Greek, Cypriot, Israeli officials seeking Italy’s East Med return

Greek, Cypriot and Israeli officials are working on details of a plan aiming to win back Rome’s support for the East Med pipeline, an ambitious 1,900-km pipeline to carry southeast Mediterranean natural gas from Israel to Europe via  Italy.

Efforts by Washington and Brussels to lure back Italy, whose coalition government has withdrawn the country’s support for the project, are pivotal.

Part of the overall diplomatic effort may be unveiled at an Athens energy summit today.

The Greek, Cypriot and Israeli energy ministers, Costis Hatzidakis, Giorgos Lakkotrypis and Yuval Steinitz, respectively, as well as US Assistant Secretary Francis Fannon, are taking part in the summit.

Fannon held successive meetings in Athens yesterday with Greece’s energy minister and the deputy foreign minister Konstantinos Fragogiannis. The East Med project’s promotion was a key subject of these meetings, especially Fannon’s talks with Hatzidakis, Greece’s energy minister.

Last May, Italian Prime Minister Giuseppe Conte, heading Italy’s right-wing populist coalition, declared Rome does not want the East Med pipeline to land on Italian territory. Instead, he proposed the pipeline’s link to TAP, another gas pipeline project being developed to carry Azerbaijani natural gas to Europe, via Italy.

East Med is envisioned to primarily carry deposits from Cyprus’ recently discovered “Aphrodite” gas field and the Israeli-controlled block “Leviathan” along a route stretching from Israel to Europe, also via Italy.

In response to Italy’s stance, Israel now appears to favor an alternate route for East Med that would avoid ending up on the Italian coast. Experts regard this prospect as difficult but not impossible as the pipeline project is still at the planning stage. Greece and Cyprus prefer Italy’s incorporation into the pipeline route.

 

 

New effort for East Med agreement at Athens energy summit

Greek gas utility DEPA and Italian energy giant Edison, collaborating on a plan to develop the East Med pipeline, envisioned to link the Greek, Cypriot and Israeli natural gas systems, are looking to take a crucial technical step ahead of construction.

Their YAFA Poseidon joint venture – spearheading the ambitious project, a 1,900-km pipeline stretch with an investment cost of between 6 and 7 billion euros – is gearing up for the launch of FEED (Front-End Engineering Design), environmental and detailed underwater research studies.

The European Commission has approved 34.5 million euros from the EU’s Connecting Europe Facility (CEF), a funding instrument, for these studies. The CEF amount will cover half the cost of the aforementioned preliminary studies, which will push the plan ahead to a mature stage.

The pipeline project is planned to carry southeast Mediterranean natural gas, primarily deposits from Cyprus’ recently discovered “Aphrodite” gas field and the Israeli-controlled block “Leviathan”, along a route stretching from Israel to Europe.

An agreement between Greece, Cyprus, Israel and Italy, where the pipeline is planned to conclude, is still needed.

East Med plans have been at a standstill ever since the current Italian government announced it was stalling the project.

According to sources, the Greek, Cypriot and Israeli energy ministers will seek to restart procedures and also send out a message of encouragement to the Italian government when they meet at an Athens energy summit tomorrow. US Assistant Secretary Francis Fannon will also participate.

East Med, still at a theoretical stage, promises geostrategic might for Greece, Cyprus and Israel, as well as the USA, on southeast Mediterranean energy matters, especially against Turkey’s opposition to hydrocarbon exploration within Cyprus’ Exclusive Economic Zone (EEZ).

The pipeline plan also promises to break Russia’s dominance of gas supply to the EU.

 

 

Greek-Cypriot-Israeli energy summit highlights US interest

Washington’s supportive interest in the energy partnership between Greece, Cyprus and Israel has grown, driven by the prospect of hydrocarbon exploration in the southeast Mediterranean region as well as the East Med natural gas pipeline, planned to carry Cypriot, Israeli and, possibly, Egyptian natural gas to the EU via Greece and Italy.

Highlighting this interest, an upcoming Athens energy summit, scheduled to take place on August 6 and 7, comes as a US initiative, energypress sources informed.

It will follow a meeting just days ago, at the East Med Gas Forum in Egypt, that brought together Greek energy minister Costis Hatzidakis with his Cypriot and Israeli peers, Giorgos Lakkotrypis and Yuval Steinitz, respectively. In addition, Greek Prime Minister Kyriakos Mitsotakis recently met with Cypriot leader Nicos Anastasiades.

US Assistant Secretary Francis Fannon, head of the Bureau of Energy Sources, will also take part in the Athens energy summit. Fannon is scheduled to meet with Hatzidakis, Greece’s energy minister, and the country’s deputy foreign minister Konstantinos Fragogiannis on the eve of the event.

The summit highlights the US-fostered partnership between Greece, Cyprus and Israel, united against escalating Turkish tension concerning offshore hydrocarbon exploration plans within Cyprus’ Exclusive Economic Zone (EEZ).

