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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.

Talks for Green Aegean link, from Greece to Germany, gain momentum

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A prospective Green Aegean grid interconnection project, planned to run from Greece to Germany’s south, facilitating exports of significant amounts of green energy as part of a wider effort to transport energy from Europe’s south to north, is gaining momentum through ongoing communication between Greek power grid operator IPTO and four German electricity transmission operators. Additionally, the international policy offices of the Greek and German energy ministries are becoming more actively involved in the project.

Though, quite clearly, the green transition stands no chance of succeeding without the development of major international interconnections for exports of colossal green energy quantities from south to north, coordinating such a transboundary project is a highly complex task, as efforts to date have shown.

From a technical point of view, an initial Greek proposal envisions a cable with a total transmission capacity of approximately 3 GW. This capacity would be boosted to 6 GW through a second round of work and eventually be further upgraded to 9 GW, according to the Greek proposal.

IPTO has worked on two alternative cable routes, both involving Albania. One proposal concerns an overland route across Montenegro, Croatia, Slovenia and Austria before concluding in Germany’s south. The Greek power grid operator’s other proposed route, which includes an underwater crossing, would run alongside the Albanian coast to Slovenia and then follow a n overland route to Austria and southern Germany.

IPTO is currently engaged in talks with each of Germany’s four transmission system operators (TSOs) – Transnet, Tenne, Amprion and 50 Hertz – covering separate German regions, to determine the extent of Berlin’s support for the Green Aegean project.

Greece and Germany, Europe’s biggest consumer of green energy, will need to reach an agreement on the project before an application can be lodged to the European Commission. If the effort moves ahead, PCI/PMI status will be sought for the project.

At present, there is no clarity on the project’s financing plan. Last March, Greek Prime Minister Kyriakos Mitsotakis told an EU Summit that the project would require funding from a variety of European programs. A European Grid Facility needs to be established to fund new multi-billion budget networks that will be able to support additional green energy, he noted.

As yet, no moves been made to modernize outdated grid infrastructure, especially in the western Balkans, lying between Europe’s south and north. This infrastructure will require a revamp in order to carry enormous amounts of green electricity stemming from the east Mediterranean, Egypt and Africa’s north.

Greece is now at a critical crossroads in terms of its green production potential, which will increasingly exceed domestic demand. On September 10, a new record of green electricity production was set, renewables covering up to 140 percent of domestic demand. Surplus amounts were exported, indicating what lies ahead and highlighting the need for solutions.

 

German-French nuclear dispute delaying capacity mechanism

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Greek government efforts for the establishment of a capacity mechanism concerning gas-fueled power stations have been bogged down, indefinitely, by a long-running dispute between France and Germany over nuclear energy. Paris is seeking to secure a greater role for nuclear energy in the European Union’s energy revamp.

According to reliable sources, this nuclear dispute is the only unresolved issue and one remaining obstacle to the EU adopting a new set of regulations for its electricity market reforms. A text for the reforms was established at an Energy Council of EU energy ministers in June.

The new set of regulations, in the context of capacity availability mechanisms, includes a provision enabling remuneration for gas-fueled power plant availability, if these plants meet required technical specifications. The text also permits the implementation of a mechanism rewarding such power plants for flexibility.

According to the same sources, developments on these mechanisms are expected later this month, under the shadow of the German-French nuclear energy dispute, which has derailed any schedule that may still exist for the EU’s electricity market reforms.

Berlin has expressed a preference for these reforms to be completed following the EU elections next June, while Paris, in response, has demanded no less than a partial agreement before the end of 2023.

 

Alexandroupoli FSRU on track for early-2024 launch

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Development of the Alexandroupoli FSRU at the country’s northeastern port is progressing steadily and set for an on-schedule launch by the end of January, 2024, energypress sources have informed.

Tanker conversion work being conducted for the FSRU at Singapore’s Keppel Shipyard was 87.1 percent ready at the end of August, meaning all basic equipment, including burners and gasifiers, has been installed, the sources added.

Representatives of Gastrade, the consortium established by the Copelouzos group for the development and operation of the Alexandroupoli FSRU, visited the Keppel Shipyard just days ago.  The consortium’s chief executive, Kostis Sifneos, headed the visiting group.

The consortium’s members – the Copelouzos group’s Elmina Copelouzou, Gaslog Cyprus Investments Ltd, DEPA Commercial, Bulgartransgaz and Greek gas grid operator DESFA, all holding 20 percent shares – plan to soon hold a meeting to discuss the project’s steps leading to its launch, the sources added.

