Decarbonization and Transition to the Post-Lignite Era: Analysis for a Sustainable Transition in the Region of Western Macedonia

Abstract

For many decades, the Region of Western Macedonia has been Greece’s energy hub, contributing significantly to electricity supply and national growth with the exploitation of lignite deposits for power generation. Lignite, though, has been banned from EU energy source policies towards achieving CO₂ emissions reduction, with profound implications on the economy of the region. Despite the importance of this energy transition, a combinatorial analysis for the area in the coal phase-out regime is missing. Therefore, a combined analysis is performed here, and more specifically, a strengths, weaknesses, opportunities, and threats (SWOT) analysis in all the affected sectors, in combination with the examination of the degree of satisfaction with the EU’s energy priorities. The results of the study show that the Region of Western Macedonia has profound strengths and offers many new opportunities during its transition to a new production model. On the other hand, it has high unemployment rates and low rates of competitiveness and innovation. The main threat is the Region’s desertification due to the inability to find sufficient jobs. Considering the Energy Union’s priorities, the Region of Western Macedonia satisfactorily follows the priorities of Europe in its transition to the new production model, with plenty of room for improvement. The analysis performed allows for a just transition strategic planning to minimize social, economic and energy challenges while maximizing sustainable power generation and has implications for all relevant stakeholders, contributing to the implementation of Energy Union governance and climate actions.

1. Introduction

The Region of Western Macedonia has been Greece’s energy hub for decades and has been central to energy developments since 2019, when most lignite-powered plants were forced to shut down following a governmental decision. Western Macedonia is a key player, requiring a just transition plan for reshaping its production base, preventing social and economic decline, and attracting new investments, especially in Renewable Energy Sources (RES).

Western Macedonia is both an industrial and agricultural region, which has gained a special status in Greece since the mid-1960s with the exploitation of lignite deposits for power generation in the Regional Units of Kozani and Florina. Lignite is an easily extracted, low-cost fuel of strategic importance and is in plentiful supply in Greece [1], mainly in the Region of Western Macedonia, with a total area of 9471 km² and a population of 283,689 [2]. According to the Just Transition Development Plan, an analysis of the current situation and prospects for energy transition areas [3] between 2008–2019 demonstrated an increase in population aging. More specifically, an increase of 2 percentage points among the population aged 65+ and a considerable decrease of 6 and 13 percentage points in the 25–29 and 30–44 age groups, respectively, was recorded between 2008–2019. Western Macedonia is first among the most sparsely populated continental regions in Greece and second among all regions in the entire country, following only the Region of the North Aegean [4].

Table 1. Age Distribution in Greece and the Region of Western Macedonia.

Age Group	2018 Greece (%)	2018 Western Macedonia (%)	2019 Western Macedonia (%)	2020 Western Macedonia (%)
0–14	14.37	13.74	13.57	13.23
15–19	5.12	6.03	6.32	6.70
20–24	4.65	4.22	3.97	3.73
25–29	5.33	5.00	4.70	4.47
30–44	21.03	18.33	18.12	17.89
45–64	27.87	29.30	29.61	30.11
65+	21.64	23.37	23.71	23.87

Source: Small Enterprises Institute (IMEGESEVEE, in Greek) [5], JTDP Government Committee, Territorial Plan for Just Transition Development of Western Macedonia [6].

shows detailed age distribution of the population in Western Macedonia, where the 30–44 age group is smaller by 2.7% compared to the total number of regions in Greece, mainly due to domestic migration for employment, while the 65+ age group is approximately 2 points higher [5].

Western Macedonia is the only non-coastal Greek Administrative Region that shares land boundaries with two Balkan countries. It is predominately mountainous, with a major proportion of the country’s surface waters, unique agricultural products of exceptional quality, a rich cultural legacy, and rare ecosystems [4].

The post-lignite era in Western Macedonia is expected to have a substantial and worrisome effect on employment, as about 5000 employees are employed directly or indirectly by the Public Power Corporation (PPC) in lignite-based activities [6]. Western Macedonia is the only region in Greece where the Gross Value Added decreased by 8.8% between 2018 and 2019, whereas the national average change was +2% (

Table 2. Gross Value Added and GDP per capita by Administrative Region (current prices in million €).

