PPC agrees to buy GEK-TERNA power plant for coverage of Cretan needs

Power utility PPC has reached an agreement with Greek construction and energy group GEK-TERNA for the purchase and transfer to Crete of the latter’s 147-MW gas-fired power plant, currently stationed in the Viotia area, northwest of Athens.

PPC, which has undertaken the task of ensuring energy sufficiency on Crete, plans to have the power plant transferred and reinstalled on the island in time for this coming summer, when energy demand typically peaks.

PPC has included Heron I, the GEK-TERNA gas-fired power plant, into its package of solutions for energy sufficiency on Crete, both before and after the completion of a grid interconnection project to link Crete and Athens.

PPC and GEK-TERNA are now expected to complete their agreement imminently so that the the power plant’s transfer and reinstallation procedure can commence as soon as possible.

As reported by energypress earlier this week, the two companies had been engaged in advanced negotiations for quite some time.

An agreement for PPC’s purchase of the power plant was apparently reached by the two sides a while ago, but a remuneration formula for the power utility’s operation of the power plant on Crete, still not fully linked to the mainland grid, had remained pending.

At a meeting chaired by the energy ministry, a decision was reached to cover 75 percent of the power plant’s remuneration through the public service compensation (YKO) account, accumulating related surcharges added to all electricity bills. PPC will cover the other 25 percent.

The European Commission still needs to approve the remuneration formula as it involves state aid.

 

PPC’s Crete energy sufficiency plans include GEK-TERNA unit

Measures planned by power utility PPC to help cover the energy needs of Crete, Greece’s biggest island, before and after the completion of a grid interconnection project to link Crete and Athens, include Heron I, a 147-MW gas-fired power plant currently owned by Greek construction and energy company GEK-TERNA.

PPC, which has undertaken the task of ensuring energy sufficiency on Crete, has reached advanced negotiations with GEK-TERNA to purchase the Heron I power plant and transfer it from its current Viotia location, northwest of Athens, to Crete.

The power plant’s installation on Crete could be completed in time for 2025’s summer season, a period when energy demand typically soars on the Greek islands as a result of tourism.

Heron I’s launch on Crete in the summer of 2025 would help safeguard the island from any energy insufficiencies should the commercial launch of the Crete-Athens grid interconnection, scheduled for the same summer, be delayed by a few months. Such a delay would leave Crete short of 220 MW, energypress sources informed. Heron I is also equipped to run on diesel.

In the meantime, PPC needs to take swift action to ensure Crete’s energy sufficiency for this coming summer, when the island’s energy deficit is projected to reach 190 MW.

Two-year extension sought for Cretan power market model

The energy ministry has forwarded a two-year extension request to the European Commission for its Cretan electricity market model.

Brussels had approved the model until the end of 2023, but the ministry now needs an extension until the end of 2025 as a result of delays in the development of the Crete-Athens grid link. Its delay has been attributed to licensing delays and pandemic-related restrictions.

The project’s delays have made it necessary to extend the current model, which was launched November 1, 2021 to coincide with the commercial launch of the Crete-Peloponnese link, the first segment of the Crete-Athens link.

Greek power grid operator IPTO expects work on the Crete-Athens link to be completed at the end of 2024 and be ready for its commercial launch in mid-2025, following testing.

Power utility PPC plans to withdraw 41 power plants operating on non-interconnected islands by 2028. Nine of these power plants are on Crete. PPC intends to withdraw five of its Cretan power plants, offering a capacity of approximately 60 MW, by 2025.

 

March deadline for 20% stake in Ariadne Interconnection

Qualifiers through to the second round of a tender offering a 20 percent stake in Ariadne Interconnection, a subsidiary founded by Greek power grid operator IPTO for the development of the Crete-Athens grid interconnection, are expected to be set a 1Q 2024 deadline for their binding bids, energypress sources have informed.

All four first-round entrants have qualified for the procedure’s next stage following approval by RAAEY, the Regulatory Authority for Energy, Environment, and Water. All four are expected to maintain their interest and submit binding bids.

The procedure’s Virtual Data Room, to offer bidders full details on the project, is expected to be made available early in the new year, the sources noted. The shareholders’ agreement and business plan are among the details to be made available to participants.

