Cyprus

Greek-Cypriot-Israeli grid link progressing, delays inevitable

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A prospective electrical grid interconnection planned to link Greece, Cyprus and Israel is making progress but delays seem inevitable, it has been determined following talks in Cyprus between Greek and Cypriot officials.

Greek power grid operator IPTO’s chairman and CEO Manos Manousakis and his deputy Giannis Margaris have just held constructive talks with Cypriot officials on the project.

The IPTO officials informed officials of the Cypriot government and the country’s transmission system operator that they have already commissioned a new cost-benefit study, a prerequisite for the Cypriot government ahead of its decision on whether to participate in this project.

Also, IPTO has forwarded, to the Greek and Cypriot regulatory authorities, an agreement it has signed with Cypriot company Euroasia, the project’s previous promoter, to succeed it at the project’s helm, according to sources at the Greek power grid operator.

This action paves the way for IPTO to be officially declared project promoter of the grid interconnection. However, the Greek and Cypriot regulatory authorities still need to recognize this transfer of project control from Euroasia to IPTO.

Meanwhile, IPTO has already formed a special purpose vehicle (SPV) named Great Sea Interconnector as a subsidiary to be assigned rights and responsibilities concerning the project’s development.

IPTO has repeatedly made note of the need for swifter action, both by the Cypriot government in its decision on whether to participate in the project, and by the regulators for their recognition of the project’s transfer of control. The European Commission has also demanded swifter progress from all parties involved – regulators, operators and governments.

Crucially, Israel has warmed to the prospect of co-developing the project’s second segment that would link the Cypriot and Israeli electrical grids and complete the interconnection, maximizing the benefits to be derived from it.

IPTO lists updated completion dates for grid links in 10-yr plan

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Power grid operator IPTO has revised its time frames for the completion of a series of international grid interconnections, as well that of a project to connect Crete and Athens, in a draft of its new ten-year development plan covering 2025 to 2034, forwarded for public consultation yesterday.

Revisions included in the plan’s draft include the addition of a further two years for the delivery of a second Greek-Turkish electrical grid interconnection, previously set for completion in 2029 but now pushed out to 2031.

The completion target for a second Greek-Albanian grid interconnection was changed to 2031 from 2030.

Delivery of an additional Greek-Italian grid interconnection has been set for 2031. IPTO’s previous development plan did not include a completion date for this project, which indicates significant progress was achieved during the intermediate period.

A project to interconnect the Greek, Cypriot and Israeli grids has been set a 2029 completion date for its Greece-Cyprus segment, an 898-km stretch, from 2027 in the previous plan. IPTO was placed at the helm of this project only last year.

All required studies have been completed for this project’s Greece-Cyprus segment with 657 million euros in support funds provided by the Connecting Europe Facility.

The completion date for an upgrade of the Greece-North Macedonia grid interconnection has remained unchanged at 2030.

The IPTO development plan’s international section also includes two new projects, a Greek-German grid link dubbed the Green Aegean Interconnector, and a Greek-Saudi Arabian grid link named the Saudi Greek Interconnector.

Great Sea Interconnector drawing US, UAE fund interest

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Latest developments concerning the prospective Great Sea Interconnector, a 1.9 billion-euro project planned to link the power grids of Greece, Cyprus and Israel, indicate that investment interest is growing.

Officials of Greek power grid operator IPTO, promoting the project through an SPV, are expected to hold talks in Nicosia today with representatives of Abu Dhabi-based fund TAQA, one of the key players examining the prospect of becoming a stakeholder in the Great Sea Interconnector.

This UAE fund has been conducting due diligence for months. Today’s meeting between IPTO and TAQA officials in Cyprus suggests TAQA is seriously considering to join the Great Sea Interconnector consortium.

In addition, IPTO is preparing to forward the consortium’s terms to Israeli fund Aluma. The two sides had signed a Memorandum of Understanding last year in view of this fund’s entry into the project.

Without a doubt, growing interest for involvement in the Great Sea Interconnector expressed by US state fund Development Finance Corporation ranks as standout news.

Following up on talks with Greek deputy energy minister Alexandra Sdoukou in Washington last December, DFC’s leadership is believed to have expressed interest to participate in the project by either becoming a stakeholder with a 50 million-euro sum or by contributing to its financing.

Though DFC has not yet gone into details, US state participation in the project would align with American energy security interests in the eastern Mediterranean region and also boost the project’s geopolitical standing.

IPTO, Nexans discuss Crete-Cyprus grid link details

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An electrical grid interconnection to link the Cretan and Cypriot systems, work on which began last month, was essentially officially launched yesterday at a meeting in Athens between Greek power grid operator IPTO’s leadership and top officials of French multinational cable and optical fiber industry Nexans.

During the session – the first major meeting between IPTO’s leadership and Nexans’ chief operating officer Mathias Bruneau, who led a ten-member team – the cooperation’s principles, as well as project fundamentals, including when deep-sea surveys would commence, the interconnection’s routing and schedule, were all discussed in detail.

Installation of the project’s cable is planned to begin in 2026 and be completed in 2029. The Crete-Cyprus grid interconnection, a project budgeted at 1.2 billion euros, will cover a distance of 898 kilometers.

Just days ago, IPTO, the Greek power grid operator, reached an agreement with its Israeli counterpart to assemble technical teams for a cost-benefit analysis concerning the project’s next stage, to link the Cypriot and Israeli electrical grids.

Energy regulators of both countries will rely on the results of the CBA to divide costs that will be recovered through regulated revenues.

The wider project’s two sections, dubbed the Great Sea Interconnector, planned to link the Greek, Cypriot and Israeli electrical grids, will cover a total distance of 1,208 kilometers and is budgeted at 2.4 billion euros.

 

Activity abounding for €1.9bn Great Sea Interconnector

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Greek power grid operator IPTO, project promoter of the Great Sea Interconnector, a 1.9 billion-euro project planned to link the power grids of Greece, Cyprus and Israel, is engaged in talks with the European Investment Bank for a loan of approximately 500 million euros.