	Gross Value Added by Administrative			GDP per Capita by Administrative
Administrative Regions	2018	2019	Change %	2018	2019	Change %
Attica	74,260	75,744	2.0%	22,854	23,341	2.1%
North Aegean	2138	2207	3.2%	11,415	11,271	−1.3%
South Aegean	5316	5533	4.1%	17,911	18,655	4.2%
Crete	7811	8007	2.5%	14,212	14,695	3.4%
Eastern Macedonia, Thrace	5969	6045	1.3%	11,472	11,639	1.5%
Central Macedonia	21,320	21,800	2.3%	13,121	13,430	2.4%
Western Macedonia	3604	3288	−8.8%	15,513	14,284	−7.9%
Epirus	3411	3493	2.4%	11,781	12,093	2.6%
Thessaly	7869	8143	3.5%	12,606	13,071	3.7%
Ionian Islands	2734	2855	4.4%	15,447	16,147	4.5%
Western Greece	6888	7027	2.0%	12,091	12,450	3.0%
Central Greece	7309	7446	1.9%	15,175	15,463	1.9%
Peloponnese	6981	7173	27%	13,995	14,421	3.0%
Greece	155,611	158,762	2.0%	16,730	17,092	2.2%

Source: ELSTAT [7].

) [7].

The goal of full decarbonization in Greece by 2028 is demonstrated in the provisions of the National Plan for Energy and Climate [8], which ensures the stability of the power generation system and energy security in Greece. In addition, it complies with the European Strategy for Climate Neutrality, as demonstrated in the Communication issued by the European Parliament Commission on 11 November 2019, the European Council, the European Economic and Social Committee and the Committee of the Regions, namely “The European Green Agreement” (COM (2019) 640) [9]. The specific Agreement requires, inter alia, that greenhouse gas emissions be phased out by 2050.

Despite all of this planning, the COVID-19 epidemic has resulted in significant societal and economic repercussions worldwide. In addition, it has affected total CO₂ emissions and the energy market, which necessitates government support, as the USA did with the QE strategy, where the Fed’s participation greatly enhanced market efficiency [10]. At the same time, the epidemic has influenced the oil market. A typical example is the American oil market, where oil consumption was significantly more affected during COVID-19’s high levels [11].

In just eight (8) years, Western Macedonia is expected to replace the economic value chain of lignite, which accounts for 42% of the GDP of the specific Administrative Region, with 5000 permanent and 15,000 non-standard jobs, and up to one billion Euros in wealth produced from lignite per year [12].

Table 3. Direct, indirect, and induced effects of lignite-based activities in Western Macedonia, 2019.

Regional Units	Gross Value Added (Million €)	Employment (Employees by Thousand)	Employment/GVA Index	Turnover (Million €)
Grevena	8.44	0.20	0.027	8.05
Kozani	1285.43	15.23	0.012	319.11
Kastoria	9.06	0.87	0.096	10.85
Florina	376.29	1.91	0.005	86.17
Total	1679.21	18.21	0.011	424.18

Source: Territorial Plan for Just Transition Development of Western Macedonia [12].

lists the direct, indirect, and induced effects of lignite-based activities in Western Macedonia in 2019.

The two most heavily populated regional units (Kozani and Florina) concentrate 67.7% of the total number of employees in the region. According to a World Bank’s labor market research [13], lignite-based activities in the municipalities along the Kozani—Florina axis take up 30% of the total number of employees.

Examining the data derived from the Independent Power Transmission Operator (IPTO) [14], following the aforementioned analysis and the information in Figure 1, it is demonstrated that from 11 November 2020 to 21 December 2021, lignite-based power generation averaged 15,523.7 MWh/day, natural gas for 59,477 MWh/day, hydroelectric power for 13,932.9 MWh/day, RES for 25,554.6 MWh/day, while the average daily needs of the country were 123,584.8 MWh/day. Net electricity imports (imports–exports) averaged 9096.6 MWh/day, which indicates the import–export of Greece’s electric power to all neighboring countries, namely Albania, North Macedonia, Bulgaria, Turkey, and Italy.

In a post-lignite era, a Just Transition necessitates strategic planning to minimize social, economic and energy challenges while maximizing sustainable power generation. Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis, a well-structured analytical tool [15] applied to many socio-economic analyses [16], is ideally suited for such studies. The origin of SWOT analysis is uncertain [17], whereas there is also a pitfall in searching for its origin [18]. Haderberg [19] argued that SWOT was first used by Harvard University in the 1960s, whereas Puyt [20] states that the SWOT empirical base dates to 1952 in Lockheed’s Development Planning Department and was first applied by Robert Frankling Stewart. Firstly, the SWOT analysis was applied mainly in finance, advertising and business and then expanded to other fields, such as energy [21] and, more specifically, renewable energy sources [22,23,24,25], and nuclear energy [26]; it was also applied to approval processes of large-scale renewable energy installations in Japan, New Zealand, the EU and the USA [27].