The tender’s four second-round participants are GEK-TERNA; a partnership involving Macquarie Super Core Infrastructure Fund and Phaethon Holdings (Copelouzos group); Italian operator Terna SpA; and StateGrid International Development Belgium.

Taking into account the Crete-Athens grid interconnection’s current rate of progress, IPTO expects the project’s development to be completed late in 2024 and, following testing, be ready for commercial launch by mid-2025.

Progress is also being reported on the equity make-up of the newly established Great Sea Interconnector, another IPTO subsidiary, established for the development of the electrical grid interconnection to link the Greek, Cypriot and Israeli systems.

The Cypriot State, which has already expressed interest to become a shareholder of the Great Sea Interconnector consortium, is working on completing its entry by late January.

IPTO has also signed Memorandums of Understanding for the same purpose with TAQA, the Abu Dhabi National Energy Company, and Israeli fund Aluma. Other investors, including from the USA, have also expressed interest to join the Great Sea Interconnector consortium.

IPTO’ aims to complete the Great Sea Interconnector consortium’s equity make-up by the end of March, 2024 with a majority stake for the operator and the Cypriot State.

All 4 bidders seeking Ariadne Interconnection 20% advance

All four first-round entrants in a tender offering a 20 percent stake in Ariadne Interconnection, a subsidiary founded by power grid operator IPTO to specifically develop the Crete-Athens grid interconnection, have qualified for the procedure’s next stage following approval by RAE, the Regulatory Authority for Energy.

GEK-TERNA; a partnership involving Macquarie Super Core Infrastructure Fund and Phaethon Holdings (Copelouzos group); Italian operator Terna SpA; and StateGrid International Development Belgium are the four entrants advancing to the tender’s second round.

IPTO tasked RAE with an appraisal of the tender’s first-round entrants to safeguard the overall procedure from any prospective legal challenges.

One matter inspected by RAE was whether participation by entrants active in electricity production could lead to conflict of interest.

The authority also decided that China’s SGCC, IPTO’s strategic partner with a 24 percent stake, is eligible to participate in this tender, through its Belgian subsidiary StateGrid International Development Belgium.

RAE deciding on Ariadne Interconnection 20% stake shortlist

A shortlist of second round qualifiers in a tender offering a 20 percent stake in Ariadne Interconnection, a subsidiary founded by power grid operator IPTO to specifically develop the Crete-Athens grid interconnection, is expected to be decided on by RAE, the Regulatory Authority for Energy, at a meeting today.

Participants approved by the authority will advance to the tender’s second round for binding bids.

A total of four participants entered the tender’s first round, these being Macquarie Super Core Infrastructure Fund & Phaethon Holdings; GEK-TERNA; Italy’s Terna SpA; and StateGrid International Development Belgium.

The regulatory authority needs to decide which of these entrants fulfil conditions and terms for qualification to the second round of this tender, staged by IPTO.

The operator has tasked RAE with this appraisal, the objective being to safeguard the overall procedure from any prospective legal challenges. One of the matters being inspected by RAE is whether entrants active in electricity production can take part, as this could lead to conflict of interest.

Another is whether China’s SGCC, IPTO’s strategic partner with a 24 percent stake, is eligible to participate in this tender, through its Belgian subsidiary StateGrid International Development Belgium.

Work on the the Crete-Athens grid interconnection is in progress, IPTO recently informed.

Ariadne Interconnection qualifiers for 20% stake soon

A shortlist of second round qualifiers in a tender offering a 20 percent stake in Ariadne Interconnection, a subsidiary founded by power grid operator IPTO to specifically develop the Crete-Athens grid interconnection, will be decided on by RAAEY, the Regulatory Authority for Waste, Energy and Water, at a meeting on April 27.

A total of four participants entered the tender’s first round, these being Macquarie Super Core Infrastructure Fund & Phaethon Holdings; GEK-TERNA; Italy’s Terna SpA; and StateGrid International Development Belgium.

The regulatory authority will need to decide which of these entrants fulfil conditions and terms for qualification to the second round of this tender, staged by IPTO.

