Ariadne Interconnection tender for minority stake approved

RAE, the Regulatory Authority for Energy, and the European Commission have approved a plan for a tender to offer a minority stake in power grid operator IPTO’s subsidiary firm Ariadne Interconnection, established specifically for the development of the Crete-Athens interconnection.

An initial plan for the sale of a 40 percent stake in Ariadne Interconnection is now expected to be lowered by IPTO, offering a reduced share, analysts believe.

The tender is likely to be announced by IPTO towards the end of the year, or possibly early in 2022. The procedure will be preceded by a roadshow pitching the tender and company that has taken on the Crete-Athens interconnection, a project budgeted at one billion euros.

Market officials believe the prospect of a minority stake in Ariadne Interconnection will most likely attract funds. China’s State Grid, holding a 24 percent stake in IPTO, has also expressed early interest.

The Crete-Athens interconnection project, currently in progress, is expected to be completed late in 2023 or early 2024.

It was originally planned as a segment of EuroAsia, a wider interconnection plan of PCI status to link the Greek, Cypriot and Israeli electricity grids, with EuroAsia, a consortium of Cypriot interests, at the helm. IPTO eventually withdrew the Crete-Athens segment for its development as a national project.

Island grid links result in initial public service savings for 2022

The public service compensation (YKO) special account, subsidizing higher-cost electricity generation on non-interconnected islands as well electricity costs for low-income households, is expected to end the year with a modest surplus, July’s launch of the Crete-Peloponnese grid interconnection being a key factor, paving the way, in 2022, for reductions of YKO surcharges included in electricity bills, energypress sources have informed.

A precise figure on the extent of the YKO special account surplus for 2021 is expected in October, when the distribution network operator, DEDDIE/HEDNO, managing this account, submits a related report to RAE, the Regulatory Authority for Energy.

As is the case each year, the report will include financial details on the YKO special account for the current year’s first ten-month period as well as the operator’s projections for the final two months.

YKO savings resulting from the Crete-Peloponnese grid interconnection are worth approximately one million euros per day, the overall benefit in 2022 estimated at 380 million euros, power grid operator IPTO informed.

The end of the energy isolation of the Cyclades islands Syros, Paros, Tinos, Mykonos and Naxos has led to YKO savings of approximately 70 million euros per day, IPTO officials added.

Public service compensation account savings are expected to nearly double by 2024, when the fourth phase of the Cyclades grid interconnection is expected to be completed and the Crete-Athens interconnection is scheduled to be launched.

Further ahead, towards the end of the decade, this account’s outlay will be subdued even more when interconnections in the Dodecanese and North Aegean are scheduled to be completed.

 

Ministry bill for small-scale PVs without competition procedure

The energy ministry has submitted legislative revisions to Parliament facilitating the installation of small-scale PVs, up to 500 KW, without competitive procedures as long as interested parties do not already own two such units that have also been installed without competitive procedures.

The draft bill also includes a revision designed to rectify unfair terms of the past for small-scale PVs on non-interconnected islands by offering 10 percent tariff increases for their output.

Another article in the bill enables older RES projects with licenses including provisions for the installation of connecting cables to now be developed without cable links if the hosting island has been interconnected or is in the process of being interconnected.

The bill also transfers distribution network operator DEDDIE’s assets on Crete to power grid operator IPTO, a pending issue that must be resolved for the launch of market activity concerning the island’s small-scale interconnection with the Peloponnese.

HEDNO’s Crete assets transfer to IPTO based on market value

A legislative revision needed for the transfer to power grid operator IPTO of distribution network operator DEDDIE/HEDNO’s assets on Crete, a pending issue that must be resolved for the launch of market activity concerning the island’s small-scale interconnection with the Peloponnese, is close to being finalized, according to sources, informing that this transfer will be based on the commercial value, not book value, of assets.

The price of the transfer will be determined by the market value of DEDDIE/HEDNO, as shaped following offers by suitors in a privatization offering a 49 percent of the distribution network operator.

These offers are expected to be submitted very soon.

Asked yesterday on whether DEDDIE/HEDNO’s assets will be valued based on market price or book value, energy minister Kostas Skrekas said the matter is still being processed.

It is already considered certain that the fiber optics network will remain with DEDDIE/HEDNO, bolstering the capital base of parent company PPC, the power utility.