IPTO plans to soon stage a teleconference with EIB in order to provide additional information supporting this project as an optimal solution for Cyprus’ energy sufficiency in an effort to remove feasibility reservations expressed by the bank in the past.

Also, IPTO’s chief executive Manos Manousakis and associates have scheduled a series of meetings in Nicosia tomorrow, including with Cyprus’ finance minister Makis Keravnos, for the Cypriot state’s entry into the GSI project with an equity amount of up to 100 million euros. These meetings will be the latest of regular meetings agreed to with Cyprus for talks on the project’s progress.

Besides Israel fund Aluma and Abu Dhabi-based fund TAQA, other investors, both from the wider region as well as the USA, are believed to be interested in becoming project stakeholders.

In addition to the 500 million-euro loan for the GSI being discussed with EIB, a further 500 million euros in loans is expected to be extended by Greek banks, currently in talks with IPTO, while 657 million euros in EU funding is also anticipated.

Adding to the overall activity concerning the GSI’s development, a team of leading officials from Norwegian company Nexans is scheduled to visit Athens on March 13 for talks with IPTO’s leadership. Nexans has begun manufacturing work for the project’s cable.

US state fund DFC’s Great Sea Interconnector entry a catalyst

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The apparent interest of US state fund DFC becoming a stakeholder in the Great Sea Interconnector, planned to link the power grids of Greece, Cyprus and Israel, would serve as a catalyst for the project as such a development would not only offer an additional funding source to the 1.9 billion-euro project but also boost its geopolitical clout as a result of the US state’s participation.

DFC, the Development Finance Corporation, only supports and promotes projects around the world that are in line with US interests, its recent funding to Onex for the acquisition of the Elefsina Shipyards, west of Athens, being an example.

Planned to stretch 1,200 km and offer 2-GW power transmission capacity, the Great Sea Interconnector, the most mature of interconnection projects envisaged between Europe and the Middle East, certainly meets the regional interests of the US.

This project promises to greatly contribute to energy supply security in the eastern Mediterranean, diversification of supply sources and, above all, development of infrastructure capable of connecting different continents.

DFC, it is being reported, could enter the Great Sea Interconnector as a 10 percent stakeholder. If the American state fund does become part of the project, it would join Greek power grid operator IPTO, the project promoter through its special purpose vehicle; the Cypriot State; Israel fund Aluma; and Abu Dhabi-based fund TAQA.

 

Further step taken for Greek-Saudi grid link, routing an issue

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Greek power grid operator IPTO and the National Grid Saudi Electricity Company have taken a further step for the development of an electrical interconnection linking Greece with Saudi Arabia by establishing a special purpose company.

The Greek-Saudi project, to stretch over 2,000 km, is planned to serve as a segment of a bigger corridor for transportation of renewable energy from the Middle East and Africa to central Europe.

As a next step, Saudi Arabian Greek Electrical Interconnection, the special purpose company just established by IPTO and National Grid, is expected to conduct environmental, technical and feasibility studies for a High Voltage Direct Current (HVDC) interconnection. However, a series of Greek and Saudi Arabian ministerial approvals are still needed.

The two sides had reached a preliminary agreement in Athens last autumn, following a visit to Greece in the summer of 2022 by Crown Prince Mohammed bin Salman Al Saud, Crown Prince of Saudi Arabia, for talks with Prime Minister Kyriakos Mitsotakis.

The formation of a special purpose company indicates that both sides are eager to push ahead with a Greek-Saudi electrical interconnection, despite fears that the Israel-Gaza war could lead to delays and revisions.

The Greek-Saudi interconnection’s eventual route, a crucial factor in the outcome of the project’s feasibility study, stands as a major challenge and will greatly depend on the condition of bilateral ties between Saudi Arabia and Israel.

Though this relationship appeared to be improving, the Hamas attack on Israel on October 7 and its resulting Israel-Gaza war has impacted ties between Saudi Arabia and Israel.

If current conditions do not change, Saudi Arabia, a Sunni Islam kingdom, will choose a longer route for the project that bypasses Israel and instead runs through Egypt’s Suez Canal to Greece. Should Saudi-Israeli ties improve, the Greek-Saudi interconnection will take a route running from Saudi Arabia to Jordan, Israel and on to Greece, possibly via Cyprus.

ENTSO-E: Greece key for harnessing offshore wind potential in southeast Europe

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ENTSO-E, the European Network of Transmission System Operators for Electricity, has, amongst other matters, underlined Greece’s importance in the exploitation of offshore wind potential in the Eastern Mediterranean region in its Offshore Wind Farm Interconnection Infrastructure Development Plan for the Eastern Mediterranean.

ENTSO-E held a meeting in Brussels earlier this week, where the development plan was presented. Greek power grid operator IPTO took part.

Italy is the region’s only country to have developed offshore wind farm projects thus far, but ambitious targets, given the current situation, for 2040 and 2050 will be achieved with countries such as Italy and Greece at the forefront, ENTSO-E noted.

The Eastern Mediterranean region’s South and East Offshore Grids will require energy transmission infrastructure totaling 8.7, 19.2 and 28.3 GW in 2030, 2040 and 2050, respectively, ENTSO-E has estimated, adding that investments needed by 2050 could reach 15 billion euros.

Environmental studies ahead of offshore wind farm projects may face fewer challenges and problems than corresponding onshore projects, ENTSO-E pointed out.

The Eastern Mediterranean region possesses strong wind potential and new offshore wind farms can help the electricity sector meet 2050 targets and become a zero-emission industry both in this region and the EU as a whole, ENTSO-E supported.

The development plan for offshore wind farms in the Eastern Mediterranean and Black Sea regions includes Greece, Bulgaria, Croatia, Cyprus, Italy, Romania and Slovenia.

