Bioenergy in Greece: Policies, diffusion framework and stakeholder interactions

ARTICLE IN PRESS Energy Policy 36 (2008) 3674– 3685

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Bioenergy in Greece: Policies, diffusion framework and stakeholder interactions Calliope Panoutsou  Bio-energy Group, Imperial Centre for Environmental Policy, Imperial College, Mechanical Engineering Building, 3rd floor, Exhibition Road, London SW7 2AZ, UK

a r t i c l e in f o

a b s t r a c t

Article history: Received 1 April 2008 Accepted 11 June 2008 Available online 13 August 2008

The paper provides a high-level scene setting analysis to understand the policy context in which the diffusion of bioenergy takes place in Greece and analysis of the perceptions of the key stakeholders at local and national levels. It is divided into six sections. Firstly the framework conditions for biomass heat and electricity generation in Greece are presented. In the second section, the policy context is set in order to identify the key support mechanisms for bioenergy in the country. The third section presents an outline of the diffusion of bioenergy in terms of key groups involved as well as key factors affecting the planning and implementation of a bioenergy scheme at local/regional and national levels. The fourth section reviews the perception of key stakeholders towards bioenergy/biofuels schemes at national level based on national networks. The fifth section focuses on a case study region (Rodopi, northern Greece) and provides an in-depth analysis for the perception of the main local actors (farmers and end users) based on structured questionnaire interviews. The final section provides the main conclusions from the surveys and draws a set of recommendations for the integration of bioenergy schemes into the Greek energy system. & 2008 Elsevier Ltd. All rights reserved.

Keywords: Bioenergy innovation Stakeholders’ perception Greece

1. Introduction Bioenergy in Greece is considered as a ‘problem-solving’ form of energy production and energy saving, especially in the wastewater and agro-industrial sectors where the main applications exist. In 2006, bioenergy accounted for the 61% of renewable energy sources (RES) energy, or 1 Mtoe. Domestic use of wood (burning of wood in mostly open hearths for cooking, water and space heating) accounted for about 73% (0.70 Mtoe) of total biomass energy production. The remaining 27% (0.26 Mtoe) was produced by the combustion of wood by-products and agricultural residues (food industry, cotton ginning residues, wood processing residues, olive pomace and pits, rice husks, fruit kernels, etc.) for process heat and the utilisation of biogas produced in landfills, agro-food industries and municipal wastewater treatment plants (heat only, electricity only and CHP) (Christou et al., 2007). A number of biogas-to-electricity installations, including a 13 MWe plant using landfill gas and a 7.5 MWe wastewater treatment plant, as well as several biogas-to-heat installations (with a total heat production of 191 TJ), have been realised so far and others are currently being planned.

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2. Framework conditions for biomass heat and electricity generation in Greece 2.1. District heating The concept of district heating is not widespread in Greece and the lack of regulated heat prices and infrastructures hinders further development in the sector. The only operational district heating schemes that exist in Greece are the ones using the waste heat from lignite thermal plants (Table 1). In the mid-1990s Public Power Corporation (PPC) (the only power-generating utility till 2001 and still the largest one with market share over 95% in 2007) converted electrical energy production stations to co-generation facilities with district heating projects for the cities of Ptolemais and Kozani (northern Greece). Three more stations are currently being converted to CHP (Amyntaio, Megalopoli and Florina). 2.2. Biomass heat generation Thermal energy produced from biomass in Greece is either domestic heat or process and space heat in wood and agroindustries exploiting their residual biomass. Under these conditions the conversion efficiency is determined by the needs and is not always the best possible.

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Table 1 District heating schemes in Greece Thermal Plants

Table 3 Units producing electricity from biomass in Greece (CRES, 2006)

Installed thermal capacity (MWth)

Ptolemaida 50 Kozani 67 Amyntaio 40 Megalopoli 20 Florina 70 117 MWth installed capacity 130 MWth additional potential capacity

Condition

Company

Activity

Installed capacity (MWe)

Operational Operational Under development Partly operational Under development

Electrical energy produced (MWh/y)

Municipality of Thessaloniki Consortium (munic.+private) Total

Landfill gas Landfill gas

0.24 13.8 14.04

383 92,824 93,207

Table 2 Biomass heat units per sector in Greece in 2000 (CRES, 2006) Type

Fuel wood combustion Domestic use Biogas combustion Food industry residues Sewage treatment plants (heat and CHP) Residue combustion Wood residues Cotton ginning residues Dry olive kernels Husks/kernels Rice residues Straw Total

Number of units

Consumption (tonnes)

Thermal energy produced (TJ)

29,393 191 11 180

13 2 11 166 56 18 2294 83 8 1

84,971 27,295 5,27,038 4100 9360 0

10,671 1226 396 8825 87 137 0

179

6,52,764

40,255

In detail, the following agro-industries have biomass heat applications (Table 2):

 Several cotton ginning factories use their residues to produce







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the heat required for cotton drying and space heating of their facilities. The total heat energy produced has been estimated to 396 TJ/year (CRES, 2006). The olive kernel wood produced in the olive kernel factories is being used for greenhouse heating, space heating, etc. The total heat energy produced has been estimated to 8825 TJ/year (CRES, 2006). Fruit kernels produced by fruit canneries and shells from almond, walnut and hazelnut peeling plants are being used for greenhouse and residential heating. The annual energy production from these types of residues has been estimated to 87 TJ/year (CRES, 2006). Rice husk produced is used to generate process heat in the rice factories and the thermal energy produced has been estimated to 137 TJ/year (CRES, 2006).

2.3. Electricity Lignite plays an important role in Greece’s energy sector as it satisfies over 70% of country’s needs in electric power. The extraction of lignite takes place mainly in three regions of Greece, namely Ptolemais-Amyndeon, Megalopolis and Florina. Almost the entire lignite production is consumed for electricity generation, while small amounts of lignite are used for briquettes and other applications. The Greek coal-fired power plants, which are about 4500 MW, use conventional technology and they are old (an average of 30 years) (Kakaras et al., 2005).