The FSRU vessel is expected to be ready to set sail for Alexandroupoli in mid-November, before reaching its destination in early December.

The Alexandroupoli FSRU, to offer a 153,500-m3 LNG capacity, will be connected to Greece’s gas network via a 28-km pipeline, through which gasified LNG will be distributed to the domestic market, Bulgaria, Romania, Serbia, North Macedonia, Hungary, Moldova and Ukraine.

The project will serve as a new energy gateway promising to play a key role in the energy security and independence of Greece as well as central and southeast Europe.

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.

ICGB concludes non-binding phase for expansion of IGB’s technical capacity

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The independent transmission system operator ICGB has announced a successful completion of the non-binding phase of the incremental capacity process launched in July to assess the market interest in increasing the IGB pipeline’s total technical capacity.

“The market interest for a few consecutive gas years is nearly two times higher than our initial expectations. While for now these indications are non-binding for the shippers, this is a great first step towards a potential expansion of the IGB pipeline’s capacity from 3 bcm/y to 5 bcm/y”, said ICGB Executive Officers George Satlas and Teodora Georgieva. The two discussed updates on the plans for the interconnector’s development with other TSOs in the region during an event dedicated to the Vertical Gas Corridor held in Thessaloniki, Greece.

“In less than a year of commercial operations, the interconnector Greece-Bulgaria became an essential part of Bulgaria’s path towards energy diversification, enhanced security of supply and energy independence. Over 82% of the total capacity for the upcoming gas year is already booked and we’re looking ahead towards plans for expansion, further strengthening Bulgaria and Greece’s roles on the region’s energy map”, Georgieva noted.

According to her, gas traders have expressed interest for up to 4 bcm/y additional capacity for the next few gas years in the interconnection points of IGB with the Greek national operator DESFA and the Bulgarian national operator Bulgartransgaz.

George Satlas highlighted IGB’s synergy with the LNG terminal in Alexandroupolis and the pipeline’s key role as part of the Southern Gas Corridor and the Vertical Gas Corridor. “With the changed security environment in the region and the change of gas flow from south to north, Bulgaria is becoming a gas transit country. Together with Greece and its growing efforts towards developing LNG projects, our two countries are showing an excellent cooperation model in the energy sector”, he noted.

IGB is the first route for diversified supplies of natural gas to Bulgaria, guaranteeing increased security of supply and diversity of sources. The gas pipeline enables the transportation of natural gas from new sources to other countries in the region as well, including Moldova and Ukraine.

The IGB (Greece-Bulgaria Gas Interconnector) project is being implemented by the joint venture company ICGB AD, registered in Bulgaria in 2011 with shareholders BEH EAD (50%) and IGI Poseidon (50%). The co-shareholder IGI Poseidon is a company registered in Greece, with shareholders the Greek company DEPA International Projects (50%) and the Italian energy group Edison S.p.A (50%).

In accordance with its charter, ICGB AD is the owner of the IGB gas pipeline, financing its implementation, distributing its transmission capacity and receiving revenues from the transmission of natural gas.

The IGB gas pipeline connects with the Greek national gas transmission system (DESFA S.A.) and the Trans-Adriatic gas pipeline (TAP AG) in the area of Komotini (Greece), and with the Bulgarian gas transmission system (Bulgartransgaz EAD) in the area of Stara Zagora. The total length of the gas pipeline is 182 km, the diameter of the pipe – 32” – and a design capacity of up to 3 billion m3/year in the direction Greece – Bulgaria. Depending on the market interest for larger capacity and the possibilities of the neighboring gas transmission systems, the capacity of IGB is designed with the option for increase up to 5 billion m3/year with additional construction of a compressor station.

 

 

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.

Italy aiming for CO2 exports to Prinos facility by early 2030

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Italy is focusing on efforts to export captured CO2 quantities for storage in Greece starting early next decade.

A joint carbon capture and storage (CCS) project involving Greece, Italy and France, also open to the participation of other countries in the future, was presented earlier this year in the neighboring country’s revised National Energy and Climate Plan, as part of the TEN-E regulation, offering guidelines for cross-border energy infrastructure.

Rome is seeking to channel CO2 quantities to Greece for storage at the depleted Prinos field. According to Italy’s NECP, facilities with a capacity of 3.6 million tons per year will be built in Italy to offer export potential to Greece from the first half of 2030.