Greece, Cyprus, Croatia, Italy and Romania have all set official offshore wind farm development targets, while Bulgaria and Slovenia have yet to do so.

Cretan grid set for revamp to enable 2 GW in RES projects

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The imminent completion of an electrical grid interconnection to link Crete with Athens, a prospect now just months away, will pave the way for a full transformation of Crete’s network through upgrades of existing cables and development of new lines which, once ready, will enable the island’s grid to host just over 2 GW in renewable energy projects.

Power grid operator IPTO’s deputy chief Giannis Margaris discussed project details on Cretan TV during a visit to the island to oversee work on the grid interconnection with Athens.

The choice of the Damasta area, located in the island’s mid-north, as the finishing point of the Athens-Crete cable, is strategically positioned to facilitate power distribution to the rest of the island, the IPTO deputy noted during the interview.

IPTO’s planning takes into account Crete’s grid interconnection with the Peloponnese and – its extension to – Athens; a plan to link the Greek electrical grid, from Crete, with those of Cyprus and Israel; development of new RES units on Crete; as well as the energy security factor, or the ability to reverse energy flow should any emergency arise due to technical issues.

IPTO’s ten-year development plan covering 2024 to 2033, which has been submitted to RAAEY, the Regulatory Authority for Waste, Energy and Water, for approval, includes projects designed to reinforce the Cretan grid.

These are budgeted at 12.9 million euros, until 2024, and 12.79 million euros, until 2025, with a completion target set for 2027.

Vertical Corridor meeting to gather project participants

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Pivotal European energy infrastructure projects such as a vertical gas corridor, crucial for decoupling the region from Russian gas, an initiative which Ukraine and Moldova will officially join; a Greek-Cypriot-Israeli electrical grid interconnection; as well as hydrogen-related plans, will all be tabled for discussion at a meeting in Athens today between the energy ministers of southeast Europe.

Participants at the CESEC (Central and South Eastern Europe Energy Connectivity) meeting will be focusing on the most mature cross-border and trans-European gas and electricity projects that promise to enhance southeast Europe’s energy autonomy and upgrade its geopolitical importance.

Important remaining priorities concerning the vertical corridor include completion of its  Bulgaria-Romania pipeline segment; and to officially bring Ukraine and Moldova into the project’s picture. As part of the process, Greek gas grid operator DESFA is today expected to sign an MoU will all TSOs involved.

The vertical corridor includes a 182-km Greek-Bulgarian pipeline, the Bulgarian-Romanian section, and its interconnection with the network on the border with Ukraine and Moldova.

This corridor, combined with the imminent launch of the 5.5-bcm capacity Alexandroupoli FSRU, in Greece’s northeast, is expected to accelerate Europe’s effort to decouple the continent’s southeast from Russian energy dependence.

 

Ariadne Interconnection launch expected in summer of 2025

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Ariadne Interconnection, a 1.1 billion-euro project to link the power grids of Crete and Athens, whose installation has reached the final mile, is expected to be completed by mid-2024, and should be electrified in 2024, enabling its commercial launch in the summer of 2025, Manos Manousakis, CEO at Greek power grid operator IPTO, developing the project,  has informed.

Once Ariadne Interconnection is operating, Crete, Greece’s largest island with a population of roughly 650,000, will be supplied its electricity from the mainland system rather than costly power plants now operating on the island.

The interconnection promises to reduce a public service compensation surcharge included in electricity bills by some 600 million euros annually, 400 million euros of which concern Crete.

Some of the island’s existing power plants are planned to be maintained to provide roughly 400 MW as back up. They include power utility PPC’s main power plant on Crete, at Linoperamata, west of Heraklion.

The Ariadne Interconnection project’s main building facilities on Crete, an AC-to-DC conversion hall, and the control building, are now close to being completed. Manousakis, IPTO’s CEO, will be visiting the facilities today. Corresponding facilities at the project’s Athenian end are also progressing.

The project’s completed smaller segment, running from Crete to the Peloponnese, has already benefited the island since its launch ahead of the summer of 2021, Crete’s first summer without power outages, Crete’s regional governor Stavros Arnaoutakis noted during a meeting with the IPTO chief yesterday.

The Great Sea Interconnector, a project to link the Cretan, Cypriot and Israeli grids,  estimated to be completed around 2029, promises to establish Crete as an energy hub, Arnaoutakis added.

IPTO’s role in accelerating green transition, transforming Greece into green energy exporter

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By Manos Manousakis*

2023, which is drawing to a close, has affirmed a familiar truth: the impact of climate change requires the formulation, adoption, and implementation of policies addressing recurrent extreme phenomena, including temperature rise, desertification, water scarcity, and environmental pollution. We owe it to the future generations το slow down and ultimately reverse climate deregulation, making the green energy transition, contingent on the strengthening and expansion of electricity grids, an absolute priority.

To grasp the enormity of the challenges posed by the climate crisis and its ensuing phenomena, consider that in the summer of 2023, the Electricity Transmission System grappled with successive or simultaneous fires in Attica (Kouvaras, Dervenochoria), Corinthia (Loutraki), and Thrace.

During these natural disasters, a total of 1,400 switch operations were documented, with flames literally reaching beneath the Transmission Lines. Despite this, the system remained resilient, and the supply of electricity to the distribution network was uninterrupted.

Due to the climate crisis, we also faced unprecedented floods in Thessaly triggered by storms Daniel and Elias. These events led to the collapse of two pylons (400 and 150 kV). Again, the system demonstrated resilience and IPTO promptly restored the damages. However, we recognize that sustaining the reliable operation of the networks necessitates more investments and actions. This commitment is reflected not only in the EUR 200 million Asset Modernisation Programme which we are currently implementing and is due to be completed by 2026, but also in the flood protection measures for our substations and the integration of innovative technologies for the monitoring and maintenance of critical equipment.

