Crete grid link seen as national project despite EC pressure

The energy ministry appears to have decided to develop the Crete-Athens electricity grid interconnection as a national project with EU cohesion policy funding through the Multiannual Financial Framework for 2014 to 2020, despite intensifying European Commission pressure for this project to be headed by Euroasia Interconnector, a consortium of Cypriot interests heading a wider Greek, Cypriot and Israeli PCI-status interconnection project.

Brussels has stepped up its pressure on Greece with a new letter to RAE, the Regulatory Authority for Energy, from Klaus-Dieter Borchardt, Director at the European Commission’s Directorate B on the Internal Energy Market. It was received by the authority last Thursday.

Athens and Brussels have been at odds over the Crete-Athens link ever since RAE appointed an SPV named Ariadne, a Greek power grid operator IPTO subsidiary, as the project segment’s promoter.

Greek officials are believed to also be considering applying for the Crete-Athens link’s inclusion in a new PCI list to be published by the EU, possibly along with the Crete-Cyprus segment, as part of a new firm, if Nicosia agrees.

The dispute is not expected to affect the development of the Crete-Athens link, needed to prevent an energy shortage threat on Crete as of 2020, when old diesel-fired power stations operated on the island by the main power utility PPC will need to be shut down.

IPTO’s Ariadne plans to officially launch the Crete-Athens project in the first quarter of 2019 and base its development along the lines of a financing formula applied to a smaller-scale Crete-Peloponnese link. IPTO capital, bank financing, as well as EU cohesion funding, covering up to 25 percent of the project’s budget, are intended.