The event’s participants are also expected to discuss the East Med pipeline. An agreement between the three countries and Italy remains pending. Last spring, Italian Prime Minister Giuseppe Conte claimed he sees no benefits for Italy in the project, effectively bringing the country’s effort in the matter to a standstill.

Washington openly supports this natural gas pipeline as it promises to establish an alternative supply route to Europe that would restrict Moscow’s energy dominance on the continent, through Gazprom.

Sideline efforts are being made to alter Italy’s negative stance, sources informed. A message could be projected to Rome through the imminent Athens event.

RES energy mix targets likely; bureaucracy, networks an issue

Greece will most likely reach a RES energy mix target set for 2020, but problems subduing investment activity in the renewable energy sector, bureaucracy and insufficient network investments being two key concerns, remain, the European Court of Auditors has observed in a special report focused on renewables and electricity generation.

Greece, along with Latvia and Austria, will most probably meet their 2020 target if they continue to implement measures targeting renewables at the current pace, the report noted, adding all three EU member states currently require increases of less than 2 percentage points.

Inspections were conducted in Greece, Germany, Poland and Spain for the report, titled “Wind and solar power for electricity generation: significant action needed if EU targets to be met.”

Specific national targets for the share of gross final energy consumption coming from renewables have been set, ranging from 10 percent to 49 percent.

Greece’s RES target for 2020 is 39.8 percent. Spain has a target of 39 percent, Germany is aiming for 38.6 percent and Poland’s figure is 19.1 percent.

Germany and Spain maintained high rates of progress between 2010 and 2017, while Greece is behind schedule. In 2017, the country was 7 percentage points off target, the report noted.

 

Greek power producers also eyeing Balkan export potential

The country’s power producers are focusing on the market prospects of  neighboring countries along with a heightened interest in Greece’s electricity market as a result of the upcoming elections, seen bringing the main opposition New Democracy party into power for more decisive reform action at power utility PPC, and intensified market competition.

Investments plans by PPC, currently developing its Ptolemaida V power station, as well as by private-sector enterprises, which have announced plans for five new state-of-the-art units, are expected to create an overabundance of electricity, even of all these plans are not executed. This is one of three main factors turning the attention of power producers to neighboring markets.

Also, it has become clear that Balkan markets lack flexibility in electricity generation as they primarily depend on coal, while gas networks that could support flexible gas-fueled power stations in the region are insufficient.

A third factor contributing to the heightened the interest of local producers for energy-related business in the wider region is Greek power grid operator IPTO’s ongoing upgrade of Greece’s grid interconnections with neighboring countries, especially Bulgaria and North Macedonia, which promises to create greater export potential.

Besides the independent producers, PPC is also looking to capitalize on this export potential.

Lender representatives visiting Athens in a pre-election mood

Pending energy market reforms, including privatizations, PPC’s disinvestment of lignite units, and other market liberalization measures, will be discussed between government officials and the country’s lender representatives, visiting Athens to begin a post-bailout review this week.

Long-term decisions on various matters will most likely need to be made following Greece’s elections, due in autumn, once the political climate has settled. This delay, though, could end up prompting tougher demands by the lenders, including the European Commission.

PPC’s sale of lignite units, relaunched following a failed previous effort, is expected to dominate the talks. The disinvestment’s deadline for binding bids has been extended to May 28, which virtually coincides with the European elections, making the prospect of the sale procedure’s punctuality uncertain.

The lenders are expected to push for financial restructuring measures at state-controlled PPC, which has just posted disappointing results for 2018. Some of these measures will entail political cost.

The lender representatives will also push for decisions on slow-moving energy-sector privatizations. The sale procedure for gas utility DEPA has fallen behind schedule while uncertainties have crept into the the ELPE (Hellenic Petroleum) privatization.

The target model as well as Crete’s urgently-needed electricity grid interconnection with Athens will also be on the agenda. The latter has led to a control-related dispute between Greek power grid operator IPTO and Euroasia Interconnector, a consortium of Cypriot interests heading a wider PCI-status Greek-Cypriot-Israeli electricity grid interconnection project.

Greek PCI support for Eurosia conditional, minister suggests

Greece’s decision to proceed with the development of the Crete-Athens electricity grid interconnection as a national project through power grid operator IPTO’s special purpose vehicle Ariadne rather than as part of a wider Euroasia Interconnector project planned to link the Greek, Cypriot and Israeli grids has cast doubts over the future PCI status of Euroasia’s Crete-Cyprus and Cyprus-Israel segments.

Euroasia Interconnector, a consortium of Cypriot interests heading the wider project, will need the support of all parties involved if the Crete-Cyprus and Cyprus-Israel segments are to secure a place in the EU’s new PCI list, enabling favorable funding, when the updated list is published later this year, in autumn.

