April 3 (Bloomberg) -- Greek Prime Minister Lucas Papademos vowed to accelerate a 20-billion euro ($27 billion) solar-power project that would help the European Union’s most-indebted nation spur growth and export clean energy.
Investment in renewable energy is a “national priority” for Greece, which agreed to deep spending cuts to fend off a possible financial collapse, Papademos told a conference in Athens today. The Helios project, named after the ancient god of the sun, would install as many as 10 gigawatts of solar panels by 2050, increasing use of Greece’s natural energy.
“In the last few years, talk has centered on Greece’s fiscal discipline,” Papademos said. “But fiscal harmonization isn’t enough for development. The energy sector gives Greece an opportunity to become a hub for the European Union and third countries.”
Greece’s debt reached 165 percent of gross domestic product last year as its economy shrank 6.9 percent, a fourth year of recession, according to estimates last month by the European Commission, the EU’s executive arm. Helios would help Greece create jobs and tap new revenue sources, while aiding the EU in meeting its clean energy targets, Papademos said.
Europe, which is seeking to lead the global fight against climate change and cut dependence on imported fossil fuels, is on schedule to meet its goal of raising the share of green energy it consumes to an average of 20 percent by 2020.
EU Energy Commissioner Guenther Oettinger threw his weight behind Helios today, saying he will continue supporting Greece in achieving a “stable, competitive and sustainable energy platform” that will bolster economic growth.
“Helios has potential to be ground breaking,” Oettinger told the conference. “Greece must demonstrate it can exploit its sun and turn this into an economic benefit for the country and other EU regions that don’t have as much sun.”
Ways to transfer solar electricity from Greece to the rest of the EU include overhead high-voltage routes via the Balkans as well as underwater and overhead interconnections through Italy or the Adriatic Sea, according to a presentation held by Greek Environment and Energy Minister George Papaconstantinou in Brussels in February.
Helios will be based on a long-term cooperation agreement between Greece and one or more EU member states and will need to attract industry or financial investors, according to Guggenheim Partners LLC, an adviser to the Greek government on the project.
Greece is currently discussing with the EU which financial mechanisms may be used to encourage investment in the project, Guggenheim’s Costas Karagiannis said today. Helios may also use planned project bonds that the EU and European Investment Bank are working on to help companies fund energy infrastructure.
“Investors would see high single- to low double-digit returns,” he said. “Based on current trends, the tariff would be 12 euro cents or 13 euro cents per kilowatt-hour.”
The average annual solar radiation in Greece is 1,800 kilowatt-hours per square meter, among the highest in Europe and about 50 percent more than in Germany, according to EU data.
Germany, where the share of solar power in energy consumption rose to 4 percent from 1 percent in 2009, supports the idea of Greece exporting solar power to other EU states and is willing to share its experience, German Deputy Environment Minister Juergen Becker told the conference today.
“Helios is a way to help Greek economic recovery,” he said. “EU states that want to import Greek solar power should make up any funding shortfall. Germany is looking at how it can contribute to financing Helios.”
The project would be a second large solar project in the EU after Desertec, backed by German turbine maker Siemens AG and Deutsche Bank AG and which aims to generate power across the Sahara desert for consumers in the Mediterranean area.
“Desertec and Helios do not exclude each other,” the EU’s Oettinger said. “Desertec is a vision for 2050, Helios should reach its full capacity already in 10 years.”