefore necessary to investigate the potential that alternative sectors of the economy have in tackling this issue.

For this purpose, a preliminary plan for WMR’s transition to a post-lignite era was developed and the corresponding investment cost was estimated, elaborating on past proposals by stakeholders in Western Macedonia. In this context, three scenarios were formulated, assuming a “mild”, “medium” and “strong” development respectively, each focusing on economic activities that are not related to lignite extraction and burning and whose implementation can be carried out over a 15-year period. More specifically, emphasis in the primary sector was placed on the cultivation of Kozani saffron and aromatic and energy plants, along with the further development of the forestry sector. In the secondary sector, the fundamental pillar was the development of Renewable Energy Sources, energy savings, waste management, the operation of a fly ash processing facility, and the processing of aromatic plants. Finally, the tertiary sector relies on the development of tourism, with an emphasis on industrial tourism and ecotourism, as well as on carrying out research in academic institutions and research centres in Western Macedonia.

In order to estimate the multifold effects that the implementation of these scenarios will have on Western Macedonia’s economy as a whole, input-output analysis at a regional level was used, regarding both job opportunities and local added value (LAV). For comparison purposes two different groups of regional multipliers were used: those based on Hellenic Statistical Authority (ELSTAT) data for 2011, and those based on a study by the Academy of Athens/Technical Chamber of Greece-Western Macedonia department (TCG-WM) which, however, uses older data (dating back to 2001 and 2005 for employment and added value respectively) and different economic sectors compared with ELSTAT’s. The results of the analysis using the newer multipliers – based on ELSTAT’s figures – are summarised in the following graph.

Comparison of 6 scenarios regarding the job opportunities and the Local Added Value they create compared with the “Inaction” scenario (ELSTAT multipliers)

Even in the “mild” development scenario, which was based on particularly modest assumptions, almost the same number of jobs and a higher LAV as those that will be lost from shutting down the lignite Thermal Power Stations (“Inaction scenario”) can be created. Significant improvement can be achieved in the “medium” development scenario, as based on ELSTAT’s multipliers, there will be 2,197 more jobs created compared with those that will be lost by shutting down the lignite stations by 2030, while LAV is estimated at €1.834 billion, approximately €0.7 billion higher than that of the “inaction” scenario.

Even in the “mild” development scenario, which was based on particularly modest assumptions, almost the same number of jobs and a higher LAV as those that will be lost from shutting down the lignite Thermal Power Stations (“Inaction scenario”) can be created. Significant improvement can be achieved in the “medium” development scenario, as based on ELSTAT’s multipliers, there will be 2,197 more jobs created compared with those that will be lost by shutting down the lignite stations by 2030, while LAV is estimated at €1.834 billion, approximately €0.7 billion higher than that of the “inaction” scenario.

The “strong” development scenario presents the greater benefits to the economy of WMR. Using ELSTAT’s multipliers, almost twice the number of jobs and more than twice the LAV can be created compared with those lost (“Inaction scenario”).

Lea Vranicar (WWF Germany)

In the Ruhr area in western Germany steel melts just as cities do and traditions must. Transforming the industrial heart of Germany has been a decades-long experience. While hard coal mining will come to an end this year, other regions can profit from the lessons learned.

The end of hard coal mining in Germany this year does not come as a surprise. It has been carefully planned – driven economically, decided politically and accompanied socially. That is why it can be a good example of how a phase out might also work in other regions.

Delegates from three European countries – Bulgaria, Greece and Poland – came to the Ruhr area at the end of March to discuss just that.

The study trip was part of the EUKI project “Just Transition in Eastern and Southern Europe”, in which representatives of the political and civil arena like mayors, unionists and NGO members work on scalable, economically viable transition plans in those parts of their countries that still rely on coal.

They are aware that coal has no future. Not if the pledges made under the Paris agreement are taken seriously, not if the fight against the climate crisis is taken on fully.

In the Ruhr area, a just transition has already taken place. The “Pott”, as the locals call it, where one city turns into the next, is the industrial heart of Germany. At the height of hard coal mining during the early 1950s, mining accounted for more than a million jobs, about half a million people were directly employed at the mines, says Reiner Priggen, an expert on energy issues and former member of parliament in the state of North Rhine-Westphalia. 

But then the economy shifted – and so the phase-out of hard coal mining began.

Multiple development programs were launched, coal mining companies were consolidated. Plus – and this was one of the very important steps on the pathway, says Alexandra Landsberg, who works for the economy ministry of the state – in the 1960s, universities were established in the region. Education and innovation were and are key elements in transforming the area.

For the employees, the coal mining company RAG (Ruhrkohle AG) managed a large amount of the transition with relocations and early retirement plans. Adaption and transition payments by the state and social security respectively further facilitated the shift. Today, only a few thousand employees remain in the mining sector. The industrial workforce in the Ruhr area has made way for jobs in the service sector. “We have more new jobs than we lost old ones”, Landsberg sums up.

In the city of Duisburg, the situation looks a bit different. Here, industrial jobs are still very dominant: Duisburg is home to the largest steel production in Europe. Every tenth resident of Duisburg is connected to it. But transformation is also urgently needed: Duisburg contributes 32 million tons of CO2 every year –incompatible with Germany’s reduction targets and the evolving economic realities of the 21st century. “There is no plan you can just copy and paste to turn the steel production city of Duisburg into a smart sustainable city”, says Dr. Thomas Griebe from the city of Duisburg. But there are ideas. And this summer, there will be a roadmap.

Early planning – one of the most important takeaways of the trip. The earlier all stakeholders know what is coming, the smoother a transition can be, the better it can be managed. And of course, these stakeholders need to be involved in this process. Moreover, when it comes to coal, the plan must entail a fixed end date. For the Bulgarian, Greek and Polish delegations, this was one of the key learnings. In 2007, the German government decided on the end of hard coal mining by 2018, leaving no more room for procrastination.

Developing a roadmap with clear dates is even more important when both time and resources are scarce. Which they are in other European regions phasing-out coal. A fifty-some years long phase-out is a luxury that no longer is applicable nor affordable. When to start a just transition, the answer is now. That holds true for other countries as well as for Germany, especially when it comes to lignite.

The Ruhr area has set an example for transition. Not everything can be copied, but a few ideas might be adapted. And the transition here did not erase traditions. Instead, some former industrial sites have been given a new life: Now tourists come to climb in old factories or dive in former gasometers. And the inner harbour of Duisburg now houses new businesses. Melting the old with the new and the necessary: a concept worth spreading. 

Source: www.just-transition.info