Diverse methods in the literature investigate the carbon footprint of coal and delignification in general. Using a Multi-Regional Input–Output and Structural Decomposition Analysis, Wang et al. [28] studied the coal footprint in China from a global viewpoint. Germany has also created a Soft-linking energy system model with an input-output model and a regional macroeconomic model that simulates the socioeconomic implications of the phase-out in the lignite regions [29]. Isoaho and Markard [30] did a socio-technical analysis in the United Kingdom and investigated the complicated interplay between policy and technological change. Fermeglia et al. [31] examined the coal phase-out from a legal perspective in the instance of Italy, taking into account the existing role of coal generation and the performance of the key legal and regulatory tools as adopted in Italy to achieve the closure of all coal power plants by 2025. In view of the European Union’s energy sector priorities, this study undertook a comprehensive, multidimensional examination of each aspect of delignitization to address a research gap.

Recently, SWOT analysis has been used to examine decarbonization and fossil fuel phase-out with a view to drawing up future and targeted strategies [32]. Such studies have also been carried out in Greece to examine decarbonization in Western Macedonia [33] and Megalopolis [34]. These two studies are based on specific development axes of the national decarbonization plan. The analysis, here, includes all main sectors of the economy in the examined region and discusses the priorities set by the Energy Union to achieve its energy goals as well as the results of the generalized SWOT analysis applied to the specific strategy of the Energy Union and places special emphasis on the axes requiring further support actions. The current work investigates the delignitization impact in all relevant socioeconomic sectors in the targeted region holistically in combination with the EU’s priorities satisfaction level which to the best of our knowledge has never taken place before. The research findings, with implications for all relevant stakeholders (industry-consumers-environment-workforce), will contribute to the implementation of Energy Union governance and climate actions.

2. Materials and Methods

To carry out a complete socio-economic analysis for the Region of Western Macedonia, the present study employs SWOT analysis to discuss all affected dimensions. The SWOT analysis that took place in this specific study has not been based on some—other strategic plan or specific study axes like it has in other similar studies in Greece. To achieve the highest level of accuracy, this analysis takes into consideration all the socio-economic aspects that affect or will be affected by the Decarbonization in the Region of Western Macedonia, such as tourism, unemployment, occupation, agricultural production, manufacturing industry, future investments, RES, infrastructure, energy security, etc. In addition, it also examined the European Union’s policy axes regarding its energy priorities. The twofold analysis that follows, i.e., the targeted SWOT analysis at the local–regional level, in combination with the simultaneous analysis of the general energy priorities that the European Union sets, is the element that differentiates this study from all the others that have taken place in the past. The European Union proposed a regulation for the governance of the energy union [35], which aims to ensure the implementation of the 5 dimensions of the Energy Union strategy. Following the regulation, the directive 2018/2002 was formulated and became a law in Greece in 2021.

The regulation outlines the objectives of the Energy Union, states the methods, and means to address new energy challenges, and sets out the required individual actions [36]. The five dimensions/priorities of the Energy Union include:

• Energy Security: Various and continuous changes have been taking place in the global energy context, resulting in energy instability, which in turn affects all economic and social aspects. To address energy instability, the EU is pursuing energy security by employing competitive, sustainable, and safe methods [37]. Actions, such as roadmaps for easier energy transport from country to country, liberalization of the energy market, energy upgrade of buildings [38], energy-efficient transport system [39], strong international partnerships and application of RES, bioenergy, nuclear fission, and CO₂ capture and storage, will provide the basis of the EU’s energy security.
• Internal Energy Market: The EU has achieved many goals for the internal energy market and has been striving to achieve the rest, as originally planned. In the context of the internal energy market, the EU wants to offer more options to consumers, i.e., a larger number of energy providers offering more competitive prices, safer networks and supply, more transparent wholesale markets, better coordination and transparency of energy relations with third countries, better control, and reduction of energy consumption through smart technologies and high efficiency and accessibility to the transmission network [40].
• Energy Efficiency: Energy efficiency contributes significantly to reducing greenhouse gas emissions and plays a key role in the transition to a safer and more sustainable energy system. The benefits of improving energy efficiency are numerous and include reduction of industrial and domestic energy consumption, new energy-efficient buildings with lower energy requirements, more efficient electrical appliances (refrigerators, washing machines, etc.), reduction of greenhouse gas emissions, and lower dependence on gas suppliers. 1% of energy saving implies that EU gas imports are expected to fall by 2.6%, i.e., for every 1% in increase in energy efficiency 2.6% of total gas imports will be saved [41].
• Exemption for Coal-Based Emissions: Exemption for coal-based emissions, which is a key priority for the EU’s energy future and will play a significant role in technology advances, has been the basis for drawing up a Strategic Energy Technology Plan (SET) [42]. The project aims to develop and implement technologies that will ensure lower CO₂ emissions. Actions related to the reduction and/or elimination of CO₂ emissions include universal applications of RES, smart cities, carbon capture and storage technologies, etc.
• Research, Innovation, and Competitiveness: In the context of the Energy Union’s strategic priorities, research, innovation, and competitiveness play a significant role in the European Union’s energy planning and must be endorsed to further improve current technological developments and competitiveness.

