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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.

Gas trading platform now an established market option

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The country’s gas trading platform has consolidated its place in the Greek energy market since its launch in March, 2022, latest data on the number of participants and trading volumes has shown.

A total of 26 national gas network users are now conducting transactions through the platform, up from 11 when the platform was launched one-and-a-half years ago, while a further three companies are set to complete their respective registration processes and ten more are preparing to begin, energypress sources have informed.

Also, Greek energy exchange officials are currently engaged in talks with a further eight companies that have expressed an interest to participate in the natural gas spot market. This sharp rise has greatly impacted the spot market’s liquidity.

Interest from abroad is also on the rise. At the time of the gas trading platform’s launch, just two companies were based beyond Greece, compared to nine foreign-based companies at present, their headquarters located in Bulgaria, Romania, Luxembourg, and the Czech Republic.

The increased participation has intensified competition, another indicator of the gas trading platform’s robust state.

Concerns over Greek auction model for standalone batteries

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The Greek auction model for standalone batteries is continuing to raise concerns within the business community ahead of a forthcoming second auction.

Market skepticism is focused on the possibility of a recurrence of low bids at levels that would raise questions about the viability of projects and the very nature of the Greek model, which features aid for both longer-term capital expenditure and operating expenses.

The main debate, both in Greece and beyond, about the Greek auction model for standalone batteries is focused on this provision of investment and operational support for projects.

Critics of the Greek model contend that aid for operating expenses is not in line with free-market logic and inevitably leads to market distortion.

A key concern for the Greek auction model, given low bids submitted in the first auction, is whether projects can be viable under the current costs of storage and battery technology, its critics are pointing out.

Many market players have expressed preference for the Spanish model, whose aid is limited to capital expenditure and project revenues are generated purely through market participation, as a more appropriate model.

This offers projects incentive to fully integrate into the market and optimize their revenues, market players have noted.

As a result, projects would be developed faster and also have better viability rates, supporters of the Spanish model note.

Southeast European bodies launch single-market effort

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Regulatory authorities, operators and energy exchanges active in southeast Europe have begun informal preparations for the establishment of a single electricity market in the region, energypress sources have informed.

These bodies, which had signed a Memorandum of Understanding in mid-November, launching their single-market preparations, are conducting preparatory work at two levels.

Southeast European regulators, headed by the Albanian regulatory authority, placed at the group’s helm, have joined forces to coordinate on high-level preparatory work.

A second team has brought together the region’s operators and energy exchanges. Its participants appointed the North Macedonian energy exchange as group leader.

The participating bodies have scheduled their next meeting for February, in Pristina, where the group will plan its next steps.

Establishing a single southeast European electricity market represents an extremely challenging task that will require time and critical intervention of market structures, experts have pointed out.

The regulatory authorities, operators and energy exchanges working on this single-market project intend to submit an application to the European Commission within 2024, making their endeavor official.

Traders are monitoring the effort’s developments as a prospective market unification would enable cross-border trade in an intraday market, currently not possible.

The unification process will be modelled on the coupled markets of Greece with Italy and Bulgaria.

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.

Wider interest for Greece-to-Germany hydrogen pipeline

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Greek gas grid operator DESFA and operators in Bulgaria, Romania, Hungary, Slovakia and the Czech Republic are interested in developing a hydrogen pipeline running from Greece to Germany via these countries and intend to sign a Memorandum of Agreement early in the new year, energypress sources have informed.

Though the initial idea emerged in Germany and has been encouraged by the German system operator, it is also compatible with broader plans and initiatives undertaken by DESFA, particularly its staging of a market test for an upgrade of Greece’s national gas transmission system that would also serve future hydrogen transmission needs.

The prospect of a vertical hydrogen corridor has been embraced by all Balkan countries, as highlighted by the results of a work group staged in September and those of ensuing meetings.

The Greek gas grid operator is in constant communication with neighboring operators and operators of the wider European region as it is determined to take on an active role in regional developments, especially ones concerning the construction of a hydrogen network serving the continent, sources noted.

Germany, it is worth noting, is set to become the largest – by far – hydrogen import market in Europe in the coming decades, with plans to buy around 70 percent of the hydrogen needed to meet its targets.

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”.

