Greek, Cyprus interconnections for EuroAsia budgeted at €2.5bn

RAE, the Regulatory Authority for Energy, has set a budget limit of 2.345 billion euros for the Crete-Athens and Cyprus-Crete power grid interconnections, representing a considerable part of the ambitious EuroAsia project planned to link the Greek, Cypriot and Israeli grids.

Greece’s regulatory authority for energy has just published the details of its cross-border cost allocation agreement reached with its Cypriot counterpart, confirming an energypress report published in October.

According to the cross-border agreement signed between the Greek and Cypriot energy authorities, a budget limit of 700 million euros, with 10 percent leeway, has been set for the Crete-Athens interconnection. The budget limit for the Cyprus-Crete interconnection has been set at 1.5 million euros, with a provision for a 5 percent leeway.

The budget limit set for the Cyprus-Crete interconnection presumes EU funding will cover 50 percent of the project’s cost.



Eurasia Interconnector cost-sharing proposal may trouble

Currently examining financial details concerning the Eurasia Interconnector, an ambitious plan whose development would link the Greek, Cypriot and Israeli power grids, the consortium behind the project has proposed that the Greek grid and its users assume 60 percent of the interconnection’s total construction cost.

Studies concerning the project’s development, receiving European Commission support, are making smooth progress but negotiations regarding the share of its cost could turn into an obstructive issue.

At this stage, the Eurasia Interconector project is seen as the most realistic and sustainable proposal made so far to utilize the east Mediterranean’s rich energy reserves and export energy from the region to European energy markets. Cyprus’s energy isolation would also end.

Officials are currently also examining the propect of linking the Eurasia Interconector with other regional projects, the planned Crete-Athens interconnection dominating these thoughts.

An initial estimate of the Eurasia Interconector’s construction cost, at European and national levels, is soon expected. Once provided these figures, officials will need to begin fine-tuning all the cost-related details, including how these will be divided up between all project participants and beneficiaries.

The Eurasia Interconector project’s submarine cable is expected to cover a length of 1,500 kilometers and possess a transmission capacity of 2,000 MW.

It has been classified as a Project of Common Interest (PCI), which facilitates EU funding. The consortium behind the project hopes that approximately half of the project’s budget, estimated to reach 3 billion euros, may be covered through EU funding.



Poor domestic RES prospects forecast for next few years

Major analysts see grim prospects for renewable energy development in Greece, as was highlighted in a recent study delivered by BMI Research, a member of the Fitch Group, which supports the Greek RES sector will not become more attractive for investors over the next few years.

This study forecast that the local sector, excluding hydropower generation, will not achieve an annual growth rate of over one percent in any year up until 2022. This applies for both production and installed capacity.

Subdued electricity demand increases and restrictive government policies, offering limited potential for RES investments, were attributed as key reasons for the negative outlook.

The BMI Research study noted that political support in Greece for RES development has diminished in recent years, causing market instability.

The prospects are relatively better for the wind energy sector as a series of projects have been lined up, the report noted. However, growth potential for the solar power field, the biggest RES sub-sector, is ominous, despite the temporary optimism generated by an auction last December, the BMI Research report noted.

Offering some silver lining, the market analyst’s report noted that improved growth prospects could be achieved if Greece assumes a more significant role as an electricity exporter.

The report highlighted the EuroAsia Interconnector project, whose development is expected to commence this year, as a vital factor. This project stands to link the Greek, Cypriot and Israeli electricity markets. An ensuing electricity demand increase could spur greater RES investments, the report noted.

Greek-Israeli-US naval exercise in area of major energy interest

A trilateral naval exercise between the Greek, Israeli and American navies, dubbed Noble Dina, is planned to begin later this month with nearly a dozen surface ships, submarines and related air assets to engage in joint reconnaissance, counterterror and antisubmarine warfare training.

The exercise will be staged in an area that has produced major hydrocarbon discoveries in recent times and already led to major investments. Two major energy infrastructure projects of Greek interest, the East Med gas pipeline, to link Greece, Israel and Cyprus all the way to the Italian coast, and the Eurasia Interconnector, planned to link the Greek, Cypriot and Israeli power grids, will be developed in a wider area to serve as part of the arena for the upcoming naval exercise.

Cyprus will participate as an observer in the three-way drill, which is staged annually. It begins in Greece and will conclude in mid-April at the Israeli Navy headquarters in Haifa.

“It’s one of our most important exercises that allows us to hone our proficiencies in very complex scenarios,” Commander Assaf Boneh, the head of international cooperation for the Israeli sea service, told Defense News. “We’ll be training in a vast area from Greece to Israel, and this gives us a lot of room to practice multiple scenarios that require jointness.”

Eurasia Interconnector preliminary studies rolling on

The Eurasia Interconector, an ambitious project to link the Greek, Cypriot and Israeli grids, may be a long-term plan but preliminary work is moving ahead. Firms representing all three countries are involved in the project’s development.

A deep sea study is now being completed following data collected by a specialized Italian vessel. This stage is   considered an essential part of the project’s preliminary process so as to examine all possible routes and decide on an optimal path for the submarine cable. Particular emphasis is being placed on sections where the sea depth exceeds 2,000 meters.

The project promises to end Cyprus’s energy-sector isolation and facilitate its energy exports to emerge as a result of major offshore natural gas deposit discoveries made in the region. The natural gas discoveries are expected to boost electricity production on Cyprus.

Once completed, the deep sea study will be followed by the establishment of a techno-economic feasibility study, and, within 2017, a finalized investment decision.

The Eurasia Interconector, which has already been classified as a Project of Common Interest (PCI), enabling EU funding, was given considerable attention during a recent summit meeting held in Cyprus between the leaders of Greece, Cyprus and Israel.

The Eurasia Interconector project’s submarine cable is expected to cover a length of 1,520 kilometers and possess a transmission capacity of 2,000 MW. The project’s budget is estimated at 1.5 billion euros. Eurasia Interconector will be linked to Crete, creating an energy link between Greece, Cyprus and Israel.

PPC, Greece’s main power utility, represented by PPC Quantum, the Cypriot energy firm Quantum Energy, and the Israel Electric Corporation, controlled by the Israeli State with a 99.85 percent share, are involved in the project’s development.