HELLENIC PETROLEUM: Kozani Spurs Greek Energy Transition

As the global energy transition continues at pace, more and more of the big-name players are introducing green energy products and services to their portfolios. Whether it’s moving away from fossil fuels, investing in new technologies, funding research, upscaling emission capture, or any activity that is tied into a more sustainable and circular future, the transition is now mainstream.

Across Europe, this transition has not only ramped up in the private sector. Governments and parastatals have also been forcing the issue as consumers demand answers for climate change problems and solutions for global heating issues.

In Greece, Hellenic Petroleum is showing its hand as it unveils its latest innovation, the Kozani solar park. This 204 MW renewable PV park is the largest solar farm in operation in Greece and sits in the north of the country. The company also recently acquired a solar PV plant in Florina, also in the north of the country, from FEN SOL, capable of generating 303 MW. Two smaller renewable projects have also been acquired – the 16 MW solar park in Viotia, north of Athens, and a 37.2 MW wind farm on the Greek island of Evia off the eastern coast.

Clearly, this traditionally fossil fuel focussed organisation is prepping for a long-term strategy that involves renewable energy.

REFINED HISTORY

The history of Hellenic Petroleum goes back to the fifties when the first crude oil refinery – Aspropyrgos – was constructed in Greece. In the seventies, the Petrola Hellas refinery was built, and the Greek state took full control of the refining, distribution, and trading of all oil products in the country. Through the eighties, the state became increasingly powerful, acquiring ESSO activities and renaming them EKO before becoming involved in further oil and gas exploration and production. More partnerships and acquisitions occurred through the nineties, and then, in 1998, subsidiaries of the state-owned company DEP were merged and renamed Hellenic Petroleum before the company was listed in Athens and London. Additional acquisitions and mergers took place which resulted in improved refining capacity within the company and expansion into new geographical markets around the region. By 2015, Hellenic Petroleum was recognised as one of the most important players in the southern European market, and its refinery assets were envied by competition. Today, the company is frequently outperforming itself financially, and contributing far beyond its own sphere of commercial interest, as a respected corporate citizen that exports across Europe.

In 2022, Hellenic Petroleum leads the way in refining, supply, and trading; fuel marketing; oil and gas exploration; power generation; production of petrochemicals; engineering; and related services.

The move into renewable energy with the launch of the Kozani solar park has been lauded by seniors in the company as well as government officials. Greece, home to more than 3000 hours of sunshine each year, is perfectly positioned to harness this magic natural resource and Hellenic Petroleum is excited about solar.

KOZANI

“This project demonstrates in practical terms our decision and commitment to respond, in a substantial way, to the new era of challenges,” said Andreas Shiamishis, Group CEO at a launch event in April, where the Greek Prime Minister inaugurated the site.

“This project is a symbol of the green transition both inside and outside the Greek borders. It is the largest solar power plant in South-Eastern Europe and one of the largest in the whole of Europe. Greece will become a leader in the sector of Renewable Energy Sources. It will adopt new innovative technologies,” stated Prime Minister Kyriakos Mitsotakis, adding that the country must turn theories and plans into development opportunities if it is to advance its green energy ambitions.  

Shiamishis said that it was vital for the company to remain nimble to stay up to date with market changes.

“We have set a strategic priority to create the Hellenic Petroleum of the next decades, overcoming any resistance to change, typical for large organisations with long and successful history. We aim at becoming a more integrated Group producing and trading all modern forms of energy, taking on a leading role and contributing to the region’s growth path. We are accelerating energy transformation, supporting the transition to advanced, zero-emissions energy sources, while modernizing at the same time our successful core business activity.

“Regarding our new strategy, it is particularly encouraging to see an almost universal alignment and acceptance by the Group’s employees, as well as our shareholders and markets. I would like to thank everyone involved in the implementation of this project, which is now more important than ever in ensuring energy efficiency and consumer access to low cost and green energy,” he enthused.

The Kozani solar park is capable of generating 350 GWh each year – enough to power around 75,000 households. At €130 million, the project is of strategic national importance, and has created 350 jobs in the region during construction, with more sustained over the lifetime of the plant.

Kozani uses state-of-the-art bifacial photovoltaic modules and an Automated Monitoring and Energy Management System and was installed by world leading solar company, JUWI.

General Manager of Group Strategic Planning and New Activities, George Alexopoulos, explained how Kozani fits into the company’s wider ambitions.  “Within a short period of time, Hellenic Petroleum has obtained an installed capacity of 300 MW from RES and has set a mid-term target to reach 1GW by the end of 2026, alongside developing a diversified, strong project portfolio, exceeding 2GW through active projects by 2030. We have made a big and important step towards energy transition. We continue towards a sustainable future for the planet, our children and us all.”

ENERGY TRANSITION

The group goal is to reduce its carbon footprint by 50% by 2030 and work alongside the rest of Europe in achieving significant climate goals by 2050. Importantly, refiners and distributors of petroleum products will play a vital role in the success of these visions as the transition will be managed over a period of time and will require use of low-carbon liquid fuels (LCLF), and modern strategies to produce these LCLFs.

But, even with a switch away from fossil fuels which might have seemingly come quite quickly for those active in the industry, there remains a lot of money surrounding new opportunities. In fact, it has been proven by big name businesses that without any fossil fuel activity, big profits can still be generated.

For Hellenic Petroleum, the tough years of 2020 and 2021 were not all bad, and the company produced good results. In May, the first quarter results for 2022 were announced with yet again very positive numbers. Adjusted EBITDA sat at €99m (+54%) and Adjusted Net Income was at €4m.

“In 1Q22, the energy crisis deteriorated, with further price increases of natural gas and electricity for consumers and industry. In the fuels market, Russia’s invasion of Ukraine resulted in significant changes, especially in our region, where Russian crude and oil products account for a significant part of the supply. Our Group immediately secured alternative raw material sources, without affecting the operation of our units and the continuous market supply, while taking advantage of the refineries’ flexibility to process various types of crude oil and good co-operation with other producing countries,” said Andreas Shiamishis of the results.

“In terms of financial results, stronger benchmark refining margins, combined with the recovery of the domestic market demand, resulted in satisfactory operating profitability across all our business activities, especially those export-oriented, as well as our international markets.”

Commenting on the energy transition and the group’s activities, he said: “We are in the process of expanding our portfolio, developing an important additional activity for the Group.”

Hellenic Petroleum has already repositioned its vision as a business to include the transition. “To be a competitive, extroverted, and innovative energy group, a pioneer in promoting sustainable development and energy transition,” is the target, and clearly – with Kozani as its first major project – this is not just talk; Hellenic Petroleum is actively taking steps to make changes that will create a better, more sustainable company with a healthier future for all stakeholders.