 

Balkan potential highlighted by IPTO’s interest in MEPSO

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Greek power grid operator IPTO’s interest, for some time now, to acquire North Macedonia’s grid operator MEPSO, either through a strategic agreement or a share capital increase, points to the existence of opportunities for energy infrastructure upgrades in the neighboring country as well as the growing role to be played by electricity networks and corridors in the wider region.

As the energy transition progresses, electricity networks and corridors will no longer merely serve as electricity transmission lines, but promise to gradually replace oil and gas pipelines.

Greece, at present, remains sorely absent from the wider Balkan energy-sector activity. IPTO has yet to make any big moves beyond the country’s frontiers.

Though the western Balkans are currently experiencing a green-energy boom with RES investment growth having reached double digits in some countries, regional networks are outdated and insufficient to support this robust investment interest.

Though it is vitally important for Greece to assert itself as an influential energy-sector player in the Balkans, the flow of energy from the region towards central Europe is currently being controlled by Italy.

Italy’s influence, on energy matters, over the Balkans was expanded in recent years with Montenegro as a base and Italian power grid operator in a leading role, as highlighted by its acquisition of a 22 percent stake in Montenegrin power grid operator CGES.

Identifying the pivotal energy role of the Balkans early on, Italy took a strategic decision for the development of a first route linking the western Balkans and Europe in the form of a 445-km line – 423 km of it as an underwater Adriatic Sea crossing – from Pescara, on Italy’s east coast, to Kotor, on Montenegro’s Adriatic coast.

The small Balkan country has since become a bridge of energy exchange between eastern and western Europe as this Adriatic link has interconnected Italy’s network with those of Bosnia and Herzegovina, Serbia, Kosovo, Albania, and, by extension, Bulgarian and Romania.

Italian power grid operator Terna is now examining the prospect of boosting this line’s transmission capacity from 600 MW to 1,200 MW. Giuseppina Di Foggia, CEO at Terna, recently held talks in Rome with Montenegro’s new president, Jakov Milatovic, about this project.

 

Subsea survey for Greek-Italian cable capacity boost early 2024

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A project aiming to triple the capacity of the Greek-Italian electrical grid interconnection is set for a challenging stage that entails thorough mapping of the seabed along the existing line’s 220-km route.

Survey work for this project is planned to begin in early 2024 following an agreement reached earlier this week at a wide-ranging Athens meeting between Giuseppina Di Foggia, CEO at Italian grid operator TERNA, and Manos Maousakis, the chief executive at Greek power grid operator IPTO.

The TERNA chief was joined by a team that included the company’s CFO as well as the head of major projects and international development.

Greece is under growing pressure to establish new export outlets for the country’s excess renewable energy. The country’s electricity exporting activity is becoming more frequent during midday hours. Also, Italy, it should be pointed out, is Europe’s biggest electricity importer.

According to sources, the Greek and Italian power grid operators are exploring all options, based on the respective experience of each company, to boost the capacity of the Greek-Italian subsea cable link from 500 MW to 1,500 MW as swiftly and efficiently as possible.

At this week’s meeting, held Tuesday, IPTO and TERNA also agreed on the need for new corridors transporting RES production from southern to central Europe.

TERNA, Europe’s biggest operator, is a highly influential market player operating 26 international interconnections and present on three continents.

 

PM prioritizes south-north link in talks with German leader

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Green Aegean, a electricity supply corridor envisaged, by Athens, to run from Greece to Germany’s south, dominated talks between Prime Minister Kyriakos Mitsotakis and German Chancellor Olaf Scholz in Berlin yesterday, sources close to the Greek leader have informed.

Mitsotakis, determined to promote this project, prioritized Green Aegean over the European migrant crisis and the Middle East conflict at yesterday’s meeting.

The German side, no longer appearing worried about the Greek economy, was keen to listen to the Greek leader’s views on the south-north corridor, but, despite agreeing with Mitsotakis on most points raised, refrained from expressing any clear position, either because of other priorities or because Berlin remains unconvinced about the project’s financial sustainability.

Mitsotakis presented Green Aegean as an important plan for both countries, noting Germany’s energy needs are high in winter, and have become even more acute ever since low-cost Russian gas supply stopped flowing as a consequence of Moscow’s war in Ukraine, while energy demand in Greece is high during the summer.