Combining the SWOT analysis with an examination of whether the European Union’s energy priorities are implemented is a novel approach that has not been encountered in other studies. As the EU has axes and guidelines for all acts, this dual analytic technique should be applied to all studies that follow sector-specific inquiries.

3. Results

3.1. Strengths

Western Macedonia features several assets in many sectors. In terms of energy, it has been the energy hub of Greece for many decades, contributing more to the power supply and growth than any other region in Greece. In parallel, with the increased industrial activity in the energy sector, excellent infrastructure was created to support high voltage energy transmission networks and other relevant structures, all of which have given Western Macedonia a competitive advantage in renewable energy investments over other regions [43].

Regarding job qualifications and skills, the highly qualified and trained workforce employed in energy, in combination with the relevant industrial culture, are strong points for the specific region. It is also worth mentioning the incomparable skills of those working in the fur industry, which had been the second-largest pillar of the economy in the region for decades, especially in Siatista and Kastoria, both well-known for their huge export potential [43].

The geographical location of Western Macedonia is also important, adding to its international character; the region borders Albania and North Macedonia and has easy access to two ports, Thessaloniki and Igoumenitsa, via the Egnatia Motorway, which connects the three regional units.

An additional strength is the production of high-quality export-oriented agricultural products, with Protected Designation of Origin (PDO), such as saffron, legumes, peaches, and a huge variety of quality and internationally recognized wines, etc. [4].

The ecosystem of Western Macedonia is of exceptional beauty, with 9 main lakes, which add to its natural beauty and attract thousands of tourists annually. They also enhance biodiversity and contribute to improving local agricultural products and fishery. The lakes, Great Prespa, Little Prespa, Zazari, Himaditida, Lake Petron, Vegoritida, Kastoria (Orestiada), Hilarion and Polyphytos, are central axes of development for the business plan for Integrated Territorial Investments in lakes [44].

In addition, among the emerging strengths of Western Macedonia is tourism, a vibrant and versatile industry in the specific region. It is worth noting that the tourism industry is among the development axes set by the Just Transition Development Plan (JTDP), namely, clean energy, industry and trade, smart agriculture, sustainable tourism, and, finally, technology and education [6]. In Western Macedonia, the tourism industry includes [45]:

• Cultural and Religious tourism,
• Wine gastronomy tourism,
• Activity tourism—Sports and sightseeing tourism,
• Ecotourism,
• Fishing tourism.

The gradual phase-out of lignite exploitation, and PPC’s withdrawal from many thousands of square meters of land, after reclamation, will create new land either for farming or investments (i.e., land for new business activities or RES sites).

In terms of infrastructure and transport networks, Egnatia Motorway, the vertical axes of the Egnatia Motorway «Niki-Florina-Kozani-Boundaries of the Prefecture of Larissa» to be soon built as well as the International Airport in Kastoria, are strong competitive advantages for the wider area.

Regarding green growth and circular economy, Western Macedonia runs a well-organized and improved waste management system. According to Farmaki [46], waste management involves a four-stage process that includes: (a) collection, (b) transportation, (c) recovery and (d) waste disposal, all of which are efficiently operated in Western Macedonia, mainly by corporations, such as the Waste Treatment Corporation of Western Macedonia.

District heating networks with low CO₂ emissions are run in several cities of Western Macedonia and offer low-cost heating to citizens; there is also a significant number of pilot power plants using biomass [4].

Finally, among the significant strengths of Western Macedonia is the local University, the University of Western Macedonia, which is actively engaged in research, partnerships, and support of local enterprises. The University is a hub of innovation and dissemination of know-how and a major pillar for decarbonization and the Just Transition Development Plan. According to Google Scholar, in the World University Ranking, the University of Western Macedonia ranks 2454th [47]. The University of Western Macedonia is without a doubt an extremely valuable asset to the region and a “strength” in light of the positive effects it has on the local economy and society as a result of the huge number of students it enrolls and the jobs it subsequently generates.

