Crete grid link project tenders headed for new extension

Bidding deadlines for two tenders concerning the respective procurement of cables and transformers for the Crete-Athens grid interconnection, a project that is urgently needed to prevent a looming energy shortage on Crete, are headed for an extension.

Ariadne Interconnector, an SPV subsidiary established by power grid operator IPTO for the project’s development, will need to extend its bidding deadlines for the two tenders as AEPP, the Authority for the Examination of Preliminary Appeals, looking into action taken by Eurosia Interconnector, a consortium of Cypriot interests heading the wider PCI-status Greek-Cypriot-Israeli grid interconnection, has deferred its hearing for July 22 from July 15.

Euroasia Interconnector has been at odds with IPTO for development control of the wider project’s Crete-Athens segment.

The deadlines for the tenders now coincide with AEPP’s new date for the hearing. The deadline for the tender concerning the procurement of cables was previously set for July 8 before being extended to July 22. The tender for transformers was originally set for July 22.

Both tenders cannot proceed until AEPP has reached a decision on the dispute between IPTO and Eurosia Interconnector.

IPTO and RAE, the Regulatory Authority for Energy, have already submitted their cases for the AEPP hearing.

According to pundits, Eurosia Interconnector’s chances of a decision in its favor are minimal, at best.

The Cypriot consortium’s decision to take its case to AEPP has been interpreted as a time-buying initiative taken with the hope of gaining the support of the newly elected Greek government.

While in opposition, the New Democracy party, which won last Sunday’s Greek elections, had not made clear whether it supported moves by IPTO, RAE and the ex-energy minister Giorgos Stathakis that ended up giving the Ariadne Interconnector subsidiary control of the Crete-Athens segment.

 

Elections, EuroAsia case to delay Crete link tender approval

Greece’s upcoming elections on July 7 and legal action pursued by EuroAsia Interconnector stand in the way of a decision by RAE, the Regulatory Authority for Energy, to approve the terms of a competition offering investors a minority stake of up to 39 percent in Ariadne Interconnection, a subsidiary established by power grid operator IPTO for the development of a grid interconnection project to link Crete with Athens.

The RAE decision was expected any day now, but these two factors will delay the announcement for a latter date, sources at IPTO have informed.

Euroasia Interconnector, a consortium of Cypriot interests heading a wider PCI-status Greek-Cypriot-Israeli electricity grid connection, has reacted as IPTO has taken control of the project’s Crete-Athens segment.

The consortium has submitted a case to Greece’s Authority for the Examination of Preliminary Appeals (AEPP) challenging tenders for the Crete-Athens link’s tenders concerning the project’s development (cables and transformers, budgeted at 600 million and 315 million euros, respectively).

AEPP has set a July 15 date to hear the Cypriot consortium’s case. EuroAsia Interconnector’s bid is not expected to succeed, legal officials explained, as this authority’s jurisdiction deals with companies protesting  tender terms that could exclude them from participating. Even so, the case needs to be heard and will contribute to the delay in RAE’s approval.

The Athens-Crete grid interconnection is urgently needed as electricity demand on the island is increasing while high-polluting units operating on Crete will soon need to be withdrawn as part of the EU’s environmental policy.

IPTO has committed itself to delivering the Athens-Crete link by the end of 2022.

 

EuroAsia avoids challenge against Crete link tender terms

Euroasia Interconnector, heading a PCI-status Greek-Cypriot-Israeli electricity grid connection but at odds with Greek power grid operator IPTO for control, as provider, of the project’s Crete-Athens segment, has chosen not to take preliminary legal action challenging the terms of a related project tender, energypress sources have informed.

A deadline set by IPTO subsidiary Ariadne Interconnection for any legal challenges expired yesterday. Action by Ariadne Interconnection, a consortium of Cypriot interests, had been anticipated by a number of officials.

On May 24, when the Ariadne Interconnection tender’s terms were announced, IPTO chief executive Manos Manousakis underlined that all interested parties, domestic and foreign, need to contribute, implying project delays would be prompted if either EuroAsia or the European Commission took legal action.

The Crete-Athens interconnection, budgeted at 915 million euros, is scheduled for completion within 2022.