This essentially means that whichever consortium acquires a 49 percent stake in DEDDIE/HEDNO will not have control over the fiber optics PPC intends to install at its subsidiary’s networks, through deals such as one already established with telecommunication company Forthnet.

Revision for Crete assets transfer to IPTO this week

The energy ministry is set to submit to Parliament a legislative revision needed for the transfer to power grid operator IPTO of distribution network operator DEDDIE/HEDNO’s assets on Crete, a pending issue that must be resolved for the launch of market activity concerning the island’s small-scale interconnection with the Peloponnese.

The transfer of DEDDIE/HEDNO’s assets on Crete to IPTO is essential for the latter to take on the responsibility of the small-scale interconnection. IPTO cannot take on this task until a 150-kV transmission line remains under the control of power utility PPC, DEDDIE/HEDNO’s parent company.

The legislative revision will be submitted to Parliament by the end of this week, barring unexpected developments, as an attachment to a draft bill concerning waste management, energypress sources informed.

In a concurrent development, RAE, the Regulatory Authority for Energy, has approved an Energy Exchange proposal concerning the island’s entry into target model markets.

The authority and other agencies involved in this procedure presented a hybrid model that will remain valid until the completion of Crete’s major-scale interconnection with Athens.

 

Pivotal IPTO substation returning to full capacity after repair work

Power grid operator IPTO’s pivotal Koumoundourou high-voltage substation, serving the wider Athens area, will be ready to counter elevated electricity demand levels of the summer season as the installation of a new autotransformer, required following an explosion and fire at the unit in February, has been completed, enabling the facility to return to full capacity, expected within the next few days.

Since the accident, the substation has operated below full capacity, following temporary adjustments.

The Koumoundourou substation’s return to full capacity promises to reinforce the country’s grid security, especially in the Peloponnese, as the summer’s power-demand peaks draw nearer.

Besides the fire-related repair work, the Koumoundourou substation is also undergoing an overall revamp, budgeted at 46 million euros. Work on this upgrade, scheduled to require a total of two and a half years to complete, is expected to be completed in September, 2023.

Once completed, the upgrade will enable the substation to take on a significant proportion of the electricity load needed in the wider Athens area, while it will also serve as the connection point for the Crete-Athens grid interconnection, expected to be completed within 2023.

The substation will also serve as a terminal for the Eastern Corridor (400 kV) from the Peloponnese to the mainland, whose completion is expected in 2024.

 

RAE aiming for July 1 start to Crete grid link hybrid model

RAE, the Regulatory Authority for Energy, has set a July 1 target date for the launch of Crete’s hybrid model enabling the island’s participation in the target model’s wholesale markets, in coordination with the commercial launch of the Cretan small-scale grid interconnection, linking the island’s system with the Peloponnese, also expected to begin operating in July.

The authority yesterday forwarded for public consultation, until June 2, a summary of the proposed regulatory framework to apply until Crete’s full-scale grid interconnection, reaching Athens, is eventually launched. This summary includes a road map leading to the implementation of the hybrid model.

Three days later, all parties involved will submit regulatory texts, for public discussion on the same day. RAE expects to have endorsed these texts by mid-June in preparation for their implementation.

 

EuroAsia taking on extra compatibility costs for Cyprus-Crete grid link

RAE, the Regulatory Authority for Energy, has updated details of a Cross Border Cost Allocation (CBCA) agreement concerning the Cyprus-Crete electricity grid interconnection plan, committing the project’s promoter, EuroAsia Interconnector, a consortium of Cypriot interests, to assume any additional compatibility costs that may arise during the development of this segment.

The development eliminates the prospect of action by EuroAsia against Greece following a decision by the Greek government, over a year ago, to detach the Crete-Athens segment from EuroAsia’s wider project, planned to link Greece, from Crete, with Cyprus and Israel.

As a result of the withdrawal, the Crete-Athens segment is now being independently developed by IPTO, Greece’s power grid operator.

Project disagreements between Greek and Cypriot officials have persisted for years but escalated into legal threats and action when, during his recent tenure as energy minister, Costis Hatzidakis decided to withdraw the Crete-Athens segment for independent development.

Following more recent negotiations, EuroAsia appears to have fully accepted the removal of the Athens-Crete segment from the wider project it is spearheading.

Israel, for some time now, has made clear its interest to link the Cyprus-Israel grid interconnection with the Crete-Athens section.

