Power grid operator IPTO appears to have gained a clear advantage over the Euroasia Interconnector consortium for the construction of Crete’s major interconnection, planned to link the island’s grid with Athens, following a failed effort by the two sides to form a partnership for the project.
Awarding the submarine project’s development to IPTO is one of a number of options available to RAE, Greece’s Regulatory Authority for Energy.
RAE is currently engaged in constant talks with the European Commission and IPTO for clarification of terms and obligations being prepared to ensure that the project’s schedule is maintained.
Officials are currently working on defining situations that will constitute unexpected developments and determining the maximum level of fines for project delays.
The European Commission’s role in the Cretan major interconnection is crucial as, even with IPTO at the helm of the project’s development, the wider Euroasia Interconnector project – headed by the Euroasia Interconnector consortium and planned to link the Greek, Cypriot and Israeli power grids via Crete – has been classified an EU Project of Common Interest (PCI).
Preservation of the PCI status will enable the existing WACC (Weighted Average Cost of Capital) terms to be maintained, which would prevent the need for new negotiations.
A completion date of 2022 instead of 2023, as was originally planned, could be agreed to for Crete’s major interconnection.
Fears of power supply shortages on Crete in the summer of 2020, stemming from an EU-related commitment to close down older power stations operating on the island, have not subsided.
RAE is pressuring IPTO to complete and launch Crete’s small-scale interconnection, to link the island with the Peloponnese, by mid-2020 to prevent power shortages. But the authority believes 2021 is a more likely delivery date.