However, the energy transition demands not only bolstering the resilience of networks but also expanding them. This reality has been acknowledged by the incoming Belgian EU Presidency, which has listed the increase of investments in the grids among its main priorities. This follows the Action Plan recently unveiled by the European Commission, which recognizes that grids are the “missing link” of the transition. The Plan delineates specific actions and incentives to secure the estimated €600 billion investment required by the end of the decade to achieve the EU’s climate targets.

To meet the ambitious European and international targets, it is imperative to invest in both national networks and cross-border and trans-continental electricity interconnections. These investments will facilitate the optimal utilization of green energy across diverse geographical areas and climate zones.

The role of IPTO

In this regard, IPTO has a pivotal role to play, as it spearheads projects contributing not only to the increased integration of Renewable Energy Sources (RES) in the country’s energy mix, now nearing 50%, but also advancing a key objective of the national energy strategy: transforming Greece into a green energy exporter to Central Europe. This will be achieved through the implementation of cross -border interconnections designed to export surplus electricity generated within the country. Notably, this initiative aligns with the plan to develop 2 GW of Offshore Wind Farms by the end of the decade, capitalizing on the substantial and continuous interest in renewable energy investment that surpasses domestic demand.

At the heart of this plan is the Greece-Cyprus-Israel interconnection, with IPTO having recently assumed the role of the project promoter through its special purpose vehicle, the Great Sea Interconnector.

Notably, during COP28, IPTO signed a Memorandum of Understanding (MoU) with the Ministry of Energy, Trade, and Industry of Cyprus and the Abu Dhabi -based fund TAQA for their potential participation in the project. We have also signed a preliminary agreement with Israeli fund Aluma. Furthermore, funds from the USA and other countries have expressed interest in the project.

These developments are tangible proof for the investor interest after IPTO assumed the role of project promoter of the Great Sea Interconnector. Given its proven expertise and robust financial profile, IPTO is well positioned to execute this highly demanding project efficiently. Construction is slated to commence in 2024.

Given our emphasis on export interconnections, we are maturing a second High Voltage Direct Current (HVDC) interconnection with Italy with a capacity of 1000 MW, which triple the electricity transmission capacity between the two countries. Additionally, the recently completed second interconnection with Bulgaria and the planned second interconnection with Albania align with this overarching strategy.

Simultaneously, we are exploring the feasibility of establishing a direct electricity corridor with Central Europe. South Germany stands out as the ideal endpoint for this corridor, due to its robust electricity system and significant demand for green energy.

The Green Aegean Interconnector, as the Greece-South Germany corridor is called, has significant synergies with the Greece-Egypt interconnection (project GREGY, implemented by Elica of the Copelouzos Group), in which we are actively engaged. Furthermore, it aligns with a visionary project, whose planning we have recently initiated: the electrical interconnection with Saudi Arabia, referred to as the Saudi Greek Interconnection. To facilitate this endeavor, we are in the process of establishing a special purpose company jointly with the Saudi Transmission System Operator, National Grid, who expressed its keen interest in the project during the recent Arab-Hellenic Chamber’s Economic Forum held in Athens.

These projects play a crucial role in promoting not only Europe’s energy transition but also its energy independence from Russia and the exploration of new energy suppliers—a key objective of REPower EU.

As we enter 2024, it becomes imperative to expedite the transition to the clean energy era. It is essential to underscore that the journey of the green transition may pose challenges, yet it is a one-way street, a path that cannot and should not be reversed.

*Mr. Manos Manousakis is the Chairman and CEO of Independent Power Transmission Operator (IPTO).

 

March deadline for 20% stake in Ariadne Interconnection

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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.

Great Sea Interconnector development to begin in 2024

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Preliminary work on the Greece-Cyprus-Israel electricity interconnection, whose Cyprus-Israel segment has been named the Great Sea Interconnector, is planned to commence in 2024.

Development of a segment stretching from Crete to Cyprus is soon expected to get underway, while the development prospects of the project’s section from Cyprus to Israel are approaching readiness.

Also, as noted by Greek power grid operator IPTO’s chief executive Manos Manousakis in recent comments to Cypriot media, the Greek power grid operator plans to sign an agreement with Siemens late in 2024 for the construction of two converter stations required by the Cypriot and Cretan grids as part of the project’s development.

IPTO and Siemens have already signed an agreement concerning preliminary studies for these converter stations, Manousakis informed.

The IPTO chief, responding to a journalist’s question, informed that, based on the company’s Crete-Athens grid link experience, the Crete-Cyprus section of the project would require between four and five years to be completed from the date a final investment decision has been taken, essentially meaning a 2029 delivery date is likeliest.

The Cypriot and Israeli regulatory authorities still need to reach an agreement so that the Cyprus-Israel segment of the project can be considered sustainable through secured revenue.

The Cypriot State is expected to enter the Great Sea Interconnector, an IPTO subsidiary, with an initial sum of approximately 100 million euros.

The project is budgeted at 1.9 billion euros, with 657 million euros secured through the Connecting Europe Facility.

Cypriot State’s entry into Great Sea Interconnector assured

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The Cypriot State’s entry into Greek power grid operator IPTO’s Great Sea Interconnector subsidiary formed for the development of a Greece-Cyprus-Israel electricity interconnection is considered certain following positive high-level talks held yesterday in Cyprus.

An IPTO team led by CEO Manos Manousakis discussed the project with Cyprus’ president Nikos Christodoulides, joined by administration’s energy minister Giorgos Papanastasiou. The IPTO team also met with Cyprus’ regulatory authority for energy.

It is now considered just a matter of time before the finalized results of a feasibility study conducted on behalf of the Cypriot State are delivered. The study is expected to give the green light for a final investment decision.

The Cypriot State is expected to enter the Great Sea Interconnector subsidiary with an initial sum of 100 million euros from the Recovery and Resilience Facility (RRF).

