Risks, Obstacles and Challenges of the Electrical Energy Transition in Europe: Greece as a Case Study

Abstract

The European Union’s 2030 target of decreasing net greenhouse gas emissions by at least 55% has resulted in a significant uptake of renewable energy sources (RESs) in the European power system, primarily wind and solar power, as well as the closure of conventional power plants that mostly used fossil fuels. The European Union’s members have accelerated the process of energy transition driven by climate change, and public authorities’ involvement in this process is impressive. The goal of this study is to present a broad overview of the existing challenges for the energy transition in Europe and how they can affect the reliability and stability of the interconnected power system in Europe and future investments, focusing especially on Greece. Unfortunately, this environmentally friendly transition is taking place without the required amount of investment in electrical energy storage technology, which raises the risk of a blackout due to the high predicted variability of RES. The gradual abandonment of conventional energy production units such as natural gas in the coming decades will intensify the problem of frequency regulation, which will become even more acute due to the particularly increased installed capacity in RESs across Europe and Greece. The European Power System, being partially unprepared for the energy transition, frequently faces a paradox: it rejects green power originating from high-RES production because of low demand, a lack of transmission line interconnections, or extremely low energy storage capacity. This paper examines all the prerequisites, including how the European electrical transmission system will be developed in the future and how new energy storage technologies will be used. Lastly, Greece’s energy future and potential risks associated with realizing the environmental goals of the European Green Deal is studied using a PESTEL analysis.

1. Introduction

The energy transition is meant to be a socially equitable and cost-effective process of transitioning from fossil fuels to a clean energy system based on increased RES use, systemic integration, and greenhouse gas emission reductions [1]. To meet net-zero emission targets and limit temperature rise by 1.5 °C before 2050, a sustainable and secure energy system must be established [2,3]. Renewable energy, particularly wind and solar, has grown at an extraordinary rate in the previous decade, outperforming predictions due to increasing cost competitiveness and widespread support for low-carbon energy policies [4,5]. According to figures given by the International Renewable Energy Agency (IRENA), the global installed capacity of renewable energy will reach 3.064 billion kilowatts by the end of 2021, accounting for 38.3% of the total installed power supply [6,7]. Meanwhile, according to the IEA’s stated policy scenarios, RES are expected to account for 80% of the incremental installed energy globally by 2030 [8].

The goal that has been set by the European Commission is the reduction of CO₂ from fossil fuels and their gradual replacement by green forms of energy such as wind and sun. EU countries are aligned with the European 2030 decarbonization targets of at least 55% cuts in GHG emissions (from 1990 levels) and at least 50% share for RESs (as addressed in the ‘Fit for 55’ package) [9]. Some EU countries will have fulfilled this target before the deadlines of the time schedules [10]. To achieve these goals, electricity grids will be required to operate with 50% of electricity production stemming from RESs of any scale by 2030 [11,12]. The dramatic increase in the proportion of wind and solar PV in the total generated energy drastically alters the power system and raises the need for power system flexibility, which is dependent on modernizing and digitizing grids. Consequently, more sophisticated and intelligent operations can be enabled, as the supply of electricity changes and as the number of users and uses grows [13,14,15]. Unfortunately, this high penetration of RESs and the shutdown of power plants working with fossil fuels have caused major instability problems that were unknown a few years ago [16,17].

Between now and 2050, the need for power system flexibility will quadruple due to changes in electricity consumption patterns and the rapidly increasing share of variable RESs [18]. This highlights the need for dispatchable low-emission technologies, including geothermal, bioenergy, and hydropower [19]. It is anticipated that capacity additions to these dispatchable renewables will triple to over 125 GW by 2030 [20].

The unpredictability of RESs causes problems in the frequency control of the interconnected European power system [21,22,23,24]. There are days of the year when the power production from RESs is very high, and as the storage capacity is considerably low in comparison to the installed RESs in the European power system, great amounts of green energy are rejected; otherwise, the over-frequency that they cause may cause severe problems or even a major blackout [25].

Unfortunately, this environmentally friendly transition is taking place without the required amount of investment in electrical energy storage technology and in the power grid [26], which significantly raises the risk of a major outage or even a blackout due to the high predicted variability of RESs. Consequently, the European Power System frequently faces a paradox: excess energy originating from high-RES production is rejected by disconnecting solar or wind parks from the system, because of low demand, the lack of transmission line interconnections, and the extremely low energy storage capacity [27,28]. This rejection of RES production is also known as curtailment, and it refers to reductions in power production (“generation curtailment”) or, less frequently, power consumption (“load curtailment”) when there is too much generation in the grid (generation curtailment) or insufficient power in the grid (load curtailment). Furthermore, more than 41 million people in Europe could not keep their homes warm enough in 2022 [29]. The multifaceted issue known as “energy poverty” is thought to be brought on by a combination of high energy costs, low income, and inefficient buildings [30], making it clear that the energy transition is not socially fair for European citizens [31,32].

This work describes the problems of the high penetration of RESs in the European power system and the barriers that delay the energy transition. In this analysis, Greece is a case study having its own unique characteristic for its efforts towards the energy transition. The penetration of RES plants in the Greek interconnected electricity system began in 2000 with the connection of mainly wind farms to the transmission system.

RES penetration began to increase at a faster rate, accelerating significantly in the 2010s with the mass connection of photovoltaic (PV) plants, mainly to the distribution network. At the end of 2022, out of a total installed generation capacity of 20.7 GW, approximately 9.7 GW of RES plants were in operation. Most of these plants are non-dispatchable wind farms and PV plants as their production depends on weather conditions. The situation today includes even more RESs, and in the absence of energy storage projects in the Greek electricity system, operators have been forced to curtail RES energy by 860 GWh in 2024 and 200 GWh in the first quarter of 2025 [32].