Berlin is well aware of the fact that additional green-energy sources will be needed, beyond large-scale offshore wind farms in the North Sea, if German industry is to become carbon-neutral by 2050.

For its part, Athens knows very well that problems will arise in the future if RES output does not reach central Europe. Greek RES output is already many times over the country’s needs and grid capacity. Also, green energy the country aspires to import from Egypt and the Middle East will require a new electricity corridor to Europe’s north. Without such an export corridor, north African and Middle Eastern producers will surely look elsewhere for pathways to Europe.

EastMed pipeline market test in early 2024, project feasible

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A market test for the EastMed gas pipeline, planned to transport natural gas from fields in the eastern Mediterranean to Italy and central Europe via Greece, will be held in the first quarter of 2024, energypress sources have informed.

Market players are already expressing interest in the project ahead of the anticipated market test, expected to take about one month to complete.

Both producers and suppliers interested in utilizing the prospective pipeline to transport gas quantities from the east Mediterranean to European markets via Greece are expected to submit offers to the market test.

Though the test’s initial round will be non-binding, its outcome will help shape the project’s developments prospects, which have fluctuated for a number of years.

Competent sources note that the technical feasibility of the pipeline – to offer an annual 21 bcm capacity and cover 2,000 kilometers, of which over 1,400 kilometers will run underwater – has been proven and clarified through a number of studies.

However, questions linger over the project’s cost. Its budget, estimated at 6.1 billion euros, is likely to increase as development costs have risen considerably since the previous evaluation.

Discussions on EastMed date back nearly fifteen years. The project has been on the EU’s PCI list since 2013, a status it is expected to retain when the new and revised list is soon officially present, most probably within November.

 

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.

IPTO submits Green Aegean proposal to ENTSO-E

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Greek power grid operator IPTO has submitted 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.

IPTO prefers a HVDC-technology subsea route for the Green Aegean grid interconnection that would pass through the Adriatic Sea to Slovenia, followed by an overland route to Austria and Germany’s south.

IPTO recently held related talks with TenneT, Germany’s biggest power grid operator, and Slovenian operator ELES.

TenneT has expressed strong interest in the Green Aegean grid interconnection and the prospect of collaborating with IPTO on the project’s development for a link with Germany’s grid in the southern part of the country.

HVDC-technology enables transmission of large quantities of electricity over long distances via submarine cables, as well as fast and accurate control of power flow, enhancing grid stability.

 

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.

 

IPTO eyeing North Macedonian operator, a Balkan gateway

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Greek power grid operator IPTO is eyeing the Balkan market to reinforce its standing, and, in this context, endeavoring to acquire a stake in MEPSO, North Macedonia’s operator.

If an agreement does go ahead, a prospect that requires the active involvement of the Greek government, then the neighboring country could serve as a gateway for IPTO’s entry into the wider western Balkan region, to take on network upgrade and interconnection projects, definitely needed.

IPTO has already submitted an offer for a stake in MEPSO, either through a strategic agreement or a share capital increase, North Macedonian sources informed.

IPTO executives have, for quite some time now, been engaged in talks with North Macedonian government officials, MEPSO and the country’s regulatory authority covering energy for a stake in the operator, the sources added.

Besides strengthening IPTO’s standing, such a move – which would complement Greek power utility PPC’s takeover agreement for Italian group ENEL’s Romanian subsidiary ENEL Romania – promises to also bolster Greece’s geopolitical role in the Balkan region.

MEPSO also stands to benefit from an agreement with IPTO as the North Macedonian operator could make the most of the Greek operator’s stronger credit rating and gain access to EU funds for network upgrades.

 

Grid links key to wholesale price convergence, PPC notes

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Grid interconnections play a significant role in determining wholesale electricity prices in coupled markets, power utility PPC has noted, among other things, in a letter submitted to Parliament as a response to a question posed by the main opposition leftist Syriza party, which called for an explanation on Greece’s consistently higher wholesale electricity prices, compared to markets in Europe’s north.

PPC noted that wholesale electricity prices are shaped by domestic energy mixes and demand, as well as grid interconnections shared with neighboring countries, and, by extension, their energy mixes.

PPC, in its response, supported that it makes no sense to compare Greece’s wholesale electricity prices with those of distant European countries that are not directly linked and which have very different energy mixes.