As a next step, Italy needs to complete a regulatory framework for carbon capture, before establishing related bilateral contacts with Greece.

The underground Prinos storage facility is planned to be operational no sooner than three years from now, with an initial CO2 storage capacity of between 0.5 and 1 million tons, which could be boosted in the future.

The project has been included in the Recovery and Resilience Facility (RRF), while an application has also been submitted for EU Innovation Fund support.

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.

PPC chief to take part in Romanian Three Seas meeting

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Greece aims to bolster its geopolitical influence in the Balkans through energy, power utility PPC’s takeover of Italian group ENEL’s Romanian subsidiary ENEL Romania being a key part of this strategy.

In addition to PPC’s takeover of ENEL Romania, Helleniq Energy recently invested in Romania and had been preceded by Mytilineos – both in renewable energy projects.

PPC’s ENEL Romania takeover has prompted an announcement from Romanian president Klaus Iohannis, who named Greece as a new member of The Three Seas, a diplomatic initiative taken by Romania’s political leadership to bring together EU member states and candidates located between the Baltic, Adriatic and Black Seas for collaboration in the fields of energy, infrastructure and the digital economy.

Austria, Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Moldova, Poland, Romania, Slovakia, Slovenia, and Ukraine are the other members of The Three Seas initiative.

Iohannis, Romania’s president, will host a two-day meeting in Bucharest on September 6 and 7 for talks on collaboration in these domains. Ministers and entrepreneurs representing the aforementioned countries, including PPC’s chief executive officer Giorgos Stassis, energypress sources have informed, will take part at the upcoming Bucharest meeting.

Romania has become a geopolitical focal point as a result of the country’s close proximity to war-entangled Ukraine. In addition, Bucharest has established a pivotal role as a result of its support of Ukraine in the war with Russia and Moldova’s EU membership quest. Romania has also facilitated the movement of grain across its borders.

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.

Additional €795m REPowerEU funds sought for key projects

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A request just submitted by Athens to the European Commission for amendments to the Resilience and Recovery Fund includes a new RePowerEU section worth an additional 795 million euros, intended for support to key projects. If approved by Brussels, some of these projects may commence development this year, with full-scale development planned for next year.

Indeed, the successful implementation of these projects will depend on the efficiency and agility of the Greek public administration. As projects progress to the next stages, the need for accelerated procedures and effective management will become increasingly crucial to meet critical milestones and secure funding.

Most of these additional funds, a 560 million-euro majority, are planned to be allocated to new rounds of subsidy support for energy efficiency upgrades of residential properties and businesses.

A 150-million sum is planned to be made available for pilot projects concerning biomethane production and, primarily, carbon capture and storage (CCS) initiatives.

The remaining amount, 85 million euros, is planned to be offered to investors for energy storage system installations.

Greece among EU’s top 5 RES producers in first half of 2023

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Greece was among the EU’s top five renewable energy producers in the first half of 2023, while Europe’s solar energy market has experienced a period of significant growth in recent years, a recent study from the energy think-tank Ember has shown.

A total of 17 EU member states achieved record RES energy-mix shares in the first half of 2023, according to the study. RES output in Greece and Romania represented more than 50 percent of the overall energy production levels for both countries, unprecedented for both, the study highlighted.

Also, Denmark and Portugal achieved a significant milestone, with their renewable energy output surpassing the 75 percent mark for the first time, the Ember study revealed.

In another first, wind and solar energy output exceeded 30 percent of the EU’s overall energy production in May and June, according to the study.

As for newly installed RES capacity during the first half of 2023, compared to the equivalent period a year earlier, the Ember study showed an acceleration in RES penetration, particularly notable in the PV sector.

Following 2022’s record performance for PV installations in the EU, which totaled 33 GW, the momentum continued through the first half of 2023. Germany was the EU’s best performer, installing 6.5 GW in PV capacity during the first six months this year, a 10 percent increase. Poland followed with 2 GW, a 17 percent increase, and Belgium ranked third with 1.2 GW, a 19 percent increase.

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.

Electricity subsidies total €9.2bn over past 2 years

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Electricity consumers in Greece have received over 9.2 billion euros in subsidies over the past two years, the EU’s sixth highest amount, as a percentage of GDP, a support effort that has been instrumental in Greece’s battle to mitigate the impact of rising electricity prices on its population, the energy ministry has informed.