According to [6,9], Greece’s energy balance has drastically changed, and the country’s “green” performance stands out internationally. Photovoltaic and wind energy now account for 50% of demand, up from 20% in 2017, with the potential to reach 80% by 2030. Greece is considered number three in Europe regarding the penetration of RESs into the energy mix. This is one of the main reasons for conducting this research and considering Greece as a case study. This paper is structured as follows: Section 2 outlines the goals of the EU for the energy transition until 2050. Section 3 provides the barriers that decelerate the European energy transition, and in Section 4 and Section 5 there is a PESTEL analysis of Greece as a case study towards its energy transition. Finally, Section 6 includes the conclusions of the current study.

2. The Goals of the EU Energy Transition Until 2050

The main challenge of the EU is to reduce CO₂ emissions, by 2050, down to 0% (see Figure 1). This is the reason that the EU has embraced the RES technologies that emit zero CO₂ and are eco-friendly. However, even with existing actions, this is not possible to achieve. Also, the power units using fossil fuels should be abandoned in the European power system by 2050 [2] (see Figure 2). As is shown in Figure 3, in 2050 there should be no electricity production from coal or oil, without CO₂ storage, while the use of gas should be almost zero [8]. Wind energy (onshore and offshore) should be 50% of the total annual electricity generation, while another 15% should be generated by solar panels, with another 10% from other RESs. The only conventional units that will produce electricity for the European system will be nuclear plants, gas thermal plants and plants using fossil fuels or biomass with the CO₂ storage technology in an amount of only 20–25% of the total annual electricity production. Although this is something desirable for the reduction of CO₂ at the European level, it is not as safe as we would expect, and it will be shown in Section 3. However, these targets may be revised in the future either up or down, depending on the presence—or lack thereof—of obstacles that may arise before then. In Figure 3, the evolution of renewable energy targets of the EU from 2010 to 2030 is depicted [8]. Also, in Figure 4, the world electricity demand is depicted, while in Figure 5 the share of electricity production by source in the EU is shown, proving the dominant role of the RES.

3. Barriers That Decelerate the European Energy Transition

3.1. The Impact of Wind and Solar Generation to the Power System

During periods of high sunshine and strong winds, to keep the electrical system up and running, it may be necessary to curtail up to 50% of the green energy produced for a period [33,34,35]. Unlike conventional sources of energy, wind farms provide actual power variations into the grid, and in some types of wind generation systems, reactive power consumption is proportional to real power production. These power variances produce voltage differences, which have ramifications for both the electrical power system and the customers. Wind energy is a non-controllable energy source that can generate transient frequency stability issues [36,37,38].

Solar energy has similar behavior to wind generation, since it is also non-controllable. Additionally, in PV generation, the “duck curve” is another issue that may cause a high risk to the power system. The duck curve is problematic for distributed solar because it causes utilities to stop the flow of energy from solar systems to the grid. During the decreasing section of the duck abdomen, traditional power sources must reduce output quickly to comply with the stage of plentiful PV generation around noon, thereby reducing the risk of overgeneration. During the growing portion of the duck neck, traditional power supply must increase production quickly around sunset to compensate for the rapid loss of PV power and fulfill the requirement of evening peak load. However, the regulating capability of standard power systems is insufficient to meet the demand for rapid ramping down and up during the segment of the duck abdomen and duck neck. Such a curve is depicted in Figure 6. The duck curve is more obvious when solar energy production is high, and the power demand is low. As the sun sets, the solar generation wanes, and the load curve takes a steep upward turn due to the sudden peak in demand. This causes great stability issues for the TSOs if no immediate action is taken.

In conditions of high RES penetration, the load left to be undertaken by the units offering balancing services is very low, but they are necessary to provide security as only they can make the required energy backup. The high technical minimum of the thermal units amplifies the problem. In such cases, the need to maintain safety reserves forces the TSO to keep thermal units in operation and curtail excess energy from the RES. If similar conditions occur in neighboring systems and each area’s faults are not checked, we may not have expected flows in wider areas with risks of major disruptions. Certainly, a similar problem that the TSOs must face is when there is a lack of RES production, such as, for example, during cold winter nights when there is a high load and usually very low wind generation and, consequently, very low production from RES. In this case there is a need to have available thermal or hydropower units to cover the high demand, which is a huge challenge for the TSOs.

It is emphasized that such operating situations are increasingly common in many European countries, such as Greece, Germany, Spain, or the Netherlands. This is especially present in the last period, due to the increasing penetration of RESs and the reduction in loads [39]. The RES forecast shows forecast errors of 10–12%. The integration of the markets and the increase in cross-border exchanges entail operational situations of the power system with large and less predictable changes.

Greece is one of the EU countries facing this curtailment issue in RESs, causing a major problem to existing and future investments in the renewable energy sector. Germany faces similar challenges. Figure 7 depicts the percentage of main renewable energy production types curtailed in relation to total production. Offshore wind has been the most curtailed energy source since 2020, reaching a peak in 2023 when it accounted for nearly a quarter, or 24%, of total production. On the other hand, the fraction of onshore wind curtailment remains low and is gradually declining. Solar curtailment was modest throughout the time. Although curtailed solar energy increased between 2022 and 2024 (until the 4th quartile of 2024), it remains very low.

While it is impossible to pinpoint the direct cause of less offshore wind energy being curtailed in 2024 compared to 2023, potential causes include improvements in grid infrastructure and improved grid management. Curtailments could be further decreased this year as part of the government’s “use instead of curtail” strategy, which was implemented in October 2024. It encourages users, such as electrolysers and power-to-heat facilities near wind farms, to use excess energy rather than waste it.