3.2. Weaknesses

A major weakness of the region is its financial dependence on lignite. A large percentage of permanent or non-standard employment involves the energy sector, which implies that the local workforce is financially dependent on PPC functions and operations. Apart from employment, however, lignite-related dependence also affects various financial activities, as well as PPC partner enterprises and suppliers.

Another significant weakness, closely related to the one previously discussed, is the high unemployment rate, especially for the 18–29 age group, which has the highest record in Europe. Unemployment rates rose rapidly, especially in 2009, because of gradual workforce reduction, and are bound to further increase in the upcoming years due to decarbonization and the shutdown of PPC units.

An additional weakness involves poor foreign investments, caused by low interest in relevant investments [43]. A significant factor affecting foreign investments is the absence of organized investment sites (Industrial Areas, Industrial Parks), and poor investment incentives in the framework of decarbonization and the Just Transition Development Plan. In addition, many issues related to sites and the installation of production and business units highlight problems in the existing spatial and urban planning, which require suggesting immediate solutions by means of new spatial and urban planning schemes for the territorial organization of land uses and land disengagement [4].

It is also worth noting that Research, Technology Development, and Innovation (RTDI) rates are extremely low in Western Macedonia, ranking 10th among the 13 administrative regions in Greece. 11% of the relevant projects are privately funded, which is a low rate compared to equivalent national (33%) and EU (64%) ones [48].

Poor infrastructure is also a significant weakness in Western Macedonia. A well-organized railway network and combined transport, with more efficient freight services and additional incentives for new investments, are fundamental requirements for the specific region.

Western Macedonia also suffers from poor business activities and an absence of business culture, especially among the youth. Furthermore, it demonstrates extremely low industry expertise and a very small share of high-value technology- and knowledge-intensive products [4].

Regional growth is also affected by the absence of a clear investment plan for the transition towards a post-lignite era, which will enable the combination of all individual financial tools and will build a clear financing landscape for new investors. This may cause confusion and restrict the use of funds mostly for financial activities.

Among the perceived weaknesses in Western Macedonia is also the absence of a regional brand name, which discourages various promotion processes. Despite any local designations, such as “The city of mushrooms” for Grevena or “Lake Region” for Western Macedonia, there is not a strong internationally recognized Brand Name, which will give new impetus to tourism and will have a positive impact on regional growth.

3.3. Opportunities

A major opportunity for Western Macedonia is a shift to a greener energy production model, friendly to residents and the environment. During the lignite-dependence period, air pollution rates exceeded limit values, causing various health problems, which will disappear with the emergent shift to RES.

A further opportunity is related to the geographical location. Western Macedonia borders Balkan countries, while it is located between two major ports and can be an excellent transit center.

In addition, tourism is a very promising and growing industry, which can become a major pillar of development for the specific region if endorsed by special promotion and support measures. Ecotourism, wine, gastronomy, and religious tourism are sectors with special growth potential [43].

Special Incentive Zones, and, overall, positive incentives, in combination with available financial tools for the new partnership agreement period and the extra funding for decarbonization, can attract new investments to the wider area. Remarkably, there is widespread support for improving integration policies for new green financial activities, particularly in the context of the circular economy and smart agricultural production, with the goal of reducing energy footprints and conserving resources [4].

A significant opportunity is also the use of lignite for non-electrical applications. Lignite, apart from power generation, can also be used for [49]:

• gasification to produce synthetic fuels
• soil conditioners and organic chemical fertilizers [50,51]
• purification and carbon-activated filters [52]
• lignite-based carbon fibers
• rare earth extraction from lignite.

The attempt to develop innovative energy production technologies, such as Hydrogen technology and RES, offers Western Macedonia an important opportunity to become a Center for Energy Development. Particularly in the case of hydrogen technology, the European Union’s approval of the relevant program will give the region a significant impetus. The White Dragon, a major Hydrogen Project of Common European Interest (IPCEI) under approval, is estimated at over 8 billion Euros and aims to draw up an innovative, integrated green hydrogen project for Western Macedonia covering the entire hydrogen value chain. Hydrogen capacity is estimated at 250,000 tonnes/year, and CO₂ emissions reduction will account for 11.5 million tonnes/year [53].

Another significant opportunity for Western Macedonia is decarbonization, which will radically improve the quality of life and public health conditions. Lignite combustion has had a considerable impact both on air and soil-subsoil pollution rates, with harmful environmental and health effects, especially for people living near mines and lignite-fired plants [54]. It is worth highlighting that, according to the research results carried out by the AHEPA University Hospital, in various villages in the regional unit of Kozani, thromboembolic (43%) and cancer cases (55%) showed a considerable increase during 1992–2007 [55]. In addition, according to a study carried out in the Public Hospital in Ptolemaida, rates of allergic rhinitis were three times as high as the national average [56].

