By Makis Georgiou
The Israel-Cyprus-Greece electricity project is going ahead with plans to link up the island’s grid to Crete by the end of 2023, despite the Greek government’s rejection of some €355 mln in EU grants for the Crete-Attica section.
The EuroAsia Interconnector said it has applied for an EU grant from the Connecting Europe Facility (CEF) for the Cyprus-Crete-Attica system that would eventually link to Israel, with the total cost of construction of the entire project estimated at €3.5 bln.
As an EU-approved project of common interest (PCI 3.10), EuroAsia applied to the CEF, the European Commission’s funding arm for infrastructure projects, such as electricity links and natural gas pipelines.
This follows the landmark agreement signed with the Cyprus Ministry of Energy and Commerce three weeks ago for the 33-year lease of the site where the project’s first converter station will be built, near Kofinou.
Earlier this week EuroAsia Interconnector said it “remains committed to the timely implementation of the electricity interconnection in its entirety that links the electricity grids of Israel-Cyprus-Crete-Attica.”
EuroAsia said the 1000MW electricity interconnection will end the energy isolation of Crete, which burdens Greek taxpayers with millions of euros every year, and Cyprus, which is the only non-interconnected EU member state.
According to the timeframes submitted to the European Commission, the interconnection between Crete and mainland Greece will be completed in June 2022 and Crete-Cyprus in December 2023.
As a PCI project, the EuroAsia Interconnector is eligible for CEF funding to a rate that may exceed 50% of the construction cost for the Cyprus-Crete-Attica interconnector.
Also, low cost financing of the project, as a PCI, by the European Investment Bank (EIB) provides additional economic benefits to Greek consumers, which is estimated to total €500 mln compared with the implementation of a new competitive project as ‘national’ that is at least 18 months behind schedule compared to the EuroAsia Interconnector.
The project and the grant request enjoys the full support of the government of Cyprus, as the EuroAsia cable has been included in three successive PCI Lists published by the European Union in 2013, 2015 and 2017.
Crete blackout
Crete survived a mini-energy crisis earlier this year when a unit at a local power station blew up, causing an island-wide blackout.
With a record number of tourist arrivals expected this year as well, Crete’s electricity grid will be under extreme stress in the hot summer days that could cause further outages, as the outdated diesel-fuelled power stations should have been decommissioned a long time ago due to high emission levels and environmental pollution.
The EuroAsia Interconnector will allow Crete to import cheap and clean-sourced electricity from Cyprus, Israel or mainland Greece, while the addition of renewable energy sources (RES), such as wind farms and solar parks, may someday help Crete export any excess energy supply to the benefit of the local economy.
The signing of the 74,000 sq.m. land concession agreement for the construction of the HVDC converter station in Cyprus paves the way for the construction works for the EuroAsia Interconnector to begin.
The company said the technical and other studies have been completed and the environmental permit has been secured from the Cypriot authorities while planning permission is already underway for the construction of the converter station and other works.
However, in submitting its application to CEF, the Greek government’s blessing was also sought, as in order for the project to retain its PCI status, both EU member states (Cyprus and Greece) need to sign off with their approval.
Greek media reported that Energy and Environment Minister Giorgos Stathakis refused to sign the letter, insisting on awarding the Crete-Attica link project to a contractor of his own choice.
Despite approval from the Cyprus Energy Regulatory Authority (CERA), the Greek regulator RAE’s Chairman Nikolaos Boulaxis opted to stay silent and avoid signing EuroAsia’s CEF application request, probably at the behest of Stathakis, himself desperate to get re-elected in the July 7 national elections, after the ruling Syriza party suffered a humiliating defeat at the polls last month.
Ironically, the RAE Chairman had co-signed the cross-border cost allocation agreement (CBCA) in late-2017 with the Cyprus regulator, that ensures EU funding for the Cyprus-Crete and Crete-Attica sectors of the cable.
This U-turn by the Greek minister who insists on going ahead with a ‘national’ project, without EU funding and with at least 18 months delay beyond EuroAsia’s delivery deadlines, has been criticised in the Hellenic press this week.
Some even suggesting that this was an “unpatriotic” move and that Cyprus would be left at the mercy of Turkey’s antics in the region because of the island’s energy isolation.
On the other hand, the minority pro-Syriza press launched another vicious attack on the EuroAsia project, with columnists making a number of allegations, including that the Cypriot-owned project did not have sufficient funds, at a time when the Greek transmission operator ADMIE was found to be short of at least €109 mln, resulting from uncollected electricity bills by the power producer DEH.
This is a shortfall that ADMIE cannot afford to have at the moment, as it is exposed to several electricity grid projects in Greece.
Meanwhile, in an indication of what is to follow with a New Democracy administration in office after the July elections, party vice-president Costis Hadjidakis suggested this week that additional strategic investors would be sought for ADMIE, in addition to the 24% control in the hands of Chinese shareholders, that would also mean the end of the present management team that has been favoured by the Syriza government.
Such a change could also pave the way for ADMIE and EuroAsia to resume joint efforts to complete the Attica-Crete link as a joint project, enjoying full EU funding and ensuring the timely implementation of the entire system, to the benefit of Cyprus, Crete and all Greek consumers.
The writer is a regular columnist on energy, geopolitical and maritime affairs
