Cretan Interconnection

RAE’s Crete-Athens link initiative lawful, IPTO contends

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A recent decision by RAE, Greece’s Regulatory Authority for Energy, to award  Greek power grid operator IPTO and its SPV Ariadne Interconnector development control of Crete’s major-scale electricity grid interconnection with Athens does not breach the terms of the wider Euroasia Interconnector, a PCI-status project planned to link the Greek, Cypriot and Israeli power grids via Crete, as the initiative puts to action a road map agreed to between the Greece’s regulatory authority and its Cypriot counterpart, IPTO have contended in comments to energypress.

IPTO and Cyprus’s Euroasia Interconnector consortium have been locked in a dispute for control of the wider project’s Crete-Athens link.

RAE needed to move ahead with its decision as a project delay in the Crete-Athens link, which threatens to create electricity shortages on Crete as of 2020, was confirmed by ACER, Europe’s Agency for the Cooperation of Energy Regulators, the IPTO officials added.

The European Commission’s division for Projects of Common Interest has summoned officials representing all parties involved in the dispute to a Brussels meeting today.

PCI talks for Crete-Athens link rivals at meeting next week

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The European Commission’s division for Projects of Common Interest has summoned officials representing all parties involved in a dispute for control of an Crete-Athens electricity grid interconnection plan to a Brussels meeting next week to examine whether this project can retain its PCI status and, if so, under what conditions.

The Crete-Athens link is part of the wider Euroasia Interconnector, a PCI-status project planned to link the Greek, Cypriot and Israeli power grids via Crete.

Greek power grid operator IPTO and Cyprus’s Euroasia Interconnector consortium have been locked in a dispute for control of the wider project’s Crete-Athens link.

The Greek and Cypriot energy ministries and regulatory authorities for energy, as well as Belgian electricity transmission system operator Elia, given an intermediary role by Brussels for the dispute, have been invited to next week’s meeting.

Brussels called next week’s meeting in response to a recent decision by RAE, Greece’s Regulatory Authority for Energy, handing IPTO the task of establishing a special purpose vehicle (SPV) for the development of Crete’s urgently needed interconnection with Athens as a venture in which the operator will hold a 51 percent stake and other shareholders – the Euroasia Interconnector consortium has priority rights – will be offered 39 percent with an option for a further 10 percent.

The RAE initiative does not contravene the terms of a MoU signed by IPTO and the Euroasia Interconnector consortium and provides the consortium with an opportunity to participate in the Crete-Athens interconnection project, Greek energy ministry officials have supported in comments offered to energypress.

Crete faces a looming energy sufficiency threat as of 2020 because an exemption to EU law concerning power station emission limits for local high-polluting units, such as those operating on Crete, ends in December, 2019. A number of power stations on the island will need to be withdrawn.

Socar, Qatari firm proposals for Crete energy sufficiency issue

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LNG usage and the establishment of a floating regasification terminal for gas-fueled electricity generation at power stations are the common factors of at least two proposals to be presented this week to RAE, the Regulatory Authority for Energy, as possible solutions for the Crete’s looming energy shortage problem as of 2020.

An exemption to EU law concerning power station emission limits for local high-polluting units, such as those operating on Crete, is set to expire in December, 2019.

An Athens-Crete interconnection plan that would resolve resulting power insufficiency issues on the island has fallen behind schedule and prompted the need for solutions until the project’s launch.

Azerbaijan’s state-run energy firm Socar – possibly in partnership with Heron, which has been given permission to relocate a natural gas-fueled power station from provincial Thebes, slightly northwest of Athens, to Crete – is expected to present RAE a model implemented by the firm on Malta in 2016. The island country faced a similar energy situation to Crete. A gas storage facility (FSU) and floating regasification terminal and combinations of gas-based electricity production now provide 50 percent of electricity demand on Malta.

A representative of a state-run Qatar energy firm has also approached RAE for a solution entailing gas supply and electricity production via a floating terminal to be anchored off Crete.

ACER complaint on Crete-Athens link backs Brussels, project in limbo

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Just days after objections were raised by the European Commission, ACER, Europe’s Agency for the Cooperation of Energy Regulators, has also expressed its disapproval of a decision by RAE, Greece’s Regulatory Authority for Energy, giving power grid operator IPTO permission to establish a special purpose vehicle (SPV) for financing and development control of Crete’s urgently needed major-scale electricity grid interconnection with Athens.

ACER, which made clear its discontent – and astonishment – in a letter forwarded to RAE, described the authority’s initiative as a “unilateral move”, energypress sources informed. RAE has yet to respond.

The Crete-Athens interconnection project’s future now appears to be in limbo as this second intervention by a European institution adds further weight to the European Commission’s insinuation that the link would cease to enjoy PCI status and subsequent EU backing if the RAE decision is upheld.

Brussels reacted to the RAE move by noting the authority cannot award Crete’s major-scale interconnection with Athens to any party until the end of the year, the time period given to Euroasia Interconnector – a consortium of Cypriot interests responsible for a wider project planned to link the Greek, Cypriot and Israeli power grids – to decide if it will utilize a right offered for a 39 percent stake, or less, in the venture to develop the Crete-Athens link.

Compatibility concerns have already been raised about four transformers to be installed in the wider Athens area, Crete, Cyprus and Israel for the Euroasia Interconnector.

Also, Cypriot officials, in comments to energypress, cited the emergence of a national issue as Cyprus now finds itself detached from the EU – regarding the project – as a result of the RAE move at a time when the island’s Turkish-occupied northeast is seeking a power grid interconnection with Turkey.

 

 

 

IPTO carrying on with SPV for Cretan link despite Brussels reaction

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Despite objections raised by the European Commission, the power grid operator IPTO is pushing ahead with bureaucratic procedures concerning the establishment of a special purpose vehicle (SPV) for financing and development control of Crete’s urgently needed major-scale electricity grid interconnection with Athens.

RAE, the country’s Regulatory Authority for Energy, last week gave IPTO permission to form the SPV.

