Energy of earth, fuel of ancients: two oil substitutes

Greece's electric utility plans to commit a heroic act, the kind that captures Greek imagination with portents of tradegy or glory: * The potential tragedy lurks in an investment plan which relies on a largely unteste domestic resourece -- lignite.

* The glory lies in the possibility of Greecehs electriciry generation becoming free of imported oil by 1985.

By 1985, the state-owned Public Power Corporation (PPC) plans to invest $10, 14 billion (568 billion drachmas) on new power sources, replacing 4,500 oldm megawatts of production with 5,000 new megawatts.

"Those are frightening numbers for Greece," says Dr. Raphael A. Moissis, PPC's managing director.

Amazingly, the investment equals the company's present gross fixed assets. It will doublem the company's debt-to-income ration, and assure the country of high capital costs and electric rates for the next two decades.

"I know of no European country with such an ambitious oil-substitution program," says Dr. Moissis, a former engineering professor at the Massachusetts Institute of Technology. Greece now imports 70 percent of its petroleum.

In taking on such a risk, PPC must rely on its own economic forecasts. Since it needs 10-year lead times to build new plants, the utility must know whether Greece will have a stagnant or an expanding economy. "PPC has been forced to be the country's long-range planner -- no other government agency plans," Moissis says.

The company's projections, in effect, set the maximum economic pace for Greece, since electricity and GNP growth rates rise and fall together like two snakes on a statistician's chart.

For the 1980s, PPC's research and computers estimate an average economic growth rate of 2.5 to 3.5 percent a year (assuming 18 percent inflation). That growth surpasses Western European economies. But it is modest for a developing nation.

In Greece, demand for electricity rises 1.5 times as fast as economic growth. (In developed nations, this "elasticity factor" is 1.0 or less.) Thus, PPC's forecast for future power growth is 5.5 percent a year.

Just as precarious as PPC's economic crystal ball is its reliance on lignite, a crude form of coal, for the country's energy future. The risk lies in relying on new technology. For one unit of energy, lignite has six times as much matter as oil, and four times as much as coal. It is high in moisture, which rules out long transport and requires burning near the mine site.

In fact, near Greece's large lignite deposit about 100 kilometers (62 miles) northwest of Thessaloniki, smokestack plumes pierce the blue sky. But few villagers complain of pollution, since PPC is the largest local employer. The mines, coupled with new roads, bridges, and rapid industrialization, make the lanscape resemble Germany's Ruhr Valley.

"We are just beginning to see the face of a major political problem," Moissis says. Effluent from the burned lignite is released with little cleaning. Greece's budding environmental awareness could someday force increased spending for pollution controls.

The debate over lignite also focused on the question of whether to exploit it now or save it for future generations, when fossil fuels may be in short supply worlwide. "We are not rich enough today to save lignite for the future," Moissis sums up.

Even though lignite is a lesser form of coal, Greece cannot count on converting power plants to burn imported coal for the day when the lignite runs out. The two fuels take different technologies. Thus, the government plans to build a 250-megawatt coal plant just to get the country's finger in coal technology for the future.

Electric prices went up 70 percent last year and are up another 20 percent in 1981. The public, which has seen no increases for three years, expressed "an ugly outcry." Opposition paryt leader Andreas Papandreou suggests that farmers get free electricity. PPC also faces a lawsuit brought by Melina Mercouri, the actress ("Never on Sunday"), now radical member of Parliament, who challenges PPC's right to turn off electricity to poor people who failed to pay a tax on television.

Geography works against cheap power in Greece.Electricity users on the mainland subsidize power usage on the dozens of Greek islands. High-voltage cable links are planned for the late 1980s.

Greece's plans for a 1,000-megawatt atomic power unit have been essentially scotched. Having just one nuclear unit providing one-fifth of the nation's power was too high a risk.

Other power options are available. Sharing power with Greece's neighbors may be one solution. For periods of high demand, it can now buy electricily from Yugoslavia, Albania, and soon Bulgaria. Italy and Greece are researching a submarine cable connection, which awaits European Community financing. Because of a two- to three-hour difference in peak demand periods, Italy could send nuclear power to Greece while Greece could transmit hydroelectric power to Italy , when needed.

Longer-range hopes rest on oil. In August the PPC began producing 25,000 barrels of day from an offshore platform in Prinos Bay, near the island of Thassos. In September, a natural gas find of over 4.8 billion cubic feet was reported by the PPC in the Ionian Sea off the Peloponnesian coast, near the ancient Olympic site.Geologists, however, are not optimistic for the future. The present oit well only meets 12 percent of the country's needs, and its quality is low.

TO speed up petroleum exploration, the PPC this year allowed foreign firms to bid for tracts. The state-owned Italian firm AGIP was the only taker.It plans to drill in the Ionian Sea near Italy.

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