Cyprus Mail 15 May 2023 - by Dr Charles Ellinas
Realisation of the EuroAsia Interconnector (EAI) has now entered the home-straight. The project is close to achieving several important milestones.
The EAI constitutes a critical infrastructure for the European Commission, Cyprus Greece and Israel. As such, it was included in all five European Project of Common Interest (PCI) lists since 2013.
Following the approval of a €657million grant by the European financing mechanism ‘Connecting Europe Facility’ (CEF) – the second highest grant ever under CEF – and €100million by EU’s Recovery and Resilience Fund, the EAI has now progressed into the construction stage. The EAI is in advanced discussions with the European Investment Bank (EIB) and Export Finance Norway (Eksfin), who will be providing the remainder of the funding.
At the end of last year EAI signed a ‘Reservation Agreement’ with Nexans Norway. Its parent company, Nexans, is one of the world’s biggest electrification and cable companies, based in Paris. The Agreement enables the commencement of works and ensures the reservation of the required manufacturing and installation capacity to design, manufacture, supply, install and test the HVDC cable system, under a construction and installation (EPCI) contract.
Siemens Energy will be constructing the first state-of-the-art multi-terminal electricity HVDC converter in Europe – at Kophinou.
The project has already secured all the relevant permits and licensing. EAI is partnered by Greek power grid operator IPTO (ADMIE), who are taking a stake in the project.
When completed by 2027, the EAI will be the world’s longest, over 1200km, and deepest, up to 3000m, subsea electricity interconnector, linking the national electricity grids of Israel, Cyprus and Greece with the European electricity grid, creating a reliable green interconnector for Europe. The first phase consists of a 1000MW HVDC subsea cable between Cyprus and Crete, with total estimated construction costs of €1,57billion. The Israel-Cyprus connection and a second 1000MW cable will be installed at a later stage.
EuroAsia Interconnector
In another first, the EAI will create the first electricity corridor between Europe and Asia. It has actually been labelled as an EU ‘electricity highway’, interconnecting Europe with Asia.
Not only it will end the energy isolation of Cyprus – the last electricity-isolated member state of the EU – but it will also contribute to the security of supply of Israel, Cyprus and Greece. In addition, it will contribute to the significant reduction of CO2 emissions and will serve the vision of the European Commission’s ‘Green Deal.’
The benefits to Cyprus are multiple. Foremost, the EAI will provide added flexibility and stability to the electrical grid so that it can accept a larger share of renewables. Combined with battery storage, this will enable Cyprus to increase the share of renewables in electricity production nearer the new EU target of 62% by 2030. That in turn will help reduce emissions dramatically and enable Cyprus to achieve EU emission reduction targets and, in the process, bring electricity prices down.
The importance of EAI has also been recognized by Cyprus’ new energy Minister, Giorgos Papanastasiou. Unequivocal and active support by the government is essential to ensure the success of this project.
The EAI will also make it possible to export excess renewable electricity to Europe, instead of having to curtail production as is happening now. It will also facilitate the reverse – to import electricity to Cyprus during periods of high demand, reducing the need to have conventional power generation on standby. It will also contribute to the development of competition in the electricity market.
This bi-directionality of EAI will make running Cyprus electricity system much more efficient than now and reduce investment into building additional standby conventional generation, thus contributing to lowering electricity prices.
When it becomes operational in 2028, Cyprus will achieve energy security and reliability. Through EAI, Cyprus can make best use of its renewable energy potential, and turn into a producer and transporter of electricity.
Project commencement
Commencement of the construction stage of the project was inaugurated on 14 October 2022 at the Presidential Palace in the presence of European Commissioner for Energy, Kadri Simson, the then President of Cyprus, Nicos Anastasiades, and the Ministers for Energy of Cyprus, Natasa Pilides and Greece, Kostas Skrekas.
In her speech at the ceremony, Commissioner Simson said “The EuroAsia Interconnector is yet another key infrastructure project strengthening the EU’s energy security by linking Cyprus to the EU’s electricity grid and contributing to our ambitious decarbonisation objectives. We hope for a speedy construction process to make this project a reality as soon as possible.”
The importance of the project was underlined by Ursula von der Leyen, President of the European Commission, who, during a visit to Israel, said “We have a major project in preparation: the world’s longest and deepest underwater power cable, connecting Israel with Cyprus and Greece. This will over time be electrification from renewable energies. That is where the investment has to go into.”
According to von der Leyen, Israel, Cyprus and Greece have an abundance of natural resources to produce renewable energy, and are important in Europe’s quest to secure clean energy supply. The EAI is an investment in energy security and will contribute to decarbonizing EU’s energy mix. “It is a great example of democracies sticking together not only in times of conflict but mostly to fight this huge enemy we have, and that is climate change. This is the big looming crisis in the background.”
Nasos Ktorides, CEO of EAI, said that through the electricity corridor that is being created, the EU will be securely supplied with electricity produced from renewable energy sources and gas reserves in Cyprus, Israel and Greece, a development that will contribute to the EU’s energy transformation and the integration of the European internal market. He also said the EAI will create prospects for energy import/export and trading, push down wholesale electricity prices, making the market more competitive and reduce electricity bill prices for Cypriot consumers.
A companion project to EAI is the EuroAfrica Interconnector, a project that would connect Egypt to Cyprus, Greece and Europe. It has the full support of the Cypriot and Egyptian governments and has also been approved by EU regulatory authorities. In October 2021, the Cypriot, Greek and Egyptian energy ministers agreed on a declaration of intent to progress this project.
With EAI now progressing to construction stage, and hopefully with immediate investments in grid upgrading, battery storage and smart meters, the hard-pressed Cypriot electricity consumers should start seeing light at the end of the expensive electricity-price tunnel.
Dr Charles Ellinas, @CharlesEllinas is Senior Fellow, Global Energy Center, Atlantic Council