From 1950 to 1994 the PPC was the only company producing, transmitting and distributing electrical energy in Greece. The PPC generation system consists of the interconnected mainland system (some nearby islands are also connected there), the systems of Crete, Rhodes, and the independent systems of the remaining islands (Vamvuka and Tsoutsos, 2002; Koukios et al., 1991). From 1994 it was allowed to auto-producers and independent producers to generate electrical energy from RES while from 1999 the deregulation of the electrical energy market was established (Table 3). The driving forces behind using biomass for electricity generation in Greece are the current EU legislations regarding the ban on the landfilling of combustible wastes (Directive, 1999/ 31/EC), the regulation on emission limits from waste treatment plants (Directive, 2000/76/EC) and also the regulation on RES (Directive, 2001/77/EC). The first attempts were focused on projects that were undertaken for environmental reasons (sewage treatment plants, landfill gas from sanitary landfills) (Table 4). About 24.6 MWe are already installed, while future projects for another 58 MWe from biomass CHP have already received power production permits from the Regulatory Authority of Energy (Table 8) (RAE, 2007). Industries are trying anaerobic digestion for the production of electricity for the first time, and also other technologies are taken under consideration. The market for bioenergy in Greece presented considerable growth after a number of financial incentives introduced in 1997. However, developments in the heat and electricity sector are rather low compared to the wider EU increase trends and bioenergy use remains rather focused on the residential sector while biofuels for transport presented an impressive increase with 420 tonnes biodiesel produced in 2005 to 51,000 tonnes produced in 2006 and announced quotas for 2007 rising up to 91,000 tonnes (Ministry of Development, 2007). National reports and dedicated studies (INASO, 2007) strongly suggest that biomass in Greece has substantially higher potential than the already exploited and there are certain technical and non-technical factors hindering further commercial development.

3. Policy context in Greece Bioenergy has always been included in the broader policy framework for renewables and has only recently (in 2005) been assessed separately in the framework of implementing the EU Biofuels Directive (2003/30/EC) as well as few legal regulations and financial incentives linked with it. Still the overall policy and legal framework for bioenergy in Greece is characterised by fractionated measures stemming from different angles of the agricultural, energy and environmental policy thus concise and coordinated efforts are required to create a secure environment for new business development in the sector. Nowadays there is a set of policies addressing issues of biomass to energy and fuel generation, the main ones being presented below:

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Table 4 Biomass CHP projects that have received production permits (www.rae.gr) Region

Installed capacity (MW)

Fuel

Technology

Tagarades, Thessaloniki Liosia, Attiki Grevena Patra, Achaia Xanthi Meligalas, Messinia Meligalas, Messinia Volos Larisa Serres Total

5.05 9.5 0.37 0.6 9.5 26.2 5 1.72 0.6 1.2 58.54

Landfill gas Landfill gas Wood residues Sewage treatment biogas MSW Olive kernels Dried olive kernels Landfill gas Sewage treatment biogas

4  1.262 MW gas engines 7  1.4 MW gas engines Combustion Anaerobic digestion Steam turbine Fluid. bed combustion, steam turbine 32  0.625 MW engines 2  0.3 MW engines Gasification, gas engine

Fig. 1. Greek national policy framework affecting bioenergy from 1990 to 2010.

3.1. Agricultural policies Greek agricultural policy acknowledges the importance of biomass as a means to diversify crop options (by introducing energy crops) and to create new market outlets for residual products (use of residues and by-products for heat and electricity). The National Plan for strategic Rural Development of Greece (2007–2013) includes financial support in certain measures as described below:

 Measure 1: Enhancement of competitiveness in Agriculture



and Forestry sectors J Cultivation of energy (non-food) crops is envisaged, to provide alternative solutions for agriculture, in order to avoid abandonment of agricultural lands (now cultivated with tobacco, cotton and sugar beets) and maintenance or increase of farmers’ incomes. Specifying the new CAP regime, the Greek government applied full decoupling to all arable crops and 65% decoupling for cotton. Measure 2: Protection of environment and rural areas J Specific target 1: Soil protection; J Specific target 2: Water protection; J Specific target 3: Maintenance of biodiversity; J Specific target 4: Prevention of climate change (through energy crops cultivation);

J

Specific target 6: Reinforcement of the effectiveness of all above with technical support and public awareness (Fig. 1).

It is worthwhile to stress out that despite the fact that support measures existed since 1990 (New Development Law 1892/90), the two major ‘market landmarks’ for bioenergy and biofuels in Greece, i.e. biogas electricity and energy crops were firstly introduced in 1997 and 2005, respectively, following the Operational Programme for Energy first round of investment grants and the increased oilseeds demand for biodiesel production. The Hellenic Ministry of Rural Development and Food (www.minagric.gr) has outlined that during 2007:

 Approximately 73,000 tonnes of indigenous oil seeds (mainly  

comprising of 69,000 tonnes cotton seeds) would be used for biodiesel production. In addition, 11,200 ha of agricultural land would be cultivated with energy crops, under contractual schemes, for biodiesel production. The Hellenic Sugar Industry announced in 2006 that two sugar mills in north (Xanthi) and central (Larisa) Greece will be converted to bioethanol plants. This fact is expected to provide robust incentives for energy farming, since the annual resource

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requirements of the two plants are expected to be in the range of 600,000 tonnes of sugar beets and 600,000 tonnes of cereals. 3.2. Energy policies Bioenergy is included in the broader framework of financial and support measures for renewable energy in Greece, the most important ones being outlined below:

