Filenews 30 July 2024 - by Eleftheria Paizanou
Whether or not the Republic of Cyprus participates in the investment of the Cyprus-Greece electricity interconnection through the Great Sea Interconnector underwater cable, consumers in Cyprus will bear 63% of the cost of implementing the project, according to an information note from the Cyprus Energy Regulatory Authority (CERA) to Parliament, in response to questions submitted by members of the parliamentary Energy Committee during a discussion on the issue last month.
Today, the Energy Committee will continue the discussion on both the electricity interconnection and the Vasilikos gas terminal, in the presence of the Minister of Energy, CERA and other competent bodies.
CERA was asked by the MPs to comment on whether the Republic of Cyprus will contribute to the depreciation of the investment, even if it does not participate in the project. As the Regulatory Authority points out, the decisions of the two regulatory authorities, Greece and Cyprus, on the cross-border allocation of interconnection costs, which were taken on the basis of the European Regulation on guidelines for trans-European energy infrastructure, are in force whether the Republic will invest in the project or not.
"Therefore, the commitment for sharing applies and the Republic of Cyprus through electricity consumers will bear 63% of the cost of implementing the project and the Hellenic Republic through electricity consumers 37%, even if the Republic of Cyprus does not participate in the project," CERA stresses.
At the same time, it clarifies the additional amount of €100 million. which will need to be recovered from consumers, in addition to €1.2 million that do not concern sponsorships. According to CERA, the decision on cross-border cost sharing set as a prerequisite the securing of a grant of €750 million.
Today, the project promoter (IPTO) has secured a grant from the "Connecting Europe Fund" amounting to €657 million, so, according to CERA, €100 million remains to satisfy this condition.
At the same time, CERA indicates that in case the sponsorship of €100 million is not secured, it will be possible to achieve the necessary funding. (originally it was a grant granted by Cyprus), then either the decision on cross-border cost sharing between the two regulators should be amended and the €100 million should be recognised. as part of the capital expenditure of the project, which will be divided into 63% for consumers in Cyprus and 37% for those in Greece, which is most likely, either, in case of non-securing of sponsorship, legal proceedings will proceed from the two regulatory authorities to the implementing body for non-compliance with the terms of the cross-border cost allocation decision, with all that this entails for the successful implementation of the project.
Late 2029 – early 2030
CERA has so far not imposed any charges on electricity consumers in Cyprus. A relevant request by IPTO to start charging consumers from 1/1/2025 was rejected by CERA on July 2, 2024, which caused a strong reaction from IPTO, which threatened to stop the project.
IPTO lodged an objection to CERA's decision, which reserved the right to accept or reject the objection until August 9.
The project is expected to be operational, if not interrupted, by the end of 2029, while its promoter has requested that the start date of construction of the project be read on January 1, 2024, as that is when the construction of the cable by Nexans, in Norway, began.
The new cost-benefit analysis of the project, recently delivered to the Ministry of Energy by IPTO, included calculations of the benefit to Cypriot and Greek consumers, which was taken into account when deciding on cross-border cost sharing.
CERA also informed the Parliament that there is no provision in the legislation for the approval of the possible consumer charge by the Parliament, but only by the national regulatory authorities.
In relation to the electricity interconnection project between Israel and Cyprus, the promoter has not submitted an investment request to the regulatory authorities.