3.2. Lack of Energy Storage Capacity in Europe and High Costs

The European Commission has defined principles for energy storage in the Clean Energy for All Europeans package, which was adopted in 2019 [40]. The primary energy storage reservoir in the EU is pumped hydro storage, although battery projects are on the rise, according to energy storage research published in May 2020 [41]. Aside from batteries, a variety of novel electrical storage technologies are rapidly developing and becoming more market competitive.

Several studies have examined the potential future paths for the adoption of energy storage in the EU [42]. These studies predict 187 GW and 600 GW of energy storage capacity by 2030 and 2050, respectively (up from approximately 47 GW in 2021, primarily through pumped hydro storage), as can be seen in

Table 1. Energy storage estimations for the EU in 2030 and 2050 [42].

Energy Storage Technology		Power Capacity (GW)
		2021	2030	2050
Power to X to Power	Vehicle to Grid (V2G)	-	57	120
	Batteries	7	57	50
	Pumped Hydro Storage (PHS)	40	53	65
	Novel gravity storage, compressed air energy storage (CAES), liquid energy storage (LAES), thermal energy storage, electrochemical and chemical energy storage	-	55	200
Power to X	P2X technologies	-	22	165
Total		47	187	600

. This need for additional energy storage in Europe has been included in the maps of TYNDP of ENTSO-e (2022–2032) [43], and these future projects are depicted in Figure 8.

It is vital to note that most of the energy transition costs are one-time capital expenses. These investments will make energy cleaner and more affordable in the future. However, there is a cost to doing nothing, and existing energy support programs are only part of the cost of a delayed transition. According to a new estimation [44] the cost of transitioning to sustainable energy in Europe by 2050 will be USD 5.3 trillion. However, the levelized costs of various RES technologies have significantly decreased in the last decade [41], as can be seen in Figure 9. It is obvious that the costs for sustainable energy sources have decreased as their use becomes more prevalent, particularly for electricity produced by solar panels.

However, today’s status regarding energy storage is not that good. In Figure 10 it is obvious that the greatest existing part for energy storage (around 93% of the total energy storage) is pumped hydro energy storage, while almost 7% is all the other energy storage technologies, with batteries covering around 5% of the total energy storage [45]. Pumped hydro energy storage has been the dominant technology until now; it has a longer life period than batteries and, as it is depicted in Figure 11, it has a lower levelized cost of energy (LCOE) compared to the batteries, making it even more desirable [46]. However, they have main obstacles in their construction:

• Geographical, geological, and environmental limitations related to the design of reservoirs. Hydroelectric systems present difficulty finding topographically suitable areas that have sufficient water capacity and an appropriate elevation difference.
• The high cost of investment.
• The long implementation times (for licensing and construction).

3.3. Grid Infrastructure

The energy transition is altering the nature of electricity generation. Decarbonization is predicted to drive RES demand, with RESs representing 45 to 50 percent of global power production by 2030 and 60 to 70 percent by 2040 [47]. With such high demand, RES installed capacity might increase ninefold from 2020 to 2050. The switch to RES, combined with economic expansion, is expected to drive substantial growth in power. Power networks will need to grow to satisfy rising demand for electricity and renewable energy to achieve net-zero emissions by 2050 [48].

According to the EU Commission, energy consumption is anticipated to increase by 60% by 2030 as heating, transportation, and industry become more electrified. This means that the expansion of Europe’s electric grid must be accelerated significantly. The continued installation of new heat pumps and charging stations, together with the more decentralized production of electricity, puts further demand on the grid. Furthermore, as more energy is generated from RES, it is critical to maintain a consistent balance between electricity generation and demand. Digital technologies are thought to help successfully integrate decentralized RESs while minimizing supply interruptions. Between 2020 and 2030, it is predicted that the necessary investments in electrical infrastructure will amount to 584 billion euros [49].

The installation of RESs changes the supply network’s premises. On the supply side, the major energy mix is expected to shift in favor of RESs. In particular, the share of weather- and location-dependent energy sources—photovoltaics and wind energy—has the potential to grow greatly, whereas controllable renewable energy, such as biomass and hydropower, is predicted to grow only somewhat. The energy supply is increasingly decentralized. Instead of a few huge power plants, there will most likely be numerous medium-sized and smaller producers placed in areas with ideal climatic and geographical circumstances. Figure 12 shows that the power transmission projects with both submarine and land cables would cover 51.4% of the total route length (i.e., 18,971 km), compared to overhead line projects (48.6% and 17,945 km) [43]. In Figure 13, the European system’s needs are depicted, as derived from a recent study of ENTSO-e [48].

3.4. Political Will and Market Design

Following Russia’s invasion of Ukraine, the European energy price crisis, which began with rising gas and power prices in 2021, escalated into a security issue regarding fossil fuel supply [50]. The current price and security concerns highlight the importance of addressing the climate crisis, which has been driving energy transformation. The EU is scrambling to respond to these new problems, portraying them as yet another compelling argument to speed up the energy transition. Fossil fuels will remain an important part of Europe’s energy mix for many years. However, the energy shift will result in dramatically increased levels of green electric power generation and consumption, displacing existing fossil fuel production and consumption. Electricity will play an increasingly important role in the decarbonized energy system, ensuring energy security.

In 2025 the uncertainty in European industry has been increased due to the high energy prices for industry and, therefore, a lack competitiveness for European products compared to similar ones, mainly from Asian countries with lower electricity costs and with lower energy transition goals [51]. This has increased skepticism among stakeholders in both industry and the energy sector about a revision of the goals for 2030 and 2050, as previously mentioned. This has become even worse after the presidential elections in the USA in 2024 [52].