 Law 2244/94, regarding revisions on the electricity production





  

code from RES, and the implementing Ministerial Decision 8295/95, which has been an important regulation mechanism for electricity production by independent producers, distinguishing between independent producers, selling the total of production to the PPC and auto-producers, covering primarily their own energy needs and selling surplus energy to the PPC. The law remained in force until the end of 2000, when it was replaced by law 2773/99 (described below) for which it still acts as reference. Law 2773/99 regarding the liberalisation of the electricity market in Greece. Key features include: (a) priority to the electricity produced from RES to cover the demand of electricity, (b) a 10-year contract to RES electricity producers at a price which will be 90% of the existing medium voltage tariff, at maximum, for the energy produced. The Directive (2001/77/EC) on electricity from RES has been adopted by the Greek government in June 2005, as Law 3468/ 06. The Directive states that Greece will have to meet an indicative target of 20.1% share of renewables in the Gross Electricity Consumption. Based on the estimations from the Ministry of Development (2007) the Gross Electricity Consumption for 2010 will be of 68 billion kWhe, which means that electricity from renewables has to be in the range of 14 billion kWhe. The share of biomass has been estimated at 0.81 billion kWhe (1.19% from the renewables 20.1%). A recent study (INASO, 2007) mentions that in order to meet the above targets new biomass electricity plants of approximately 50 MWe should be built. The same report assumes that no more biogas to electricity plants can be expected shortly (as the major ones are already operational) so this additional capacity should be fuelled by solid biomass deriving from residual forms or energy crops. The LCP Directive (2001/80/EC) has been adopted in the MD ˆ /15.4.93). 58751/2370/93 (Official Gazette 264/A The IPPC Directive (1996/61/EC) has been adopted in Law 3010/02. The Biofuels Directive (2003/30/EC) has been adopted by the Greek government late 2005, as law 3423/2005.

3.3. Environmental policies

 The Directive 2003/87/EC on CO2 Emission Trading has been  

adopted by the Greek government in CMD 54409/2632 (FA˚Eˆ ˆ /27-12-04). 1931/A The Landfill Directive (1999/31/EC) has been adopted in CMD 29407/3508/2002 (FA˚Eˆ 1572/B/16.12.02). The Waste Incineration Directive (2000/76/EC) has been adopted in the MD 922/77 (FA˚Eˆ 315/A´/14.10.77)

3.4. Financial support policies The development law 1892/90 together with its amendment 2234/94, which is a general ‘development law’ that provides subsidies (40–60%) for investments by the private sector, including bioenergy and biofuels.

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The new development law 2601/98, replacing 1892/90, remains the main funding tool of RES applications. The law foresees a combination of subsidy options: capital investment subsidies up to 40%, interest subsidy up to 40% and subsidy for leasing up to 40%; tax deduction up to 100% and interest subsidy up to 40% for The 3rd Community Support Framework (200–2006) constituted a powerful instrument for the development, the social cohesion and the modernisation of Greece. Its goals are the continuation and the enhanced support of policies for the real convergence of Greece and the older EU Member States, the regional development and the social cohesion (Tsoutsos et al., 2008). Emphasis was given to investments for infrastructure projects, which are essential for the rational use and management of environmental resources. Moreover, the monitoring of environmental obligations, to which the country is committed, is also recognised as an important priority in policies within the sustainable axes action (Tsoutsos et al., 2008). Finally, as part of the national strategy to promote biofuels, any investment in the field is subsidised from the law 3299/2004 on promotion of investment. Subsidies vary from 40% to 55% according to region, and the type of the enterprise (in case of SMEs and specific regions they can reach up to 55%).

4. Bioenergy in Greece Bioenergy in Greece can be characterised as fragmented and highly individualistic. There are a number of institutions (RD&D, Universities, etc.) involved in a range of research and demonstration activities in the field, but clear interaction and role allocation among these is inadequate and sometimes missing. Flow of information among the universities, companies and industry is limited and most of the times fragmented and uncoordinated. Competition is evident due to scarcity of funding sources and links. The main responsible ministries for bioenergy are the Ministry of Development and the Ministry of Agricultural Development. Issues related to wastes and their management are mainly coordinated by the Ministry of Environment. The division of responsibilities makes communication and the process of accessing, understanding and handling information slow and difficult. The information flow to society is insufficient, and the diverse nature of bioenergy applications confuses the public perception (Table 5). 4.1. Early and current adopters Biomass energy being an alternative form of power and fuel production involves a ‘diffusion’ process through certain channels over time among the members of a social system (Rogers, 1995). Bioenergy itself, especially the use of wood fuel, is not a ‘new’ idea. However, technological improvements along with increasingly rising concern for environmental issues caused by the extensive use of fossil fuels as well as oil price increases, favour the development of new ‘diffusion–adoption’ channels. Two important research questions arise with respect to the adoption of technology:

 how the earlier adopters differ from later ones, and  how the perceived attributes of bioenergy, such as its relative advantages, affect its rate of adoption, rapidly or slowly. In Greece, biomass has been widely used in the past for space heating in the domestic sector (and still remains an important fuel

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Table 5 Main drivers for bioenergy in Greece Economic

Social

Environmental

Maximisation of profit and indigenous employment

New employment within the community

Local and global greenhouse gas emissions

Retaining income within a region

Protection of existing employment

Other local polluting emissions

Potential to diversify for the existing agro-industries

Self-sufficiency and sustainability

Better use of local resources

Additional economic activity

Mitigating rural depopulation

‘Green’ label to differentiate from competitors Establishment of a new market Rising fossil fuel prices