Transitional plan for Cretan small-scale link sent to Brussels

Technical and other preparations are now being made to enable Crete’s imminent small-scale power grid interconnection, to the Peloponnese, to cover, for the time being, approximately 30 percent of the island’s electricity needs.

The energy ministry has forwarded to the European Commission its proposal for a transitional model concerning Crete’s participation in the target model’s new wholesale markets.

Also, the energy ministry has prepared a draft bill needed for the transfer, to power grid operator IPTO, of distribution network operator DEDDIE/HEDNO’s assets on Crete. This will enable IPTO to assume responsibility for the island’s small-scale interconnection.

Normally, when grid links for non-interconnected islands are carried out, IPTO takes on the responsibility of their electricity networks. However, Crete, Greece’s biggest and most populous island, represents a much bigger interconnection project that is being developed over two stages. The project’s second stage, to reach Athens, is anticipated in 2023.

The transitional plan, shaped with the assistance of consultant Reed Smith, includes the sale, by power utility PPC, DEDDIE/HEDNO’s parent company, to IPTO, of a 150-kV transmission line on Crete, running from Hania to Lasithi, based on decisions reached by RAE, the Regulatory Authority for Energy, concerning management of Crete’s grid for the island’s small-scale interconnection.

The transitional model, to expire once the island’s full-scale interconnection has been completed, will allow Crete to purchase electricity transmitted through the small-scale interconnection at the target model’s new wholesale markets.

Crete-Athens grid link omitted from Greek RRF proposal

A grid interconnection to link Crete with Athens has been omitted from a national plan containing 112 projects for which financial support will be sought through the European Commission’s Recovery and Resilience Facility.

It was the energy sector’s only surprise omission from the government’s plan for RRF support, to be submitted to Greek Parliament within the next few days for ratification before being forwarded to the European Commission.

Even so, progress of the Crete-Athens grid interconnection project, vital for Crete’s energy sufficiency without reliance on high-cost local power stations, will not be affected by the decision as a number of other financing options remain available, authorities have stressed.

These include the National Strategic Reference Framework and the Just Transition Fund.

The national RRF plan was discussed at a cabinet meeting yesterday ahead of its presentation, planned for tomorrow.

A proposal for a 200 million-euro injection into the RES special account, facing deficit territory, has been included in the national plan.

Other key features of the plans are: the country’s energy efficiency upgrade program for homes, businesses and public buildings; the decarbonization plan; installation of smart meters; upgrade and undergrounding of transmission lines; as well as development of electric vehicle recharging infrastructure.

PPC staging tender for generators as back-up on Crete this summer

Power utility PPC has just announced a tender for leasing contracts concerning power generators with a total capacity of 58 MW for Crete, to serve as back-up for grid sufficiency on the island during July and August, in anticipation of the tourism-related peak in electricity demand.

The generators, to be installed at PPC’s power station at Atherinolakkos, southeastern Crete, are intended to back an imminent subsea grid interconnection linking the island with the Peloponnese – the first step of a bigger interconnection project to reach Athens – which will have only been in operation for a few months when summer arrives.

The Crete-Peloponnese power grid interconnection is expected to be ready for launch in late April.

PPC’s plan for generators, budgeted at approximately 4 million euros, has been divided into two sections, one for 23 MW, the other for 35 MW. Participants can only submit offers for one of the tender’s two sections.

According to the tender’s terms, PPC will maintain the right to extend the lease contracts for all or some of the generators by a month, also covering September, if needed.

Distribution network operator DEDDIE/HEDNO has estimated that Crete will need between 75 and 80 MW in additional capacity this summer. Besides the 58 MW to be provided by the generators through the tender, PPC will secure the required remainder through back-up solutions already possessed by the power utility.

If all goes according to plan, PPC’s rented generators, mobile units running on high-cost diesel, will not need to be used at all while stationed on the island, meaning the initiative’s total cost would be limited to the value of the lease agreements.

Crete’s small-scale grid link headed for April completion

A second subsea cable needed for the grid interconnection to link Crete and the Peloponnese has been installed, with just a trial run by power grid operator IPTO now required for the completion and launch of the project, to cover approximately 30 percent of the island’s electricity transmission needs.

IPTO is aiming to conduct its trial run by the end of April. The Cretan interconnection project will eventually be complemented by a larger-scale link to Athens.