However, Brussels has responded by noting that RAE cannot award Crete’s major-scale interconnection with Athens to any party until the end of the year, the time period given to Euroasia Interconnector – a consortium of Cypriot interests responsible for a wider PCI-status project planned to link the Greek, Cypriot and Israeli power grids – to decide if it will utilize a right offered for a 39 percent stake, or less, in the venture to develop the Crete-Athens link.

A company founding document for the new SPV, noting the PCI-status  project will be transferred to the operator once the interconnection is developed, was submitted to the General Commercial Registry (GEMI) three days ago.

According to the founding document, the SPV, named Ariadne and given a 25-year duration, will be headed by a five-member board that could be increased to 11 members.

 

 

Brussels opposes RAE move giving IPTO Cretan link control

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The European Commission has raised objections to last week’s RAE (Regulatory Authority for Energy) decision awarding power grid operator IPTO financing and development control of Crete’s urgently needed major-scale electricity grid interconnection with Athens.

Just days ago, IPTO established a special purpose vehicle (SPV) named Ariadne for the project.

Brussels, in an email forwarded to all parties involved, noted that RAE cannot award Crete’s major-scale link with Athens to any party until the end of the year, the time period given to Euroasia Interconnector – a consortium of Cypriot interests responsible for a wider PCI-status project planned to link the Greek, Cypriot and Israeli power grids – to decide if it will utilize a right offered for a 39 percent stake, or less, in the venture to develop the Crete-Athens link.

The European Commission’s move essentially comes as a warning suggesting the Crete-Athens link will be regarded as a national Greek project rather than a PCI-status European project if RAE’s decision to award IPTO the project remains valid.

The Euroasia Interconnector consortium wants to avoid legal action but cannot exclude such an outcome, sources informed.

IPTO establishes SPV for major-scale Cretan link

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Power grid operator IPTO has established a special purpose vehicle (SPV) named Ariadne Interconnection for the financing and development of Crete’s urgently needed major-scale electricity grid interconnection with Athens.

Last week, RAE, the Regulatory Authority for Energy, decided to award IPTO control of the project’s development. The authority could set official terms during the day. RAE has already given IPTO a related road map whose content includes advice on financing through the Europe Connecting Facility (CEF), an EU funding instrument developed specifically to direct investment into European transport, energy and digital infrastructures.

The Ariadne Interconnection SPV, established as a wholly owned subsidiary of IPTO, will begin operating with startup capital of 200 million euros. It will be responsible for the Greek segment of the wider Euroasia Interconnector, a PCI-status project planned to link the Greek, Cypriot and Israeli power grids via Crete.

Euroasia Interconnector, a consortium of Cypriot interests responsible for the wider project, has been given until December 10 to decide if it will utilize a right offered for a 39 percent stake, or less, in the venture to develop the Crete-Athens link.

IPTO and Euroasia Interconnector have been involved in an extended dispute for control of the wider project’s Cretan segment.

IPTO has been given the right to stage a tender offering the venture’s remaining 10 percent. Belgian operator Elia and France’s RTE have both expressed interest.

 

 

RES producers excluded from Cretan major-scale link’s SPV

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Certified network operators, primarily, and possibly financial institutions, will be entitled to take on minority roles in a special purpose vehicle (SPV) to soon be established by Greece’s power grid operator IPTO for the development of Crete’s urgently needed major-scale electricity grid interconnection with Athens.

Companies with existing electricity production roles will not be able to participate in the SPV, whose 10 percent will be offered through a tender. This essentially means holders of licenses of major wind energy projects on Crete will not be able to join the SPV.

The Euroasia Interconnector consortium, responsible for the wider Euroasia Interconnector, a PCI-status project planned to link the Greek, Cypriot and Israeli power grids via Crete, will be offered priority rights for a 39 percent minority stake. If this consortium does not exercise this priority right for all or any of the 39 percent it is entitled to, then any leftover portion will be added to the 10 percent stake to be offered to certified network operators and, perhaps, financial institutions.

IPTO is rushing to form the SPV in an effort to counter to Crete’s looming energy sufficiency threat as of 2020 because an exemption to EU law concerning power station emission limits for local high-polluting units, such as those operating on Crete, ends in December, 2019. A number of power stations on the island will need to be withdrawn.

IPTO and Euroasia Interconnector, a consortium of Cypriot interests, have been involved in an extended dispute for control of the wider project’s Cretan segment.

The SPV will initially stand as a wholly-owned IPTO subsidiary and, three months later, by the end of the year, a tender will be staged inviting investor-operators to bid for a minority stake in the venture.

Belgian network operator Elia and France’s RTE have both expressed interest in the major-scale Cretan interconnection project. It remains unclear if they will seek to join the Euroasia Interconnector consortium for part of the SPV’s 39 percent stake or focus on the 10 percent stake.

RAE, the Regulatory Authority for Energy, awarded IPTO the task of swiftly establishing a special purpose vehicle, and its majority 51 percent stake, this week in a decision that runs against a European Commission initiative that gave the Euroasia Interconnector consortium until the end of the year to resolve its dispute with IPTO. The European Commission has yet to offer an official response.

It is not yet clear if the issue will be added to the agenda for upcoming talks between the government and post-bailout inspectors.

RAE plans to give IPTO Crete-link control, SPV task

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Fearing project delays that could prompt power supply shortages on Crete, RAE, the Regulatory Authority for Energy, intends to inform the European Commission of a decision to give Greece’s power grid operator IPTO the task of swiftly establishing a special purpose vehicle for the development of Crete’s urgently needed major-scale electricity grid interconnection with Athens as a venture in which the operator will hold a 51 percent stake and other shareholders will be offered 39 percent with an option for a further 10 percent, energypress sources have informed.

The Euroasia Interconnector consortium, responsible for the wider Euroasia Interconnector, a PCI-status project planned to link the Greek, Cypriot and Israeli power grids via Crete, will be offered priority rights for the 39 percent stake, the sources added.

IPTO and Euroasia Interconnector, a consortium of Cypriot interests, have been involved in an extended dispute for control of the wider project’s Cretan segment.

RAE’s plan comes as a counterproposal to a European Commission initiative giving the Euroasia Interconnector consortium until the end of the year to resolve its dispute with IPTO.

