Greece's Transition Away From Coal Offers a Roadmap for Other Countries

Greece is on the fast track to cut down its use of coal, which now makes up only 9% of its total energy supply, down from 25% six years ago. By 2028, the government plans to end all energy production from coal, and if it succeeds, the Greek roadmap to a just transition could help other countries move away from coal.

Accomplishing such an ambitious trajectory requires careful planning. Two years ago, the World Bank partnered with the European Commission (EC) to help Greece do just that. Greece became the first European Union (EU) member state to submit a detailed roadmap to the EC for a just transition away from coal that supports workers and communities.

The World Bank's work on the roadmap was supported by the EC through its Directorate-General for Structural Reform Support, which helps EU countries design and implement reforms to underpin job creation and sustainable growth. The work also supports the European Council's 2030 Framework on Climate and Energy, which calls for reducing coal-fueled energy for EU member states by 2030. The World Bank is engaged in several coal-dependent regions to help governments transition away from coal.

With its roadmap in place, Greece is set to invest billions of dollars in coal-dependent areas. The plan will spur economic development, helping absorb jobs lost in the coal sector while setting the stage for new clean energy industries. Lessons learned from Greece's experience — including the importance of early planning and stakeholder engagement and the need to understand the unique opportunities in the affected region — will be valuable to other countries where the World Bank and the EC support a just transition away from coal, such as Bulgaria, the Western Balkans and Ukraine.

"With its roadmap in place, Greece is set to invest billions of dollars in coal-dependent areas. The plan will spur economic development, helping absorb jobs lost in the coal sector while setting the stage for new clean energy industries."

For example, the World Bank, the EC, and other partners created a Platform in Support of Coal Regions in Transition in Western Balkans and Ukraine. It allows participants to share and compare experiences as they prepare transition roadmaps and early investment projects in coal regions. Coal-dependent countries outside of Europe are already benefiting, with knowledge transfer to South Africa, India and Indonesia.

Greece’s transition is coming at a critical time: its economy shrank by nearly 10% during the COVID-19 pandemic, and unemployment hovers around 14% overall and almost 34% for younger workers. The roadmap provides an opportunity to build back better — and greener.

Energy Storage Hub Eyed for Western Macedonia

The cornerstone of the Greek roadmap is the transformation of Western Macedonia, which currently produces 80% of Greece's coal, into an alternative energy hub.

World Bank analysis showed that Western Macedonia is home to generations of skilled coal workers and their families, energy infrastructure worth millions of dollars, and a system of transmission lines that reach every corner of Greece. Together with national and local stakeholders, the World Bank set out to help the region harness these assets to build a new economic future rooted in a clean energy identity.

"World Bank analysis showed that Western Macedonia is home to generations of skilled coal workers and their families, energy infrastructure worth millions of dollars, and a system of transmission lines that reach every corner of Greece."

Months of research and thorough engagement with stakeholders succeeded in building consensus that clean energy technologies could save the region's energy jobs and create new ones. Stakeholders began to realize the transformative powers of affordable clean energy and storage for the entire Greek economy.

Concentrating clean energy facilities in one region can attract additional energy investment both downstream and upstream, especially in an era of related technological breakthroughs. The World Bank proposed several solutions, including green hydrogen, pumped storage, and converting thermal power plants into renewable power plants with energy storage. These solutions make it possible to produce energy entirely from renewables by storing electricity when the sun shines and the wind blows and deploying that excess energy when it's needed in the grid.

"At a time when those of us who were talking in Greece about green hydrogen and long-duration energy storage were very few, the World Bank study came along to put these issues at the center of the coal phaseout debate for Western Macedonia and the country. Many important steps have taken place since at the national and regional level that will contribute to the emergence of Western Macedonia as an Alternative Energy Hub of supranational importance," said George Kasapides, Governor of the Region of Western Macedonia. "We thank the World Bank and the European Commission for their work."

The World Bank's early planning and stakeholder engagement proved instrumental in helping Greece accelerate its just transition away from coal, highlighting the importance of leveraging each region's unique strengths when preparing for a post-coal economic future.

Greece is set to pass a wide-ranging policy framework that would make it faster and easier to implement projects like Western Macedonia's energy storage hub. The policies, expected to take effect in early 2022, will shorten approval time and provide hundreds of millions of euros in subsidies and tax credits for energy storage and other clean energy initiatives.