Greece has steadily recorded variable-tariff electricity price levels below the European average, especially since the summer of 2022, when the energy crisis began to take full force, and, subsequently, has ranked as one of Europe’s lowest-cost countries for retail energy, the energy ministry added, referring to regular data published by HEPI, Europe’s Household Energy Price Index.

The government’s electricity subsidies policy has continued to produce tangible results for consumers in Greece, protecting society and the economy, the ministry noted.

A subsidy-funding mechanism withholding windfall earnings of power producers in the wholesale market, and the suspension of indexation clauses in electricity bills, have both been extended until December 31 in order to assess the situation in international energy markets over the coming months and decide accordingly on the necessity of emergency measures, the ministry noted.

During this period, the ministry will also establish a suitable framework enabling suppliers to better inform consumers on products, while also promoting transparency and price-comparing ability, it added.

Greece’s greenhouse gas emissions down 8.3% in Q1

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Greece’s greenhouse gas emissions fell by 8.3 percent in the first quarter of 2023, the fourth-largest drop in the EU, according to data published by Eurostat.

Bulgaria registered the EU’s biggest greenhouse gas emissions reduction in the first quarter, down 15.2 percent, followed by Estonia (14.7%) and Slovenia (9.6%).

The biggest increases in greenhouse gas emissions were registered by Ireland, up 9.1 percent, Latvia (7.5%) and Slovakia (1.9%).

Overall, the EU’s greenhouse gas emissions fell by 2.9 percent in the first quarter, dropping to 941 million tons from 969 million tons.

Households were the biggest polluters as they were responsible for 24 percent of the EU’s greenhouse gas emissions in the first quarter, followed by the industrial sector (20%), electricity and natural gas sectors (19%), agriculture (13%) and transportation (10%).

SolarPower Europe: Greek solar energy goal for 2030 to be reached by ’24

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Greece will achieve its 2030 solar capacity target included in the country’s National Energy and Climate Plan from 2019 six years earlier, by 2024, the SolarPower Europe association has forecast.

The association expects Bulgaria, the Czech Republic, Hungary and the Netherlands to do likewise.

A total of 12 EU member states, among them Greece, have so far submitted upgraded NECPs with 2030 targets Their overall solar capacity additions exceeds 90 GW.

Upgraded NECP solar capacity targets have increased by an average of 63 percent. Lithuania is projected to achieve a 500 percent increase in solar capacity by 2030, while Finland, Portugal, Slovenia and Sweden are seen doubling theirs.

The association estimates that four EU member states have already reached their solar capacity targets, 19 more are likely to reach it within the next five years, and another four between 2027 and 2030.

Revised Nabucco pipeline hopes fade, Sofia drops pro-Turkish stance

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A Russian initiative to establish Turkey as a central gas hub, through a revival of a revised version of the old Nabucco project plan, as the transitional government in Bulgaria had attempted to do last spring, appears to have hit an impasse and is unlikely to progress further.

Under the leadership of Bulgarian Prime Minister Nikolai Denkov, who assumed office in June, the new government in Sofia has veered away from the pro-Turkish stance of its predecessor. Instead, it has embraced a more pro-Western orientation in the realm of energy policy.

Also, the European Commission has not shown any interest to financially support the project, dubbed Solidarity Ring.

The ambitious plan had received the backing of certain political circles in Bulgaria keen to exploit Azerbaijan President Ilham Aliyev’s intention to more-than-double his country’s gas exports to the EU from 11 to 27 bcm by 2027.

Bulgaria, Romania, Hungary and Slovakia signed an MoU in Sofia in early May, in the presence of Aliyev, for increased gas supply to central Europe via the Solidarity Ring route.

However, talks in support of this gas pipeline project have ceased, despite its supposed intention to help end Europe’s energy reliance on Russia, EU sources have informed.

Athens, along with other major international energy players, contributed to this impasse. In a letter forwarded to the European Commission in May, Athens noted the project would degrade Greece’s role on the international energy map, upgrade Turkey’s, and serve Russia’s efforts to regain access into the European market, indirectly, by supplying Russian gas as Azeri gas.

This is possible as the Solidarity Ring would bypass Greece and follow a Turkish-Bulgarian-Romanian-Hungarian-Slovakian route into central Europe, meaning Ankara could use Turk Stream, the Russian pipeline running through Turkey, to feed Solidarity Ring.