EuroAsia’s restraint may reflect a new strategy by the Cypriot consortium entailing an effort to secure Greek government support required for the induction of the rest of the project (Crete-Cyprus-Israel) into the EU’s next PCI list, which ensures EU funding support.

Crete link tender designed to overcome any legal complications

A tender being prepared by RAE, the Regulatory Authority for Energy, for Crete’s major-scale electricity grid interconnection with Athens will include terms ensuring the prevention of any legal complications for the procedure, regardless of whether the project will be developed as a national or PCI-status project.

RAE officials have ascertained decisions will soon be reached so that the tender may be launched within May.

The Crete-Athens interconnection is still part of the EU’s PCI list as it was initially incorporated into a wider PCI-status interconnection involving the Greek, Cypriot and Israeli systems. However, Greece’s power grid operator IPTO withdrew the Crete-Athens segment as a result of a dispute with Euroasia Interconnector, a consortium of Cypriot interests heading the wider project, for control of the local segment.

IPTO chief executive Manos Manousakis disclosed yesterday that the operator will seek EU structural funds as it views the Crete-Athens as a national project.

Ariadne Interconnection, a special purpose vehicle established by IPTO for the project, is set to submit an application for EU structural funds, Manousakis noted. The official said he is confident of a favorable response from EU authorities as the Crete-Athens link is a project of major importance for the national economy and will ensure long-term energy security for Crete.

An updated PCI list will be finalized in autumn. Until then, the Crete-Athens link will remain a part of the current PCI catalog. Athens officially informed Brussels of its decision to remove the wider interconnection’s Greek segment on April 12.

The Crete-Athens link will be developed as planned and completed within the final quarter of 2022 if no other delays emerge and the tender is launched this month, IPTO officials have noted.

 

 

Crete grid link tender in May, RAE endorsement any day now

RAE, the Regulatory Authority for Energy, is moving to approve, any day now, an imminent tender for the development of the Crete-Athens electricity grid interconnection.

The tender is expected to be launched within the current month.

IPTO has been at odds with Euroasia Interconnector, a consortium of Cypriot interests heading a wider PCI-status Greek-Cypriot-Israeli electricity grid interconnection project, for control of the Crete-Athens segment. The Greek operator has withdrawn this segment from the wider project.

However, the project has yet to be removed from the EU’s PCI list. An updated list will be finalized in autumn. Until then, the Crete-Athens link will remain a part of the PCI catalog.

The tender, to be staged by power grid operator IPTO subsidiary firm Ariadne once RAE gives the green light, needs to be launched in May, otherwise ensuing delays could be crucial for Crete’s energy future. The island faces a looming energy shortage threat.

The Crete-Athens link will be developed as planned and completed within the final quarter of 2022 if no other delays emerge and the tender is launched this month, IPTO officials have noted.

 

Euroasia legal action ‘will not delay’ Crete interconnection

Legal action allegedly taken by Euroasia Interconnector against RAE, Greece’s Regulatory Authority for Energy, for its decision to grant the power grid operator IPTO control of the development of the Crete-Athens electricity grid interconnection will not affect the project’s progress, energy minister Giorgos Stathakis has told reporters when asked to comment.

Euroasia Interconnector, a consortium of Cypriot interests, heads a wider PCI-status Greek-Cypriot-Israeli electricity grid interconnection project. IPTO has taken control of the project’s Crete-Athens segment and established an SPV subsidiary, Ariadne Interconnector, for its development.

Euroasia Interconnector has apparently filed a case against RAE at a Greek court and also submitted an official complaint to the European Commission for infringement of PCI regulations, according to reports. This latter move could pave the way for a  European Court hearing.

RAE has not been informed of any legal action taken by Euroasia Interconnector, officials at the regulatory authority contended.

 

RAE expecting extra IPTO data for Ariadne WACC figure

Power grid operator IPTO is currently preparing additional data for RAE, the Regulatory Authority for Energy, requested by the authority to determine the weighted average cost of capital (WACC) and regulated yield for Ariadne, an SPV established by the operator to develop the Crete-Athens grid interconnection.