Development of a sense of community/pride in the community and community links

Desire to be seen as a ‘green’ or environmentally aware community Emissions trading could be a potential motivator for renewable energy schemes, including community schemes

type for rural mountainous communities) and as fuel for process heat requirements in a large number of small-scale agroindustries (i.e. olive mills, cotton ginning factories, sawmills, etc.). The main reasons for this high adoption rate in rural areas have been:

 cheap and easy to collect source of energy,  disposal method for certain secondary residues deriving from agricultural factories and sawmills and

 high cost of alternative sources of energy in the respective regions. However, it should be stressed out that the traditional use of biomass energy has its own environmental problems—inefficient energy production and depletion of a valuable resource. Increasing oil prices, awareness for climate change and its adverse effects (temperature rises, prolonged drought periods, decreased crop productivity are some of the most important ones that Greece already faces) have recently brought biomass to the front stage along with the other renewable energy technologies. Moreover, the increasing demand for the resources and the related inputs for their production, namely land and water, as well as the development of innovative pathways to enhance mobilisation of existing feedstocks (residue and waste streams), create new (energy cropping solutions) and promote the cascading of raw materials favour the development of new ‘diffusion–adoption’ channels in the bioenergy sector. The new potential adopters of biomass energy face other significant challenges, which might lead them to develop a favourable attitude. The main ones deal with: (i) environmental concerns for adverse climate change impacts, (ii) increasing fossil energy prices and (iii) scarcity of fossil fuel supply (Table 6). However, we should clearly note that their favourable or unfavourable attitude will rely on factors such as:

 relative advantages of bioenergy schemes, in economic terms,   

convenience and satisfaction compared to the existing power supply options, compatibility of the bioenergy carrier with the existing infrastructure or additional investment required to buy new or modify existing equipment, trialability, which is the degree to which bioenergy has been or is being experimented elsewhere or on demonstrative projects, and complexity of the bioenergy scheme, including issues of reliable fuel supply.

The aim of this section is to set the background for the diffusion process of bioenergy schemes at local/regional and national level in order to further explore the reactions of different key

stakeholders in the population to the prospect of wider use of bioenergy. 4.2. Bioenergy diffusion schemes The development of bioenergy schemes follows an innovation–diffusion process through which the relevant parties (individuals or other decision-making units such as local authorities) pass from: (1) technical knowledge in terms of feedstock supply and energy conversion issues, (2) economic and socio-economic impacts, (3) sustainability as compared to current or future alternatives, (4) awareness of the legal framework conditions, the related policy and financial mechanisms, to: (5) form a decision to adopt or reject and to (6) implementing the ‘new’ concept (Fig. 2). This process consists of a series of actions and choices over time through which individuals, companies or organisations evaluate the new concept and decide whether or not to incorporate the innovation into ongoing practice. The main issues affecting the selection and adoption of bioenergy schemes in Greece at different application levels (local, regional and national) are presented in Table 7.

5. Perceptions at national and regional level This section provides a two-stage analysis (national and regional level) on the perceptions of key stakeholders for bioenergy. National-level analysis has been based on the formation and operation of several bioenergy networks for a series of years (1996–2002) (Altener Programme, 1997; Altener 4.1030/D/97-029, 1998–1999; Altener 4.1030/Z/98–593, 1999–2000). Further to this Rodopi region (northern Greece) has been selected in order to conduct a structured and focused interview analysis involving two of the most important stakeholders, namely farmers for energy crop production and end users of biomass for energy (mainly process heat) purposes. Rodopi region is situated in the northeast of Greece, in the middle of Thrace. The area is bounded by the Thracian Sea to the south, the prefecture of Xanthi to the west, the Greek–Bulgarian frontier to the north and the prefecture of Evros to the east. Rodopi covers an area of 250 kha. Some 76 kha (30%) are mountainous areas, 82 kha (32%) are semi-mountainous areas and 95 kha (38%) are plains (Panoutsou and Kipriotis, 1998).

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Table 6 Characteristics of earlier and current biomass adopters (Adopted from Egmond et al., 2006) Early

Current

Awareness

React to current problems, caused by internal or external sources (motivated by current problems)

Looking for alternative solutions Wide access to information Increased communication efficiency

Knowledge channels

Limited knowledge/communication channels

About innovative products, technologies About strategic projects (motivated by future opportunities)

Attitude

Pragmatic Short-term oriented Avoid risks

Visionary and strategy minded Long-term oriented Entrepreneur Long-term risk–benefit considerations Green image is important

Weight pros and cons Reinforcing factors

Cheap and easily collectable form of energy High cost/lack of alternatives

Rising concern on climate change Evidence of adverse changes in climate/ecology (storms, prolonged dry periods, etc.) Publicity—green profile High oil prices

Behavioural characteristics

Stay with the herd Select risk adverse solutions with low cost More reactive than proactive

Seek alternative solutions Work on their own Seek diverse opportunities Decide and implement fast

Environmental characteristics

Low degree of environmental concern

High environmental profile

Organisational norm

Sensitive for social and environmental responsibility

Comply to government targets Experiences of others Standards/norms are important

 the unemployment rate is higher than the national average, Sustainability: Sustainability: economy, economy, environment, environment, society society

Economics: production productioncosts, costs, market market prices, prices, whole wholechain chainappraisal, appraisal, Sensitivity Sensitivityanalyses analyses

Innovators: Innovators: farming/ forest community, entrepreneurs, entrepreneurs, technologyproviders, providers, technology policy makers makers policy



Policy: Policy: Global/ Global/European European National National Regional Regional Local

especially among young people (National Statistics on Employment and Unemployment, 2004), and the climatic conditions favour the use of heat produced in a bioenergy scheme (Panoutsou, 1998; Panoutsou et al., 2000).

Both the selection of the stakeholders categories and the level of analysis has focused on covering a full-chain approach for bioenergy/biofuel schemes (Fig. 3). 5.1. National level

Technology: efficiency, efficiency,space spacerequirements, requirements, dimension dimension && scale, scale, fuel fuelspecification specification emissions emissionscontrol control

Fig. 2. The bioenergy diffusion process.