 

Crucial studies for Greek-Egyptian GREGY link in autumn

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Extensive attention paid to the prospective grid interconnection that would link Greece and Egypt through the 3.5 billion-euro GREGY Interconnector project at a meeting yesterday between Greek Prime Minister Kyriakos Mitsotakis and Egyptian President Abdel Fattah Al Sisi in El Alamein reaffirms the strategic importance of this project.

So, too, does the involvement of Nikos Tsafos, the Greek PM’s special adviser on energy matters, and two Egyptian ministers, Tarek El-Molla, minister of petroleum and mineral resources, and Mohamed Shaker, minister of renewable energy, in working groups staged during the visit.

The GREGY Interconnector was recently favorably assessed by the European Commission for inclusion on its PCI/PMI list, but a series of challenging steps lie ahead.

Three crucial studies considered pivotal for the project’s prospects are planned to be staged in autumn – an environmental study, a final engineering study, and a seabed mapping survey, the trickiest and costliest of the three that will involve imaging of the seabed with a special vessel along the project’s 954-kilometer subsea route.

This latter survey is expected to require at least six months to complete. A vessel to take on the seabed mapping is expected to be commissioned in autumn through a tender.

Great water depths, such as those to be encountered in this East Mediterranean region, require expertise and experience possessed by few companies in the world.

Elica, a subsidiary of the Copelouzos group established to promote the Greek-Egyptian GREGY Interconnector, has come up with a budget estimate of 15 million euros for the seabed scan.

However, given the survey’s deep-sea nature and the fact that the proposed route’s seabed remains largely unknown as the area it covers has never before been scanned in detail, survey costs could escalate beyond initial estimates. Bad weather could also delay the effort. At best, a Final Investment Decision should not be expected before mid-2024.

Euroasia Interconnector’s budget-increase need validated

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RAAEY, the Regulatory Authority for Waste, Energy and Water, has approved as valid a budget-increase request submitted by Euroasia Interconnector, the consortium promoting a project planned to interconnect the Greek, Cypriot and Israeli power grids, as the cost of materials, especially cables, have increased significantly.

The authority’s approval of the request highlights Greece’s support for the interconnection project.

The Euroasia Interconnector consortium has asked for the project’s budget to be increased by 350 million-euro budget increase, to 1.925 billion euros from the present level of 1.575 billion euros.

All parties involved with the Euroasia Interconnector project appear determined to push ahead following a recent warning from EU authorities that delays have placed under threat 657 million euros worth of Connecting Europe Facility (CEF) funding for the PCI-listed project.

The Euroasia Interconnector consortium now needs to provide detailed supporting documents to RAAEY and its Cypriot counterpart, RAEK, explaining the reasons why the budget revision has been requested.

Though a timeline has not been established, the Euroasia Interconnector consortium and the regulatory authorities are expected to act fast, given the political support for the interconnection project.

 

Greek gas hub potential now realistic, DESFA actions show

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Greece, for the first time, has shown true potential to soon establish itself as a regional gas hub and gateway for southeast Europe, judging by the results of gas grid operator DESFA’s recent auctions offering grid capacity reservations, as well as the operator’s non-binding market test for a prospective expansion of the country’s gas transmission network.

DESFA has prepared an extensive ten-year development plan that is fully aligned with the new market conditions taking shape, as well as with the company’s efforts to achieve energy-transition objectives, the operator’s administration has underlined at a news conference.

Greek gas exports increased by 15.09 percent in the first half of 2023, compared to the equivalent period last year, according to DESFA data presented at the news conference.

Also, DESFA’s non-binding market test for a prospective expansion of the country’s gas transmission network drew the participation of 27 companies, 17 of these from abroad, primarily central and southeast Europe, such as Bulgaria, Romania, Austria, Hungary, Slovakia, Germany, Cyprus, North Macedonia, as well as the USA.

Forty percent of the market test’s participants have never before been active in Greece’s natural gas market, DESFA announced.

Participants expressed interest for all the country’s gas grid entry points (Sidirokastro, Nea Mesimvria, Kipoi and Agia Triada), as well as for connections to Greece’s prospective FSRUs (Gastrade, Argo, Dioryga Gas, Elpedison).

Highlighting the Greek natural gas market’s export orientation, exports to Bulgaria totaled approximately 2.4 bcm in 2022, roughly half of Greece’s annual gas consumption last year, 4.9 bcm.

EastMed pipeline project still viable, Edison CEO says

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ROME (Reuters) – A project to build a 2,000 km pipeline to bring natural gas from East Mediterranean fields to Europe is still alive, the CEO of Italian energy group Edison (EDNn.MI) said on Friday.