3.4. Threats

Regarding the potential threats, a significant threat for Western Macedonia is the vast increase in the use of wind turbines and photovoltaics, which entails a risk of encroachment on Highly Productive Land and land used for agriculture and livestock use, as well as degradation of the microclimate and biodiversity.

In addition, failure to address long-term unemployment problems, combined with the shutdown of lignite-fired plants, have caused a serious risk of economic decline and mass migration, especially in the case of young scientists (brain drain). The situation will deteriorate unless the implementation of the Just Transition Development Plan achieves the desired outcomes. Unemployment will cause social exclusion and social inequalities. Regarding SMEs, the non-flexible nature of small and medium-sized enterprises in Western Macedonia trading in new and innovative technologies and applications implies a potential risk of further loss of market share and income. Finally, poor investments, the sharp reduction of the number of PPC units, as well as high unemployment rates have generated a risky socio-economic mix with grim economic forecasts for the specific region.

Obviously, the transition in Western Macedonia will be supported by funding from several financial resources. In this context, a major threat is the fact that immature projects and actions are most likely to inhibit resource leveraging. More specifically, despite fund availability, project requirements, deliverables, and obligations, as well as bureaucratic delays, may prevent potential beneficiaries from absorbing funds.

A common threat for Greece, and especially for Western Macedonia, is the long-term financial crisis, which, in combination with the financial consequences of the coronavirus pandemic, is expected to increase losses. During 2009–2019, Western Macedonia’s GDP dropped from 5039 million Euros to 3795 million Euros, a reduction of around 25% in only ten years [4]. Enduring macroeconomic pressures and increased urban competitiveness, low competitiveness of local SMEs, poor growth, and insufficient adoption of new and innovative production and promotion methods have created an appalling financial context.

Health services are also insufficient, heavily burdened both by lignite-related pollution problems and the COVID pandemic; they are also understaffed and poorly funded [4].

Table 4. SWOT analysis results for the Region of Western Macedonia during the early period of decarbonization.

S	W	O	T
Strengths	Weaknesses	Opportunities	Threats
Energy hub of the country Energy networks and infrastructure Industrial Culture and Industry expertise Geographical Location-Cross-border location Versatile tourism industry Exceptional ecosystem—Lake Region High-quality agricultural products University of Western Macedonia Satisfactory infrastructure and transmission networks	Lignite-based economy High unemployment rates Poor Foreign Investments and absence of well-organized Investment sites Low research, technological development, and innovation rates Poor railway network Poor business activities and business culture (young people) Absence of Brand Name	Shift of the production base Growth rate of the Tourism Industry Positive investment incentives in the framework of decarbonization Lignite for non-electric applications Green technologies (White Dragon) Improving life quality and public health conditions	Increased penetration of RES—Expansion to large areas Failure to address long unemployment problems Non-flexibility of SMEs in the context of new developments Risk of not leveraging transition funds Long financial and health crisis Insufficient health service delivery

below shows a summary of the SWOT analysis results for Western Macedonia.

3.5. Comparative Analysis of Decarbonization Research in Greece

Relevant research in decarbonization and the post-lignite era in Greece includes two previous studies employing SWOT analysis, a survey about Megalopolis carried out by Marinakis et al. [34] and a similar analysis about Western Macedonia by Ziouzios et al. [33]. Both examine the five pillars of development set by the Just Transition Development Plan, and discuss issues in terms of clean energy, smart agricultural production, sustainable tourism, industry, education, technology, and a universal dimension, whereas in the survey about Western Macedonia a sixth pillar is added, namely, the environment.

The research carried out on Western Macedonia [33] includes brief information about the JTDP, discusses the views of local actors on decarbonization and applies the method of SWOT analysis in line with the roadmap drawn out by JTDP comprising the development pillars of decarbonization. More specifically, it highlights that decarbonization is among the economic strengths, green energy projects among those of clean energy, a large agricultural potential with high prospects of smart agriculture among the strengths of the agricultural sector, ecotourism and easy access to historical and tourist sites among tourism strengths, skilled workforce and retraining and reskilling programs among those of industry, education, etc. and finally, a reduction of pollution rates among environmental strengths. Economy-related weaknesses include lignite-dependent economy and social inequalities, low funding and bureaucracy problems are associated with clean energy, low-skilled farmers and a small number of young farmers are among the weaknesses in the agricultural sector, poor infrastructure quality and pollution is a tourism-related weakness, long exposure to air pollution is associated with the environment, whereas high unemployment rates, poor digital infrastructure and weak business culture are related to industry, education, etc.. In terms of opportunities, the strong points for the economy include great investment interest and restructuring policies, whereas in terms of clean energy the opportunities include energy communities and reduction of energy poverty; new sustainable agriculture and smart rural centers are among the opportunities in the agricultural sector, agrotourism incentives and synergies are related to the tourism industry, lignite mine reclamation to environmental opportunities, and leverage of skilled personnel and reuse of lignite infrastructure are associated with relevant opportunities in industry, education, etc.. Finally, in terms of threats, economic threats include social inequalities, unemployment and population aging, clean energy risks imply energy poverty and institutional uncertainty, poor skills are related to agricultural threats, whereas tourism-related risks include environmental degradation. Environmental threats include negative effects of climate change and threats in terms of industry, education, etc. Low rates of innovation, low digital competence, absence of synergies and public funding are potential problems.