Though Greece’s energy ministry has yet to make its intentions clear, it faces pressure, especially from Cyprus, to support the continued PCI-status of the Crete-Cyprus and Cyprus-Israel segments as their development would end Cyprus’ electricity grid isolation.

Greece’s stance will most likely depend on Euroasia Interconnector’s moves and whether it will seek to obstruct the development of the Crete-Athens interconnection through legal procedures and other action.

Energy minister Giorgos Stathakis has suggested Greece’s support for the wider project’s PCI status would be conditional.

IPTO recently decided to remove the Crete-Athens segment from the wider Greece-Cyprus-Israel interconnection project as the operator was embroiled in a dispute with the Cypriot consortium over the local segment’s control.

Three-way summit to support ambitious East Med project

The leaders of Greece, Cyprus and Israel are expected to unite for a joint statement in support of the East Med natural gas pipeline’s development as well as the reinforcement of regional energy security at a summit in Jerusalem this Wednesday, where they will be joined by US Secretary of State Mike Pompeo.

The anticipated declaration by Greek Prime Minister Alexis Tsipras and his respective Cypriot and Israeli counterparts, Nicos Anastasiades and Benjamin Netanhyahu, will represent yet another step towards the development of East Med, promising a transportation route for regional natural gas to  EU markets.

Pompeo’s presence at the forthcoming three-way summit, combined with ExxonMobil’s recently declared intention to take part in a new round of Israeli tenders offering licenses, make clear Washington’s determination for a leading role in the Mediterranean.

Discoveries of major natural gas fields in the region and plans for EU-bound transportation routes have increased US interest.

However, many obstacles still lie ahead for the East Med pipeline. These include Italy’s step back as a result of objections expressed by Italy’s Five Star Movement, a member of the country’s far-right coalition. Italy’s environmental ministry has ordered a new environmental impact study for Italy’s Otranto seaside location, where East Med is planned to reach.

Greece, Cyprus and Israel now appear to be examining alternative East Med routes towards Europe, the most favorable option being North Macedonia.

Though Egypt expressed support for East Med last week, Cairo plans to utilize the country’s LNG terminals with the aim of exporting gas in liquefied form. This infrastructure would have an advantage over East Med.

East Med’s commercial feasibility is another concern. Quantities and customers still need to be assured.

 

 

East Med pipeline prospects bolstered by Egyptian support

Egypt’s constructive participation in talks for the development of the East Med natural gas pipeline, planned to carry Cypriot, Israeli and, possibly, Egyptian natural gas to the EU via Greece and Italy, has created favorable prospects for the realization of a project promising to play a pivotal role on the southeast Mediterranean energy map.

US support for the project and an effort by participating countries to ensure ExxonMobil’s involvement are also bolstering the East Med’s development prospects.

Last month, Egypt’s petroleum minister Tarek El-Molla had told Cyprus News Agency his country is not interested in participating in the East Med project with its Zohr natural gas deposit.

However, the Egyptian minister changed his tune yesterday at Ceraweek 2019, an international energy in Houston, Texas, noting Egypt will support the East Med project.

Quite clearly, Egypt is looking to establish yet another alternative supply route for its Zohr field, an enormous natural gas discovery, to major consumer markets of the west.

Prior to expressing support for East Med, El-Molla took part in a meeting with his Greek, Israeli and Cypriot counterparts – Giorgos Stathakis, Yuval Steinitz and Giorgos Lakkotrypis, respectively – and US energy under secretary Mark Menezes, at the Houston event.

All four officials confirmed their support for the East Med gas pipeline, according to a statement released by Greece’s energy ministry.

Stathakis, Greece’s energy minister, also held a separate meeting yesterday with ExxonMobil officials for talks on developments concerning the oil major’s hydrocarbon exploration interests at offshore blocks west and southwest of Crete – through a consortium established with Total and ELPE (Hellenic Petroleum) – and the East Med project, energypress sources informed.

 

Greek-Cypriot-Israeli deal for East Med pipeline likely this month

A three-way agreement between Greece, Cyprus and Israel for the development of the East Med natural gas pipeline, planned to carry Cypriot and Israeli natural gas to the EU via Greece and Italy, appears increasingly likely to be signed by the leaders of the three countries at a Tel Aviv summit scheduled for March 20.

A draft of the planned agreement is currently being fine-tuned in Brussels.

Despite the emergence of a growing number of reports contending an agreement is near, objections expressed by Italy’s Five Star Movement, a member of the country’s far-right coalition, could turn into a problem for the East Med pipeline plan.

Italy’s environmental ministry has ordered a new environmental impact study for Italy’s Otranto seaside location, where East Med is planned to reach. Incidentally, the TAP project to carry gas from Azerbaijan to the EU is also planned to reach this spot. The Five Star Movement has also raised environmental concerns over this project.

Lebanon is another country in the region opposing East Med as a result of its ongoing EEZ dispute with Israel. Turkey, not on good terms with Israel and unsettled by the evolving Israeli-Cypriot cooperation, also opposes the project. Cyprus is continuing its hydrocarbon exploration activities, adding to Turkey’s concerns.

