Dr. Ioannis N. Tzortzis President of JTDP Legal Experts Committee, Ministry of Environment and Energy Attorney at Law at the Supreme Court, Regulatory Authority for Energy (RAE) The Greek way to de-carbonisation: A success law story How to create major investment opportunities by drafting law out of the box 23 MARCH 2021 The main goal of Greece As a key part of the National Energy & Climate Plan, the Greek government is clearly committed to decommission all lignite power plants by 2028, with the majority expected to take place by 2023 The goal is to support the transition of local economies and employment and minimize the associated social and environmental impact during this process 2 Greece with local (captive) mines is more depended per capita on lignite & affected by the transition than any other EU country Coal mining is concentrated in just a few areas of the EU Possible negative impact on EU local employment 53 thous. employment positions in coal power plants Mostly affected countries (of which 1.1 thous. in Italy & 1.4 thous. in Spain) Germany 450 118 thous. employment positions in coal mines thous. (of which 3.4 thous. in Spain) The Czech Republic 215 thous. indirect EU employment positions Poland related to coal (of which 2.2 thous. in Italy & 5.2 thous. in Spain) Romania Possible negative impact on EU local communities Bulgaria The coal areas are already lagging behind compared to the rest, with regard to GDP per capita Greece • -2% GDP1 areas with coal power plants • -8% GDP1 areas with coal mines 1. GDP per capita per area / GDP per capita per country. Note: The unemployment figures include workforce who are employed in mines or power plants, but indirectly depend on them. Source: European Commission 2018, JTDP Technical Secretariat 3 Five basic principles underline the In accordance with Greek vision for the next day EU policy objectives • A smarter Europe Focusing on labor-intensive industries to create new job 1 opportunities for local communities • A greener Europe 2 Leveraging the innate advantages of the affected regions Ensuring a speedy transition with a focus on quick wins 3 • A more connected Europe via a short sharp shock strategy 4 Promoting social and environmental sustainability • A more social Europe Integrating modern technology and promoting an 5 entrepreneurial spirit throughout all new activities • A Europe closer to its citizens Source: Europe 2020 Strategy, Analysis by JDTP Team 4 Vision & Investments The Greek Master Plan The Greek Master Plan vision for the "next day" vision for the "next day" Sustainable socio-economic development leveraging region's competitive is designed as the advantages to drive economic growth & improve quality of life for its citizens New Greek Parthenon 1 2 3 4 5 with 5 growth pillars founded upon 4 key enablers. Clean Smart Sustainable Industry and Technology & Energy agricultural Tourism trade Education Put on Public production consultation for 39 days Physical and digital infrastructure and presented to the Reskilling of human capital Hellenic Parliament. Guidance for entrepreneurship & Incentives Land repurposing Source: Analysis of JDTP Team 5 Vision & Investments The vision for the “next day” will be promoted with public, private and PPP investments ` Public-Private Private Investments Public Investments partnership 6 Deep-dive: Western Macedonia W. Macedonia 7 Vision & Investments Our vision for Western Macedonia: Center for production and research in clean energy with a diversified economic model Current situation in Western Macedonia in 2020 Our vision for Western Macedonia in 2028 From: To: Clean energy Modern industry and Lignite based energy Limited industrial production and transit center in the production activity research center Balkans (~ 2.5GW PV) Under-utilized perspective Focused production of Specialized tourist Dynamic crops of of tourist activity PDO products destination exportable products 8 Copyright ©by 2020 BostonConsulting Group. rightsAll reserved. Vision & Investments W. Macedonia: Expressed interest in 11 major projects estimated to mobilize over € 2 billion in new investments in the region Large investments under consideration Estimated Investment Photovoltaic parks (~ 2GW) Clean Green hydrogen production unit ~€1.5Β Energy Energy storage facilities Field of energy research and technology1 with PPP Industrial park with emphasis on the manufacture of electric Industry, products (lithium batteries, etc.) by a nationwide group handicrafts Establishment of a waste management unit ~€200Μ and trade Biomass processing center Smart Smart agricultural production units of the latest technology agricultural (hydroponics) from an international company in the food industry ~€100Μ production Sustainable Wine tourism ecosystem to the