Greek energy minister Giorgos Stathakis had pre-notified of RAE’s latest move in parliament as well as in Chania last Friday, when he informed the energy authority would task IPTO with establishing an SPV by the end of this year, adding IPTO would hold a 51 percent stake and the Euroasia Interconnector consortium the other 49 percent.

Crete faces a looming energy sufficiency threat as of 2020 because an exemption to EU law concerning power station emission limits for local high-polluting units, such as those operating on Crete, ends in December, 2019. A number of power stations on the island will need to be withdrawn.

 

 

 

Brussels gives Elia intermediary role for delayed Cretan link

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The European Commission has given the Belgian electricity transmission system operator Elia an intermediary role to seek solutions for the development of the major-scale Cretan interconnection, both in terms of the line-up of the consortium to undertake the project and technical details.

Brussels has decided to take initiatives following the breakdown in negotiations this summer between Greece’s power grid operator IPTO and Euroasia Interconnector – a consortium of Cypriot interests awarded the development of the wider PCI-status Euroasia Interconnector to link the Greek, Cypriot and Israeli power grids – for development control of the Athens-Crete segment of the wider link.

Crucial decisions will need to be made in September on the schedule and method of development of the project, crucial for the the country’s grid.

The European Commission has extended a Euroasia Interconnector consortium deadline until the end of the year, for progress solutions, before the Euroasia Interconnector project is officially branded a delayed PCI project. Euroasia Interconnector will need to find solutions over the next four months.

Meanwhile, RAE, Greece’s Regulatory Authority for Energy, facing a looming energy sufficiency threat on Crete as of 2020, is seeking to commission the Crete-Athens link’s development as soon as possible. An exemption to EU law concerning power station emission limits for local high-polluting units, such as those operating on Crete, will cease to apply at the end of 2019 and force the closure of units.

Responding to the summer’s failed talks between IPTO and Euroasia Interconnector, the European Commission appears to have indicated that the Euroasia Interconnector project cannot be broken down into two separate projects – as a PCI-status Greek, Cypriot and Israeli power grid link and a national Athens-Crete link.

Elia and IPTO officials are scheduled to hold a meeting in Athens on September 3. The Elia board is also likely to convene for a discussion on the matter this coming autumn, possibly within the month of September.

RAE, on edge as a result of the energy sufficiency threat on Crete, has indicated it will reach decisions for the Crete-Athens link by September 12.

Also, Greek, Cypriot and Israeli officials are expected to stage a top-level three-way meeting within September to discuss energy matters, especially the Euroasia Interconnector issue, as well as East Med, the natural gas pipeline plan.

RAE to seek consulting firm support for Cretan energy alert

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RAE, Greece’s Regulatory Authority for Energy, is preparing to seek consulting firm support to counter a looming energy sufficiency threat on Crete as of 2020 prompted by the end, in December, 2019, of an exemption to EU law concerning power station emission limits for local high-polluting units, such as those operating on Crete. A number of power stations on the island will need to be withdrawn.

Delays in a plan for the development of Crete’s major-scale grid interconnection, to link the island with Athens, have raised sufficiency concerns.

Greece’s power grid operator IPTO has been at odds with Euroasia Interconnector – a consortium of Cypriot interests awarded the development of the wider PCI-status Euroasia Interconnector to link the Greek, Cypriot and Israeli power grids – for control of the Athens-Crete link’s development.

RAE has called on the Greek government to seek exemptions from the European Commission for some of the upcoming power station closures on Crete. It remains unknown if such a Greek request will be endorsed in Brussels.

Also, authorities are examining the prospect of allowing energy firm Heron to transfer an existing power station in Viotia, slightly northwest of Athens, to Crete. Questions have been raised as to this option’s cost of production level.

A smaller-scale Cretan interconnection is planned to link the island with the Peloponnese.

Slow Athens-Crete link action raising island’s energy fears

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Crete’s major-scale electricity grid interconnection with Athens is a PCI-status project as it represents a part of the wider Euroasia Interconnector to link the Greek, Cypriot and Israeli power grids, meaning EU terms and conditions will need to be observed for the Crete-Athens link, the European Commission informed participants at a related meeting in Brussels earlier this week.

Greek and Cypriot regulatory authorities for energy, the European Commission, and the Euroasia Interconnector consortium, responsible for the wider Euroasia Interconnector project, took part in the meeting.

Officials of Greece’s power grid operator IPTO, which is at odds with the Euroasia Interconnector consortium for control of the Athens-Crete link’s development, skipped the meeting claiming there was no chance of any agreement on the issue with Euroasia Interconnector, a consortium of Cypriot interests.

The Athens-Crete interconnection has fallen behind schedule. Slow-moving bureaucratic procedures in Brussels have intensified Greek concerns of a serious power sufficiency problem on Crete as of 2020. An exemption to EU law concerning power station emission limits for local high-polluting units, such as those operating on Crete, is set to expire in December, 2019.

The Athens-Crete link’s PCI status promises to offer the project fast-track licensing advantages, reduce the risk of legal challenges by rival companies, and ensure transparent procedures.

RAE, Greece’s Regulatory Authority for Energy, will most likely award the Athens-Crete link’s development to IPTO, but, even so, the power grid operator will need to stage a tender and include other companies. Belgian power grid operator Elia, currently examining details of the wider Greek-Cypriot-Israeli link, is believed to be interested in participating in the Athens-Crete project.

Valuable time will have been lost by next month, when developments are expected, which will increase the urgency of Crete’s looming energy sufficiency problem.

 

 

IPTO to skip Brussels meeting on Euroasia Crete link dispute

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Greece’s power grid operator IPTO has chosen not to be represented at a meeting scheduled for today in Brussels as an effort to resolve the operator’s dispute with the Euroasia Interconnector consortium for control of the development of Crete’s major-scale electricity grid interconnection with Athens.

The Euroasia Interconnector consortium, responsible for the wider Euroasia Interconnector, a PCI-status project planned to link the Greek, Cypriot and Israeli power grids via Crete, has insisted on also controlling the project’s Cretan segment.

The adamant stance of Euroasia Interconnector, a consortium of Cypriot interests, makes it pointless for IPTO to be represented at today’s meeting, IPTO officials have concluded, according to enegypress sources.