Meanwhile, Greek energy minister Giorgos Stathakis arrived in Houston, Texas yesterday to take part in Ceraweek 2019, an international energy conference running until Friday.

Stathakis is scheduled to take part in a panel discussion tomorrow on east Mediterranean developments following recent natural gas discoveries by Cyprus and Israel. His Cypriot, Israeli and Egyptian counterparts will also join this panel.

Sideline talks, by these officials, on regional energy matters are expected.

PPC, troubled Larco reach deal, ministry to balk closure threat

Troubled nickel producer Larco has accepted terms set by the main power utility PPC including a production cutback of approximately 20 percent as a means of lowering its monthly electricity costs from a current level of 5.5 million euros to 4.1 million euros, regarded as manageable by the industrial producer.

The two sides, both state-controlled, are expected to sign their new electricity agreement within the next few days, no later than January 31. Requiring the approval of shareholders at both companies, the new agreement will enable Larco to continue being a recipient of electricity at favorable industrial tariffs.

Larco, which owes PPC over 300 million euros, has also committed itself to a 4.1 million-euro payment to be covered by customer-related cash inflow.

If the plan to limit Larco’s monthly electricity cost to 4.1 million euros fails as a result of extraordinary cost increases, such as a sharp rise in CO2 emission right costs, then the nickel producer will need to provide letters of guarantee, updated monthly, according to the new PPC-Larco agreement.

On a negative note, Greece, as of yesterday, faces a new state aid challenge that threatens to take the country to the European Court if Larco does not return 135.8 million euros to the state within two months, by late March or early April. The amount is currently unavailable. Greece will need to return this amount to the EU or face hefty fines and financial sanctions.

Continuing to favor a state-controlled version of Larco, the government and energy ministry can be expected to try and buy as much time as possible for the return of the 135.8 million-euro amount and extend the matter to May, at least, with the objective of keeping the debt-laden nickel producer afloat ahead of national elections, due later in the year.

The government wants to avoid any political fallout of a company closure that would lead to 1,200 or so job losses.

 

 

Three-way East Med gas pipeline deal reached, US keen

The leaders of Greece, Cyprus and Israel have reached an agreement to develop the East Med natural gas pipeline, planned to carry enormous southeast Mediterranean natural gas deposits to the EU via Greece. They met today at the Israeli city Beersheba for a fifth summit on the issue.

The project’s development plan still needs to be endorsed by the European Commission before a final agreement is signed by the three countries. This is expected in the the first quarter of 2019.

The European Commission has already received the project’s details and is expected to offer its approval early in 2019.

Greece’s Prime Minister Alexis Tsipras, joined by energy minister Giorgos Stathakis for the Israel trip, and the respective leaders of Cyprus and Israel, Nicos Anastasiades and Benjamin Netanyahu, are scheduled to sign related memorandums later in the day.

In the lead-up to today’s session, diplomats had described the meeting as one of the last pre-construction steps for the East Med project.

A disputed electricity grid interconnection project involving the three countries has not been included on today’s agenda. Greek authorities awarded Ariadne Interconnector, an SPV established by Greek power grid operator IPTO, control of the Greek-Cypriot-Israeli project’s Crete-Athens segment, despite European Commission objections.

Brussels favors Euroasia Interconnector, a consortium of Cypriot interests heading the wider Greek-Cypriot-Israeli project, for control of its Crete-Athens segment.

The East Med natural gas pipeline, whose cost has been estimated at 7 billion dollars, promises to be the world’s biggest submarine pipeline – in terms of length and depth.

The US has showed increased support for the project in recent times. US involvement in the project has not been excluded.

An annual gas transmission objective of 20 bcm has been set for East Med. EU natural gas needs have been forecast to reach 100 bcm in 2030.

CO2 rights market now in right shape, Brussels officials note

A market stability reserve introduced to fix CO2 emission rights market irregularities detected earlier this decade is now offering more effective protection against potentially dangerous extreme fluctuations, European Commission officials noted at a Brussels news conference.

“The adjustments have been implemented and are working. We’re not claiming that the CO2 market is working because of the revisions, as, in actual fact, this is a market system. Market forces are determining prices,” a Brussels official pointed out. “Obviously, we will see CO2 emission right price increases amid economic growth and increased productivity,” the official added.

The CO2 emission rights market is fundamental to the EU’s decarbonization targets, European Commission officials stressed.

It is no longer necessary, following the Paris Agreement (COP21), to keep explaining why more needs to be done about climate change, Brussels officials highlighted.

CO2 emission right prices reached as high as 26 euros per ton in recent times but, last week, deescalated to levels of around 16 euros per ton.

As a country whose energy system remains heavily reliant on lignite-based electricity production, Greece is among the EU member states currently restricted to less ambitious decarbonization targets. A slower transformation process is needed.