IPTO is also expected to hold talks with two other prospective Great Sea Interconnector entrants, Israeli fund Aluma, and TAQA, the Abu Dhabi National Energy Company, for their participation in the project, budgeted at 1.9 billion euros, with 657 million euros secured through the Connecting Europe Facility.

The consortium could feature the three aforementioned participants along with IPTO, but it is still too early to tell if this could result in respective 25 percent stakes for all four.

Greece-Cyprus-Israel power grid link nearing development

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The Greece-Cyprus-Israel electricity interconnection, now named the Great Sea Interconnector, is nearing development, its prospects driven by new investors and, above all, increased funding.

The project’s next big steps will develop along three fronts. Firstly, Norwegian company Nexans will install the cable section of the Crete-Cyprus interconnection, which, according to Manos Manousakis, CEO of Greek power grid operator IPTO, is imminent.

Secondly, the Greek operator will hold discussions with three prospective investors, namely the Cypriot State, Israeli fund Aluma, and TAQA, the Abu Dhabi National Energy Company, for their participation in the project.

Thirdly, funding details needs to be shaped. These details remain unclear at this stage as the project’s shareholders, and their stakes, have yet to be finalized.

The consortium could feature the three aforementioned candidates, along with IPTO, but it is still too early to tell if this could result in respective 25 percent stakes for all four.

A 657 million-euro sum from the project’s 1.9 billion euro has been secured through the Connecting Europe Facility. The remaining 1.3 billion euros will be raised through bank loans, both through the EIB and commercial banks, as is customary for this type of project.

Nexans is expected to begin installing the project’s cable for the Crete-Cyprus section as soon as a deposit is provided by CINEA, the European Climate, Infrastructure and Environment Executive Agency, managing decarbonization and sustainable growth.

EastMed boosted by ENI discovery, Cypriot leader’s comments

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Italian multinational energy company Eni’s discoveries at block 6 of the Cypriot EEZ and favorable comments by Cypriot President Nikos Christodoulides have come as a boost for the development prospects of the natural gas pipeline EastMed, planned to transport natural gas from fields in the eastern Mediterranean to Italy and central Europe via Cyprus and Greece.

The Cypriot president, in comments made just days ago, linked Eni’s recent findings at block 6 of the Cypriot EEZ with the revival of the pipeline.

According to sources, ENI, which has rights to seven of ten licensed blocks at the Cypriot EEZ, estimates that it will be able to shape a development plan for the field and proceed with its exploitation early in 2024, once drilling confirming the discovery is conducted, most probably in January.

If the plan is confirmed, the block will be the first to be developed in the Cypriot EEZ since 2011, when Aphrodite was discovered, followed by four more discoveries.

In an interview last Thursday with Italian newspaper La Repubblica, the Cypriot president, citing ENI’s discovery, noted that EastMed “has always been one of the strategic options for the implementation of an energy corridor linking the Eastern Mediterranean with Europe, facilitating the export of energy resources through Italy”.

 

Greece, Cyprus, Israel grid link attracting wider interest

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The Cypriot State, Israeli fund Aluma, as well as investors from Saudi Arabia and the United Arab Emirates are among a growing list of parties showing interest to secure stakes in a power grid interconnection project plan to link the Greek, Cypriot and Israeli systems.

Players from both Saudi Arabia and UAE view this grid interconnection project as a European gateway for their green-energy production, and also envisage it becoming part of a bigger network of such projects in the region.

Athens and Riyadh warmed their bilateral ties in September, agreeing on a Saudi-Greek Interconnection and establishing a joint venture, an uncommon practice for the Saudis.

The involvement of such players in the Greek-Cypriot-Israeli grid interconnection promises to increase its geopolitical weight and help secure the required capital. The budget for the project, which has been upgraded, has now increased to an estimated 1.9 billion euros.

UAE plans to invest up to 54 billion dollars in RES projects over the next few years with the aim of achieving zero carbon emissions by 2050.

UAE involvement in the Greek-Cypriot-Israeli grid interconnection could tie in with the country’s broader plan for a green export corridor to Europe.

IPTO considering fiber optics for EuroAsia Interconnector

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Grid Telecom, a subsidiary of Greek power grid operator IPTO, is considering to attach a fiber-optic cable system onto EuroAsia Interconnector, a prospective grid link to connect the Greek island Crete, Cyprus and Israel, in order to meet rapidly growing demand in the wider region for online services.

Investments in data centers, storing ever-increasing information via the internet, require fiber-optic cables. IPTO has identified a key opportunity in the region, given the solid basis of its relations with the Israeli side.

Grid Telecom is considering taking on the project, whose budget is expected to reach tens of millions of euros, with two partners, one of which is Tamares Telecom, a fiber-optic network operator and subsidiary of the Israeli fund Aluma.

The project is planned to serve the needs of EuroAsia Interconnector as well as those of other customers.

Interest in the Greece-Cyprus-Israel interconnection is extremely strong. Aluma is awaiting the results of a due diligence procedure before becoming a shareholder in the EuroAsia Interconnector project. The Israeli energy ministry is also very keen on its development. Highlighting the level of interest, the ongoing Israel-Gaza war has not altered project plans.

Just a month ago, Grid Telecom and Tamares Telecom announced that they had completed the initial design for the intercontinental fiber optics linking Greece with Cyprus, Israel and the Arabian Peninsula.

 

Ruptured Israeli-Turkish ties to reshape regional energy map

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The rupture in Israeli-Turkish ties, vanishing any hope of Turkish president Recep Tayyip Erdogan’s unlikely proposal for the transfer of Israeli gas to Europe via a Turkish transit route, threatens to rebalance ties in the wider region and reshape the east Mediterranean’s energy map. Hydrocarbon exploration plans and major projects in the east Mediterranean will be impacted.

As an initial consequence, Erdogan’s open support for Hamas in the Israel-Gaza war ends any hope of Turkish collaboration with Israel on energy interests for a very long time.

