N.M. Christodoulakis et al. r Energy Economics 22 2000 395]422 405
2000 all additional electricity demand is solely satisfied by the introduction of new gas-fired stations in the interconnected distribution network, which absorb approxi-
mately 3.3 billion m
3
by the year 2012. The average thermal efficiency for the target period increases to approximately 39 and the contribution of RES reaches
approximately 10. In addition, there is also a partial substitution of liquid fuels with NG in the tradable and public-tertiary sectors. The gradual penetration of NG
into these sectors results in a final consumption of 860 ktoe, or equivalently 1 billion m
3
of NG by the year 2012. Although, this figure is smaller than the one Ž
. expected by the PGC for the same period PNGC, 1997 , it is estimated that the
penetration of NG into the domestic and tertiary sector will be rather slow due to inertia in the consumption of households and increased demand needs of gas by
Ž
3 3
the electricity production sector 3.3 billion m compared to 1.5 billion m , which .
also incorporates investment in CHP units by the industry sector .
4. Quantitative evaluation of the four scenarios
In this section we present the projections computed by the model equations based on the four scenarios described in the previous section. To obtain these
projections, the same assumptions for the Greek economy described in Christodou- Ž
. lakis and Kalyvitis 1998a have been adopted. No other constant adjustment of
endogenous variables to bring them closer to externally discernible values has been Ž
made. For the two exogenous variables of the energy model the international price .
Ž . of oil and the price of solid fuel the following two assumptions are adopted: i the
Ž . international price of oil is assumed to remain constant; ii the price of solid fuel
is assumed to continue to grow at the same average rate that prevailed for the estimation period. The benchmark solution is obtained through a dynamic simula-
tion of the model over the period 1995]2012, keeping single-equation errors at zero levels.
The forecasts of the model compare well with actual annual energy consumption Ž
provided by the Ministry for Development for the years 1995 and 1996 see Table .
4 . As expected the Benchmark scenario underestimates total energy demand, Ž
while the absolute discrepancy in the CSF II scenario which incorporates the .
cumulative effects of CSF II actions does not exceed 0.3. These discrepancies are well within the uncertainty range of the actual data collection system and are
expressed as ‘statistical differences’ in Annual Energy Balances. Table 5 displays the model forecasts in terms of energy demand for the
Benchmark set of assumptions up to the year 2012. In absolute terms, total final
energy demand will reach 24.6 Mtoe at year 2012 from 13.7 Mtoe at year 1990, while the average annual growth rate for the period 1990]2012 is 2.7 p.a. The
demand for energy in the tradable sector increases by an average 2.5 p.a., while the corresponding energy demand by the non-tradable sector increases by 3.7
Ž .
p.a. As in Christodoulakis and Kalyvitis 1997 , the higher energy needs in the
N.M. Christodoulakis et al. r Energy Economics 22 2000 395]422 406
Table 4
a
Ž .
Comparison between model forecasts and actual fuel consumption in Mtoe for years 1995 and 1996 Oil
Electricity Total
Year: 1995 Actual
10.8 2.9
14.7 Ž
. Ž
. Ž
. Benchmark
10.8 0.6 2.9 0.0
14.7 y0.4 Ž
. Ž
. Ž
. CSF II
11.0 2.2 3.0 2.2
14.6 y0.3 Year: 1996
Actual 11.6
3.1 15.6
Ž .
Ž .
Ž .
Benchmark 11.1 y4.0
3.0 y1.9 15.3 y1.9
Ž .
Ž .
Ž .
CSF II 11.3 y2.5
3.1 2.1 15.6 0.3
a
Numbers in brackets are deviations from actual consumption.
non-tradable sector in the Benchmark scenario reflect faster growth of non-trad- able output relative to tradable sector output. During the same time period, the
demand by the public-agricultural sector will increase by 0.8 per year. Turning to the demand for each energy type we observe that oil needs decrease
over time relative to the demand for electricity; the former increase by 2.1 per year on average, thus reaching 69.8 of total final consumption at year 2012, while
electricity demand increases by 2.8 and reaches 21.4 of total final consumption in 2012. The relative contributions of these two fuels for the year 1990 were 74.1
and 17.9 for oil and electricity, respectively, resulting in a fall of the proportion of oil to electricity consumption from 4.1 in 1990 to 3.3 in 2012. Again, these
findings confirm previous evidence reported by Christodoulakis and Kalyvitis Ž
. 1997 who found that the demand for oil increases relatively slower to that of
electricity. Next, using the Benchmark scenario forecasts for demand of oil, electricity and
coal of Table 5, and the corresponding emission factors reported in Section 3, CO
2
Table 5
a
Ž .
Forecasts of energy demand in Mtoe for the Benchmark and Benchmark with NG scenarios Variable
1990 1995
2000 2005
2008 2010
2012 Average
1990]2012 2008]2012
changeryear TFC
13.7 14.6
17.4 20.1
21.8 23.2
24.6 23.2
2.7 Tradable sector
4.0 4.1
5.2 5.9
6.3 6.6
6.9 6.6
2.5 Non-tradable sector
5.8 6.1
7.4 9.3
10.7 11.7
12.9 11.8
3.7 Public-agricultural
4.0 4.4
4.9 4.9
4.9 4.8
4.8 4.9
0.8 sectors
Oil 10.2
10.8 12.3
14.1 15.3
16.2 17.2
16.3 2.1
Electricity 2.4
2.9 3.4
4.1 4.6
4.9 5.3
5.0 2.8
a
TFC denotes total final consumption of energy.