There are also structural issues in the electricity market design for the new era of decarbonization, and the electricity price in many countries is high enough to lead to energy poverty for a great number of electricity consumers. It is critical to acknowledge that we are transitioning from fossil fuel energy security to renewable electricity security. The intermittent nature of renewable energy necessitates investments in flexible energy resources to meet demand, store excess energy, and manage network operations.

Designing markets that encourage effective investment and operations in this new system is crucial and difficult. Most analysts agree on one point, though: the existing wholesale power market design is inadequate. To overcome the following difficulties, modest or significant improvements are necessary:

• Recovering fixed investment costs for RESs and other assets at near-zero marginal cost, resulting in low average wholesale energy market prices.
• Encouraging investment in flexible technologies to ensure supply security when renewables are intermittent.
• Providing spatial price signals to reflect associated costs.
• To enable the transition to the energy and electrical system of the future, three areas demand more attention from governments than they have received thus far.
• Developing a new market architecture to provide decarbonized electricity supply.
• Avoiding government interventions that hinder the transition and increase costs; and
• Encouraging consumer participation in electricity markets.

3.5. Investment Risks

The oversupply of energy from RESs and the lack of advanced technology in its management create surpluses in European countries, which changes the balance of the system, causing zero-prices domestically and negative prices internationally, directly affecting all European markets. Large business groups on RESs are threatened with shrinking profits and, therefore, will see reductions in investment; small producers enter loss-making uses and find it difficult to survive, as the variability of RES creates problems in effective management.

Geopolitical risk, which refers to the uncertainties and tensions resulting from political, economic, and security issues that might influence a nation’s energy policy decisions, is another risk factor. These dangers can take many different forms, including political instability, trade disputes, regional conflicts, and sanctions. Additionally, the investment problems in RESs in turn affect investments in new transmission projects both at the national level [53] and in PCI projects [54]. If there are no investments in RES in the medium term (as originally estimated), then it is very likely that these projects will pose a great risk to the economies of the states with unforeseeable consequences.

4. Case Study: The Energy Transition in Greece

4.1. What Greece Has Achieved Until Now Regarding Its Green Transition

With the goal of having standardized regulations for cross-border electricity exchanges and the operation of whole-sale electricity markets, the European Target Model is the foundation upon which the Greek electricity market operates [55]. On 1 November 2020, the Hellenic Energy Exchange was launched in Greece, completing the Target Model. To meet the nation’s promises for further penetration of RESs into the Greek energy system and to make use of the local capacity to secure energy supply, there has been a persistent drive in recent years to fully utilize RESs’ potential. The focus is on technologies that have garnered significant financial interest and have high commercial maturity and domestic potential, such as wind farms, photovoltaics, biomass, and small hydroelectric power plants. It is important to note that lignite production has started to be replaced, in major part, by natural gas and RES plants, which has contributed to a notable rise in the installed capacity for electricity generation during the past ten years.

However, with the introduction of the Target Model in the electricity market, its implementation did not bring the expected price reduction, which is attributed to the fact that the Greek wholesale market is not fully competitive. The implementation of the European model is characterized by three basic and asymmetric options:

• Great freedom of movement of producers;
• Strong central control from the European Commission and the delays in the adoption of corrective changes;
• The blind trust in the competitive functioning and self-regulation of the market and the absence of control mechanisms.

Despite the strictly legal transformation of the market, aligned with the European model, the structural characteristics of the Greek market were not considered, such as limited interconnections with other countries, areas with congested transmission networks and insufficient competition. Another rule of the European Model that leads to distortions of the energy market is the regulation of the day-ahead price at the marginal cost, i.e., at the level of the last accepted bid, for all those who bid, who are thus paid at a level above their bid. And the same applies to the Balancing Market.

In 2023, the total installed capacity of units in the interconnected system of Greece amounted to 23,958 MW, recording an increase of 16.7% from the levels of 2022 (20,514 MW). RES recorded the largest increase in domestic installed capacity in the interconnected system in 2023 compared to 2022, recording a new installed capacity of 1997 MW and a total installed capacity of 11.9 GW [56]. Similarly, natural gas units and lignite plants showed an increase in installed capacity by 15.9% and 17.3%, respectively.

Greece’s electricity demand increased continuously until it peaked in 2008 at 56.9 TWh, according to IPTO data shown in Figure 14. The economic crisis then caused a six-year decline from 2009 to 2014. The COVID-19 pandemic and the restriction measures put in place were the primary causes of the notable 4.0% decline in electricity demand in 2020 over 2019. In 2021, demand recovered, and Greece consumed 52.4 TWh of electricity, while in 2022 and 2023 a downward trend is observed mainly due to mild weather conditions that limited heating needs in winter and cooling needs in summer. As can be seen from Figure 14, consumption in the System was decreasing from 2021 to 2023, while the opposite trend was observed for consumption in the Network.

4.2. The Future of the Energy Transition in Greece: Risks, Challenges and Opportunities

The revised National Energy and Climate Plan (NECP) for Greece [57] foresees a reduction in greenhouse gas emissions by 59% by 2030, well above the European target of 55%. At the same time, it foresees that RESs will contribute to gross energy consumption by 42.8% (compared to 42.5%, which is the European target). The corresponding target in the previous version of the NECP presented in 2023 was 44%. In electricity generation, the benchmark for RESs is set at 75.9% for 2030. This is well above the European target of 69%, but is 4.1% lower than the 80% of the previous version. The final NECP lead to a cost reduction by at least 30% by 2030 compared to the 200 billion previously foreseen, and additionally by at least 40% in the period 2030–2050, without risking the main objective, which is the energy transition.