A trial run of the Crete-Peloponnese project’s first subsea cable has already been completed with success.

Despite various obstacles raised by the pandemic, work on this project has progressed swiftly, promising to soon end Crete’s energy isolation.

A variety of records have been set along the way. The Crete-Peloponnese subsea link, covering a 174km distance, is now the world’s longest subsea AC power connection, as well as the longest underwater high-voltage cable connection. Reaching up to 1,000 meters in depth, this subsea installation is also the world’s deepest high-voltage link.

A transitional hybrid model for Crete’s participation in target model energy markets – covering production and consumption and to be applied until the island’s full-scale grid interconnection to Athens is completed – is expected to be approved by the European Commission’s Directorate for Energy. The hybrid model’s regulatory framework is now ready and will soon be delivered to Brussels by the energy ministry.

Transitional hybrid plan for Cretan participation in markets

RAE, the Regulatory Authority for Energy, has decided on a transitional hybrid model for Crete’s participation in target model energy markets, covering production and consumption, once the island’s small-scale grid interconnection to the Peloponnese is soon launched.

The fundamentals of the transitional model – to be applied until Crete’s full-scale grid interconnection, all the way to Athens, is completed – have been agreed on by the participating market operators. But details still need to be worked out.

Power grid operator IPTO, distribution network operator DEDDIE/HEDNO and the energy exchange are currently shaping the finer details of the transitional plan, expected to be finalized over the next few days.

Under the transitional hybrid solution, Crete – whose grid will continue being managed by DEDDIE/HEDNO until IPTO takes on the responsibility when power utility PPC, DEDDIE/HEDNO’s parent company, has transferred its network ownership on the island to IPTO – will purchase electricity transmitted through the small-scale grid link at target model energy markets.

As for electricity flowing in the opposite direction, production of Cretan units will be represented by IPTO.

The transitional model, when ready, will be forwarded for public consultation. European Commission approval will be needed for the finalized plan. RAE has already briefed Brussels officials on its proposed transitional model.

Finding a solution for Crete has proven to be a challenge as the small-scale grid link to the Peloponnese will not fully cover the island’s energy needs, meaning it will not automatically cease to be a non-interconnected island once the small-scale grid link begins operating. However, a considerable part of Crete’s energy needs, approximately 30 percent, will be served by the small-scale interconnection.

Normally, when grid links for non-interconnected islands are completed, IPTO assumes responsibility of their electricity networks. However, Crete, Greece’s biggest and most populous island, represents a much bigger interconnection project that is being developed over two stages. The project’s second stage, to reach Athens, is anticipated in 2023.

Failure to find a transitional solution would threaten to leave the small-scale link unutilized.

DEDDIE seen assuming Crete network responsibility

RAE, the Regulatory Authority for Energy, appears to have reached a decision requiring distribution network operator DEDDIE/HEDNO to assume management responsibility of Crete’s network when a small-scale grid interconnection linking the island with the Peloponnese is soon launched.

Subsequently, power grid operator IPTO will not need to take on this responsibility until it becomes the owner of the island’s network, RAE appears to have decided.

Just days ago, IPTO made clear it should not assume responsibility for Crete’s electricity network until it acquires this asset from power utility PPC, the current owner. RAE appears to have agreed with this IPTO argument.

The authority held a virtual meeting yesterday with the two operators in search of a solution following the unwillingness, at present, of both to assume management responsibility of the Cretan network.

Normally, when grid interconnection projects for non-interconnected islands are completed, IPTO assumes responsibility of their electricity networks. However, Crete, Greece’s biggest and most populous island, represents a much bigger interconnection project that is being developed over two stages. The project’s second stage, anticipated in 2023, will reach Athens.

It remains unclear how Crete’s electricity system will participate in the target model’s new energy markets once the island’s small-scale interconnection is launched.

The Crete-Peloponnese line will not fully cover Crete’s load, meaning the island may not lose its non-interconnected island status. On the other hand, a considerable 30 percent share of the island’s energy needs will be transmitted through the small-scale interconnection.

An older recommendation by RAE to the energy ministry noted that Crete’s non-interconnected island status should be ended once the small-scale interconnection begins operating for a connection with the mainland grid.