Up until the outbreak of the Israel-Gaza war earlier this month, the Turkish president had seized on every opportunity to claim a role for Turkey as a constructive player on the east Mediterranean’s energy map.

Erdogan had proposed a closer energy partnership with Israel during a meeting with Israeli prime minister Benjamin Netanyahu in New York last month, even though such a prospect would have been highly improbable, given Israel’s mistrust of Turkey.

The latest deterioration in Israeli-Turkish ties provides Cyprus and Greece with an opportunity to establish themselves as trusted transit partners for transportation of Israeli natural gas to Europe.

Turkey could now reemerge as an aggressive player in the region, which could prompt Ankara to engage in illegal hydrocarbon exploration and drilling at undefined areas, as was the case in 2020, or even obstruct exploration and drilling plans by ExxonMobil consortium off Crete, testing Greek-Turkish ties.

Latest events prompt energy market turmoil ahead of winter

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Last weekend’s outbreak of the Israel-Gaza war, undermining any attempt at peace in the Middle East and the process of normalizing Israel’s relations with the Arab countries, and, in addition, the suspected sabotage of the Baltic-connector gas pipeline, used by Finland and Estonia for access to an underground gas storage facility in Latvia, are two developments that have come at the worst possible time for European energy security and cost concerns, right before winter and following an EU decision to end energy crisis-related support measures for consumers all over Europe.

The two developments would have impacted energy markets any time of year, but their pre-winter emergence makes them even more critical. This is the time of year when demand for natural gas and oil increases in Europe, along with prices. In Greece, the heating oil trading season is set to begin October 13.

Markets around the continent have not been appeased by the fact that European storage facilities are 95 percent full, but instead, are being driven higher by the unease brought about by the latest events.

Besides the Israel-Gaza war, the Baltic-connector pipeline has just been shut down after a sudden drop in pressure, raising fears of Russian sabotage as retribution for Finland joining Nato in April this year.

The damage to this infrastructure has revived concerns about energy security following the Nord Stream pipeline blasts last year.

According to macroeconomic research consultancy Capital Economics, the combination of events could raise oil prices to levels well above 100 dollars a barrel for some time.

Wholesale natural gas prices rose 12.3 percent in a day, to just under 50 euros per MWh at the Dutch TTF hub.

The Greek government may need to reconsider its decision to end energy subsidies for all consumers. Supply companies may need to hedge prices and factor in the new risk factors. Also, refineries and gas importers may need to secure loads before prices escalate.

With Israel preparing for a ground attack on Gaza, it has become clear that decisions such as the choice of route for Israeli gas exports to Europe; promotion of Israel’s energy cooperation with Greece and Cyprus; and the development of projects such as the Israel-Cyprus-Greece electricity grid interconnection, are, for the time being, not a top priority.

 

Major east Mediterranean projects brought to a standstill

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The Brent crude price began trading today 5 percent up, over 88 dollars a barrel, as markets have not ruled out stricter US sanctions by the US against Iran, which supports Hamas, responsible for the weekend’s shock attack on Israel.

European and US markets are also expected to rise today, reflecting anxiety over an escalated conflict that would be brought about by an Israeli ground military operation in Gaza and the involvement of the powerful Hezbollah from the Israel’s north, with the support of Iran and Syria.

Should the US impose stricter sanctions on Iran, global oil supply would be reduced, creating an opportunity for Russia to increase its share, analysts have noted.

Washington, since late 2022, has turned a blind eye to an increase in Iranian exports circumventing US sanctions, on the basis of an informal détente with Tehran, analysts have reminded. The US has pursued such a course knowing it would hurt Russia.

Israel’s energy-related interests in the eastern Mediterranean, including talks with Cyprus and other regional players for gas exports to Europe, will now be put on hold following the Hamas attack on Israel.

Earlier today, Israel’s energy ministry ordered US oil giant Chevron to halt operations at the Tamar gas field, off the coast of Israel. The company stated it is complying with the ministry’s request.

The development of a Cypriot LNG terminal, planned to receive Israeli pipeline gas, and, even more crucially, a recent push by Israeli Prime Minister Benjamin Netanyahu for decisions promoting exports from east Mediterranean fields within the next three to six months, are now being brought to a standstill.

As for the role of Turkey, statements made yesterday by President Recep Tayyip Erdogan, who called for restraint from both sides without condemning the Hamas attack on Israel and spoke again of a Palestinian state with Jerusalem as its capital, probably reinforce Israel’s reservations against Turkey.

At a recent meeting in New York, Netanyahu and Erdogan agreed to schedule an exchange of visits aimed at restoring relations between the two countries. Erdogan, at that meeting, had proposed the transportation of Israeli gas to Europe via a subsea pipeline running alongside the Turkish coast.

Operations by Greece’s Energean Oil & Gas, listed on the London Stock Exchange, at licenses within the Israeli EEZ have not been disrupted by the conflict, company officials informed, noting the Energean Power FPSO and all other company facilities are not situated close to the battle zone.

 

 

IPTO seeks Green Aegean grid link’s entry into ENTSO-E plan

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Greek power grid operator IPTO intends, within the next few days, to submit a Green Aegean grid interconnection plan, envisaged to run from Greece to Germany’s south, to the ten-year development plan of ENTSO-E, promoting closer cooperation across Europe’s TSOs to support the implementation of EU energy policy and achieve Europe’s energy and climate policy objectives.

The project’s inclusion in the development plan of ENTSO-E, representing operators from all of the EU’s 27 member states, would represent a significant first step towards PCI/PMI status for the project, securing EU funding, as planned by IPTO.

The Green Aegean grid interconnection project is seen as vital for channeling, further north in Europe, huge quantities of green energy that are expected to enter Greece in the coming years from the Middle East and Asia through projects such as the Saudi Greek Interconnection. The project would also allow Greece to export some of its excess domestically-produced energy.