This region presents certain characteristics (Liapis, 1993; Panoutsou and Kipriotis, 1998; Panoutsou, 1998; Kypriotis, 2000; Panoutsou et al., 2000), which favour the potential development of bioenergy schemes:

 agriculture is intense both in terms of land use and an active

Based on the results of networking activities at national level (Altener Programme, 1997; Altener 4.1030/Z/98–593, 1999–2000) the perceptions of key stakeholders on bioenergy and energy crops have been recorded. Five stakeholder groups were identified as the key ones to cover in this study: farmers, end users, local planners, environmental NGOs and governmental representatives. These networks have been formed to encourage dialogue between farmers, potential end users of heat and/or power, environmental groups, the government and the local community and to create a consensus view on the environmental status of biomass and its potential contribution to environmental objectives in global, national and local terms. Based on the results of the formation and the operation of the aforementioned network projects, this section analyses the respective views and perceptions.

population,

 the agricultural sector is one of the most important economic activities of the region which itself is facing economic difficulties (Commercial and Industrial Service of Rhodope, 2006),

5.1.1. Farmers Farmers in Greece, clearly face an increasingly difficult and uncertain situation (European Union, 1995; Panoutsou et al., 1998). Unstable incomes, reduced subsidies, small size of farming

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Table 7 Key issues affecting the selection and adoption of bioenergy schemes in Greece at different application levels (local, regional, national)

Level of application Local/region

National

Technology

Economics

Policy

Sustainability

Innovators

Supply should be integrated in local production systems (agro-forestry ones) in terms of efficient use of resources and infrastructures Availability is dependant on local ecological and climatic conditions so attention has to be paid in the selection of high yield species System dimensions and respective space requirements determine the site selection

Opportunity costs for feedstocks esp. for residual streams

Renewables, bioenergy and biofuels have been recently included in regional funding frameworks both at research and investment level (rural development funds)

Greenhouse gas savings (GHG) of 35% compared to the displaced fossil fuels

Farmers/farmer cooperatives looking for outlets to current production

Issues regarding soil conservation and water availability and management

SMEs operating in the area within relevant fields (agro-industries, pulp mills)

The first Greek Biofuels Platform has been funded with regionallevel funds (Thessaly region)

Public perception of bioenergy/biofuels production

Entrepreneurs looking for advanced technology concepts

Member states are often encouraged/ guided to adopt EU directives

The recent dilemma of food vs. fuel will act as a hindering factor to support measures

Policy makers trying to  Diversify funding frameworks, and  Meet sustainability criteria  Promote innovation

Possibilities to exploit national level competencies (e.g. seed oil companies invested in biodiesel production, the Hellenic sugar industry is examining prospects to convert two plants to bioethanol production, etc.) Exploit national infrastructures (Greek fossil fuel distribution companies entered the biodiesel field—ELIN S.A. with a plan to use their existing fuel distribution network) Develop national industries in terms of technology/individual system components (e.g. seeds, propagation material, catalysts, filters, etc.)

Market demand for the different feedstock types will affect their prices in the future Biofuels integration into current industrial streams (e.g. seed oil, sugar industry, etc.) improves their cost effectiveness and minimises investment risks Indigenous biofuel production should be competitive in the longer term so that tax reductions are reduced

National level

Industries seeking to diversify their activities

Cotton and cereals are currently accounting for the highest percentage of cultivated land both at national and regional level (Rodopi). Based on that along with the fact that the market for energy crops in the country is not well established, both the farmers that participated in the national networks for biomass and the ones who were interviewed individually expressed high interest on energy crops but were reluctant to devote all or part of their productive land. The main reasons are the following:

Community

Bioenergy/ biofuels chain

European targets (compulsory or mandatory) related to renewable energy support bioenergy and biofuels development

Protectionism over indigenous raw material supply and biofuels production can be of limited influence as it is restricted by international laws

Policy

Environmental NGOs

Local/ regional level

 Lack of appropriate market structures does not form a secure End users

Supply

1515end endusers users

50 individual farmers

Fig. 3. Stakeholders at national and local/regional level.

land, decreasing employment opportunities, lack of alternative solutions for cropping and a constantly changing, complex policy situation leads them to confusion and adverse conflicts with the government. Under this complex framework, the option of cultivating crops dedicated to energy purposes seem to them a promising alternative land use. Furthermore, agriculture in the country is highly subsidised and farmers rely on that fact to form decisions for crop choices.



context on which farmers can rely for their income, especially when their farms are relatively small and no other sources of income are available for them. It is worthwhile to mention here that the average farm size in Greece is 4.1 ha with an EU25 average of more than 13 ha. Farmers are sceptical especially for perennial energy crops, such as cardoon and giant reed, which are examined in this thesis, since they would have to devote their land for a very long period. This along with the fact that the agricultural policy situation is constantly changing and farmers’ choices to maximise their income are rather limited (especially in the region under study) reduce the attractiveness of energy crops as alternative land use.

However, and in the context of diversifying their activities and maximising profits, some farmers were keen to grow energy crops

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on set aside/low-productivity land. That of course would also require long-term contracts with the end users.

   

feedstock quality and year-round security of supply, current feedstock prices and projected increases, efficient technologies, governmental support to ensure successful take-off of bioenergy schemes.