The main features of the revised NECP foresee a significant increase in the targets for batteries and pumped storage to 6 GW, a reduction in the operating hours of natural gas plants, and lower overall investments for energy transition, mainly in buildings and transport. A key change in the text of the national energy plan is that the target for batteries is increased by 30% compared to the draft sent to the European Commission in November 2023, to support the mass penetration of RES. Thus, the benchmark for batteries rises to 4 GW, which means that if the projects described in the NECP are carried out and added to the approximately 2 GW that it also sets as a target for pumped storage, then a storage “firepower” equal to 6 GW will be created. This capacity is estimated to be capable of supporting significant penetration of RES, but also to limit stability problems in a stochastic system, with a green surplus and with the role of natural gas significantly reduced. More on wind as for the energy mix, the target for an installed capacity of 23–24 GW from RES remains in the NECP, due to increased investments in storage. The figure for the total green capacity from photovoltaics and wind does not change; however, the ratio is being reshaped. According to the information, wind will move close to 11 GW, while photovoltaics remain at the original 23 GW.

The participation of natural gas units in the country’s energy balance is being drastically limited, through a significant reduction in the units’ operating hours, from the levels of 16–17 TWh to 10 TWh. In the context of the electrification targets, the equivalent operation of gas units is significantly limited and, from approximately 3200 h today, it is reduced to less than 1300 h per year. In fact, from 2040 onwards, the production of these units is predicted to decline to 4–5 TWh, which means that their equivalent operation will be around 700 h per year. The central idea underlying the new NECP seems to include more realistic forecasts in individual policies, such as buildings, the renewal of old household equipment with new ones, and electric mobility, and attempts are being made to achieve the same objectives with lower costs. The same does not apply to RES, where, with the argument of increasing storage targets, the benchmark for 2030 remains the same.

The target that, five years from now, by 2030, Greece will have 460,000 vehicles, electric and plug-in hybrid, is also being limited. It was made clear by the Ministry of Economic Affairs and Energy that there is no way this can be achieved, as the electric cars currently circulating in Greece do not exceed a few tens of thousands. All of this means that the estimate of spending of 100 billion euros from electric mobility alone is being significantly reduced. The focus will be on developing an extensive charging network nationwide. According to Commission data, the charging points offered in Greece per million inhabitants’ amount to 53.2, compared to an average in the EU of 28.

In Figure 15, the installed capacity of various units is depicted. From approximately 23 GW in 2022, it is expected to reach 28,4 GW in 2025, 36,4 GW in 2030 and 71,6 GW in 2050 [57]. The energy mix will be mainly from wind and solar parks (around 80%), with around 10% power units with combustible fuels and another 10% from hydro power plants.

Greece is connected to its neighboring countries and, in addition to domestic electricity production, is increasingly active in electricity trade. According to the Ten-Year Development Plan of IPTO 2024–2033 [58], the Greek interconnected electricity system, with the completion of the second Greece–Bulgaria interconnection line, which was put into operation in June 2023, and the completion of interconnection projects in neighboring countries by the end of 2023, will meet the 15% target before 2025, i.e., earlier than the target year of 2030 with the full utilization of these interconnections. For the year 2030, the interconnection rate is set at 16.8%. Natural flow electricity imports into Greece amounted to 9.2 TWh in 2023, up 5.2% when compared to 2022. Correspondingly, electricity exports from Greece in 2023 amounted to 3.24 TWh, down 32.8% when compared to 2022, mainly to Italy, Albania and North Macedonia. Greece was a net importer of electricity for all months of 2023, except for September and October [59]. In Figure 16 the transmission system of Greece with existing and future transmission lines is depicted [60], while in Figure 17 the future interconnections of Greece with other countries are shown. In Figure 17 the new HVDC submarine interconnections between Greece (Crete)–Cyprus–Israel, Greece–Egypt, Greece–Austria–Slovenia and Saudi Arabia–Greece are shown, and are fully explained in Table 2. Figure 18 depicts the evolution of net electricity production and imports for Greece until 2050. It is obvious that more than 85% of the total energy mix in 2050 will be produced by RES.

The primary goal of the TSOs in the Mediterranean region is to connect the Mediterranean region in the framework of the larger vision of an interconnected European–Mediterranean (Euro–Med) power system for a future low-carbon energy system [61,62,63].

In Figure 19, the capacity of the energy storage units both in terms of power (in MW) and energy (in MWh) installed in Greece is depicted [57]. Until today, there have only been hydro pump energy storage units. In 2050 there will be an increase in both hydro pump and battery energy storage with a total capacity of approximately 18 GW. Also, in Table 2, the future submarine HVDC transmission projects between Greece and other countries are shown.

Table 2. Future submarine HVDC transmission projects between Greece and other countries.

Name of the Project	Interconnected Countries	Capacity [GW]	Budget (in EUR)	Estimated Completion Year	Included in the TYNDP of ENTSO-E
EuroAsia Interconnector [64]	Greece (Crete)–Cyprus–Israel	1	3.5 billion	2026 (Greece–Cyprus) 2028 (Cyprus–Israel)	Yes
GREGY interconnector [65]	Greece–Egypt	3	4.2 billion	2030	Yes
Green Aegean Interconnection [66]	Greece–Austria–Slovenia	3	8.1 billion	2035	Yes
Saudi Greek Interconnection [67]	Saudi Arabia–Greece	Not defined yet	Not defined yet	Not defined yet	No

Table 2. Future submarine HVDC transmission projects between Greece and other countries.