The Greek and Cypriot regulatory authorities for energy and European Commission officials are all expected be participate at today’s meeting.

Over the past couple of months, the Euroasia consortium has claimed Belgian power grid operator Elia would finance its stake in the Euroasia project. This has yet to occur.

According to sources, Elia intends to conduct a feasibility study to decide if its involvement in the investment plan for the Greek-Cypriot-Israeli interconnection project would be viable.

Sources have not ruled out a meeting between IPTO and Elia officials during the current month for investment plan talks.

At this stage, RAE, Greece’s Regulatory Authority for Energy, appears likely to award IPTO the Crete-Athens segment of the wider project by early September.

Cretan energy alert the focus, new IPTO-Euroasia meeting

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The energy ministry and RAE, Greece’s Regulatory Authority for Energy, are currently focused on delivering measures to counter Crete’s energy sufficiency alert between 2020 and 2022, when the island’s major-scale electricity grid interconnection with Athens is planned to be developed.

At the same time, the power grid operator IPTO and the Euroasia Interconnector consortium – responsible for the wider Euroasia Interconnector, a PCI-status project planned to link the Greek, Cypriot and Israeli power grids via Crete – will make yet another attempt to reach an agreement on the Cretan link at a meeting in Brussels on Monday.

The two sides have vied to secure control of the large-scale Cretan link with Athens. This dispute has delayed the project’s development. A smaller-scale Cretan link is planned to link the island with the Peloponnese.

Pundits see little chance of a compromise between IPTO and the Euroasia Interconnector consortium at Monday’s meeting. If so, RAE may award the Cretan major-scale interconnection’s development to IPTO, with conditions attached, next week.  In this case, IPTO would seek minority-stake partners for the establishment of a Special Purpose Vehicle (SPV) to take on the project.

Crete faces a serious energy sufficiency threat as of 2020 as an exemption to EU law concerning power station emission limits for local high-polluting units, such as those operating on Crete, is set to expire in December, 2019. Completion of the island’s major-scale link stands no chance of being completed by 2020, authorities have warned.

In their attempt to resolve the issue, Greek officials are expected to forward a request to the European Commission for some of the main power utility PPC’s diesel-fueled power stations on Crete to be temporarily exempted from the EU’s strict anti-pollution directives, sources informed.

Cretan power stations currently generating 601 MW of the island’s 813 MW in electricity production will need to stop operating in 2020, according to the emission-limit rule imposed by Brussels.

To help counter the looming issue, RAE also appears to be moving ahead with procedures for the transfer to Crete of Heron I, a small 150-MW gas-fueled unit currently operated by the energy firm Heron in Thebes, slightly northwest of Athens. Heron I runs on two types of fuel, natural gas as the main fuel and diesel as a backup fuel. The unit’s transfer to Crete, sought by Heron, would help the Cretan energy sufficiency problem but not fully resolve it.

In addition, the smaller-scale Cretan link, planned to link the island with the Peloponnese via a submarine power cable whose capacity could be anywhere between 150 MW and 180 MW, will offer further support.

RAE could also examine staging RES auctions for the installation of renewable energy units on Crete, such as solar energy facilities, which can be swiftly set up, sources added.

 

 

 

RAE set to award IPTO crucial Crete-Athens interconnection

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RAE, Greece’s Regulatory Authority for Energy, appears to have reached a decision to award the Cretan major interconnection project’s development to the power grid operator IPTO with conditions attached.

IPTO and the Euroasia Interconnector consortium, responsible for the wider Euroasia Interconnector, a PCI-status project planned to link the Greek, Cypriot and Israeli power grids via Crete, have fought to secure control of the large-scale Cretan segment, to link the island with Athens. This dispute has led to delays.

RAE may announce its decision within the next few days and, in doing so, attribute the need to push ahead with the major-scale Cretan link to the island’s looming energy sufficiency threat in 2020, energypress sources informed. An exemption to EU law concerning power station emission limits for local high-polluting units, such as those operating on Crete, is set to expire in December, 2019.

According to sources, RAE officials and the European Commission have been in constant touch in recent times for a solution to the local segment of the PCI-classified Greece-Cyprus-Israel grid interconnection.

The European Commission appears to have insisted on a last-ditch effort that may lead to an agreement between IPTO and the Euroasia Interconnector, a consortium of Cypriot interests. However, it is feared course of action could take up valuable time. Crete’s energy sufficiency alert is expected to be given precedence.

Euroasia seeks restart in Cretan link talks, IPTO remains firm

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The Euroasia Interconnector consortium has requested a restart of failed negotiations concerning the development of Crete’s major interconnection planned to link the island’s power grid with Athens, sources have informed.

Negotiations between the Euroasia Interconnector and IPTO, Greece’s power grid operator, both seeking control of the Cretan major interconnection project’s development, fell through less than a fortnight ago, and, in response, the European Commission gave RAE, Greece’s Regulatory Authority for Energy, two months to decide on how the Cretan segment of the wider Euroasia Interconnector project will be developed and by whom.

The wider Euroasia Interconnector project, a PCI-status project awarded to the Euroasia Interconnector consortium, is planned to link the Greek, Cypriot and Israeli power grids via Crete.

In the ordeal’s latest development, the Euroasia Interconnector consortium has just forwarded a letter to all parties involved – the European Commission, ACER (Agency for the Cooperation of Energy Regulators), RAE and its Cypriot counterpart RAEK, as well as IPTO – seeking fresh talks following the recent breakdown.

The Euroasia Interconnector consortium, in its letter, appears willing to accept a minority role for the Cretan segment of the wider interconnection project but insists on having a say in interoperability matters and project specifications.

In the letter, the Euroasia Interconnector consortium also doubts a recent ACER update  contending the Greek-Cypriot-Israeli interconnection has fallen well behind schedule and, furthermore, questions whether RAE has the authority to become involved in decisions concerning the project’s Cretan interconnection segment.

The Euroasia Interconnector consortium, in the letter, insists on the staging of a tender for all the project’s converters. This is one of the contentious issues that has troubled the consortium’s negotiations with IPTO as the power grid operator views the stance as pressure by Euroasia Interconnector for control over technical specifications and tenders concerning the project.