Greek and Saudi delegations met yesterday to establish a 50-50 joint venture for the Saudi-Greek Interconnection, with IPTO and Saudi Arabia’s National Grid as shareholders.

The Greek-German Green Aegean grid interconnection; the Saudi-Greek interconnection; along with Euroasia Interconnector, planned to connect the Greek, Cypriot and Israeli grids; as well as the Greek-Egyptian GREGY grid link, all represent parts of a green-energy intercontinental axis running several thousands of kilometers and involving many individual interconnections and special purpose companies. All these initiatives share one common goal, to transport, via Greece, renewable energy from Asia and the Middle East to green energy-hungry markets of Europe’s north.

 

IPTO in advanced talks for EuroAsia Interconnector helm

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Power grid operator IPTO appears set to assume the role of project promoter at EuroAsia Interconnector, the Cyprus-headquartered consortium established to develop a grid interconnection project linking the Greek, Cypriot and Israeli electricity networks.

Questions have recently abounded about the consortium’s financial and technical ability to develop such a complex project.

Negotiations between IPTO and EuroAsia Interconnector, headed by Cypriot CEO Nasos Ktorides, have reached an advanced stage, sources informed.

IPTO, which recently acquired a 25 percent stake in the EuroAsia Interconnector, has submitted an offer that would give the Greek operator majority control of the consortium. The offer, sources informed, has been accepted, but still requires the European Commission’s approval.

Though the consortium has achieved noteworthy progress by securing, among other things, 657 million euros in funding from the Connecting Europe Facility and establishing an agreement for the project’s cable with Norwegian company Nexans, the overall endeavor has now reached a critical pre-construction stage, leading to greater needs, especially financial, which the Cypriot company appears to have found challenging.

IPTO’s assumption of the project promoter’s role at EuroAsia Interconnector is seen, by all parties involved, as the best solution for the smooth implementation of the project, as the Greek operator possesses the necessary financial strength, technical capacity and expertise to develop an HVDC interconnector of such magnitude and technical complexity.

The Cypriot government is taking this interconnection project very seriously, while cooperation between IPTO and the Cypriot energy ministry is excellent at all levels, IPTO officials informed energypress, in response to questions.

EuroAsia Interconnector fears abound after payment failure

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Questions continue to abound on the uncertain future of the beleaguered EuroAsia Interconnector project, aspiring to interconnect the electricity networks of Greece, Cyprus and Israel, after the project consortium leader’s denial of having missed a payment deadline last Friday.

Asked by the Cypriot newspaper Phileleftheros to comment on an energypress report stating that EuroAsia Interconnector, the Cyprus-headquartered consortium promoting the project, failed to meet a September 7 deadline for a 50 million-euro payment to Norwegian company Nexans as a first installment for cable supply, the consortium’s chief executive officer Nasos Ktorides denied the existence of any such deadline.

The CEO claimed EuroAsia Interconnector had no contractual obligation to make a first payment of 50 million euros to Nexans by last Friday for the construction and installation of a 1.4 billion-euro cable running from Crete to Cyprus.

Instead, Ktorides insisted that the EuroAsia Interconnector consortium respects all terms of its agreement with Nexans. The CEO acknowledged the existence of payment deadlines but refused to offer any dates.

As reported by energypress, the agreement between EuroAsia Interconnector and Nexans for a first installment by September 7 may not have been binding, but the consortium’s failure to make the payment does underline its financial issues.

The Cypriot government has kept a growing distance from the EuroAsia Interconnector project ever since the European Commission warned a 657 million-euro CEF sum secured for it would be reexamined if the project’s schedule is not maintained.

EuroAsia Interconnector fails to make first Nexans payment

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The beleaguered EuroAsia Interconnector project, aspiring to interconnect the electricity networks of Greece, Cyprus and Israel, has run into further trouble following its Cyprus-headquartered consortium’s failure to meet yesterday’s deadline for a 50 million-euro payment to Norwegian company Nexans as a first installment for cable supply.

This deadline was widely viewed as a crash test for the credibility of the consortium, spearheaded by Cypriot entrepreneur Nasos Ktorides, its chief executive officer.

The payment failure has given rise to various scenarios concerning the project’s future. Without a doubt, the Cypriot government wants this geostrategically important project to go ahead, while the European Commission, which has offered funding support worth 657 million euros, through the Connecting Europe Facility, can be expected to become more actively involved in an attempt to push the project forward.

Given its commitment to the EuroAsia Interconnector project, Greek power grid operator IPTO could also intensify its efforts to keep the grid interconnection project afloat.

IPTO has pledged to contribute 33 percent of the investment if legal due diligence is successfully completed, while an Israeli fund that has expressed interest could provide an equivalent amount. Under such a scenario, IPTO and the Israeli fund would hold 66.66 percent of the EuroAsia Interconnector project’s equity capital.

It remains unclear as to why the EuroAsia Interconnector consortium failed to meet yesterday’s payment deadline, despite having recently received the required 50 million-euro amount from the CEF. According to one resulting scenario, a new consortium could now be sought for the project’s development.

A growing number of Cypriot government officials have been distancing themselves from the Euroasia Interconnector project ever since Brussels’ recent warning that the 657 million-euro CEF sum secured for it would be reexamined if the project’s schedule is not maintained.

Cyprus’ energy minister Giorgos Papanastasiou recently noted the project is still 1.1 billion short of its 1.9 billion-euro budget, which was revised upwards from a previous total of 1.57 billion euros.

Euroasia Interconnector, short of €1.1bn, faces payment test

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The moment of truth is approaching for the promising yet troubled Euroasia Interconnector project, aspiring to interconnect the electricity networks of Greece, Cyprus and Israel but facing challenges in terms of its schedule and funding.