standards of Northern Italy tourism (interest from a leading company in winemaking) ~€25Μ Other State-of-the-art physical rehabilitation clinic with PPP from Investments public entities ~€60Μ 1. Indicative: electric propulsion, hydrogen and alternative fuels, storage technologies P-P 2. University of Western Macedonia Source: PPC, ELPE, Investment plans, Proposals of institutions, Private entity Public entity Analysis of SDAM Team Partnership 9 Deep-dive: Arcadia-Megalopolis Arcadia Μεγαλόπολη 10 Vision & Investments Our vision for Megalopolis: Sustainable development with emphasis on industrial profile and natural advantages of the region Current situation in Megalopolis in 2020 Our vision for Megalopolis in 2028 From: To: Restart industry in Coal-based energy Limited industrial Diversified and competitive sectors of the network, but also a production robust green energy natural gas unit profile (~ 1GW PV) economy Unknown tourist Small agricultural Ideal destination for Cultivation of exportable destination production of specific those looking for products and development products adventure in nature of feed and livestock production 11 Copyright ©by 2020 BostonConsulting Group. rightsAll reserved. Vision & Investments Megalopolis: The region is modernizing its energy and industrial profile, while utilizing its natural advantages Large investments under consideration Estimated Investment Clean Photovoltaic Parks (~550MW) ~€250Μ Energy Industry, handicrafts Standard pharmaceutical industry ~€90Μ and trade Smart Intelligent livestock and animal feed unit agricultural Smart agricultural units for the production of ~€40Μ production exportable products1 Sustainable Original adventure, entertainment and education ~€40Μ tourism theme park Other ~€30Μ Investments Other public investments P-P Private entity Public entity 1. It has been covered in the chapter of W. Macedonia for which the investment interest has been expressed Partnership 12 2. Source: Investment plans, Proposals of institutions, Analysis of SDAM Team Jobs & reskilling Investments can create employment for the directly affected and locally unemployed workforce Considering the estimated vacancies created from the other planned investments, it is expected that more vacancies will eventually be created than those affected by the decommissioning plan. Initial estimation – W. Macedonia and Megalopolis Estimated up to ~ 8,000 total vacancies from …which can mitigate the expected jobs loss the most mature projects… from the decommissioning of the plants & mines Total vacancies1 Total vacancies1 ~8,000 ~8,100 8,100 1,710 4,959 1,431 Construction Phase Operation Phase New jobs Direct job loss2 Indirect Surplus 1. Includes direct employment (estimated per emblematic investment) and indirect and induced employment (estimated on the basis of TEE / job loss JTM closed type multipliers by industry) 2. Includes the short-term unemployed (<12 months) in Western Macedonia, but for Megalopolis is included in total unemployment Source: PPC, OAED, TEE. JTM Investment plans, Analysis of SDAM Team 13 Source: SDAM Team analysis Jobs & reskilling Workforce Redeployment: The need for reskilling is identified in 3 main sectors of specialization Initial estimation – W.Macedonia Horticulturists, Farmers, stockbreeders Catering-tourism Other administrative agronomists, winemakers professionals staff Catering & Sectors: Agricultural Production Administrative tourism Services Positions1 : ~420 (~16%) ~520 (~20%) ~1,615 (~64%) Need and Type of Reskilling Low(<1 month intra-corporate) Medium (1-3 months in competent entity) High (3+ months in competent entity) Source: Analysis of SDAM Team 14 Rapid implementation via the Prerequisites drafting of out of the box legislation by the JTDP Legal Experts Committee Institutionalisation of incentives Special Urban Plans (SUP) Project financing Land restoration Public Investment Fast Track Licensing process 15 Incentives Defining incentives: Type of incentives and targeting Prediction of 15 specialized incentives divided into 3 groups ▪ Incentives to attract a new production process: Provision of a grant for a new investment, Tax exemption, Tax relief, Subsidy for insurance contributions, Exemption of fees, Loan on favorable terms, Guarantees ▪ Incentives to maintain the existing operation: Provision of a grant for reform/modernization of a productive operation, Subsidy of loan obligations, Subsidy of wage costs, Participation in Equity, Loan on favorable terms ▪ Incentives to support individuals: Income tax deduction, Mortgage subsidy, Enhancement of projected benefits and training programs The way of defying incentives and targeting ▪ The determination of the incentives took into account all the communication that has preceded with local entities,