 

Athens-Crete grid link issues a ‘concern’ for Cypriot interconnection

Cypriot energy minister Giorgos Lakkotrypis has urged his Greek counterpart Giorgos Stathakis to support action that would ensure Greece’s energy-related support for Cyprus and prevent the island nation’s isolation in this sector.

Lakkotrypis, who expressed his appeal in a letter forwarded to the Greek energy minister following meetings and telephone discussions, is pushing for a solution that would resolve a dispute between Greek power grid operator IPTO and Euroasia Interconnector, a consortium of Cypriot interests heading a PCI-status project planned to link the Greek, Cypriot and Israeli power grids via Crete. The two sides have fought for control of the wider project’s Crete-Athens segment.

The wider project’s development is crucial for EU plans aiming to interconnect the Greek and Cypriot electricity markets and, by extension, the Cypriot and European markets.

 

IPTO OKs technical committee for Crete link, wants swift action

Power grid operator IPTO will accept the establishment of a technical committee for a supervisory role concerning compatibility between the Crete-Athens grid interconnection and a wider PCI-status project planned to link the Greek, Cypriot and Israeli power grids via Crete, but wants this committee to have delivered its final decisions by November 30 for avoidance of further delays to the Crete-Athens segment.

The Crete-Athens interconnection, ready for development in terms of technology and financing, according to IPTO, is crucial to ensure power sufficiency on Crete as of 2020.

IPTO is expected to present a full plan at a meeting in Brussels today to focus on compatibility issues concerning the Crete-Athens segment and the wider Greece-Cyprus-Israel grid interconnection.

RAE, the Regulatory Authority for Energy, recently named the SPV “Ariadne Interconnection”, an IPTO subsidiary, the Crete-Athens link’s project promoter. Euroasia Interconnector, a consortium of Cypriot interests, heads the wider Greece-Cyprus-Israel interconnection project. IPTO and Euroasia have fought for control of the Crete-Athens link segment.

The Greek and Cypriot regulatory authorities for energy, Greek and Cypriot government officials, as well as representatives of IPTO, Euroasia Interconnector, ACER, Europe’s Agency for the Cooperation of Energy Regulators, and Belgian operator Elia, are all expected to take part at today’s meeting.

Greece backs Poland in CO2 price investigation request

Poland appears to have gained the Greek government’s support in the country’s request to the European Commission for an investigation into CO2 emission right price manipulation suspicions at energy exchanges.

Like Warsaw, the Greek government is also concerned by the rise in CO2 emission right prices, energy ministry sources have admitted.

It remains unclear if the issue was tabled at a meeting yesterday between energy minister Giorgos Stathakis and Maros Sefcovic, the European Commission’s vice president for Energy Union.

Emission right allowances could be increased if these price manipulation suspicions are confirmed, sources around Europe believe.

Poland has been particularly affected by escalating CO2 emission right prices as it a coal-dependent nation. Just weeks ago, the Polish government forwarded a request, in writing, to Brussels calling for an investigation into CO2 emission right prices. They reached 20.70 euros per ton yesterday.

Greece supporting energy projects ahead of FYROM vote

Energy minister Giorgos Stathakis will head a Greek delegation of key energy-sector figures on a visit to the Former Yugoslav Republic of Macedonia (FYROM) for energy investment talks with FYROM government officials on September 24 and 25.

The visit has been timed just days ahead of the neighboring country’s September 30 referendum asking voters if they support EU and NATO membership by accepting a recent agreement between their country and Greece over a new name for FYROM, the Republic of Northern Macedonia, to be used for both domestic and international purposes.

The name dispute, 27 years long, has kept the smaller and younger country out of international institutions.

The two sides have not ruled out the signing – during the two-day visit – of Memorandums of Cooperation for energy projects that would provide energy security to the neighboring country and highlight Greece’s prospective role as an energy hub.

Representatives of Greek natural gas grid operator DESFA, Hellenic Petroleum (ELPE) and power grid operator IPTO will join Stathakis, the energy minister, on the visit, also seen as an attempt by Greece to encourage a “yes” vote in the referendum.

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

 

 

Balkan countries working on EU protective solidarity arrangements

EU member states are working on forming and signing solidarity arrangements to offer wider crisis prevention plans against electricity and natural gas supply abnormalities by December 1, based on an EU regulation issued last November.

These arrangements are intended to protect consumers and infrastructure against energy shortage threats raised by emergency conditions as a coordinated European effort rather than a series of national plans, seen as too limited to counter threats with broader implications.

RAE, Greece’s Regulatory Authority for Energy, has been tasked with heading the wider arrangement’s Balkan group, coordinating the protection plans of Greece, Bulgaria and Romania.

The solidarity arrangements are seen as a necessary form of protection in emergency situations given the interactive nature of electricity and natural gas markets, especially neighboring markets.