European Commission warnings over the project’s insufficient financing plan have raised concerns among authorities in Cyprus, where the Euroasia Interconnector consortium is headquartered. The consortium faces a September 7 deadline for a 50 million-euro payment to Norwegian company Nexans, for the construction of a cable. Tomorrow’s deadline represents a crash test for the consortium’s credibility.

A growing number of Cypriot government officials have been distancing themselves from the Euroasia Interconnector project since Brussels’ recent warning that EU funds worth 657 million euros secured by the project would be reexamined if the project’s schedule is not maintained.

The project’s challenges have been highlighted by the very statements of Cypriot government ministers and officials. Asked, just days ago, about Euroasia Interconnector, government spokesman Konstantinos Letymbiotis replied that the Cypriot government would first wait for a rating agency’s assessment of the project’s feasibility and geostrategic value before taking any decisions on its involvement.

Also, Cyprus’ energy minister Giorgos Papanastasiou has downplayed the significance of Greek power grid operator IPTO’s recent preliminary agreement with an Israeli fund for the latter’s entry into the equity capital of Euroasia Interconnector with a share of up to 33 percent.

This agreement would contribute roughly 100 million euros to the project, just a fraction of the Euroasia Interconnector’s budget, which has risen sharply to 1.9 billion euros from a previous estimate of 1.57 billion euros, Papanastasiou noted, when asked to comment on IPTO’s agreement with the Israeli fund.

This agreement’s anticipated 100 million euros, along with the Connecting Europe Facility’s 657 million euros, and a further 100 million euros from the Cypriot recovery fund, all totaling 857 million euros, still leaves the project’s required funding short of 1.1 billion euros, Papanastasiou pointed out.

East Med, Turkey on Nicosia’s Trilateral Summit agenda

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Israeli prime minister Benjamin Netanyahu is expected to stress that his country’s strategic alliance with Greece and Cyprus runs deep and will not be affected by Israel’s rapprochement with Turkey during today’s Trilateral Summit in Nicosia, whose agenda will include talks on all major east Mediterranean projects, current and prospective.

In statements made yesterday, Netanyahu noted decisions need to be reached to enable Israeli gas exports to the West, while making clear he will focus on two projects, the East Med gas pipeline and a liquefaction plant in Cyprus, during today’s meeting with Greek prime minister Kyriakos Mitsotakis and Cypriot president Nikos Christodoulides.

The East Med gas pipeline plan has been put on hold as a result of unfavorable developments over the past couple of years, but Greece and Cyprus have never abandoned the project.

Israel’s leader is determined to press ahead with plans facilitating the transportation of Israeli natural gas to European markets. Turkish president Recep Tayyip Erdoğan, meanwhile, considers a Turkish transit route for these Israeli gas exports to be of utmost importance.

The outlook on Turkish-Israeli ties currently remains unclear. Some clarity may be offered when Netanyahu soon visits Ankara. He is likely to make clear to his Turkish counterpart that the improvement in ties between Turkey and Israel, as well as between Greece and Turkey, will not undermine the strategic alliance developed over recent years between Greece, Israel and Cyprus.

External investor interest for Greece-Cyprus-Israel grid link

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A preliminary agreement between Greek power grid operator IPTO and an Israeli fund that would facilitate the fund’s entry into the equity capital of Euroasia Interconnector, the developer of the Greece-Cyprus-Israel grid interconnection, with a share of up to 33 percent, has ignited considerable investment enthusiasm in the project among external investors.

News of this strong investment interest was revealed by Cypriot Minister of Energy, Trade and Industry Giorgos Papanastasiou during a Parliamentary Energy Committee meeting held yesterday for a discussion on the project’s progress.

The parliamentary session took place just hours after IPTO’s preliminary agreement with the Israeli fund had been disclosed.

IPTO has already reached an agreement of its own with Euroasia Interconnector for a stake of at least 25 percent in the consortium, with an option to increase this stake to 33 percent.

Papanastasiou, the Cypriot minister, noted IPTO’s entry into the Euroasia Interconnector consortium serves as a vehicle for the Greek State’s involvement in the project. For the time being, the Cypriot State officially remains absent from the project.

“For us, it is inconceivable that the Republic of Cyprus should not be involved in such a project,” Papanastasiou noted.

Nevertheless, he emphasized that the Cypriot government is diligently assessing the matter. Given the project’s significant expenses, any decisions will be made after a comprehensive evaluation of the project’s technical and financial aspects.

The minister rejected claims suggesting the project would result in significant electricity tariff increases for Cypriot consumers, noting preliminary calculations indicate a cost increase of approximately 0.7 cents per KWh, which is just a fraction of Cyprus’s current retail electricity prices, reaching 35 cents per KWh.

IPTO in deal with Israeli fund for Euroasia Interconnector

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Power grid operator IPTO has reached a preliminary agreement with an Israeli fund facilitating its entry into the equity capital of Euroasia Interconnector, the developer of the Crete-Cyprus grid interconnection, with a share of up to 33 percent, according to confirmed information.

This development seems to have injected new life into the project, which has encountered notable challenges in recent times, namely strict warnings by the European Commission over schedule delays and, even more crucially, the developer’s inability to produce a sound financial plan, an issue that has prompted the Cypriot State to seriously reassess its participation in the project.

Highlighting the urgency of the matter, it should be noted that, on the basis of a contract signed recently by Euroasia Interconnector with Norwegian company Nexans for the construction of a cable for the Crete-Cyprus interconnection, Euroasia Interconnector faces a September 7 deadline for a 50 million-euro payment.

If IPTO’s agreement with the Israeli fund goes ahead, it confirms, on the one hand, Israel’s increased interest in the project, which will potentially interconnect the Greek, Cypriot and Israeli power grids, and, on the other hand, it should provide a solution to the existing financial gap that has generated doubts over the project.

IPTO and the Israeli fund’s equity participation in Euroasia Interconnector promises sufficient equity capital for the project, which in turn could facilitate project borrowing from the European Investment Bank, while also formulating a comprehensive financing plan for the project.