Crete network responsibility rift may delay new link’s utilization

Though Crete’s small-scale grid interconnection, to reach the Peloponnese, appears set for a late-March launch, as planned by the project’s developer, the power grid operator IPTO, a dispute with distribution network operator DEDDIE/HEDNO over the point in time at which management responsibility of this link should be transferred from DEDDIE, currently responsible for Crete’s network as the island is classified as a non-interconnected island, to IPTO, threatens to delay the vital grid link’s full utilization.

Normally, when grid interconnection projects for non-interconnected islands are completed, IPTO assumes responsibility of their electricity networks.

However, Crete, Greece’s biggest and most populous island, represents a much bigger interconnection project that is being developed over two stages. The project’s second stage, anticipated in 2023, will reach Athens.

IPTO, in a letter forwarded to RAE, the Regulatory Authority for Energy, and DEDDIE/HEDNO, contends it cannot assume management responsibility of networks that it does not own, such as Crete’s high-voltage network, which belongs to the power utility PPC group.

PPC will need to swiftly sell to IPTO the Cretan network, a 150-kV transmission line running from Hania to Lasithi, before the operator assumes its responsibility, the operator noted.

PPC does not appear quite ready to make such a move at present. As a result, IPTO insists DEDDIE/HEDNO needs to maintain responsibility for the Cretan grid from the moment the island’s small-scale interconnection is completed until ownership of the Cretan grid is transferred to IPTO.

On the contrary, DEDDIE/HEDNO, citing technical reasons as the main factor, believes IPTO should take on management responsibility of Crete’s grid as soon as it completes the small-scale link.

For the time being, RAE is consulting both sides in search of a solution. If PPC moves slowly on the transfer of ownership of the Cretan network to IPTO, then the new infrastructure’s full commercial utilization could be delayed.

Crete-Athens grid interconnection 10% complete, small-scale link in March

Power grid operator IPTO has left unchanged its completion target for the Crete-Athens grid interconnection, keeping it at June, 2023, in its new 10-year development plan covering 2022 to 2031, an update on the 2021-2030 plan delivered last March.

Preliminary work on the project began last summer, now 10 percent completed.

IPTO’s updated 10-year development plan, prepared in December, is soon expected to be forwarded for public consultation.

Significant steps have been made for the project’s environmental licensing requirements, a procedure expected to be completed by the end of 2021.

Expropriation procedures, including property purchases, needed for the installation of converter stations and overhead cables, are also anticipated to have been completed by the end of this year. Sound progress has been reported along this front.

A small-scale grid interconnection to link Crete with the Peloponnese is scheduled for completion at the end of March, according to IPTO’s updated ten-year development plan.

Crete interconnection to require new energy control center

Crete’s grid interconnection with the mainland will require the development of a new, upgraded regional energy control center on the island, according to power grid operator IPTO’s ten-year development plan covering 2021 to 2030.

The new center will be needed to ensure effective management of new energy market data, not achievable through the existing center’s means and infrastructure, as these would not be able to incorporate new technologies, IPTO stresses in its ten-year development plan.

Also, the existing energy control center’s maintenance has become extremely difficult and costly due to the unavailability of spare parts and experienced technicians for its type of technologies, the operator added.

IPTO awaiting approval of 20% Ariadne sale for €40m minimum

Power grid operator IPTO’s needed approval from RAE, the Regulatory Authority for Energy, of its sale plan offering a 20 percent stake in subsidiary firm Ariadne Interconnection, tasked with the development of the Crete-Athens grid interconnection, is now in the hands of the authority, sources informed.

A condition setting a minimum sale price of 40 million euros, or 20 percent of the nominal value of Ariadne’s equity capital, totaling 200 million euros, has been included in the plan, the sources added.

It also includes criteria that will need to be met by prospective bidders, as well as the tender’s steps all the way to the final round, when qualifiers will be given access to the sale’s video data room.

The VDR will offer candidates financial, technical and legal details concerning the Crete-Athens grid interconnection, a project budgeted at one billion euros and slated for completion within 2023.

IPTO has already secured a 400 million-euro loan from Eurobank, an additional 200 million euros will stem from own capital, while the other 40 percent is expected to be provided in the form of EU subsidies, now close to approval.

China’s SGCC, IPTO’s strategic partner with a 24 percent stake, as well as European operators, among them Italy’s Terna and Belgium’s Elia, have all expressed interest ahead of the Ariadne Interconnection tender.