N.M. Christodoulakis et al. r Energy Economics 22 2000 395]422 407
Table 6 Ž
. Forecasts of CO emissions in Mt and relevant indicators for the Benchmark and Benchmark with NG
2 a
scenarios Variable
1990 1995
2000 2005
2008 2010
2012 Average
1990]2012 2008]2012 changeryear
Benchmark scenario Total CO
76.4 81.6
91.5 103.2
111.4 116.5
123.6 117.1
2.2
2
CO rGDP 0.158
0.157 0.160
0.163 0.165
0.166 0.169
0.167 0.3
2
CO rcapita 7.6
7.8 8.7
9.7 10.4
10.8 11.4
10.9 1.9
2
Benchmark with NG scenario Total CO
76.4 81.6
90.4 98.9
104.4 108.7
113.3 108.8
1.8
2
CO rGDP 0.158
0.157 0.158
0.156 0.155
0.155 0.155
0.155 y0.1
2
CO rcapita 7.6
7.8 8.6
9.3 9.8
10.1 10.5
10.1 1.5
2 a
The CO rGDP indicator is in units of t CO r1970 thousand DRS and the CO rcapita indicator is
2 2
2
in units of t CO rinhabitant.
2
emissions for the period 1995]2012 are calculated and presented in Table 6. For the period 1990]2012, CO emissions are found to increase by an average annual
2
Ž growth rate of approximately 2.2, thus amounting to an average of 117.1 Mt or
. an average increase of 53 for the 5-year target period 2008]2012 compared to
the 1990 levels. During the target period 2008]2012, the bulk of these emissions Ž
. are attributed to electricity production 53 , while contributions of the other
sectors amount to 15 for the tradable sector, 21 for the non-tradable sector and 11 for the public and tertiary sectors. In absolute values, CO emissions per
2
GDP in constant 1970 prices remain relatively constant compared to CO emis-
2
sions per capita for the same time period. By 2012, the former indicator increases Ž
. by approximately 7 or at an average annual growth rate of 0.3 , whilst the
latter follows closely the growth rate of total CO emissions, mainly due to the
2
modest projected population increase, which is estimated to approximately 6.5 in total from 1990 to 2012.
As displayed in the second part of Table 6, the introduction of NG in the electricity production sector has a marked effect on total CO
emissions for
2
Ž .
Greece Benchmark with NG scenario . This can be attributed to both the lower Ž
carbon content of gas 0.6 tCrMtoe compared to indicative values of 1.4 tCrMtoe .
for lignite and 0.8 tCrMtoe for oil and the improved overall thermal efficiency of electricity production stations. For the target period, average annual total CO
2
emissions amount to 108.8 Mt, or 42 above 1990 levels, compared to 53 for the Benchmark
scenario. This increase results in an annual growth rate of approxi- Ž
. mately 1.8 that is slightly lower than that of GDP 1.9 during the 1990]2012
period. Thus, it is not surprising to observe a reduction in the CO rGDP indicator,
2
which stabilises to approximately 0.155 tCO rGDP compared to 0.158 tCO rGDP
2 2
in 1990.
N.M. Christodoulakis et al. r Energy Economics 22 2000 395]422 408
As shown in Table 7 and Fig. 1, results change considerably when the effects of Ž
. CSF II actions are included CSF II scenario . Total energy consumption will be
higher by 10.4 on average for the target period 2008]2012 compared to the Benchmark
scenario, while the annual average growth rate of energy demand for the period 1990]2012 is above baseline by approximately 0.5 percentage units
amounting to 3.2 per year. The demand for oil will be higher by 7.7, and the demand for electricity by 11.0 in year 2012. On average, demand for electricity is
higher by 11.3 per year for the period 2008]2012 while the demand for oil increases by 7.6 per year, compared to the Benchmark scenario. Thus, as in
Ž .
Christodoulakis and Kalyvitis 1997 , CSF intervention causes a rise in the relative share of the demand for electricity. Following the significant rise of output,
particularly during the CSF implementation period 1994]1999, energy demand by the tradable sector increases with an annual average growth of 2.0 over the
period 1990]2012, while the corresponding energy needs of the non-tradable sector and of the public-agricultural sectors increase by 5.0 and 1.4, respectively,
relative to Benchmark scenario.
As before, resulting CO emissions are calculated by using the estimated energy
2
demand forecasts, shown in Table 7, and the corresponding emission factors. The results for CSF II and CSF II with NG scenarios are presented in Table 8 and a
comparison with the other two scenarios is illustrated in Fig. 2. Up to the year 2000, CO emissions are expected to increase almost linearly at an average annual
2
growth rate of approximately 2.3. After 2000, however, there is a marked reduction of the growth rate of CO emissions to 1.9 per year, brought about by
2
increased replacement of coal by gas, especially for the case of CSF II with NG scenario. Increased use of natural gas assumed by CSF II with NG scenario, results
in a more rapid decrease of average CO emissions for the target period, which are
2
less than those of the Benchmark and CSF II cases, amounting to 114.4 Mt or 50 higher compared to 1990 levels. Despite this rapid growth of emissions, the
CO rGDP indicator stabilises to approximately 0.160 tCO rGDP or approxi-
2 2
Ž .
mately 1 higher than its 1990 value Fig. 3 due to rigorous changes in economic infrastructure that lead to a GDP increase of approximately 48 compared to the
1990 levels. As expected, however, this is not the case for the CO rcapita index
2
that follows the increase of total CO emissions in a manner similar to that of the
2
Ž .
Benchmark case Fig. 4 .
Ž .
Finally, it is worth noting that Anton et al. 1996 derived similar results regarding the environmental effects of CSF II in Spain. These authors found that a
significant increase in CO emissions should be expected, although they did not
2
take into account changes in energy consumption structure and emission factors. Such changes may have a positive impact stemming from more extensive and
effective usage of types of energy that are more friendly to the environment.
5. Concluding remarks