Name of the Project	Interconnected Countries	Capacity [GW]	Budget (in EUR)	Estimated Completion Year	Included in the TYNDP of ENTSO-E
EuroAsia Interconnector [64]	Greece (Crete)–Cyprus–Israel	1	3.5 billion	2026 (Greece–Cyprus) 2028 (Cyprus–Israel)	Yes
GREGY interconnector [65]	Greece–Egypt	3	4.2 billion	2030	Yes
Green Aegean Interconnection [66]	Greece–Austria–Slovenia	3	8.1 billion	2035	Yes
Saudi Greek Interconnection [67]	Saudi Arabia–Greece	Not defined yet	Not defined yet	Not defined yet	No

5. PESTEL Analysis for the Energy Sector in Greece for the Energy Transition

5.1. Introduction to PESTEL Analysis—Methodology

A PESTEL study was conducted to evaluate Greece’s prospects for making the transition to sustainable and renewable energy. The PESTEL study in this instance focuses on evaluating the macroeconomic climate of the energy industry. The six main categories of factors—political, economic, social, technological, environmental, and legal—are described. The PESTEL analysis’s primary premise is that future actions should be thoroughly discussed, carefully considered, and swiftly shaped.

Prior to the addition of environmental and legal considerations in the 1980s, PESTEL analysis was simply known as PEST. Originally created by Fahey and Narayanan [68] to analyze the business environment from a macroeconomic standpoint [69], PESTEL analysis has since been proven to have practical and beneficial applications in a variety of other sectors.

Based on the information provided in the earlier sections on international relations and trade, as well as an analysis of strategy papers and the tools Greece employed to support them, this analysis also serves to set the stage for future research. Finding and grouping the problems that impede the deployment of sustainable renewable energy systems into six categories was the first stage of the analysis. Considering the authors’ primary presumptions, this stage was founded on a thorough examination and synthesis of the body of knowledge in the field of renewable energy sources.

Because it is a qualitative descriptive analysis with documentary research, a series of processes to be followed in the analysis process—scanning, forecasting, association, and interpretation—were developed to implement the PESTEL framework (Figure 20). Documentary research (obtained from government sources, and associations of sectors and industries) and bibliographic research (articles and scientific publications) were used to identify the macro-environmental factors to be scanned, anticipated, and connected. The elements that were found and predicted were assessed according to how directly or indirectly they related to Greece’s renewable energy industry.

The first phase in the analysis was to classify the difficulties affecting the adoption of sustainable renewable energy systems into six categories. This step was based on a rigorous examination and synthesis of knowledge in the field of renewable energy sources, considering the authors’ key assumptions. Then, in each group, a set number of elements were identified as being the most crucial for the growth of renewable energy. A questionnaire was prepared to collect interpretations of elements as potential threats or opportunities from a panel of 110 academic experts with a recognized reputation and significant scientific achievements in the field of sustainable renewable energy. The questionnaire sought to assign each macro-environmental aspect a type of influence (possible opportunity or threat) as well as its amount of impact on the researched sector. The six response options for each factor shown in the questionnaire were presented as follows:

(a)

Possible opportunity for low impact;

(b)

Possible opportunity for medium impact;

(c)

Possible opportunity for high impact;

(d)

Possible opportunity with low urgency;

(e)

Possible opportunity with medium urgency;

(f)

Possible opportunity with high urgency.

Although the experts who agreed to collaborate on the research were preserved,

Table 3. Profiles of academic experts.

Number of Participants	Professional Specialization	Academic Degree	Years of Experience
35	Associate Professor or Full Professor	PhD in Electrical Engineering	20–25
25	Associate Professor or Full Professor	PhD in Mechanical Engineering	20–25
18	Associate Professor	PhD in Project Management	18–28
14	Full Professor	PhD in Economics	27–32
18	Associate Professor or Full Professor	PhD in Environmental Engineering	20–30

shows each profile of the academics that agreed to collaborate. The interviews were sent and answered by email between the 10th and 20th of July 2024.

5.2. PESTEL Analysis Results for the Greek Case Study

Around the world, particularly in Greece, the RES industry is expanding quickly. But, as was already mentioned, there is a lot of potential and many risks associated with this development. A lot of opportunities are created by political issues related to the growth of RESs in Greece, primarily because of its membership in EU organizations. This promotes political system stability and active involvement in the field of research. However, there is a serious risk that considerably slows down the growth of RESs and the fulfillment of climate responsibilities because of legislation that is overly broad and ineffective in putting political goals into practice.

Lack of communication between various entities, institutional hurdles, and a limited corporate horizon are major roadblocks to the adoption of novel energy solutions [70]. Better collaboration may boost the efficiency of funding expenditures and the use of innovative ideas. Greece has average economic circumstances for RES research and investment development since EU funds can be obtained for this purpose and because the country’s support systems are still growing, and positive economic development is present. The advantages of new investments in renewable energy were one of the economic factors. Benefits, investment costs, salaries, and land ownership are all factors that affect the economics of utilizing green infrastructure [71]. These restrictions and the advantages of solutions are presented to investors.

Over the past five years, Greece has become highly computerized and has had access to the newest technologies and information. The inclination of society to employ creative solutions in the sphere of renewable energy sources is another factor that influences the development of sustainable energy sources. The worldwide movement to lessen environmental effects might be a factor in developers restricting their work to air pollution. It is important to note that, even while RES use lowers emissions, it may have major effects locally (e.g., noise, landscape alteration). Therefore, from a long-term viewpoint, a comprehensive environmental impact assessment should come before any investment. For this reason, several economic circles are emphasizing how crucial it is to lower emissions to finance energy technology.