Importantly, IPTO is still awaiting RAE’s approval of WACC levels for the Cretan interconnection project – permitted revenue (2018-2021) and required revenue (2019-2021).

Projects categorized as projects of major significance are legally entitled to additional returns beyond the asset-based yield.

Athens-Crete interconnection work commences at both ends

Work at both ends of the Athens-Crete grid interconnection, Greece’s biggest infrastructure project at present, has begun in earnest, power grid operator IPTO sources have informed.

In the lead-up, IPTO subsidiary Ariadne Interconnection, developing the project, and contractors signed contracts totaling approximately one billion euros last month.

Various preliminary studies and construction work are now underway. A high-voltage subsea cable is planned to run from Heraklion, Crete to Megara, slightly west of Athens.

Also, a converter station will be built close to the Cretan village Damasta.

A converter station will not be needed at Megara, on the Athenian side of the project. Instead, the interconnection’s line will run through an underground passage to reach a central unit, where the converter station will be installed.

IPTO has discussed the project with local communities to minimize any inconveniences. Requests made by locals, determined to conceal any visual impact, were taken into consideration by authorities when planning the project’s route.

Revisions were made to an environmental impact study approved by the energy ministry last April.

IPTO made significant changes for the Megara end of the interconnection, significantly increasing the operator’s budget for the project. Changes included the adoption of subterranean line passages. Similar-minded revisions have also been agreed to for the Cretan end’s Korakia area.

Once launched, the Athens-Crete grid interconnection promises to offer electricity consumers overall annual savings of 400 million euros in Public Service Compensation (YKO) surcharges, included in electricity bills.

The project will also offer major environmental benefits as CO2 emissions resulting from the overall electricity supply effort for Crete will be reduced by 60 percent once the Athens-Crete interconnection is fully launched.

This project represents Crete’s major-scale link. A preceding smaller-scale link from Crete to the Peloponnese has also been incorporated into the effort.

Norton Rose Fulbright Athens team advises on largest interconnection project

Global law firm Norton Rose Fulbright has advised IPTO/ADMIE, the owner and operator of the Greek electricity transmission grid, on the concession of the Crete – Attica HVDC interconnection project, to ADMIE’s subsidiary, Ariadne Interconnection. It is the largest electricity grid infrastructure project ever developed in the country and one of the longest subsea electricity links (328kms) developed so far globally.

The project includes the construction of a bipolar high voltage direct current (HVDC) cable, linking the island of Crete with the transmission grid in the Athens metropolitan area (Attica), with a rated power of 1 GW (2 x 500 MW), as well as the construction of electrode stations, AC/DC converter stations and onshore (underground) high voltage lines in Crete and Attica. The project is expected to be commissioned in 2022 and its estimated budget is €1 billion.

Advice included the drafting of the concession agreement and also extended to the consultation of the concession agreement with the national regulatory authority for energy (RAE) and credit institutions which are interested in financing the implementation of the project.

The Norton Rose Fulbright team was led by Athens-based partner Vassilis Koroxenidis with assistance from senior associate Sergios Karotsieris. Dimitris Assimakis, head of the firm’s Greek energy practice, assisted the team on the national and EU regulatory and public procurement issues relevant to the project.

Dimitris Assimakis commented: “We are delighted to have assisted ADMIE, the Greek electricity TSO, with the implementation of this emblematic electricity interconnection project. This project illustrates ADMIE’s strong commitment to the further expansion of the transmission grid to the Aegean Sea islands. This contributes not only to the improvement of a reliable power supply and the economic growth of these regions but, most importantly, helps combat their environmental degradation and enables the addition of new renewable capacity from the islands into the national grid.”

PPC using extra 58-MW unit on Crete for safety despite weak tourism data

Power utility PPC plans, next week, to begin operating 58-MW capacity generators leased and to be installed at a company power station even though electricity demand on the island is expected to be far lower than usual this summer.

The island will still need this generation boost to meet local energy requirements despite the pandemic’s anticipated negative impact on tourism, authorities have estimated.

Crete’s energy sufficiency situation will not be resolved until the island’s grid interconnection with Athens is completed.

The generators, to be installed at PPC’s power station at Atherinolakkos, southeastern Crete, are scheduled to begin operating on July 1.