Considering current policies, several views were expressed. Some were in favour of subsidies in all steps of the bioenergy chain (crop production, capital grants, etc.). Others believed that the best way to increase competitiveness of biomass to energy schemes is through environmental taxes on fossil fuels. Some stressed out that prospects for biomass might be better if people could appreciate its role in an appropriate agricultural, environmental and energy policy, which will emphasise the advantages for the agricultural development, the energy conservation and the preservation of the environment with the use of RES. Concerning state-of-the-art technologies, advanced combustion systems and co-generation schemes seemed to be the most economically attractive solutions for heat and electricity generation at the moment. 5.1.3. Environmental NGOs Environmental groups are eager to use agricultural biomass as a way to produce renewable energy, but are sceptical on the possible environmental impacts of both using residues and producing energy crops in large scale. Some of the critical issues under consideration are:

 impacts of large-scale biomass production on current agricul  

tural structures (crops, biodiversity and landscape-level effects, infrastructures, etc.), soil health and maintenance (e.g. erosion, nutrient balance, etc.), emissions and air quality, food security.

All these concerns can be turned to advantages if the benefits that biomass can provide are communicated and well justified. Carefully selected energy crops can provide variety, good habitats for wildlife, controlled integration into the landscape and they are a non-polluting source of renewable energy. Biomass has certain positive effects on the environment, but it is not an automatic, specific application. Rules, in the sense of good practice guidelines, have to be respected (Gosse, 2006). 5.1.4. Governmental representatives The most important decision-making group, governmental representatives, when they learn more about the purpose of biomass and more specifically energy crops they almost become genuinely interested and cautiously optimistic about their widespread use as a fuel. However, they raise a great number of questions, which can be categorised as follows:

 Environmental impacts: J

of exploiting residues for energy purposes,

of feedstock production/handling schemes, and of their use as a fuel. Competitiveness of biomass in the market (compared to the alternative market demands); Agriculture’s role within an appropriate energy policy; Local vs. national interests. J J

 5.1.2. End users End users involved in the biomass to energy schemes are greatly concerned about biomass availability, feedstock properties and the economic viability of such energy systems. Their focus lies on:

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Questions in all these areas need answering in order to minimise misconceptions and possibly hostile reactions. 5.1.5. Local community People representing the local community, were more concerned on local country issues than any global ones. Nevertheless, there is widespread concern about some global environmental problems, even if some people do not fully understand them. Some of the more serious ones are believed to be climate change, underground water pollution and overuse of chemical inputs in agriculture. Most of the members of the national network already knew that possible solutions to climate change are energy use conservation, switch to more friendly sources of energy like the renewables and cutting the use of dangerous chemical substances. Once they see biomass fuel can help in reducing the adverse effects of the aforementioned problems, they find it more acceptable as an energy source. However, people were sceptical on the environmental impact of the energy crops, the scale of the conversion plant and its overall effect on the look of the countryside. Averages of 50–100 ha, carefully integrated into the landscape and adding to its variety, seem likely to be acceptable. Plantations, which dominate the landscape and reduce scenic variety, will not be welcomed. Many people feel that energy crops could spread out of control unless strict guidelines or planning restrictions are enforced. 5.2. Local-level perceptions Following the analysis of group perceptions at national level, a questionnaire survey was used in the selected region (Rodopi, northern Greece) to capture the perceptions of two stakeholder categories namely the farmers and the end users in the under study region. 5.2.1. Designing the questionnaires The main objective of the questionnaire survey was to validate key findings of the network operation and to investigate in depth various issues arising from this. The most important ones are summarised below:

   

finance and profitability considerations, reasons for adopting energy crops, the need for alternative land uses and markets.

The sample of this survey consisted of 50 farmers and 15 end users located in the industrial area of Komotini (northern Rodopi). The farmers were stratified by age and farm size. There were two levels of farm size stratification: ‘large’ meaning greater than 100 ha and small being less than 50 ha. Three levels of ages were employed for the stratification: younger than 30, aged from 30 to 45 years and older than 50 years. The end users were selected among the total number of industries in the area, so that their business was either relevant to biomass, e.g. cotton ginning industries, or had high-energy demand during the process, e.g. food processing industries with high needs of hot water.

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5.2.1.1. Farmers. The questionnaire has been divided in three parts. The structure and the analysis that follows are based on similar studies for farmers’ perception on Short Rotation Coppice in the UK (ETSU, 1993). In Part A there were questions designed to collect information on farm and farmer characteristics thus allowing the farmers and their businesses to be categorised (e.g. by age, education, farm income, farm type, labour force, etc.). In the second part there were questions designed to find out the farmers’ attitude towards energy crop introduction in the current agricultural systems. The last part of the questionnaire included questions about whether and where the interviewed farmers might plant energy crops.

they had an income from non-farm business sources. Of this latter group, the most common sources involved part-time work in local restaurants. During the last year their income was highly based on the available grants for cereals and set aside land.

5.2.1.2. End users. The questionnaire was divided into two parts. In the first part of the questionnaire, general questions concerning awareness of bioenergy as well as willingness to use it in their industry were collected. In the second part detailed information both on the energy needs of the industry as well as on the availability of residual biomass forms and interest on energy crops were presented.

aside regulation a 50% establishment grant is eligible for perennial crops, cost of setting up (estimations based on models).

5.2.2. Survey results 5.2.2.1. Farmers. Farms: The 50 respondents who answered the appropriate question farmed a total area of 3000 ha. They were chosen randomly from villages near valleys. The average farming size is 60 ha, which is rather big for the area (average farm size is 5 ha) but it derives from big variation in the faming size. The largest farm of those who replied was 300 ha and the smallest was 0.5 ha, a wide range. The total area of agricultural land in Rodopi was 86,000 ha in 2005. Thus the area farmed by the survey respondents is representative of some 3.5% of the total area of the region. The most frequent enterprise on the survey respondents’ farms was wheat cultivation. The least common enterprises were vineyards and livestock farmers (cattle and pigs). The most important information collected in the questionnaire are summarised below (Table 8). Farmers: The mean age of survey respondents was 56 years with a range from 30 to 75 years. No equivalent official figures are available for comparison. The respondents’ age was fairly evenly distributed about the mean with 46% being under 50 and the rest being over 50 years. We should mention that only 10% were under 40, so it is clear that they were distinctly middle-aged, or older, a fact which could cause implications in the diffusion and adoption of innovations. In general, the respondents’ education had been up to primary school only; their mean age of finishing education was nearly 12, which reflects the fact that most of them are not highly educated. Approximately 13% of them had received some form of agricultural training or education and 90% of them belonged to local farmers’ cooperatives. The ‘mean’ respondent had been farming for about 30 years ‘on his or her own account’ and almost half of them have identified a successor who would take over the farm business. Most respondents did not have a source of income apart from that coming from their farm business, for only 15% indicated that