Greater price convergence between Greece, Italy and Bulgaria has been observed ever since the implementation of the Target Model in Greece, roughly three years ago, and especially since the coupling of Greece’s day-ahead market with those of Italy and Bulgaria.

Greater capacities of grid interconnections linking two countries lead to greater convergence in their wholesale electricity prices.

The completion of a second grid interconnection between Greece and Bulgaria, as well as another to offer a capacity boost to the link between Greece and Italy, are two developments that promise to offer even greater price convergence between these countries, PPC noted in its statement.

Energy crisis brings fossil fuels back to the forefront

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The energy crisis has brought about a revival of the hydrocarbons sector, as highlighted by a growing number of energy companies that have decided to reactivate exploration and production projects that had been put on hold as a result of climate-target pressure. Much of this reignited upstream activity is occurring in Europe. Greece must not be left behind.

Yesterday, French oil and gas giant TotalEnergies announced it would boost fossil fuel output over the next five years, a contrast to its reduced production in recent years.

Earlier in the week, on Wednesday, the UK’s North Sea Transition Authority approved plans for production at the new Rosebank oil and gas field in the North Sea, estimated to contain approximately half a billion barrels of oil.

Norwegian upstream giant Equinor, holding the biggest stake in the Rosebank field, estimates production will begin in 2030, with initial investments seen reaching roughly 3.8 billion dollars before totaling approximately 10 billion dollars by 2051.

Two two months earlier, UK Oil & Gas Plc had announced it would recommence production at its Avington oil field, estimated to contain 60 million barrels. Production at this field had been disrupted at an embryonic stage six years ago, with output having reached just several hundred thousand barrels.

In late August, Norway, which has captured the biggest share of Russia’s lost natural gas supply to the EU, announced that a latest round of tenders for licenses at 92 locations, 78 in the Barents Sea and 14 in the Norwegian Sea’s northwest, had attracted interest from 25 companies, including majors such as Shell, ConocoPhillips, Equinor and Aker BP.

The heightened interest expressed by majors highlights a turnaround of their green-focused investment policies of recent years. Shell, for instance, has announced it will disrupt an investment cutback plan of between 1 and 2 percent, annually, until 2030, adding it will increase investments in natural gas.

The hydrocarbons sector is also making a comeback in regions closer to Greece, Italy being a prime example. Italy had stopped issuing new licenses for many years but took a turn in November, when officials announced the country will be holding tenders offering ten-year licenses that offer total production potential of 15 bcm in natural gas from deposits in the Adriatic Sea.

Quite soon, companies operating in Greece will receive results from seismic surveys conducted west and southwest of Crete (ExxonMobil – HelleniQ Energy); Gulf of Kyparissia (Helleniq Energy); Ionian Sea (HelleniQ Energy); and Northwest Ionian (Energean – HelleniQ Energy).

In addition, Energean is awaiting an environmental permit to proceed with exploratory drilling in the Zitsa area, close to Ioannina, northwestern Greece.

Given the international developments and Greece’s energy needs – 6 bcm of natural gas a year and 300 barrels of oil per day – imported at lofty prices, the Greek State must facilitate, it has become clear, the endeavors of companies seeking to move ahead with their projects.

Greek wholesale electricity prices fourth highest in Europe

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Greece’s wholesale electricity prices were ranked fourth highest in Europe during the year’s first eight-month period, behind those of Italy, Malta and Ireland, according to data presented to Greek Parliament by RAAEY, the Regulatory Authority for Waste, Energy and Water, in response to a question raised by the left-wing main opposition Syriza party.

The authority primarily attributed Greece’s high European electricity price ranking to lofty prices recorded in January, when they peaked at 201 euros per MW/h as a result of a delayed implementation of natural gas prices in the Greek market, in contrast to other parts of Europe.

Subsequently, a natural gas price peak to 119 euros per MWh in December, 2022 made immediate impact on wholesale electricity prices in other parts of Europe but did not influence electricity prices in Greece until a month later, when prices had begun falling elsewhere on the continent.

Wholesale electricity prices in Greece were Europe’s highest in January. However, several months later, in June and July, the setting had changed drastically, with Greek wholesale electricity prices ranked 15th among 32 European countries, RAAEY noted.

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.

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.