Another significant issue in Greece under investigation is the state of the electrical grids, which must be improved, as well as the narrow scope of collaboration between industry and academia. Greece’s lignite and gas deposits are abundant, making them both natural energy supplies and a significant obstacle because of the lobby for conventional fuels. Additionally, signing climate pledges entails making promises to reduce emissions and increase the proportion of energy derived from renewable sources, among other things. All the results mentioned above as the outcome of the PESTEL analysis are included in

Table 4. PESTEL analysis for the energy sector in Greece (Category: Political).

PESTEL Category
Factors		Analysis	Type (Opportunity/Threat)	Impact (High/Medium/Low)	Urgency (High/Medium/Low)
P1	Infrastructure	RES share is expected to rise by 2050.	O	H	H
P2		Moderate raw energy material reserves (oil, lignite).	O	M	L
P3	Trade/Tariffs	Energy security is dependent on foreign supplies, primarily gas. In a few years, lignite as a source will be totally phased out.	T	H	H
P4		Low competition with neighboring countries as RES exporters.	T	H	H
P5	Policy	The scientific and research domain, including RES, benefits from the stability of the economic system.	O	L	M
P6	Political structure	Regular changes to the central government.	T	H	H
P7		Ineffective public administration.	T	H	H
P8	Regulation	Frequent modifications to the law.	T	H	H
P9	Fiscal policy	Lack of a clear plan for attracting investors.	T	M	H
P10	Defense/Wars	High geopolitical risk between Greece and Turkey may cause the planned HVDC interconnections with Saudi Arabia, Cyprus, and Israel to be delayed or even canceled.	T	H	H
P11	Protectionism	Location on transmission routes is dependent on local societies and local administration, lengthening project delivery times.	T	M	M

,

Table 5. PESTEL analysis for the energy sector in Greece (Category: Economic).

PESTEL Category
Factors		Analysis	Type (Opportunity/Threat)	Impact (High/Medium/Low)	Urgency (High/Medium/Low)
E1	Monetary Policy	The scientific and research domain, including RES, benefits from the stability of the economic system.	O	M	M
E2	GDP Growth	Greece’s economic situation could abruptly alter because of a possible global economic crisis.	T	H	H
E12		The Greek economy may enter a recession if the high cost HVDC are delayed or canceled for geopolitical reasons (such as with Turkey).	T	H	M
E3	Financial Markets	Greece is highly dependent on the economies of other counties for its imports.	T	H	H
E4	Inflation	Electricity prices are rising, particularly after RES has become widely used.	T	H	H
E13		High cost of electric cars.	T	H	M
E5	Investment	RES installation costs are still not very competitive, despite significantly lower operating costs.	T	M	M
E6	Financing Accessibility	Aid funds for RES investments (grants, loans) are moderately available.	T	M	L
E7	Business Cycles	Curtailment in RES production creates an investing environment of high uncertainty.	T	H	H
E8	Unemployment	Significant employment in the lignite sector—abandonment of which will lead to mine closures and higher unemployment.	T	H	H
E11		Favorable conditions for RES development in the most unemployed areas.	O	M	M
E12		While the growth of RESs will generate new jobs, it will also result in mine closures and job losses.	T	H	H
E13	Investment	Low investment rates in energy storage technologies.	T	H	H
E14		Pressure to increase budget revenues.	T	M	M

,

Table 6. PESTEL analysis for the energy sector in Greece (Category: Social).

PESTEL Category
Factors		Analysis	Type (Opportunity/Threat)	Impact (High/Medium/Low)	Urgency (High/Medium/Low)
S1	Population Growth	The Greek population’s fall has resulted in an unfavorable demographic position that limits their flexibility in responding to changes in the labor market and economy.	T	H	H
S2	Education	Insufficient knowledge about RESs. There is a shortage of skilled workers for positions in numerous energy-related projects (such as energy storage projects and HVDC interconnections).	T	H	H
S3	Cultural Dynamics	International organizations and local governments are not doing anything to increase public awareness of RES in Greece.	T	M	M
S5	Behaviors	Although society views RESs as environmentally favorable, the phenomenon known as “NIMBY syndrome” (Not In My Back Yard) can occasionally be seen.	T	M	M
S6	Attitudes	A widespread concern about rising energy costs because of more electricity coming from RESs.	T	H	H
S7	Cultural Dynamics	A powerful political movement that publicly opposes the growth of RES in Greece is impeding its progress, particularly in the local municipalities.	T	H	H
S8		The variety of communication channels helps to educate the public and advance RES.	O	H	H
S9		The potential for property owners to possess a RES. This method of obtaining energy (solar, wind, hydro energy) is essentially free.	O	H	M

,

Table 7. PESTEL analysis for the energy sector in Greece (Category: Technological).

PESTEL Category
Factors		Analysis	Type (Opportunity/Threat)	Impact (High/Medium/Low)	Urgency (High/Medium/Low)
T1	Infrastructure	Electricity transmission networks need to be modernized due to their aging and be further developed due to the goals of the energy transition.	T	H	H
T2		The country’s energy security is seriously threatened by technical flaws and a lack of energy storage infrastructure.	T	H	H
T3		The establishment of a distributed energy market based on RES can contribute to energy stability by granting access to energy near RES installations.	O	H	H
T11		Insufficient infrastructure in the distribution system for the adoptation of electric mobility.	O	H	H
T4	Mobility	Most of the economy, including the private sector, depends on the central government, and strategic companies are unprepared for energy concerns.	T	H	H
T5	Digitization	The systems for producing and supplying electricity are not well integrated.	T	M	M
T6	Innovation	Utilizing RES to reduce emissions and achieve climate goals.	O	M	M
T7		Relying mostly on non-waste RES (such as solar, wind, and water); and employing biomass to a limited degree.	O	L	L
T10		High-skilled jobs will be created by new HVDC connections with neighboring nations (such as the Aegean interconnection).	O	H	H
S9		Development of RES-focused university curricula.	O	M	M
P4		The growth of RES is made possible by Greece’s membership in the EU and involvement in European research areas (e.g., joint research programs, participation in research centers, etc.).	O	M	L

,

Table 8. PESTEL analysis for the energy sector in Greece (Category: Environmental).