The operator has tasked RAAEY with this appraisal, the objective being to safeguard the overall procedure from any prospective legal challenges.

One of the matters being inspected by RAAEY is whether entrants active in electricity production can take part, as this could lead to conflict of interest.

Another is whether China’s SGCC, IPTO’s strategic partner with a 24 percent stake, is eligible to participate in this tender, through its Belgian subsidiary StateGrid International Development Belgium.

Work on the the Crete-Athens grid interconnection is in full progress, IPTO recently informed.

Crete unable to take on more grid links, IPTO informs GAP Interconnector

The Cretan grid cannot take on any further interconnections as power grid operator IPTO’s Crete-Peloponnese and Crete-Athens grid links, plus the Cyprus-Crete subsea cable connection planned by EuroAsia Interconnector have exhausted the island’s capacity, IPTO officials have underlined.

IPTO officials, at a recent meeting with representatives of the Eunice Group, heading the effort for development of the GAP Interconnector (Greece-Africa Power) project, informed of Crete’s inability to take on any further interconnections, according to IPTO sources. An alternative route for the GAP Interconnector not involving Crete will, as a result, be needed, the IPTO officials have asserted.

GAP Interconnector officials want to develop their project as a means of importing RES-generated energy from Egypt to mainland Greece via Crete.

The plan entails installing two subsea cables, offering a 2,000-MW capacity, from coastal Matruh in Egypt to Crete’s Atherinolakko, a distance of approximately 450 kilometers.

Any new major grid interconnection involving Crete would hamper the local grid’s ability to operate safely and reliably, while also endangering the grid, itself, and interconnections, IPTO officials warned.

Ariadne Interconnection 20% tender a draw for funds, SGCC

A tender just launched by power grid operator IPTO to offer a 20 percent stake in subsidiary firm Ariadne Interconnection, established specifically for the development of the Crete-Athens grid interconnection, anticipates investment interest from funds, which would contribute to the infrastructure project’s financing and benefit from subsequent earnings.

Besides funds, which typically invest in infrastructure projects, State Grid Corporation of China (SGCC), IPTO’s strategic partner with a 24 percent stake, is also expected to express interest in the tender offering a 20 percent stake of Ariadne Interconnection.

A September 28 deadline has been set for non-bindings bids, it was announced yesterday. Participation by Greek energy companies is also likely, sources informed.

Participants are entitled to take part either alone or collectively as consortium members, the tender’s terms have specified. Also, bidders must meet own capital criteria of at least 750 million euros, annually, to be eligible for entry.

Ariadne Interconnection has already ensured one billion euros worth of capital for the project, it noted in the tender’s announcement, the sources being: 200 million euros of company capital; 400 million euros from the National Strategic Reference Framework (NSRF); a 200 million-euro Eurobank bond loan; and 200 million euros from the European Investment Bank.

 

Cretan diesel output costing less than supply from mainland

Cretan electricity demand through the island’s grid interconnection with the Peloponnese has fallen to its lowest level since the line’s recent launch as electricity currently costs less to generate at the island’s diesel-fueled facilities than to bring in from the mainland through the interconnection.

Cretan electricity demand through the Crete-Peloponnese interconnection fell to approximately 18 GWh in November, the lowest since the line’s launch several months ago, according to data provided by power grid operator IPTO in a monthly report.

Demand for electricity through the mainland link was well above this level in preceding months. In July, when the interconnection was launched, demand reached 48 GWh, rose to 64.6 GWh in August, peaked at 65.2 GWh in September and eased to 50 GWh in October before plummeting to November’s level of 18 GWh.

Electricity prices on the mainland are the main reason behind this sharp decline, a bigger factor than the demand drop following the tourism-related peak, market officials noted.

Diesel prices have risen only mildly compared to the skyrocketing wholesale natural gas prices of recent months that have prompted an electricity price surge as about half the country’s electricity is generated at natural gas-fueled power stations.

The potential benefits of Crete’s grid interconnection with the mainland cannot be disputed in the long term, when RES units are expected to dominate generation and energy storage capacity will have grown, the officials pointed out.

 

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.