A comparison of the two previous studies discussed above [33,34] with the present research study demonstrates several differences. Firstly, the SWOT analysis in this paper is not based on specific development axes of the national decarbonization plan but is carried out in terms of a wider socio-economic context. More specifically, the SWOT analysis here includes all main sectors of the economy in the examined region, i.e., the energy industry, agriculture, manufacturing, and tourism mapping. In addition, it discusses all the threats involved in the transition of the economy to a new and rather implicit production model, strongly questioned in terms of its potential to bridge the huge gap in the lignite industry and its social part, in which unemployment, poverty, and migration have already created social inequalities and decline. The research also discusses below the priorities set by the Energy Union to achieve its energy goals, as well as the results of the generalized SWOT analysis applied to the specific strategy of the Energy Union. Considering the priorities of the Energy Union, the research explores the actions complying with the specific priorities in the Region of Western Macedonia and places special emphasis on the axes requiring further support actions.

3.6. Energy Union Strategy

In the framework of the present research about Western Macedonia,

Table 5. Performance indicators in Western Macedonia in terms of the dimensions of the Energy Union Governance. ‘+’, ‘++’,’ +++’ symbols stand for “low”, “good”, and “excellent” performance respectively.

Strategic Dimension of the Energy Union	Performance	Actions
Energy Security	++	Liberalized energy market Increased penetration of RES Efficient energy transmission system International Energy Partnerships
Domestic energy market	++	Transparency of energy relations with third countries Efficiency and accessibility to the transmission network Reducing energy consumption through smart technologies Large number of energy providers and competitive prices
Energy Efficiency	+	Save-Autonomous Programme
Reduction of CO2 emissions	+++	Gradual shutdown of lignite-fired plants Low, gradual shift to use of hybrid & electric cars Smart cities
Research, innovation, and competitiveness	+	Low rank of Research and Innovation in Greece Good prospects for Technology Centers and spin-offs in the framework of decarbonization

briefly describes the actions and activities carried out in the specific region during the transition to a lignite-free era, by exploiting the results of the SWOT analysis.

3.7. Policies for Energy Transition

A major goal during the design process and the first stages of implementation of a development policy is to identify the key points to achieve a successful outcome. In the case of Western Macedonia, it is required that policies supporting the development plan of the region be congruent with the goals and guidelines set by the European Union.

Regarding RES, particularly photovoltaics, the analysis demonstrated increased penetration of RES in the wider area of Western Macedonia and great interest from big investors, businesses, and citizens. However, the huge demand for photovoltaic investments cannot be met, and licensing from the Regulatory Authority for Energy has been rather stagnant because of network overload. It is, thus, imperative that networks be upgraded to meet energy investment requirements, and the use of RES be increased in the energy mix. In addition, most of the energy poverty problems should be addressed, and transition-affected citizens should be offered an indirect and/or direct income.

An additional support measure for RES involves the elimination of bureaucracy and facilitation of licensing procedures. The role of the government is pivotal, as land allocation for photovoltaic installations has caused the local population’s strong reactions against lost arable land and environmental degradation. In addition, among the factors affecting the use of photovoltaics in non-urban areas [57,58] the analysis demonstrated poor public awareness of the role and significance of renewable energy sources, poor support systems, connection problems of new installations with energy networks and heating, absence of proper schedules, inadequate legal framework, and weak energy network in rural areas [59]. To address the specific problems, locals should be offered financial incentives and benefits equivalent to those granted by the Recovery Fund for Western Macedonia. It is vital that a complete Special Urban and Territorial Plan be designed to protect highly productive land and crops and ensure enough sites for RES investments.