PESTEL Category
Factors		Analysis	Type (Opportunity/Threat)	Impact (High/Medium/Low)	Urgency (High/Medium/Low)
E1	Climate change	Utilizing RES to reduce emissions and meet climate goals	O	H	H
E2	Pollution	Reducing the use of gas and oil throughout the chain—RESs reduce the use of transport fuels (reduced deterioration of roads, vehicles, etc.) because it does not require the transportation of fuels for energy production.	O	H	M
E3		Diversifying the energy mix from oil and gas into sources that are healthier for humans and the environment.	O	M	M
E4	Natural resources	Reductions in fossil fuel exploitation, which results in the preservation of resources for future generations	O	M	M
E5		Power units using conventional fuels will be phased out gradually.	T	H	H
E6	Sustainability	Reducing the amount of habitat and land loss caused by raw material extraction	T	H	H
E7	Ecological Attitudes	Because RES plant manufacturers have a market, it is frequently essential to import parts or entire equipment, which increases the danger of importing outdated applicable technologies.	T	M	L
E8		Port customs and shipbuilding, and as a result, adequate infrastructure for offshore wind farms	O	H	H
E9		Concerns on how RES installations may affect nearby ecosystems and residents (such as the effects of wind turbines on birds, animal migration, and noise emissions	T	H	H

and

Table 9. PESTEL analysis for the energy sector in Greece (Category: Legal).

PESTEL Category
Factors		Analysis	Type (Opportunity/Threat)	Impact (High/Medium/Low)	Urgency (High/Medium/Low)
L1	European Law	The signed climate aggreement resulted in a commitment to reduce GHGs and increase the share of RESs.	O	H	M
L2	Risk	Nevertheless, unstable policies and frequent changes to legal restrictions raise doubts about whether the expected targets would be met.	T	H	H
L3	Legal System	The government’s inability to fulfill its international commitments due to impractical national legislation; the difficulty in acquiring licenses.	T	H	H
L4		The primary dangers to the field of science and research in RESs are overly complex laws and ineffective practical application of political goals.	T	M	L
L5	European Law	The creation of a new energy policy that takes into consideration the advancement of RESs and nuclear.	O	H	H
L6	Investor Protection	Potential investors are deterred by the frequent changes to legal regulations, such as the RES Act.	T	H	H
L7		The legal framework for the curtailment of the RES production is not well defined.	T	H	H
L8		The establishment of an auction system that enables the support of new RES installations.	O	M	L
L9	Liability	The system of support for RES development is inadequate and does not match recipient groups optimally.	T	M	M

where different factors for these six different categories (Political, Economic, Social, Technological, Environmental and Legal) are analyzed. These different factors are characterized as opportunity or threat and receive a different scale according to their impact and urgency as low (green color), medium (yellow color) or high (red color).

6. Conclusions

The energy transition is a major goal of the era. The expected cost of achieving this goal and the corresponding impacts are a cause of increasing controversy, mainly in the Western world. Concerns about the course of the energy transformation are reflected at the European level in the recurring National Energy and Climate Plans (NECPs) that are mandatory for EU member states. In most of them, one will recognize very ambitious goals, but will find little to no information on critical parameters, such as the availability of resources, capital, technological steps, supply chain capabilities, etc. As for the time evolution of the transition, indicative goals are mentioned (for 2030 or 2050) but the time required for this transformation cannot be estimated. In conclusion, decarbonizing the economy using only RES is extremely difficult to achieve without massive storage of electricity in batteries. In the current geopolitical and economic landscape, the development of nuclear energy in Europe may constitute a complementary solution to mitigate the difficulties that Europe’s electricity systems will face in the future. It should be seriously considered as an energy source that will support natural gas in enhancing RESs in the coming decades. It is emphasized that for batteries and Small Modular Reactors (SMRs), there is still no complete European institutional framework for operation and environmental protection that will contribute to their integration into the energy transformation.

In all the above-mentioned concerns there is also the issue of the curtailment of thousands of MWh of generated power in recent years due to the increasing adoption of renewable energy sources (RES). The system’s inability to absorb the energy generated by wind and photovoltaic farms throughout the day is the cause. It is a daily task for management of European electrical systems to deal with this new reality and the dwindling energy demand, which becomes harder as RES penetration rises. Green energy cuts are the primary weapon used by management throughout Europe to keep power grids stable and to avoid possible blackouts. These cuts, together with the growing frequency of zero and negative pricing, also restrict investment returns. Legal, financial, and technical obstacles (no precise regulation for RESs, simplified technology transfer processes, lack of funding and high rates of interest, outdated infrastructure) must be eliminated to meet the objectives outlined in the road map for renewable energy use in the ensuing years. Additionally, awareness of the renewable energy sector needs to be raised.

The current technological level of Greece’s energy grid and components cannot sustain the unpredictable and transient nature of renewable energy sources (RESs) and their scaling within a short timeframe. To properly address these difficulties, smart grids that enable cutting-edge communication technologies and information systems are needed for various solutions and analyses. Integrating renewables at the generation and distribution levels relies on transparent, secure, and interoperable information and communication technologies. Interoperability among smart grid components is crucial for grid expansion. Smart grids and smart technologies can help in this direction, by increasing both the reliability and flexibility of the Greek power system, helping with the avoidance of future possible blackouts.