IPTO sees no reason to reconsider or change its course as a result of the letter, sources noted. Negotiations between the two sides broke down at a meeting on July 12.

Prior to the collapse, IPTO proposed the establishment of a special purpose vehicle (SPV), which the Greek power grid operator would control with a majority stake, to finance, develop and operate the Cretan interconnection. Regulators and the European Commission viewed the IPTO proposal as the only basis for negotiations before the breakdown.

 

Euroasia consortium doubts ACER report, insists on Crete link control

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The Euroasia Interconnector consortium awarded the PCI-status Euroasia Interconnector planned to link the Greek, Cypriot and Israeli power grids, has strongly doubted an ACER (Agency for the Cooperation of Energy Regulators) report noting the project’s development has fallen two years behind schedule and insists it should be given control of the major Cretan interconnection, part of the wider Mediterranean project.

The Cypriot regulatory authority for energy appears to be lending its support to the Euroasia Interconnector consortium over the issue.

The latest developments could affect hopes of progress following a July 12 meeting when RAE, Greece’s Regulatory Authority for Energy, was tasked, by the European Commission, to decide within two months on how the Cretan major interconnection segment of the Euroasia Interconnector project will be developed and by whom.

The Euroasia Interconnector consortium and IPTO, Greece’s power grid operator, have been at odds in their efforts to secure control of the development of the Cretan major interconnection planned to link the island’s grid with Athens.

The ACER report is intended to serve as a key guide for RAE’s decision-making in the dispute.

Recent talks between RAE and IPTO suggested that the Greek power grid operator would be awarded the contract for the major-Cretan interconnection as part of the Euroasia Interconnector. However, initial support by the European Commission for such a course of action now seems indefinite.

The Euroasia Interconnector consortium continues to believe it should be given the upper hand for the Cretan major interconnection’s development. Highlighting this stance, the consortium has organized a public consultation event for today at seaside Megara, on the western outskirts of Athens, for talks with local authorities and residents on project issues.

The major Cretan interconnection’s submarine power cable is planned to run from Crete to the Megara region before continuing as an overland connection to a central grid facility in Athens.

 

 

 

 

New Mykonos grid interconnection to save €80m per year, energy minister tells

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The country’s new electricity grid interconnections represent a significant step along the way towards a new era, energy minister Giorgos Stathakis noted during a speech at a ceremony held yesterday to inaugurate an interconnection project linking the island Mykonos with the mainland grid.

This project, which completes the first phase of the Cyclades grid interconnection with the mainland, promises annual savings of 80 million euros, otherwise spent on high-cost, high-polluting electricity generation at power stations operating on the islands. The operating costs of these facilities are covered by consumers through public service compensation (YKO) surcharges added to electricity bills.

The minister told the ceremony, attended by Prime Minister Alexis Tsipras, that he expects the Cretan submarine power cable interconnection to soon be completed. This project’s completion, covering electricity supply to and from Crete, the country’s biggest and most populous island, will lead to further public service compensation savings and also offer major environmental benefits. YKO costs in Greece amount to between 600 and 700 million euros per year.

Stathakis, during yesterday’s speech, also made reference to EU environmental targets for 2030. An EU objective has been set for the renewable energy sector to provide 32 percent of electricity consumed. The EU is also aiming for a 32.5 percent electricity consumption reduction compared to 2009 levels.

If these targets are to be achieved, the RES sector will need to double over the next decade and energy consumption will need to drop at a rate of nearly 1.5 percent per year.

The interconnections will provide crucial support for Greece in the country’s effort to reach these goals as current electricity production on the islands is harmful for the environment.

IPTO, Euroasia under tremendous pressure for Crete interconnection deal

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IPTO, Greece’s power grid operator, and Euroasia Interconnector, both vying to secure control of the construction of Crete’s major interconnection, linking the island’s grid with Athens, will go into a meeting today, organized by RAE, Greece’s Regulatory Authority for Energy, under great pressure to reach an agreement. The two sides stand far apart at present.

Besides IPTO and Euroasia Interconnector, tomorrow’s meeting will also involve officials representing RAE, its Cypriot counterpart, the European Commission and ACER, the European Agency for the Cooperation of Energy Regulators.

A preliminary meeting staged yesterday made clear that the establishment of a partnership between IPTO and Euroasia Interconnector, based on the terms of a MoU signed by the two sides last October, is the only way of resolving the dispute.

One authority involved in the matter noted that the two sides will be given a limited amount of time, without the possibility of any extensions, to establish a partnership.

If this is not achieved, then RAE, fully supported by the European Commission, could either stage a tender offering the project’s development, proceed with a competitive procedure concerning its financing, or offer IPTO the project’s development, based on a specific schedule.

The MoU signed by IPTO and Euroasia Interconnector last October envisions a stake of at least 51 percent for IPTO in the project, 39 percent for Euroasia Interconnector, and 10 percent for private-sector investors. It also foresees the establishment of a special purpose vehicle (SPV) by the two firms to take on the project’s financing and development.

Euroasia Interconnector appears to be demanding equal powers for all technical matters and sub-contracts concerning the project.

The prospect of IPTO being responsible for sub-stations and the cable on the Greek side was discussed at yesterday’s preliminary meeting. In this case, Euroasia Interconnector will be exclusively responsible for technical matters concerning other segments of the project.

If such an arrangement is not agreed to, then the project’s procedures will need to recommence from scratch. Both sides would lose in this case as any new tender would attract additional investors for involvement in a project promising regulated and guaranted earnings.

The Euroasia Interconnector consortium insists it was formed to link the Greek, Cypriot and Israeli power grids via a Crete interconnection as an entire project, adding it has already been classified as an EU Project of Common Interest (PCI).

 

IPTO, Euroasia meet seeking consensus on Crete interconnection

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IPTO, Greece’s power grid operator, and Euroasia Interconnector, both vying to secure control of the construction of Crete’s major interconnection, linking the island’s grid with Athens, held an initial meeting yesterday, six days into a ten-day deadline set by the Greek and Cypriot regulatory authorities for energy for an agreement.