Table 8 Information collected during farmers’ interviewing Type of information Category of land to be planted Effect of farm type Effect of farm size Age category of the respondents Education level

5.2.2.2. Level of interest shown in energy crops. Farmers were provided with some information about energy crops concerning:

 adaptability and yields based on R&D programmes,  profitability,  subsidies: it was mentioned to them that under the current set 

which they were asked to read and then questions about willingness to adopt were posed. The three broad questions that were posed were:

 Whether respondents might consider planting an area or areas of energy crops on their farms in the next 5 years.

 If the respondents were interested in planting energy crops in 

the next 5 years, what areas they might plant on what types of land on their farms. If they felt they would or would not consider planting energy crops within the next 5 years, of which several reasons (and they could specify more than one and add additional ones) would be the most critical.

Of the 50 respondents who stated their planting intentions, 38 said they might consider planting energy crops. This is an appreciable level of interest. Before examining the factors which determined their decision, one should give a broad picture of the context under which farmers have to form their choices. It is clear that under the current agricultural policy farmers’ net income relies heavily on the subsidised crops. This along with the fact that they own small pieces of land and agriculture is their main occupation, limits their willingness to undertake risky ‘innovations’ such as energy crops when these are not supported and do not have a guaranteed market. The above numbers become useful when they are combined with the areas and the type of land they might consider to plant energy crops. Such details are provided in Table 9, which shows the total area specified by respondents classified by the category of land they indicated they would plant on. Table 9 the areas respondents specified they might consider planting to energy crops by category of land. Obviously, a statistic of great interest to local authorities and policy makers will be that approximately 1000 ha (1.2% of the regional agricultural land)—but this is a very high proportion of the land (33%) cultivated by the farmers interviewed—could be available for energy cropping. The result is significant but special note should be made to the fact that a very large proportion of the land is set aside. The most ‘likely’ categories of land that the respondents said they might consider planting on are, in order of total area specified, as follows: (i) set aside land 500 ha, (ii) non-irrigated land growing cereals 350 ha, (iii) irrigated land growing cereals 100 ha The above categories of specified land to be planted make up 93% of the total area specified as being considered for planting.

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5.2.2.3. Characteristics of potential adopters. The aim of this section was twofold. First, to identify factors in order to aid policy-makers in future, if they wish to encourage energy crops, to more easily target their promotional efforts. Second, the analysis in itself might as well, through identifying differences in potential adopters compared with non-adopters, establish what it is about energy crops that make it potentially attractive as an alternative land use for farmers in Rodopi.

5.2.2.4. Effect of farm type and size. In Table 10 the division between potential adopters and those showing no interest is presented on the basis of farm type. It can be seen that cotton farmers were less likely to indicate that they might plant energy crops when compared with those with cereals. This difference confirms what, a priori, might have been expected, for cotton farmers, with a guaranteed income have less chance to turn to an unknown crop at the moment. Table 9 The areas, respondents specified they might consider planting to energy crops by category of land Category of land to be planted

Total area specified by respondents (ha)

Set aside land Non irrigated land growing cereals Irrigated land growing cereals Other sitesa Total

500 350 100 70 1020

a Other miscellaneous sites specified by respondents e.g. corners of their farms, stream bans, farm land close to roads, etc.

Table 10 A comparison of the proportions of respondents who indicated they might consider planting energy crops with the proportions of those who would not by type of farm business Farm-type category

Would not plant energy crops

Might plant energy crops

Cotton Cereals Totals/overall proportions

3 9 12

8 30 38

Table 11 A comparison of the proportions of respondents who indicated they might consider planting energy crops with the proportions of those would not by size of total area farmed Size of total are farmed

Would not plant energy crops

Might plant energy crops

Under 50 50–100 101–150 150 and over Totals/overall proportions

4 5 2 1 12

5 7 11 15 38

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Interest in energy crops in relation to size of total area farmed by the respondents is shown in Table 11. It is clear that there is a size threshold affecting interest in planting energy crops, for respondents in the size categories of over 100 ha total area farmed were more likely to indicate that they were interested in it than those with smaller farmed areas. This difference was significant and can probably be explained by suggesting that the respondents with larger farms may have thought that they had enough land to be able to afford to risk trying this ‘new’ enterprise. Those who farmed smaller areas probably felt that they could not risk their income for novelties.

5.2.2.5. End users. The 15 end users who answered the questionnaire were the main industries existing in the area of Rodopi, producing by-products or having high heat demand during their processing. In detail, the industries and their answers are categorised in Table 12. Out of 15 industries, only cotton ginning factories and sawmills were familiar with biomass energy use. As expected they were covering part or in total their heat demand from their residues, cotton ginning residues or wood processing ones. In detail their arguments are presented below. (i) Cotton ginning factories cannot use oil as a fuel during the ginning process because it seriously affects the quality of the produced cotton (black and oily). This in addition to the fact that the residues are a problem for the surrounding areas as they are dump and lots of insects are gathered in these piles, made the factory owners to buy biomass boilers. They cover part of their needs with biomass and their secondary fuel is gas. (ii) The sawmills exploit their residues for energy purposes mainly because these are a problem to get rid of. They also cover part of their needs and their secondary fuel is heating oil. (iii) The frozen food industries have high hot water requirements and consume large amounts of heating oil per week. Their perception on biomass was very good however, since they are small enterprises they are not willing to buy new boilers and switch to biomass unless there is a subsidy for the capital cost. (iv) The dairy product industries produce a sufficient number of effluents and their option for exploiting them is anaerobic digestion. Similarly to the previous industries the investment costs were considered high due to the small-scale of the enterprises and subsidies were considered essential. Most of the respondents were familiar with the term ‘energy crops’ except people in the dairy industry. Cotton ginning and wood processing industries considered the introduction of these crops to the agricultural system as positive. They were keen on using them as supplementary fuel and their main worry was if they could use this ‘multi-fuel’ option in their burning appliances. Energy crops together with the residues could cover totally their heat demands. Combined heat and power was not considered as an option since these industries are seasonal (4–5 months annual operation) and cannot cover the anticipated high capital costs for such a system.