Edison CEO Nicola Monti said that the group, which is one of the promoters of the pipeline, was actively talking with Cyprus and Israel about the project.

Last month, the energy minister of Cyprus told Reuters the country was proposing a shorter pipeline to bring gas from Israel’s East Mediterranean fields to the island where the gas could be partially liquefied to be transported to the European markets.

The shorter connection could be seen as an alternative to the more ambitious EastMed pipeline.

“A link between Israel and Cyprus can be a first portion of the (EastMed) pipeline we are promoting. Because from Cyprus we could then connect with Crete and Greece,” Monti said, speaking with journalists on the sidelines of a meeting of energy industrial lobby Confindustria Energia.

He said he believed that the total costs of building the EastMed pipeline would be lower than the investment needed to build a shorter Israel-Cyprus connection, a liquefaction plant and the expenses of shipping the gas to European markets.

Reporting by Francesca Landini Editing by Keith Weir

EuroAsia Interconnector funds threatened by project delays

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EU authorities appear to have issued a strict warning to Cyprus over major delays in binding scheduling terms for EuroAsia Interconnector, a project of strategic importance planned to interconnect the Greek, Cypriot and Israeli power grids.

According to sources, the EU has warned the Cypriot government that if appropriate decisions are not taken immediately to ensure that the project can be put back on track, then a decision offering 657 million euros worth of Connecting Europe Facility (CEF) funding for the PCI-listed project would need to be reviewed.

In response, Cypriot president Nikos Christodoulides held an emergency meeting last Friday with Nasos Ktorides, CEO of the EuroAsia Interconnector consortium, and the country’s energy minister George Papanastasiou.

Though no official announcements have been made, Cypriot press has reported that the government intends to engage directly and vigorously at the highest political level to secure the planned funding for the project.

Delays include Greek power grid operator IPTO’s entry into the EuroAsia Interconnector consortium with a 25 percent stake. A strategic agreement was announced at the end of June but the matter has not progressed further as due diligence remains unfinished.

The EU has insisted on IPTO’s participation as, on the one hand, the project will be connected to the Greek operator’s networks in Crete, and on the other, IPTO, it is believed, would ensure the project’s technical integrity and operational viability.

EuroAsia Interconnector has also been held back by the consortium’s delay in signing a contract with Norwegian company Nexans, to manufacture the project’s subsea cable.

This delay threatens to deprive EuroAsia Interconnector of its intended production slot at Nexans because the manufacturer faces high demand for cables from countries such as Germany and the Baltic countries as a result of Russia’s war in Ukraine.

 

 

 

IPTO: New Greece-Bulgaria electrical interconnection completed

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Athens, July 3 2023

IPTO and the Operator of the Bulgarian Electricity Transmission System ESO EAD energized the new, international ultra-high voltage 400 kV electrical interconnection between Greece and Bulgaria. Energy transmission through the new Line commenced on Friday, June 30th, after the close cooperation of the competent personnel of the Transmission System Operators of the two countries for the start of the trial operation.

This is the second Transmission Line connecting the two countries, which significantly increases the margin for energy exchanges between the neighboring systems of Greece and Bulgaria, respectively upgrading the possibilities of cross-border trade and energy security in SE Europe and the Balkan Peninsula. In the following period, a permanent working group staffed by all Operators in the region, will determine the new, gradually increasing, available amounts of transmission capacity on the Greece-Bulgaria border and from the end of the summer season the new Line is expected to start contributing to the cross-border trade.

The total length of the international interconnection, which starts from Nea Santa EHVC in Rodopi and ends at Maritsa East Substation in Bulgaria amounts to 151 km, out of which approximately 30 km extend within the Greek Territory.

The second interconnection between Greece and Bulgaria, the domestic part of which cost 11.3 million euros, is a project of pan-European interest that was included since the beginning of its planning in the Ten-Year Development Program (TYNDP) of ENTSO-E as well as in the list of Projects of Common Interest (PCI) of the European Union.

On the occasion of the new international interconnection’s electrification, the Minister of Environment and Energy, Mr. Theodoros Skylakakis, stated:

“The second, international ultra-high voltage electrical interconnection of Greece-Bulgaria, is an important energy project of pan-European interest. The immediate benefits of this cooperation include: enhancing cross-border trade and strengthening energy security in Southeast Europe and the Balkan Peninsula. More international interconnections will follow, which will further upgrade our country on the European energy map“.