PPC has received a production permit for the generators between July 1 and August 31. Depending on the conditions, this license could be stretched to also cover September.

Under normal circumstances, electricity demand on Crete typically reaches 700 MW during the summer as a result of major tourism development on the island. Power outages, both short and long-lasting, are a common summer occurrence on Crete.

 

RAE renews call for ministry’s help on Crete sufficiency plan

RAE, the Regulatory Authority for Energy, has reiterated a request for energy ministry support needed for the execution of a plan that is expected to resolve energy sufficiency concerns on Crete until the island’s major-scale interconnection with Athens is completed.

The authority, which has resent a package of Crete-sufficiency proposals to the energy ministry, is essentially seeking permission from the ministry to recruit consultants so that it can proceed with necessary tenders.

The RAE plan, comprised of four basic actions, is based on a related study conducted by the National Technical University of Athens. Besides ensuring energy sufficiency for the island, the proposals also meet environmental standards.

The conversion of a diesel-fueled power station into a 100-MW natural gas-fueled facility is one of the four RAE proposals.

Another entails the installation of a new 100-MW power station, preferably natural gas-fueled.

A third action involves a RES capacity addition of roughly 200 MW, evenly split between wind and solar facilities.

RAE’s fourth proposal concerns the installation – and introduction to the Greek grid – of energy storage systems, or high-tech batteries, representing a capacity of between 30 and 40 MW.

The first and second proposals depend on LNG supply to Crete. Subsequently, a tender will need to be staged for the installation of an FSRU as well as a 100-MW power station.

The additional RES capacity will also require tenders. In addition, RAE proposes a tender for the energy storage systems it envisions for the island.

These batteries could also be used on other Greek islands in the future if they are eventually no longer needed on Crete.

 

IPTO, ministry, RAE seeking common ground for Ariadne tender

Officials at power grid operator IPTO, the energy ministry and RAE, the Regulatory Authority for Energy, are seeking common ground that would pave the way

a tender to offer a minority 39 percent share in IPTO subsidiary Ariadne Interconnector, an SPV established for the development of the Athens-Crete electricity grid interconnection.

IPTO is looking to attract an investor, or investors, for a minority stake in Ariadne as financial support for the costly project.

IPTO wants to maintain a majority stake in its subsidiary as the operator is determined to control the construction of a project it will eventually operate.

State Grid Corp of China (SGCC), holding a 24 percent stake of IPTO, is expected to participate in the tender. The Chinese company has already expressed interest for a 20 percent stake in Ariadne and has signed a related memorandum with IPTO.

If SGCC’s interest is limited to a 20 percent stake, then a second equity package carrying a further 19 percent is likely to be offered to other investors.

EuroAsia Interconnector, a consortium of Cypriot interests heading a wider PCI-classified project planned to link the Greek, Cypriot and Israeli grids, was expected to acquire a 39 percent in Ariadne. However, a dispute with IPTO over control of the wider project’s Crete-Athens section has distanced EuroAsia.

Energy minister Costis Hatzidakis and IPTO chief executive Manos Manousakis are both confident concerns raised by RAE over the tender’s procedure will be overcome and enable a launch of the competition within the first months of this year.

RAE is worried about complications that could arise and trouble the tender as a result of SGCC’s stake in IPTO. If not handled appropriately, the tender could spark protests from rival bidders claiming unfair competition, RAE fears. Also, the authority is well aware of Brussels’ sensitivity to the prospect of a wider Chinese presence in EU infrastructure.

 

SGCC interest in extra IPTO stake, 20% of Crete grid link SPV now official

State Grid Corp of China (SGCC) chairman Wei Kou has officially expressed an interest by the company to boost its 24 percent share of Greek power grid operator IPTO at a meeting with energy minister Costis Hatzidakis, ministry sources have informed.

The SGCC proposal will now be examined by the government, planning to offer a further stake of IPTO to investors.

SGCC holds preferential rights for the sale of any additional IPTO stake, according to a  shareholders’ agreement signed in 2017 for the Chinese company’s acquisition of a 24 percent stake.

The SGCC head official also confirmed his company’s interest to acquire a 20 percent stake in Ariadne, an IPTO subsidiary established as a special purpose vehicle for the development of the Crete-Athens electricity grid interconnection.

