Greece is likely to spend $5.9 billion to neutralize the economic impact of phasing off lignite-based power generation according to a report by Athens News Agency – Macedonian Press Agency.

In a related development, the partially state-owned refinery and oil marketing company, Hellenic Petroleum (HELPE) has applied for a €75 million ($89.11 million) loan from the European Bank for Reconstruction and Development (EBRD) for building a 204 MW solar park near the country’s lignite mining region.

Greek environment and energy minister Kostis Hatzidakis told the agency: “We want a new beginning for Western Macedonia, not to depend only on energy, even after we move to RES (Renewable Energy Sources). We want it to be based on industry, handicrafts, alternative tourism, and ‘smart’ agriculture.”

“We have two main tools in this direction. One is the €5 billion ($5.9 billion) that will be given to the lignite areas, an amount ten times more than the Regional Program of Western Macedonia. The other is the framework of investment-tax incentives that will be finalized by the European Commission and will attract large and significant investments,” the minister told the agency.

Greece is scheduled to abandon solid fossil fuels by 2028, both for environmental and economic reasons. To smoothen the transition, the Greek government has prepared a comprehensive plan to aid lignite phase-off and provide developmental support. Support would be for clean energy, industry, handicrafts and trade, smart agricultural production, sustainable tourism, technology, and education.

The solar power project will be critical to Greece’s decarbonization plans that envisage the decommissioning of the country’s lignite-fired generation projects by 2028. Hellenic Petroleum’s photovoltaic complex will replace lignite-fueled thermal power plants in Western Macedonia.

According to EBRD, the project will create job opportunities, especially for the communities in proximity, mainly affected by the project. During construction, the project is expected to benefit local communities, as half of the 250-300 skilled and non-skilled workers required will be hired locally. Construction is scheduled to begin by the fourth quarter of 2020 and will require 18 months.

The solar power project will be one of the largest in Southeast Europe. It will avoid carbon dioxide generations of almost 187,000 tons per year and meet the power requirement of 75,000 households in Greece, EBRD said in its report.

Recently, PPC Renewables S.A., a Greece-based renewable energy company, has floated a tender for 50 MW of solar projects. The last date for the submission of bids is September 30, 2020.

Meanwhile, Germany is also working towards phasing out its coal capacity against compensation. In a recent statement, Germany’s power regulator Bundesnetzagentur said that a maximum of 4,000 MW would be eligible for compensation.