The Chairman and CEO of IPTO Mr. Manos Manousakis, stated:

“IPTO in cooperation with the Bulgarian Operator have completed an important energy project that greatly increases the interconnectivity of the two countries and strengthens adequacy on a regional level. The second international interconnection between Greece and Bulgaria will allow us to better utilize the green energy produced in the region and will contribute to the reinforcement of the European electricity market. With a strategic goal to upgrade the country’s position on the European energy map, over the coming years IPTO is launching new international interconnections with all neighboring states while at the same time supports major intercontinental interconnection projects in the Eastern Mediterranean, with Greece being the main hub“.

Natural gas price spike prompts new market alert

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News that the Netherlands intends to soon stop production at Groningen, one of Europe’s largest gas fields, as a result of earthquake-related risks, pushed gas prices up by 28 percent yesterday, not surprising, as Groningen is a key gas source for countries in Europe’s west.

The development has made even more urgent the intention of Greece and Spain, along with other EU member states, to reestablish a common front as protection against the outbreak of any new energy crisis.

This group plans to request the continuation of a windfall earnings recovery mechanism in the wholesale electricity market when EU energy ministers meet on Monday to discuss a new structure for the bloc’s energy market.

The Dutch TTF benchmark has risen 113 percent over the past 15 days, from 23 euros per MWh to 49 euros per MWh yesterday, before easing off to 39 euros per MWh.

A temporary disruption of operations at some of Norway’s gas fields has unsettled European markets. Though production at these Norwegian gas fields will soon be normalized, the Netherlands have yet to reach a final decision on the country’s Groningen gas field. However, it is expected to continue producing should a new energy crisis hit Europe or if its upcoming winter is a cold one.

At this stage, ambiguity prevails as it remains unclear if Europe’s natural gas market finds itself at the onset of a new upward trajectory.

A sudden increase in LNG demand in Asia as a result of China’s post-pandemic return to full production is another major concern for European energy market players. Such a development promises to escalate prices.

 

Spain, Greece want windfall recovery mechanism continued

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Greece and Spain, part of a group of EU member states seeking to reestablish a common front against any new energy crisis, intend to call for the continuation of a windfall earnings recovery mechanism in the wholesale electricity market when EU energy ministers meet on June 19 to discuss a new structure for the bloc’s energy market.

The European Commission last year adopted a windfall earnings recovery mechanism that was essentially based on a Greek model before it was applied by member states with some variation.

The Spanish government and the country’s energy minister Teresa Ribera want a recovery mechanism included in the European electricity market’s new structure and activated whenever any price crisis breaks out.

The proposal has already received support from Greece, to be represented at next Tuesday’s meeting by the interim government’s energy minister Pantelis Kapros, and a number of other EU member states.

This group of member states is now working on establishing a united stance on the recovery mechanism ahead of next week’s meeting.

It remains to be seen if the alliance will be strong enough to convince Brussels to include the mechanism in its plan for the new market structure.

Some EU member states remain concerned about the possibility of a new energy crisis despite EU gas storage facilities being 60 percent full and a  continual inflow of LNG at European ports.

 

 

Next mixed RES auction offering Europe’s lowest starting prices

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RES auction starting prices in Greece have, contrary to other European markets, remained unchanged at levels set earlier this year ahead of a  session in September and, as a result, are currently the continent’s lowest.

Several months ago, local authorities set RES auction starting prices of 54 euros per MWh for solar energy and 63 euros per MWh for wind energy.

The energy crisis and its escalated wholesale electricity prices prompted – in more recent times – countries such as Germany to offer investors generous increases in RES auction starting prices.

These rises were offered in parts of the continent after European RES auctions held in 2022 failed to attract the anticipated level of interest from investors, leaving significant amounts of unwanted capacities, including in Greece.

Berlin raised its RES auction starting price for solar energy to 73 euros per MWh from 60 euros per MWh for a session in March. The initiative drew a satisfactory number of participants.

Serbia, preparing for its inaugural RES auction, is offering a starting price of 105 euros per MWh for wind energy and 90 euros per MWh for solar energy to attract investors.

Italy, for its most recent RES auction, in May, set a starting price of 65 euros per MWh for solar energy, the same level set by Spain for its most recent RES auction.

The UK recently offered a starting price of 54.8 euros per MWh for solar energy and 61.9 euros per MWh for wind energy.