Crete FSRU plan encounters issues, onshore unit proposed

A plan to install an FSRU off Crete to import LNG as a means of countering the island’s looming energy sufficiency problem between 2020 and 2023 appears to have run into trouble as floating units of the required capacity are not available in the market for this time period.

Gas grid operator DESFA, requested by RAE, the Regulatory Authority for Energy, to examine the FSRU prospect, has already proposed an even more ambitious alternative, the installation of an onshore LNG terminal on Crete, according to sources.

However, the considerable time required to develop this alternative – no less than three years – is a problem. So, too, is the cost entailed. Some form of support, possibly through CAT remuneration, could be needed.

If its development is eventually pursued, the onshore facility would serve as an LNG storage and regasification unit for LNG arriving from the Revythoussa islet terminal, close to Athens, or other sources, including Egypt.

An onshore unit’s sustainability would depend on the existence of gas-fueled power stations on Crete with a total capacity of around 400 MW, it is estimated.

Its adoption would bring about changes to a four-part solution proposed by the National Technical University of Athens (NTUA) that entails converting power utility PPC’s 100-MW diesel-fueled units, situated at Atherinolakkos, into gas-fueled facilities; installing new gas-fueled power stations with a capacity of about 100 MW; developing new RES facilities offering a capacity of between 100 and 150 MW; and setting up a storage system for 30 to 40 MW.

A small-scale grid interconnection is planned to link Crete with the Peloponnese as of 2020, when older high-polluting units operating on the island will have been withdrawn, based on EU regulations. However, the island’s energy sufficiency issue will not be fully resolved until 2023, with the anticipated launch of a major-scale grid link with Athens.

 

Crete link tender deadline for cables expires today

The deadline of a tender for the engineering, procurement and installation of underwater cable systems (2 x 500 MW) concerning the Crete-Athens electricity grid interconnection expires today following two extensions.

An initial July 22 deadline was extended to July 29 before being stretched further to August 5. These successive deadline extensions sparked rumors of possible revisions concerning the 330-km long project.

Power grid operator IPTO, whose subsidiary Ariadne Interconnection is staging the tender, has ruled out the possibility of any further extension.

IPTO is determined to make clear that the tender is pressing ahead despite efforts by Cypriot consortium Euroasia Interconnector aiming to block the procedure.

Euroasia Interconnector, heading a wider PCI-status project to link the Greek, Cypriot and Israeli grids, is at odds with IPTO for control of the Crete-Athens segment’s development.

Euroasia Interconnector took fresh legal action last week against IPTO and RAE, the Regulatory Authority for Energy, which, if successful, could prompt further tender delays.

The Crete-Athens electricity grid interconnection is urgently needed to prevent a looming energy shortage on the island, Greece’s largest. Outdated diesel-fueled power stations operating on the island need to be withdrawn to meet EU environmental regulations.

The Cretan grid interconnection project is scheduled to be completed in 2022.

Italy’s Prysmian and France’s Nexans, both leading companies in the field, have shown interest in the tender.

 

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.

 

Bigger power shortage forecast for Crete demands extra action

Having just determined a bigger-than-expected electricity shortage on Crete for this coming summer, DEDDIE/HEDNO, the Hellenic Electricity Distribution Network Operator, has informed the main power utility PPC to bolster its plan for additional mobile electricity production units on the island.

The operator has increased its projected summer shortage for Crete to 90 MW from the previous forecast of 50 MW.

PPC licensing procedures concerning the transfer of mobile electricity production units to Crete are already in progress, based on the original power shortage forecast. These mobile units, including 18 company-owned units currently stationed on Rhodes and totaling 23 MW, possess a total production capacity of 61 MW.

More units will now need to be brought into action to cover the 90-MW shortage forecast for Crete. RAE, the Regulatory Authority for Energy, has urged PPC to act fast. Crete’s electricity needs will begin escalating to high levels in July.

PPC has already made clear it will need to be assured of reimbursements before it can make any additional capacity-boosting moves for Crete. It is awaiting officials documents from RAE recognizing the cost entailed.

Once the Cretan capacity issues for this summer have been resolved, RAE will need to think about the summer of 2020 as a small-scale grid interconnection linking the island with the Peloponnese will not have been completed. Solutions for the summers of 2021 and 2022, the intermediate period between Crete’s small-scale interconnection and the big link to Athens, also need to be found.

Solutions minimizing cost and environmental impact are the top priority for authorities.

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.