In addition, the new energy system will enable Greece to further enhance partnerships with neighboring countries and EU members in the field of renewable energy and become a pillar of stability in the energy market. In the EU, the energy sector is a weak point, owing to increased energy dependency. Figure 2 shows dependency rates on energy imports in the European Union [60]. The main energy supplier in the European Union is Russia, which supplied 26.9% of imported oil (crude oil), 46.7% of fossil fuel and 41.4% of natural gas in 2019 [61]. EU’s energy autonomy has been among its primary goals, and the use of RES-generated green energy is greatly emphasized by investing huge funds for energy transition and development.

Additional policies to help accelerate energy transition include partnerships with all stakeholders in transition processes, i.e., government, region, municipalities, chambers, and citizen representatives as well as a basic framework and long-term plan for CO₂ emissions. Although there is an EU central plan on emissions reduction, individual plans should be designed by each country in line with the EU, whereas a plan for fund management, raw materials and recycling of waste and new industrial equipment is also required. Finally, it is vital to identify, monitor and collect data about all transition-related aspects; in other words, the use of indicators of the effects of energy shift on the environment, the economy, and the society is crucial to promote good practices, disseminate knowledge and update design and policies if necessary [62].

4. Discussion and Conclusions

Western Macedonia has already been applying several decarbonization processes, laying the foundations for the next day, and following the Energy Strategy of Greece and the European Green Deal. Lignite is not included in future EU or Greek energy plans but has been replaced by natural gas and renewable energy sources, mainly photovoltaics and wind.

The transition involves both the energy sector and the wider economic and social sectors that will be affected, which will be under great pressure. In Western Macedonia, lignite mining and electricity generation had dominated economic activities for many decades, in combination with the fur industry, which finally shrank. Thus, solutions to support the economy and society in Western Macedonia are imperative, and EU funding for a Just Transition is crucial.

SWOT analysis is a useful tool for policy and decision-makers. The research analysis demonstrated the strengths and critical points requiring special attention, such as the energy sector, industrial culture, energy transmission networks, high-quality agricultural products, and the University of Western Macedonia. Major weaknesses include the dependence of economic activities on lignite, causing high unemployment rates, among the highest in Europe, particularly for young people. A further weakness involves poor foreign investments and low rates of competitiveness and innovation, whereas a significant opportunity is the transition to a new production model, which, despite any risks, offers significant opportunities for a new transition plan for the specific region and a different, lignite-free future. Finally, the main threats include potential unsuccessful outcomes of the Just Transition Development Plan, the inability to absorb funds, environmental degradation caused by the huge number of photovoltaic panels and wind turbines, and the risk of migration due to poor job opportunities and social exclusion caused by unemployment. The long financial crisis in Greece and the complications and money problems caused by COVID-19 are also risks.

Considering the strategy for the governance of the Energy Union and the five relevant axes, it is demonstrated that the Region of Western Macedonia satisfactorily follows the priorities of Europe in its transition to the new production model. Actions should be focused on research, innovation, and competitiveness, and additional measures should aim at increasing energy efficiency.

The current study differs from the two previous studies on decarbonization and the post-lignite era in Greece [33,34]. First, the present SWOT analysis is not based on specific development axes of the national decarbonization strategy, but a broader socio-economic environment. SWOT analysis comprises energy, agriculture, manufacturing, and tourist mapping in the analyzed region. In addition, it discusses all the threats involved in the economy’s transition to a new, rather implicit production model, which is questioned in terms of its potential to bridge the huge gap between the lignite industry and its social part, where unemployment, poverty, and migration have already created social inequalities and decline. The study also discusses the Union’s energy goals and the results of a generalized SWOT analysis applied to its strategy. The current study investigates the Union’s energy priorities in Western Macedonia and focuses on the areas that need more help.

Despite the minor limitations of the current study (i.e., short delays in the release of data from the National Authorities), the research analysis demonstrated specific policies to be considered by policymakers towards optimizing energy transitions and prosperity in Greece. In terms of energy transition support, a number of policies and measures should be applied to facilitate, accelerate and ensure Just Transition, such as improvement of the existing network to enable meeting all investment needs in RES, no licensing delays and elimination of bureaucracy, reciprocal benefits for local populations, similar to those of the Recovery Fund, a well-organized territorial plan to protect arable and highly productive land as well as conservation of the natural environment.

For the first time, a study examines the impact of delignitization in all socioeconomic sectors in a specific region holistically rather than at a more comprehensive national level, while also taking into account the EU’s priorities in the energy sector. Simultaneously, it creates the framework for further scientific inquiry. This study is required to identify the following research steps, which include the design of environmental, economic, and social simulation models, governance models, and risk and crisis response mechanisms.