The Greek and Cypriot regulatory authorities are being pressured by the European Commission to push for a solution.

According to energypress sources, IPTO took the initiative and extended an invitation to Euroasia Interconnector, which agreed to a first round of talks. Even so, no progress appears to have been made at this first session. Both sides are believed to have stuck to their initial positions.

At yesterday’s meeting, IPTO presented Euroasia Interconnector a shareholders agreement based entirely on the details included in a Memorandum of Understanding (MoU) signed by the two sides last October. It envisions a stake of at least 51 percent for IPTO in the project, 39 percent for Euroasia Interconnector, and 10 percent for private-sector investors. Euroasia Interconnector pledged it would offer a response to this plan within the next few days.

The MoU foresees the establishment of a special purpose vehicle (SPV) by IPTO and Euroasia Interconnector for the project’s financing and development. This appears to be a pivotal detail keeping the two sides apart.

Euroasia Interconnector contends that it is responsible for the project’s construction and has noted the SPV should only concern financial aspects.

The Euroasia Interconnector consortium insists it was formed to link the Greek, Cypriot and Israeli power grids via a Crete interconnection as an entire project, adding it has already been classified as an EU Project of Common Interest (PCI). As a result, Euroasia not only holds priority rights over the Cretan section of the overall interconnection project but has an overall responsibility as well, Euroasia Interconnector contends. Euroasia has noted it only recognizes ACER, the European Agency for the Cooperation of Energy Regulators, as a supervisory body.

Euroasia Interconnector has already reached a partnership agreement with Belgium’s ELIA and contends it can fully cover the project’s entire financing needs, a claim that remains unsubstantiated. The credit ability of Euroasia Interconnector represents a key factor in any future agreement for collaboration between IPTO and Euroasia Interconnector. IPTO has already made significant progress in this faculty following the recent signing of a 200 million-euro loan agreement, at a favorable interest rate, with the Bank of China and ICBC.

At a meeting last week, European Commission officials clearly favored the Greek and Cypriot regulatory authorities as the two bodies responsible for handling the dispute. This means that commitments based on decisions already made by the two regulatory authorities should remain valid.

On the one hand, Euroasia Interconnector has been granted a license for the overall project under the condition that the Crete-Athens interconnection will be co-developed with IPTO, while, on the other, IPTO has already included the Crete-Athens interconnection into its ten-year plan under the condition it collaborates with Euroasia Interconnector.

If the dispute is not settled soon, both sides could loose their existing rights to the project, which would require a restart of the entire procedure, an authority told energypress.

 

 

 

IPTO, Euroasia pressured to decide on Crete interconnection

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IPTO, Greece’s power grid operator, and Euroasia Interconnector have been given a ten-day deadline by the Greek and Cypriot regulatory authorities for energy – both pressured by the European Commission – to reach an agreement for the development of Crete’s major grid interconnection.

The two sides are vying to secure control of the project’s construction.

IPTO has offered a convincing presentation concerning preliminary efforts for the project’s financing and technical studies, energypress sources informed.

The operator has an advantage provided by the content included in a Memorandum of Understanding (MoU) signed by the two sides last October, envisioning a stake of at least 51 percent for IPTO in the project, 39 percent for Euroasia Interconnector, and 10 percent for private-sector investors, possibly investors developing major renewable energy projects on Crete.

The MoU foresees the establishment of a special purpose vehicle (SPV) by IPTO and Euroasia Interconnector for the project’s financing and development. This appears to be a pivotal detail causing disagreements between the two sides.

Euroasia Interconnector contends that it is responsible for the project’s construction and has noted the SPV should only concern financial aspects.

The Euroasia Interconnector consortium was formed to develop links between the Greek, Cypriot and Israeli power grids via a Crete interconnection.

The European Commission has made efforts to support collaboration between the IPTO and Euroasia Interconnector for joint development of the project.

 

 

 

Crete facing blackout threat in 2020 despite tender for link

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An announcement made yesterday of a tender for the development of a Cretan interconnection, via a submarine power cable to link the island with the Peloponnese, heralds the launch of a needed project, but, even so, Crete is in danger of experiencing power outages in 2020.

This threat exists because an exemption to EU law concerning power station emission limits will expire in December, 2019.

As a result, a number of local power stations will need to shut down permanently. According to PPC, the main power utility, the development will lead to the closure of power stations with a total capacity of 42 MW. Certain power stations, whose capacity totals 98 MW, will be able to continue operating if they undergo environmental upgrades.

These developments mean that the amount of electricity to be generated on Crete will not suffice. Worse still, electricity consumption on the island, Greece’s largest, is growing at a rate of 4 percent per year.

According to a joint study conducted by the power grid operators IPTO and HEDNO/DEDDIE, whose results have been presented to the energy ministry and RAE, the Regulatory Authority for Energy, the electricity deficit for Crete could range beween 50 and 200 MW.

The Crete-Peloponnese interconnection, the smaller of two interconnection projects planned to service the island, is scheduled to be completed by 2020 and, thereby, counter any power sufficiency issues. However, officials generally remain skeptical as to whether the project will progress as planned. IPTO’s chief executive Manos Manousakis, who worded a related statement with particular care, noted that “the operator will make every effort to complete the project within 2020.”

Despite the swifter pace of things at IPTO since the recent entry of China’s SGCC as a strategic parner with a 24 percent stake, the overall feeling suggests the Crete-Peloponnese interconnection will most likely be completed in 2021.

RAE is examining plans to protect Crete from any power outages in 2020, sources informed. One of these efforts concerns seeking an extension of the EU law for power station emission limits until 2023. The authority is also looking at ways to boost electricity generation on the island through various means. These include a floating natural gas storage facility to be linked to a power station, as well as fuel changes at existing units.

 

 

Cyclades, Crete links to increase IPTO tariffs as of 2019

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A decision on IPTO (power grid operator) electricity transmission and distribution costs for the four-year period covering 2019 to 2022, anticipated towards the end of the year, is expected to lead to related tariff rises as the cost of the Cyclades and small-scale Cretan interconnections will be factored in.