The solidarity arrangements will enable EU member states affected by natural gas and electricity supply problems to seek support from neighboring countries.

According to the EU regulation, gas supply sufficiency priority will be given to households, telethermal facilities and key social services such as hospitals.

In the plan’s most recent regional development, Greek and Bulgarian energy regulatory and energy exchange officials, as well as system operators representing the two neighboring countries, held a meeting early last month to establish a road map with an objective to bridge their electricity markets.

The crucial role of energy as a link promoting stability, economic growth and competition-related potential, ultimately offering mutual benefits to energy consumers of both countries, was reiterated at the meeting, according to participants.

Exporters turn north, Greece-Italy link closed for maintenance

The Greece-Italy electricity interconnection, closed over the past week for maintenance work, has transformed market conditions for local traders as the Italian market, normally offering alluring prices for exports during considerable parts of the day, is currently not accessible.

Over the past year or so, electricity amounts acquired at Greek NOME auctions and left unabsorbed by the local market have been exported to Italy.

As a result of the temporary block towards the Italian market, Greek electricity exports can currently only be channeled through gateways in the country’s north, as has been highlighted by a sharp increase of exports through this region.

Prior to the commencement of maintenance work on the power cable interconnecting Greece and Italy, electricity exports to the north were usually limited to no more than 1,000 MW per day. Over the past week, this figure has risen sharply to levels exceeding 9,000 MW.

Under normal circumstances, Greece’s interconnections in the north are primarily used for electricity imports which are then either absorbed by the local grid or relayed to Italy, Greece serving as a transit zone.

Wholesale electricity prices in neighboring markets north of Greece are generally lower than those available in Greece and Italy.

The increased electricity export activity presently witnessed through the country’s north once again highlights that electricity amounts acquired at local NOME auctions are not being used to intensify domestic market competition, as was intended by authorities, but, instead, greatly exploited by traders for export opportunities.

Greece still strongly supporting fossil fuels, OECD report notes

Greece remains among the countries still considerably dependent on solid fuels, specifically lignite, an OECD (Organisation for Economic Cooperation and Development) report on Greece has noted in its section concerning the energy sector.

Greece continues to support the development of lignite-fired power stations while other countries are moving in an entirely different direction, the OECD report explained.

A swifter transition to renewable energy reliance can only be achieved if support measures for fossil fuels are gradually faded out, according to the report. This would also facilitate the implementation of a new EU directive detailing an emissions trading system.

The local renewable energy sector’s penetration of the Greek energy market has now reached a level of close to 15 percent, nearing the EU-28’s average, the OECD reported pointed out.

Solar energy per capita levels in Greece are among the world’s five highest, the reported pointed out.

Greenhouse gas emissions in Greece have dropped significantly in recent years and are now well below the OECD average, the report noted. The extended recession’s resulting reduction of industrial output and transportation needs were listed as main reasons for the country’s lower CO2 emission levels.

Greece is one of the few countries to have experienced an increase in environment-related tax revenues as a percentage of GDP over the past decade, the report noted in a chapter covering fuel taxes.

 

 

 

 

 

Greek, Cyprus interconnections for EuroAsia budgeted at €2.5bn

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

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

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

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

 

 

French energy privatizations echoing Greek developments

France, like Greece, is undergoing a process of energy sector privatizations, but the scale and terms are vastly different.

By the end of this week, French president Emmanuel Macron’s administration plans to have finalized legislation enabling the privatization of state assets, the objective being to raise 10 billion euros in revenues.

The French state’s 24.1 percent stake in power utility Engie is one of the assets to be placed for sale. This sale is of particular interest for Greece as the firm maintains interests in the Greek market.

In 2009, Engie, the world’s biggest independent electricity producer and supplier, acquired a stake in Greek independent power company Heron. Engie, valued at over 36 billion euros, currently holds a 25 percent stake in Heron.

As is the case in Greece, France also appears to be facing European Commission pressure to privatize hydropower facilities, the objective being to intensify competition.

So far, the Greek government has managed to avoid including hydropower units in the state-controlled main power utility PPC’s bailout-required sale of units. The sale package for the PPC sale in progress is limited to lignite facilities.

Engie controls approximately 15 percent of France’s hydropower facilities. EDF owns roughly 85 percent of the country’s hydropower units.

Last month, CGT, France’s biggest union, condemned the French government for delivering a secret plan to Brussels for hydropower privatizations without any previous discussion with workers. At the time, the French administration refused to comment on the union’s reaction, which only intensified the concerns of workers.

CGT has taken strike action for such cases in the past and can be expected to act likewise in this latest instance.

These older union initiatives, however, failed to stop the liberalization process of France’s electricity market. The CGT threats also did nothing to stop the transfer of EDF and Engie stakes to private-sector investors.

Rush needed to overcome IGB hurdles, stick to time frame

Greek and Bulgarian officials have admitted the prospective IGB gas grid interconnector, already well behind schedule, is facing new delays and issues. A rush will be needed to overcome various hurdles and stick to the project’s time frame.

