Filenews 19 June 2024 - by Chrysanthos Manoli
Through a very interesting publication today of the reputable energy website energypress.gr emerges -through estimates by Greek electricity stakeholders- as a fear for the Cypriot Government the possibility that electricity consumers in Cyprus will eventually be asked to bear financially 80% or more of the construction cost of the electricity interconnection between Cyprus and Crete!
Why is there a risk of this? According to the report, if the Cypriot government insists on putting €100 million into the project, it will not be able to do so. Instead of as a sponsorship, as the Anastasiades government had decided, then the regulatory decision on cross-border cost sharing between consumers in Cyprus and Greece should be changed.
And according to the report, if given... the opportunity to change the regulatory decision on CBCA (Cross Border Cost Allocation) so that the €100 million is not counted in grants; If the Anastasiades government "ordered", then it is likely that the cross-border distribution will change and become 80-20% at the expense of Cypriot consumers, from 63%-37% now.
And why should Cypriots pay (even) more? Because, according to the publication (which puts forward -existent- claims of energy people in Greece), the 63-37% distribution was decided when the electricity interconnection of Cyprus included the electricity interconnection of Crete – Attica. After a long battle fought by ADMIE, the interconnection between Crete and Attica was finally promoted by ADMIE and not by EuroAsia and is close to implementation. The so-called small interconnection between Crete and Peloponnese has already been completed.
The energypress.gr writes: "However, the initial plan for the interconnection between Greece and Cyprus provided that the networks of the two countries would be connected in Attica, not in Damasta in Heraklion, as today. In this way, the 37% charge for Greek consumers was justified at the time, precisely because Crete – Attica was an integral part of the whole project (Phil. consumers in Crete, among others, would benefit directly). However, for five years, the above interconnection has been cut off from the original trunk and is now in the process of completion. Given this, as the same sources explain, if the cost sharing takes place again from the beginning, the Cypriot side risks being overburdened, while the Greek side may even bear less than 20%.
Phileleftheros has long pointed out that in Cyprus, too, in government and other energy circles, the possibility of amending the regulatory decision of CERA and the Greek RAE is being discussed, but not in order to increase the amount that consumers in Cyprus will pay, but to reduce it. Because, as it is argued, any benefit to Cypriot consumers from the expensive electricity interconnection does not prove to be greater than the benefit that the Greek electricity system may have, given that many times lately ADMIE and personally its chairman and CEO, Manos Manousakis, have stated that it is in urgent need of green electricity exports.
Because already in Greece much more electricity is produced from RES than the country can consume without problems in the stability of the system and the rates of rejection of green electricity have increased (as in Cyprus and other EU countries), due to overproduction and low consumption in some periods.
Recently, Phileleftheros wrote that both the European Commission and the relevant Directorate-General warned Cyprus that if it insists on a revision of the CBCA it may... regret it, because it is likely that the grant of EUR 657 million will be reduced. given by the EU (although the cost increased from €1.5 billion to €1.94 billion!). The current position of the Cypriot Government is that it does not claim an amendment of 63% – 37%, despite the reactions that exist between consumers and economic – energy factors.
Phileleftheros has also repeatedly informed its readers (even yesterday) that the intention of the current Cypriot government is not to "donate" to IPTO and the interconnection the €100 million. It will borrow from the European Recovery Fund as a grant (to reduce the cost of building the cable by an equal amount and accordingly to reduce the cost by €63 million to Cypriot consumers, out of the total -inevitable- €1.2 billion!). The Government has long since officially announced and informed ADMIE that it will not allocate "free" money, but will allocate it to receive a substantial percentage of shares in the Great Sea Interconnector, to have a role and say in the major project that will operate for 30-40 years and may determine the energy data -and investments- in Cyprus.
On the other hand, however, the Cypriot state, apart from its role and reason, will also be burdened with investment risk if it participates in the GSI's shareholding structure, e.g. in the event that the project sinks in the middle for technical or geopolitical reasons or in the event that the current cost of €1.9 billion will be borne by the Greek government. ejected again for some reason. This is also of great concern to the Cypriot Ministry of Finance.
However, energy experts argue that because the project was considered by the EU as a regulated project of common interest, with guaranteed recovery of (any) cost from consumers in Cyprus and Greece and at the same time guaranteed for investors a guaranteed return of the project for its decades of operation, at a rate of just over 8%, the margins of investment failure are controlled...
We are informed that there is no question of differentiating the intentions of the Christodoulides government. The only possibility that remains open is that the participation in the share capital of the Great Sea Interconnector will be deemed unprofitable and unsafe for the state, when the final cost-benefit analysis that ADMIE will prepare and submit at some point is evaluated in many ways.