The operator intends to start recovering amounts concerning cost coverage of these projects before the Cyclades interconnection is completed and ahead of work on the small-scale Cretan interconnection.

Public service compensation (YKO) surcharges included on consumer electricity bills to primarily subsidize high-cost electricity production on Greece’s non-interconnected islands will not have yet been reduced once these hikes are implemented.

However, this surcharge, also supporting the Social Residential Tariff (KOT) program offering subsidies for lower-cost electricity to underpriviledged households, will be reduced once the aforementioned interconnections have been completed.

IPTO’s ten-year program, a binding schedule, foresees completion of the small-scale Cretan interconnection, to link the island with the Peloponese, in 2020.

As for the Cyclades, the first phase of the overall proect was inaugurated a few days ago. The second phase is expected to be completed early next year, a third phase is set to be completed at the end of 2020, while work on the fourth phase should soon commence.

The maintenance cost of local power stations on Paros, including stand-by costs to be sustained until the Cyclades interconnection is completed, is one of the factors that will increase IPTO’s transmission costs.

As was reported by energypress yesterday, IPTO’s electricity transmission and distribution costs for 2018, expected to be calculated next week, should lead to a decline of approximately 10 percent for high and medium voltage consumers. Household tariffs are not expected to change while mild hikes are expected for low-voltage electricity used by professionals.

IPTO board to visit SGCC heads in Beijing for results presentation

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The administration of IPTO, Greece’s power grid operator, has scheduled to visit Beijing next week to present to the leaders of State Grid Corporation of China (SGCC), the operator’s strategic partner, IPTO’s latest and yet-to-be-released financial results as well as a business growth plan. SGCC acquired a 24 percent stake in IPTO last year.

According to sources, IPTO’s results, to be released within the next few days, will be better than expected, a prospect that will surely please the operator’s Chinese partner.

Meanwhile, the operator is waiting for a decision, any day now, from RAE, the Regulatory Authority for Energy, on new tariffs, to apply for a four-year period.

IPTO is bolstering its position through the development of new interconnections, planned to follow the first phase of the Cyclades interconnection.

The second phase of the Cyclades interconnection with the mainland is expected to be completed in early 2019. A third phase is planned to be completed by the end of 2020, while a fourth phase is set to be added to the operator’s ten-year business plan covering 2019 to 2028.

An international tender for the first phase of the Cretan interconnection, a small-scale connection to link Crete and the Peloponnese, is expected to be announced within the next few days. Talks with the EuroAsia consortium for the establishment of a partnership for development of the second phase of the Cretan interconnection, to link Athens with Crete, are in progress.

The Cretan interconnection is planned to be incorporated into the prospective EuroAsia project, which will link the Greek, Cypriot and Israeli grids.

IPTO, EuroAsia in advanced Crete interconnection talks

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IPTO, the power grid operator, and the EuroAsia consortium, behind an ambitious project to link the Greek, Cypriot and Israeli grids, have reached an advanced stage in talks aiming to strike a deal for the co-development of the major-scale Cretan interconnection, to link the island with Athens.

A smaller-scale Cretan interconnection, running from Crete to the Peloponnese, has already been included in IPTO’s binding ten-year development plan covering 2018 to 2027 and received approval from RAE, the Regulatory Authority for Energy. Its completion date has been set for 2020.

The larger Cretan interconnection has been listed, by IPTO, as a project that could be completed by 2024. The EuroAsia consortium foresees its completion by 2020. A 2022 completion date is likely to be set if the two sides reach an agreement. This is deemed as a feasible target date as the project has already been classified as a Project of Common Interest (PCI), enabling EU funding.

RAE is applying pressure for the major-scale Cretan interconnection’s swifter development. The authority has given IPTO and EuroAsia until the end of April to complete their negotiations.

The revised ten-year plan will be a binding commitment, meaning that both IPTO and the EuroAsia consortium would face penalties for a delayed completion of the major-scale Cretan interconnection.

IPTO and the EuroAsia consortium have joined forces as part of an effort associate the Cretan interconnection with the grander Euroasia Interconnector, also on the EU’s PCI list.

The EuroAsia interconnection’s section linking Israel and Cyprus is expected to be completed by the end of 2019. Its Cyprus to Crete section is planned to be developed between this coming October until the end of 2022.

 

 

Cretan interconnection revised following mainland reaction

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The recently appointed new administration at IPTO, the power grid operator, has decided to make revisions to stage one of Crete’s interconnection with the mainland in order to reduce the project’s environmental impact following protests by a small percentage of locals at the Malea peninsula in the Lakonia area, southeast Peloponnese.

After taking into consideration the concerns and views of Malea residents and examining alternatives, the new IPTO board, appointed in late June, has decided to reduce the interconnection’s overhead length in the Malea area by 3.7 kilometers to 23.8 kilometers and replace this section with a 4.5-kilometer underground segment. As a result, the total length of the interconnection’s underground section in Malea will increase to 14 kilometers. The revised plan also removes one pylon from the interconnection project.

These revisions are seen as a compromise. Opting to develop the project entirely underground at its Malea end, as the area’s locals have requested, would delay the project by at least two years. At present, the interconnection is scheduled to begin operating within 2020.

The schedule needs to remain on track in order to prevent electricity insufficiency issues on Crete. Certain older high-cost fuel and mazut-fired power stations on the island will need to cease operating by 2020 to comply with new EU emission regulations.

As for Crete’s bigger, stage two interconnection with the mainland, IPTO chief executive Manos Manousakis, speaking at an IENE (Institute of Energy for Southeast Europe) conference yesterday, noted it could be developed sooner that 2023, as is currently scheduled, if associated with the Euroasia Interconnector, an ambitious project to link the Greek, Cypriot and Israeli grids.

 

RAE pushing for more specific interconnection project targets

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IPTO, the country’s power grid operator, is facing RAE (Regulatory Authority for Energy) pressure to establish more specific targets for the development of submarine island interconnection projects, especially those concerning Crete and the Cyclades, which are included in the operator’s ten-year plan (2018-2027), sources have informed.

RAE wants realistic target dates to be set, which, if missed, would lead to penalties, unless the delays are justified by certain circumstances, such as legal proceedings, for example.