Table 12 Type of industries responding to the questionnaire and their perception on energy crops Industry type

Number

Interest

Already using biomass

Perception on energy crops

Cotton ginning Dairy products Frozen food Sawmills

5 3 4 3

High Low Medium High

Residues for heat No No Residues for heat

Good Never heard of them Good but not interested Good

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A potential problem which was identified through interviewing end users is that there is no evidence of them being willing to create a market for biomass by setting up new schemes. This should be pointed out as an important weakness and support mechanisms should be oriented towards this direction especially at regional planning.

6. Conclusions Biomass can be seen as the means to sustainable energy development only if attention is paid to the integration with current activities, synergies with respective sectors and efficient co-product allocation. In many cases, especially within the Mediterranean region, it could be seen as one strand of future land use strategies and regional planning and carefully incorporated with other renewables to achieve local/regional low-carbon economies. In detail, bioenergy schemes and their potential spread throughout the country would involve a number of issues concerning:

   

effectively linked policy framework, community relationships, local employment and the rural economy, as well as self-sufficiency.

6.1. Effectively linked policy framework It is generally acknowledged that biomass lies across the borders of several policy sectors, the most important ones being agriculture, energy, environment and international trade. Each of them has a major effect on the successful development of biomass systems and efficient interaction is expected to be critical for future development. Ideally, a platform should be created linking the relevant policy sectors and using biomass in an overall climate change strategy by tackling key issues such as water management, rising temperatures, soil erosion, etc. Synergies have to be developed towards the following key areas:

 Land use strategies compatible to the climatic, environmental and socio-economic profiles in each region.

 Improved efficiency in agricultural production and management 

systems to cope with the high demand for raw materials to satisfy diverse market requirements (food, feed, fibre and fuels). Harmonise support mechanisms and funding schemes to improve the overall effectiveness of biomass supply chains.

6.2. Community relationships A reliable source of energy (heat and/or power) requires longterm guaranteed contracts with fuel suppliers. This was also stressed by the farmers interviewed during this study. Therefore in the development of local bioenergy schemes it would be advisable to encourage local farmers’ cooperatives or other local businesses to participate as contract coordinators. Cooperatives could indeed act as independent power producers, producing the feedstock and using it locally for heat and/or electricity production. Such a role for cooperatives would be consistent with their existing roles with respect to conventional crops. Local farmers’ cooperatives which are governed by central farmers’ cooperatives at the regional level, deal with all the sales, distribution, formation of market prices and so on for agricultural products. In many cases they also own the more expensive machinery for farmers to hire. They would also be more willing to

join bioenergy schemes if they have the leadership and guidance of their cooperatives. Thus, in the case of energy crops, farmers’ cooperatives could act as initiators of the innovation adoption by farmers and also facilitate adoption by providing guidance and advice and hiring out the main pieces of machinery required by farmers. 6.3. Local employment and the rural economy A regional energy plant supplied by locally produced biomass crops would provide incomes for individuals in the community and money, which would be spent within the community as well. Several studies suggest that communities in which biomass projects are developed experience employment increases (Brower et al., 1993). The development of community-based bioindustries often results in strengthening the community support services, providing additional jobs in the local government and service sectors. 6.4. Self-sufficiency Some energy crops have alternative uses or co-products associated with them, which would provide the farmer with greater cropping and marketing flexibility. Farmers and other landowners who can be flexible in response to the economic environment have operations, which are sounder and less dependent on outside help. Strengthening the income of farmers through long-term contracts and reduced dependence on federal subsidies can help stabilise rural economies. The local business cycles and tax support associated with the development of a biomass energy industry would enable rural communities to be more selfsufficient and less dependent on outside assistance. On a broader scale, the use of biomass for energy generation could reduce dependence on fossil fuels and make energy production systems more efficient and cost-effective. In addition, energy crops offer an environmental and economic compromise between high input, intensively managed conventional crops (high economic return but negative impacts on local ecology) and natural, unmanaged systems (little, if any, economic reward and little impact on the local ecology). This is a statement that Hughes and Ranney (1993) also support. It can therefore be assumed that for many hectares of marginal farmland, energy crops could provide a desirable ecological compromise and an economic opportunity. In Greece and especially in Rodopi, there are still many technological and economic obstacles to be overcome and a number of social and environmental issues, which should be addressed to ensure that a strong infrastructure is built. New relationships among unlikely partners must be formed. These relationships could be encouraged through governmental actions at national and local levels. Current subsidy programmes for the energy industry and for agriculture should be evaluated and perhaps integrated to support this opportunity. Biomass energy production has the potential to benefit not only the power industry and the agricultural community, but the public and environment as well. At this juncture there is an opportunity to plan and develop a new industry, which is ecologically and economically sustainable. References Altener 4.1030/D/97-029, 1998–1999. Agriculture and forestry biomass network. PhaseIV. Altener 4.1030/Z/98–593, 1999–2000. Agriculture and forestry biomass network. PhaseV.

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