Filenews 14 April 2024 - by Chrysanthos Manoli
Publicly, the Greek government and ADMIE have made public their annoyance at the handling of the Cypriot government only – or mainly – regarding the request to update the cost-benefit study, but also the "business plan", as Energy Minister George Papanastasiou called it on Friday.
In fact, the issues causing tensions between the two governments are two: The first is indeed the update of the study and the second, about which Phileleftheros has already written, concerns the starting time of charging electricity consumers in Cyprus and Greece with a special fee, which will end up in the coffers of the implementing body. so that gradually - over a period of about 30 years - to recover the cost of the project.
The pressure exerted by the Greek side for the withdrawal of the Cyprus side is intense and manifests itself almost on a daily basis.
Regarding the need to carry out new studies on the benefit that Cyprus would derive from its possible participation in the share capital of Great Sea Interconnector (currently 100% owned by IPTO), the Cypriot Government did not back down. And IPTO has already publicly stated, through its chairman, Manos Manousakis, that the cost-benefit study will be carried out and is expected to be delivered in June. How and who will evaluate this study from the Cypriot side (apart from CERA, which will do so in its duties) is another issue that will be discussed at a later time.
Regarding the second front of the confrontation, i.e. the starting point of charging electricity consumers in order for the implementing body to start generating revenue, the Cypriot side has also not backed down. But the Greek side has not stopped exerting pressure either. In fact, it seems to have, in this aspect, the understanding of the European Union, which, informally, appears to favour the start at this stage of cost recovery by the operator, since amounts are already paid to the cable manufacturer by IPTO.
As we wrote before, ADMIE argues that the regulatory decision of 2017 (CBCA, for the sharing of cross-border costs between consumers in Cyprus and Greece) provides that cost recovery will begin with the start of construction of the project. And ADMIE believes that construction began as soon as the construction of the cable began by Nexans, in Norway.
However, on the Cypriot side, it is emphasized that at no point in the regulatory decision is it mentioned that cost recovery starts from the day construction begins.
It is noted that CERA accepted the charging of consumers from the construction stage (before the operation of the interconnection) in order for the implementing body to recover costs and finance the projects, but did not commit through the CBCA decision at which stage of construction the entity will start collecting. On the contrary, the decision clearly states that recovery will begin when CERA (for Cypriot consumers) and RAE (for consumers in Greece) so decide. CERA favours the start of recovery during the cable laying process.
This issue remains open and will probably not be closed until the cost-benefit study or other studies that may be done in the meantime have been delivered and evaluated.
However, it should be noted that the new studies will only determine whether Cyprus will participate in the implementing body. The charging of consumers per kilowatt hour of consumption has already been locked by the regulatory decision (regardless of whether or not the state participates in the project) and what remains to be done is only when the charge for interconnection will start to be imposed.
We remind you that through the update of the studies, CERA and the Government will also evaluate on which side (of consumers) the greatest benefit will be created. Based on the existing study, of '17 (confirmed in 2023), Cyprus is considered more favoured than cable, hence its consumers will bear 63% of the cost and consumers in Greece with 37%. It is possible that this agreed sharing will be asked by the Cypriot side to be differentiated, which will obviously run into disagreement with the Greek government.