The energy authority is increasing the pressure to avoid further delays, a common occurence at IPTO with major projects in the past.

Completion of the interconnection projects would reduce energy generation costs, a benefit that would be rolled over to consumers, currently covering high-cost electricity generation on the non-interconnected islands through Public Service Compensation (YKO) surcharges imposed on electricity bills.

Binding targets for IPTO are expected to come into effect in 2018 and include the Cretan interconnection project, to be developed over two stages (minor and major interconnections) and the Cyclades interconnection (second and third stages).

The new IPTO board, established following SGCC’s (State Grid Corporation of China) recent acquisition of a 24 percent stake, has already accelerated the pace at which the interconnection project is being handled by the operator, according to sources.

Prior to the arrival of IPTO’s Chinese strategic partner, RAE’s leadership often threatened to transfer the island interconnection projects to other companies. These threats are no longer being made.

According to IPTO’s current ten-year development plan, the minor Cretan interconnection (140-180 MW) is expected to link the island, Greece’s largest, with the Peloponnese by 2020, while the major interconnection (700 MW) is planned to link Crete with the wider Athens area by December, 2023. However, the operator has noted that Cretan electricity demand will not be fully integrated into the country’s grid until 2025, a prospect that has raised concerns.

Progress of the minor Cretan interconnection has been hampered as a result of legal action taken by residents of the Lakonia region’s Malea peninsula, where the submarine cable running from Crete is planned to reach the Peloponnese. Local residents are demanding revisions, including an alternate location, and have taken their case to the Council of State, Greece’s Supreme Administrative Court.

 

Crete interconnection local resistance persisting

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An electricity interconnection project planned to link Crete with the Peloponnese via a submarine and overland cable crossing – whose development would greatly reduce the need for local power generation on the island, Greece’s largest, and cut Public Service Compensation (YKO) costs paid by all consumers to support electricity production on the non-interconnected islands – is at a crucial stage and is threatened by delays as a result of persistent residential resistance at the Peloponnese end.

Locals of the Lakonia region’s Malea peninsula, where the submarine cable running from Crete is planned to land, have reacted and are demanding an alternate location.

IPTO, the power grid operator, contends that any change of plan would lead to a two-year project delay. In an effort to appease the ongoing concerns of the Malea area’s residents, the operator intends to develop a longer subterranean section of the cable’s overland stretch on the Peloponnese as well as additional projects. These include finding optimal positions for electricity pylons, as far away as possible from small mountain villages in the wider area. The replacement of large pylons with smaller ones, wherever technically possible, is also being looked at. It remains to be seen whether local communities and authorities will be satisfied by these moves.

An EU decision, already taken, will, as of 2020, lead to stricter emission limits for conventional power stations, meaning that high-cost fuel and mazut-fired local stations on Crete will need to cease operating.

Taking this into account, IPTO plans to have its Cretan link, the first stage of a bigger interconnection, operational by 2020 to prevent electricity supply problems on the island. The interconnection will facilitate electricty supply to Crete from the mainland.

Given the circumstances, the Cretan interconnection faces greater time pressure than equivalent projects in other parts of Greece.

IPTO chief executive Manos Manousakis noted that, despite the project’s urgency, the operator has agreed to enter a new round of consultation with locals in search of alternatives minimizing the project’s length of overland cable crossings.

Manousakis noted that the project plan has already been revised once before to satisfy local concerns. Those changes, he pointed out, led to a decision to install subterranean cable crossings covering 30 percent of the project’s land segment on the Peloponnese side, a change that significantly increased the interconnection’s cost.

Malea area authorities have pointed out that the project’s cable work at the Cretan end is entirely subterannean.

Malea area authorities and residents have already filed a case at the Council of State, Greece’s Supreme Administrative Court. It is feared the legal proceedings could delay the project.

 

 

 

 

ESAI producers group troubled by interconnection delays

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ESAI, the Hellenic Association of Independent Power Producers, locally acronymed HAIPP, remains concerned by power grid operator IPTO’s ten-year plan, despite various improvements, including greater detail, following the association’s intial expression of concern a few months ago.

ESAI is concerned by what it sees as a discoordination issue concerning the wider Athens-Crete electricity system interconnection, a project planned to be finalized by 2023, and the inclusion of Crete’s entire electricty demand into the system in 2025.

The association is also troubled by delays concerning all other interconnection projects to link the Greek islands in the Aegean Sea with the mainland, except for the Paros, Naxos and Mykonos island projects.

The finalization of the interconnection projects concerning these three islands, located relatively closer to the mainland, is expected by 2019.

Retail electricity competition ‘needs production competition’

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The absence of fair competition in the electricity market, at a production level, will also deprive the market of true competition at a retail level, Dinos Benroubi, the chief official at independent electricity supplier Protergia, stressed last night during a roundtable discussion titled the Impact of Fluctuating Oil and Energy Prices on the National Economy, organized by the Greek Energy Forum, an international thinktank.

Benroubi, who noted that annual electricity costs for the country’s household and industrial sectors amount to 6.5 billion euros, also addressed the hefty grid-connection costs faced by Greece’s electricity consumers.

The Protergia official asserted that only half the electricity bill amount paid by consumers concerns production costs. Transmission and distribution costs represent another part of the overall cost, while about a third concerns other surcharges, Benroubi remarked.

The public service compensation (YKO) surcharge added to electricity bills, an amount paid by mainlanders in order to equate electricity costs for the country’s islanders, as Benroubi explained, needs to be resolved through the interconnection of the Greek islands with the mainland, he highlighted.

Though the benefits promised by this interconnection would cover its investment cost in no more than three years, development of its two sub-projects, concerning the Cyclades and Crete, is being severely delayed, Benroubi noted.

The Protergia head also stressed that Greece needs to focus on pursuing EU goals concerning decarbonization, RES targets, energy efficiency, energy storage and a trend towards presuming [electricity production by electricity consumers through PV generation, etc]. Instead, Benroubi added, the focus is on maintaining a state-controlled monopoly holding an 87 percent share of the retail electricity market and battling to regain lost ground, Benroubi added, referring to the main power utility PPC.