Filenews 11 June 2024
The Cyprus Electricity Market Association (with the participation of private electricity production and supply companies, member of OEB), announced yesterday that it supports the electricity interconnection between Cyprus and Europe, "in a way, however, that will ensure the uninterrupted supply of electricity, strengthen the competitive market in Cyprus and offer benefits to consumers and the economy of the country. offering geopolitical value to the country".
According to the association, "none of the above criteria are met, if ADMIE's design for the Great Sea Interconnector is accepted, as shown by the conclusions of the study and the basic assumptions made to make the pipeline viable, based on what is known."
The Hellenic Electricity Market Association expresses deep concern and concern about the intentions of ADMIE (the operator of the interconnection), a concern that is reinforced, as it says, by the lack of transparency.
The association warns that "if ADIME's design for the Great Sea Interconnector is accepted, it will mathematically lead Cyprus to serious energy deadlocks and unbearable financial burdens, with catalytic consequences for the economy and society of Cyprus. It will lead to a stranglehold on the production and supply of electricity (conventional and RES) by both EAC and private initiative."
It adds that "IPTO's design for the Great Sea Interconnector contains many highly problematic assumptions (technical and commercial). The state must seriously and objectively study the design of IPTO, with the contribution of independent and impartial experts."
Commenting on the main conclusion of the preliminary study prepared by Exergia on behalf of ADMIE for an expected 30% reduction in the cost of electricity in Cyprus after the operation of the cable, the Electricity Market Association argues that the study "ignores the benefits of importing natural gas, which will bring about significant reductions in the cost of electricity production and a reduction in significant penalties for pollutants. We note that based on the timetables, the import of natural gas is expected to be completed much faster than the operation of the Great Sea Interconnector. Also, among other things, it ignores the reduction of production costs from the imminent operation of two additional conventional production units (6th EAC Unit and PEC Power Station), using natural gas. It also ignores the reduction that will be brought about by the further utilization of electricity production from renewables."
Particular concern is expressed through the announcement about the term that sounds included in the planning for the interconnection "for the steady import of electricity up to 500MW uninterruptedly, 24 hours a day, seven days a week, 365 days a year. This means not a reduction, but an increase in electricity costs, since the consumer will pay the cost of all existing fixed assets (for existing investments – infrastructure), even increased, since it will not be amortized by placing their production about 8 months a year when consumption is below 500 MW".
According to SAE, "ADMIE's prediction – demand that the Republic of Cyprus, i.e. the Cypriot consumer (households, commerce, industry, agriculture, etc.), should start charging for the use of the Great Sea Interconnector as of today, while the project will be operational, if there are no delays, in 2030 is also extremely provocative and unacceptable. Extremely provocative and destructive for the economy and society of Cyprus," it added, "is the regulatory decision for the Cypriot consumer to pay at least 63% for the construction and operation of the project."
"In fact, the Great Sea Interconnector, as proposed by ADMIE, has as its strategic objective the cost-free service of ADMIE itself and serving the interests of producers in Greece, so that through the electricity pipeline it can channel to Cyprus the surplus electricity production in Greece, where the production capacity is constantly increasing."
Regarding the debate on whether or not investing in energy storage (batteries) is a more advantageous option than the construction and operation of the cable, the Electricity Market Association considers that "it is misleading to argue that the €2 billion Great Sea Interconnector, in the economic, technical and commercial terms it proposes, will be a more economical solution than the "alternative". In such a comparison, it should be mentioned that storage costs, at current prices (which are constantly decreasing), will be €0.75 billion."
Essentially, the association concludes, "ADMIE with the proposed design proposes to become itself the main supplier of electricity in Cyprus, from production sources in Greece and convert the production of Cyprus (conventional and RES) to backup, in order to supplement the needs. This means bankruptcy of local production, including EAC, destruction of investments, annihilation of the value of the €700 million investment. for a natural gas terminal and most importantly: Concession of the energy sovereignty of the Republic of Cyprus in the hands of IPTO. For Cyprus, what remains is an estimated additional cost of €120 million annually to secure Cyprus' energy reserve, which will be added to the electricity bills".