Troubling news initially emerged from Bulgaria, when it was recently reported that  tenders for sub-contractors have been bogged down by legal action taken by firms not associated with the project’s development, including a winery.

ICGB, the IGB project’s consortium – involving the state-controlled Bulgarian Energy Holding (BEH) with a 50 percent stake, as well as DEPA, Greece’s public gas corporation, and Italy’s Edison with 25 percent stakes – has confirmed this news.

Despite noting that it expects this obstacle to be cleared within weeks, the consortium expressed concern of the emergence of similar issues in the future.

Earlier this month, the consortium announced the resignation of its chief executive Elio Ruggeri, who is now in charge of the LNG division at Italy’s Snam.

In comments offered this week, Bulgaria’s energy minister Temenuzhka Petkova insisted that the project’s current schedule remains valid. She also noted that EU funding worth 37 million euros and initially intended to finance a Bulgarian-Serbian interconnection could be redirected towards the IGB. The minister did not elaborate and offered no explanations as to how such a change of plan could impact the Greek-Bulgarian interconnection’s development and time frame. Petkova also informed that the IGB consortium could secure a more favorable financing agreement.

Her Greek counterpart Giorgos Stathakis, speaking at an Athens Energy Forum event yesterday, made reference to the IGB, noting its construction is expected to commence “within 2018”. Given the consortium’s most recent time frame, scheduling work to begin by this coming June, the project, it appears, is headed for a further delay.

Dimitris Tzortzis, the recently appointed chief executive officer at DEPA, Greece’s public gas corporation, believes work on the IGB will start in the third quarter this year. He described the project’s existing schedule as demanding. “We are depending considerably on continued full support from both the Greek and Bulgarian governments for the timely completion of related host government agreements,” Tzortzis commented.

The DEPA official added that he expects the IGB pipeline to begin operating in the second half of 2020.

The IGB interconnector, a project to measure 180 kilomteres in length and offer a 4.3 bcm capacity with upgrade options, is budgeted at approximately 220 million euros.

Plenty of preliminary work is still needed before the project’s development commences.

The IGB is receiving full political support from Greece, Bulgaria the EU and US. Combined with the TAP pipeline, to run horizontally across northern Greece, the IGB promises to serve as a vertical route for the wider region. TAP and IGB officials are currently engaged in advanced talks for an agreement to interconnect the two pipelines.

 

Greece, Albania reach EEZ deal promising Block 1, 2 progress

The governments of Greece and Albania appear to have reached an Exclusive Economic Zone (EEZ) agreement whose implementation would clearly define offshore regional borders and enable hydrocarbon exploration progress in the Ionian Sea’s Blocks 1 and 2. An official announcement by both sides is expected soon, energypress has been informed.

In the past, Albania has strongly reacted against the prospect of any exploration at these blocks, which the neighboring country has regarded as disputed offshore territory.

The Greek government’s agreement with Tirana comes as acknowledgment of partial faults that have existed until now in the mapping out of the EEZ, reliable sources noted.

In exchange, Albanian officials will not be able to raise hydrocarbon-related objections with regards to the continental shelf close to Greece’s Othoni and Erikousa islets, located in the Ionian Sea’s north.

Leading Greek government officials have expressed confidence that problems encountered in the past, from Albanian opposition against Greek hydrocarbon activity in the region to attempts by the neighboring country to explore areas within Greece’s EEZ, will not be repeated following this latest agreement.

Blocks 1 and 2 were included in a Greek package of 20 offshore blocks included in a tender that ended in July, 2015.

A consortium comprised of Total, ELPE (Hellenic Petroleum) and Edison signed an agreement for Block 2, in the Ionian Sea’s north, last year.

The situation concerning Block 1, in the Ionian Sea’s northwest, remains unclear. ELPE had submitted an offer but local authorities have kept putting off its appraisal.

Less than a decade ago, Turkey had intervened following a previous EEZ agreement reached between Greece and Albania, demanding Tirana to retract the arrangement as it offered Greece full islands rights, which carried negative implications concerning Ankara’s hydrocarbon interests in the Aegean Sea.

 

 

 

 

 

Communications cable alongside EuroAsia Interconnector

An agreement has been reached for the installation of a submarine communications cable system (Quantum Cable) to connect Greece, Cyprus and Israel. It will run parallel to the EuroAsia Interconnector, planned to link the power grids of the three countries.

It has just been revealed that a Memorandum of Cooperation was signed last week in Nicosia between Quantum Cable and a leading global sector player based in the US for the communications cable system’s installation.

This subsea ultra-fast cable system will be installed at a depth of more than 3,000 meters. Its overall development cost is expected to reach approximately 200 million dollars and will be undertaken by the Quantum Cable firm.

