The investment of 2 billion euros for the electrical interconnection between Greece and Cyprus is leading to a new impasse.
This results from the latest conference call between the Deputy Minister of Environment and Energy Alexandra Sdoukouthe president and CEO of ADMIE Manos Manousakithe ERAEF and representatives of the Ministry of Energy of Cyprus and CERA.
On August 23, in an electrified atmosphere several times during the teleconference, the Cypriot side insisted on its position that Cypriot consumers should not be burdened with the cost of the Great Sea Interconnector from the start of the project and the funding of more than 600 million euros from the E.U.
The Greece – Cyprus cable
CERA’s insistence on not revising its previous decision is short-circuiting the grandiose project of electrical interconnection of Cyprus with Greece and the EU. and the lifting of its energy isolation.
The investment project that ADMIE undertook to rescue following the advice of the Cypriot republic, taking the financial risk and having even entrusted the execution of the project to the French Nexans, seems to be doomed…
The Christodoulidis government, both with recent statements by the Minister of Finance Makis Keravnos and Giorgos Papanastasiou, show that they support the decision of CERA, which, in relation to what is applied internationally to such projects with adjustable returns and revenues, rejects the recovery of the project costs from the start of its construction.
The interests
But who benefits from the collapse of the project?
According to sources who are in a position to know the data of the energy market of Cyprus, the state EAC (public electricity company) which operates diesel power units and the minimum RES producers representing only 25% of the market.
The wholesale price for the island’s diesel power producers is at 200 euros/MWh, while the prices of RES producers are not far from the aforementioned exorbitant price as they amount to 195 euros/MWh. In fact, as the same market players report, in the electricity system of Cyprus the production of RES – although it represents only 25% – is subject to power cuts in order to satisfy the diesel units and the EAC.
In order to understand the comparison in the Greek electricity market, RES producers are compensated with prices around 57 euros/MWh, while the wholesale market as a whole fluctuates around 120 to 140 euros/MWh.
With this system, Cypriot consumers are the losers, who pay perhaps the highest price in the EU. for the electricity they consume: At 33 euros/MWh.
On the contrary, in Greece, Greek consumers pay for electricity with a price range of 9 to 13 euros/MWh.
The charge
Among the arguments of the Cypriot side is the burden that will be borne by the country’s consumers from the electrical interconnection amounting to 2 billion euros.
Based on the cost-benefit study, the burden on Cypriots amounts to just 0.6 euro cents per kilowatt hour.
At the same time, through the new electricity transmission system, the Cypriot market will benefit from the circulation of cheap green energy, which will result in the strengthening of competition on the island and the reduction of electricity costs.
The role of Turkey
Officials of the Cypriot government are reported to be expressing, like Finance Minister Makis Keraynos, their concern over the aggressive rhetoric and overall response of Turkey towards the project.
They are even reminiscent of the recent incident with the Italian research vessel “Ievoli Relume” which was carrying out research work on behalf of Nexans in the international waters of Kasos – Karpathos.
On the other hand, however, the Turkish side has already expressed its intention to the European Commission for the development of an electrical interconnection from Turkey to the occupied territories of Cyprus with all that this entails for the island’s energy security.
H Nexans
Pressure for the implementation of the electrical interconnection project cannot be ruled out, the information says, for the French Nexans to exert as well.
The multinational cable interconnect manufacturer has already been downgraded by Goldman Sachs as a significant portion of its construction backlog depends on the Great Sea Interconnector.
Shipwreck;
Everything shows how the investment of 2 billion euros is not excluded, although it receives the support of the EU. to be driven to a wreck.
The solution seems to be clearly in the hands of the leaders of the two states, Kyriakos Mitsotakis and Nikos Christodoulidis.
Source: ot.gr
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