Returning to Greece, it remains to be seen if the de-escalation in electricity prices of late will prompt investors to choose RES auctions for their project tariffs or instead opt for other solutions such as PPAs.

 

PCI/PMI list preliminary ratings out, GREGY a borderline case

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The European Commission’s Directorate-General for Energy, preparing a shortlist of electricity projects for a sixth PMI/PCI list, including Projects of Mutual Interest and Projects of Common Interest, has just staged a teleconference with representatives of projects vying for a place on the list.

As for the PMI list, the Brussels officials, in addition to preliminary ratings for candidate projects, also presented their criteria and formula applied for appraisals.

The presentation of these details was necessary as, under the revised TEN-E Regulation, new PMI selection criteria are being used for the first time for projects also involving non-EU members.

According to energypress sources, the GAP Interconnector, an Egyptian-Cretan power grid interconnection project plan been promoted by the Eunice group, was not appraised, as had been expected, because it has not secured Letters of Support from the Greek state.

GREGY, another Greek-Egyptian grid interconnection plan, which is being promoted by the Copelouzos group, was given a preliminary rating of 9.3, just below the 10-level score required for inclusion on the PMI list.

GREGY project officials have until June 30, when the PMI shortlist will be announced, to enhance their project’s dossier with additional details that could boost its rating and secure a place on the PMI shortlist. Copelouzos group officials are confident this can be achieved.

The Euroasia Interconnector, planned to link the Israeli, Cypriot and Greek power grids, has amassed the points needed to secure its inclusion on the PMI shortlist.

A total of five European projects, two of these with Greek interests, have achieved preliminary scores offering places on the PCI shortlist.

One of the two Greek projects, Terna Energy’s pumped-storage station project plan for Amfilohia, northwestern Greece, was included on the EU’s PCI list in 2013, while all indications suggest it will retain its place on the list’s sixth edition.

The Eunice group’s Ptolemaida BESS, a 250-MW energy storage facility planned for Ptolemaida, northern Greece, has scored highly for a place on the revised PCI shortlist.

Alexandroupoli FSRU pipeline work in progress, tanker to arrive November

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Development work for the Alexandroupoli FSRU at the country’s northeastern port is in full progress on all fronts, in preparation for the project’s launch early next year.

Besides the project’s floating LNG storage and regasification infrastructure, work is also in progress on the offshore and onshore pipelines to transmit gas to the national grid and, from there, the Greek-Bulgarian IGB pipeline connection for gas quantities to the Balkans.

Officials at Gastrade, the consortium established by the Copelouzos group for the development and operation of the Alexandroupoli FSRU, offered an on-site presentation of the FSRU’s work in progress to visiting ambassadors. This mission was organized by George Tsounis, the US ambassador to Greece, and included the ambassadors of Bulgaria, Romania, Moldova and Ukraine.

The FSRU’s subsea pipelines, to measure 24 km, and overland pipelines, measuring a further 4 km, have been delivered to the Alexandroupoli port for installation.

The Alexandroupoli FSRU promises to serve as an additional source of gas supply for Greece and other Balkan countries. Quantities will be transmitted through the IGB for delivery to Bulgaria and, by extension, Romania.

The project’s specially equipped floating tanker is expected to arrive at its Alexandroupoli location in late November, while the FSRU facility should start operating early in 2024.

Gastrade has already been granted a further license for an additional FSRU, intended to serve Moldova and Ukraine, if the results of a related market test indicate that such an additional project would be viable.

It remains unknown when Gastrade could make an investment decision on this additional FSRU.

 

Further energy-crisis alleviation projected by EC report

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The European Commission has projected a further de-escalation of the energy crisis for the rest of the year in its assessment of the impact of measures on Greece’s GDP.

This observation has been included in a post-program surveillance report covering the state of the Greek economy and its developments, just published along with a package of recommendations in the so-called European Semester, part of the EU’s economic governance framework.

Given the rapid decline in energy prices since autumn 2022, expenditure on energy-crisis measures is now expected to be significantly lower than expected, Brussels noted in its report.

The overall cost of energy-crisis measures implemented in autumn, 2022 represented 5.8 percent of GDP, but is now estimated to drop to 0.9 percent of GDP as a result of reduced energy prices, according to the report.

The net cost of energy measures is expected to fall to 0.2 percent of GDP, revised downwards since a 0.5 percent forecast projected last autumn, as a result of a new solidarity levy imposed on refineries.