Nasos Ktorides, who heads both Quantum Cable and the EuroAsia Interconnector consortium, formed to develop a 2,000-MW electricity interconnection, noted that the Quantum Cable submarine communications cable system will offer considerable capacity to handle tens of millions of concurrent high-resolution teleconferences between Asia and Europe.

A simultaneous launch for the two projects is being planned, which would greatly reduce the development costs of both.

Ktorides noted that the fiber-optic cable connection will also play a supportive role for the growing demand in high-speed connections, Cloud, data center and electronic services between Asia and Europe.

Last June, Greek Prime Minister Alexis Tsipras and his Israeli and Cypriot counterparts, Benjamin Netanyahu and Nicos Anastasiades, respectively, agreed to support the development of the undersea cable, whose broader scale is seen as a vital link between Europe, the Middle East and Asia.

 

 

 

Local diesel prices now EU’s 5th highest from 15th a year ago

The price of auto diesel in Greece has climbed ten places over the past year, from fifteenth highest to fifth on the EU-28 list, an unprecendented leap for an EU member state, according to seasoned pundits.

A year ago, auto diesel prices in the Greek market were marginally higher than the EU average but are now five percent over the common market’s average of 1.243 euros per liter.

Auto diesel was priced at 1.186 euros per liter on December 19, 2016 and has now risen to 1.303 euros per liter, a 10 percent year-on-year increase.

The sharp price increase of the fuel, prompted by tax increases, has caught many diesel vehicle owners who have switched technologies by surprise.

Finland, the UK, Italy and Sweden occupy the EU’s top four places in terms of auto diesel prices.

Greece has also climbed higher on the EU list of gasoline and heating fuel prices over the past year. Last December, gasoline prices in Greece were the EU’s fourth highest and have since climbed a place to third. The price of heating fuel in Greece has risen from ninth to eighth place in the EU since last December.

The price of gasoline in Greece is currently at 1.534 euros per liter, 13 percent over the EU average of 1.359 euros per liter, according to latest European Commission data.

 

 

East Med natural gas pipeline MoU to be signed in Nicosia today

Greece’s energy minister Giorgos Stathakis is in Nicosia today for a four-way Greek, Cypriot, Israeli and Italian meeting, along with EU participation, at which a Memorandum of Understanding for the East Med natural gas pipeline project is expected to be signed.

The prospective pipeline project is planned to carry southeast Mediterranean natural gas deposits along a route stretching from Israel to Europe.

Rejuvenated interest expressed by Italian officials in East Med has bolstered the ambitious project’s development prospects and prompted European Commission support for the project.

Preliminary studies co-financed by the EU have determined the project is technically feasible, financially sustainable and commercially competitive.

Its annual transmission capacity is planned to measure 10 billion cubic meters. The pipeline will be designed to enable a capacity increase to 16 billion cubic meters if needed. The project’s cost is estimated at 6 billion euros. Studies conducted to date indicate the project could be completed by 2025.

Following up on today’s MoU, technical teams representing Greece, Cyprus, Israel and Italy are scheduled to meet on December 21 to sign a finalized agreement.

Then, the leaders of Greece, Cyprus and Israel plan to stage a three-way meeting in Nicosia on January 8.

An article published by the Jerusalem Post to coincide with today’s four-way meeting presented the Greek-Cypriot-Israeli energy collaboration as part of a “series strategic interests” as well as an effort by the three countries to “restrict the Russia-Iran-Hezbollah axis in the region.”

This description has raised eyebrows and further complicates any attempt to determine hydrocarbon trends in the southeast Mediterranean, highly significant both geopolitically and geoeconomically.

 

 

IGB construction, procurement tenders to be announced January

Development of the Greek-Bulgarian IGB gas grid interconnector is expected to commence in mid-2018 as documentation concerning two project tenders, one for construction, the other for pipeline procurement, has been finalized, according to sources.

Both tenders are expected to be announced in January, which would enable the project to begin midway through next year, as ICGB, the project’s consortium, currently plans.

A number of key institutions, including the European Investment Bank (EIB), have expressed an interest in the project’s financing. Participation by the European Fund for Strategic Investments (EFSI) has not been ruled out.

The IGB is expected to be completed by 2020 along with TAP, the Trans Adriatic Pipeline, a project to transport natural gas from the giant Shah Deniz II field in Azerbaijan to Europe, through a route crossing northern Greece, Albania and the Adriatic Sea, to southern Italy.

State-controlled Bulgarian Energy Holding (BEH) holds a 50 percent stake in the ICGB consortium, while DEPA, Greece’s public gas corporation, and Italy’s Edison control 25 percent stakes.

The IGB interconnector, a project to measure 180 kilomteres in length and offer a 4.3 bcm capacity with upgrade options, is budgeted at approximately 220 million euros.

Its development promises to offer Azerbaijani natural gas an alternative route into southeast European markets. Procedures are already in motion for an extension to Serbia. The project will also enable LNG supply to regional countries currently subject to limited gas supply and facing major energy security issues.