Besides IPTO, RAE’s WACC decision will also interest investors interested in acquiring a minority stake expected to soon be offered in Ariadne.

IPTO plans to offer an Ariadne stake of less than 49 percent, the most likely figure being a 39 percent share that had been offered to Euroasia Interconnector, a consortium of Cypriot interests heading the wider PCI-status Greek-Cypriot-Israeli electricity grid interconnection project.

IPTO and Euroasia have been embroiled in a dispute for control of the project’s Crete-Athens segment. Euroasia did not respond to a February 28 deadline for this minority share but, instead, has warned of taking action.

IPTO has already submitted a proposal to RAE for the remainder of the regulatory period covering 2018 to 2021. A WACC figure already set by RAE for the national grid for this period, beginning at 7 percent and gradually descending to 6 percent, will serve as a base for the Ariadne figure.

Investors will be invited to submit bids to an Ariadne tender over two stages, beginning with expressions of interest to shortlist contenders, and followed by binding offers. An Internal Rate of Return (IRR)  maximum price will be set as a starting price for a descending price auction.

 

RAE requests more IPTO details on Crete link project to set WACC figure

RAE, the Regulatory Authority for Energy, has requested additional data from power grid operator IPTO to determine the weighted average cost of capital (WACC) and regulated yield for Ariadne, an SPV established by the operator to develop the Crete-Athens grid interconnection.

Moves are also being made to recategorize the Crete-Athens link as a national project rather than a segment of the wider PCI-status Greek-Cypriot-Israeli electricity grid interconnection project, as has been the case until now.

Euroasia Interconnector, a consortium of Cypriot interests heading the wider project, has just warned that the loss of the Crete-Athens segment’s PCI status will prove costly for Greek consumers.

IPTO and Euroasia Interconnector have been at odds for control of the wider grid interconnection’s Crete-Athens segment.

Details requested by RAE from IPTO include a precise budget figure for the Crete-Athens link’s total construction cost as well as specific completion and electrification dates.

Until now, IPTO has provided a construction cost figure of 996.4 million euros, not including support and extraordinary costs. A Grant Thorton study has budgeted the project at 1.1 billion euros. Also, a 2022 completion date has been provided but RAE wants the exact month declared.

Energy minister Giorgos Stathakis has set a February 28 deadline for Euroasia Interconnector to recognize IPTO’s Ariadne as the sole project promoter for the Crete-Athens segment.

Euroasia Interconnector is not expected to accept. If so, RAE, immediately following the February 28 deadline, will award the Crete-Athens project to Ariadne as a national project included in IPTO’s investment program.

 

 

IPTO to keep over 51% of SPV for Crete grid interconnection

Power grid operator IPTO has finalized a plan for a tender to seek strategic investors for Ariadne Interconnector, its SPV established by the operator to develop the Crete-Athens grid interconnection.

The IPTO plan is expected to be submitted to RAE, the Regulatory Authority for Energy, within the next few days for approval. This could take some time as the grid interconnection, crucial for Crete’s energy needs, will now be categorized as a national project and no longer be part of the wider PCI-status Greek-Cypriot-Israeli electricity grid interconnection project.

Euroasia Interconnector, a consortium of Cypriot interests heading the wider project, has been embroiled in a dispute with IPTO for control of the Crete-Athens segment.

Energy minister Giorgos Stathakis has set a February 28 deadline for Euroasia Interconnector to recognize IPTO’s Ariadne as the sole project promoter for the Crete-Athens segment.

Euroasia Interconnector is not expected to accept. If so, RAE, immediately following the February 28 deadline, will award the Crete-Athens project to Ariadne as a national project and a tender for strategic investors should be announced soon after.

Investors are expected to be offered less than a 49 percent stake of the Ariadne Interconnector SPV, the most likely share being 39 percent, the corresponding stake offered to Euroasia Interconnector amid the dispute.

Ariadne is expected to sign a concession agreement for the project’s development. The SPV will hand over the completed project to IPTO and then be compensated through commission fees generated by the project’s utilization.

Euroasia Interconnector is expected to react and demand either a financial sum or a percentage of the project as compensation covering project study costs and other preliminary work.