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By Makis Georghiou
The credibility of Greek institutions has been placed in doubt after the government in Athens decided to abandon its partnership with a Cypriot electricity highway developer and go it alone by awarding the project directly to a company of its own choice, violating EU rules.
The EuroAsia Interconnector, a subsea cable connecting the power grids of Israel and Cyprus to Crete and then on to Athens, has already received tens of millions in EU grants for studies and is eligible for low-cost financing from European financial institutions, such as the EIB and EBRD.
It is also challenging in court the Greek government decision to award the Crete-Attica link to Chinese-controlled transmission system operator ADMIE.
Following unprecedented public pressure exerted on its board members, the Greek energy regulatory authority (RAE) has been stalling its decision to de-assign the Crete-Attica sector of the cable from a ‘Project of Common Interest’ with all the EU support and funding benefits that this entails, and re-assign it as a ‘national’ project.
Industry watchers in Brussels, miffed by the Greek Energy Ministry’s decision to abandon plans which all Prime Ministers have supported since 2012, said this shows how unreliable the Greek government could be, opening a Pandora’s Box, as it also jeopardises Athens’ commitment to similar projects, such as the EastMed gas pipeline.
Questions posed during the TEN-E electricity Regional Groups meeting in Brussels on April 11-12, hosted by the Commission’s DG Energy, remained unanswered by the RAE representatives attending, according to transcripts from the meeting.
“What is the guarantee that projects that are labelled as PCIs will remain such and not lose this designation,” asked one participant at the meeting, adding that Greece could change its mind on any energy project in the future, including the Israel-to-Italy EastMed pipeline, and throw billions in investments down the drain, let alone risking such projects ever being completed.
This prompted Catharina Sikow, Head of Unit Trans-European Energy Networks at the EU Commission to respond by saying that a lot of money “has already been invested” in the EuroAsia Interconnector and that this investment must be safeguarded.
The meeting, called to review all current and prospective projects to be included in the next Union List of PCIs in November, decided to postpone its conclusions until after questions had been answered by all stakeholders.
This process, that will also consider the joint communique issued in Nicosia in late February whereby the European Commission and Cyprus authorities reiterated their full support for the timely implementation of EuroAsia Interconnector as a PCI, could take months to conclude.
And this is where the RAE dilemma kicks in. The Greek regulator must first de-list the Crete-Attica link from the PCI list before it is re-designated as a ‘national’ project, ultimately delaying any procurement process issued by ADMIE for the construction of the high-voltage direct current (HVDC) cable and the corresponding converter stations. Already, the first tender issued by ADMIE a fortnight ago has been recalled.
Furthermore, Cretan voters have placed the issue high on the agenda of upcoming local municipal elections, saying that the EuroAsia preferred site for a converter station was accepted by all and that ADMIE insists on placing its controversial converter station near a highly-populated tourist area of Heraklion.
The RAE board was supposed to rubber stamp the Ministry’s decision before the Easter break, but the meeting was adjourned twice and the outcome unknown, despite all earlier decisions being widely publicised in Greek media.
ADMIE, too, by its own admission, has pushed back the date for commissioning of its ‘national’ Crete-Attica cable to the last quarter of 2022, placing it a good six months after EuroAsia’s planned completion in June 2022.
This counters the argument over RAE’s rationale of claiming “unsubstantiated delays” in order to assign the project to ADMIE to do it faster, with the risk of delays repeatedly pointed out by the European Commission.
Already, an explosion at an old transformer in Crete on March 22 plunged the Greek island into darkness and made it vulnerable to future power outages.
“The event prompted residents and local politicians to demand an end to delays of the Crete-Attica electricity interconnection that would ensure the island’s energy security,” former Cyprus Transport Minister and EuroAsia board member Marios Demetriades wrote in an article at the time.
The lawsuit filed by EuroAsia Interconnector against RAE in the Administrative Court of Appeals of Athens on March 22 calls for the annulment of all RAE decisions pertaining to its unilateral awarding of the Crete-Attica link project to ADMIE, causing further headaches to potential tenderers who have backed down fearing legal repercussions, while the cost of the ‘national’ variant seems to spiral.
The only consoling news for ADMIE came from the EIB decision to finance half of the EUR 350 mln cost of the far smaller Peloponnese-Crete link, which Greek cable makers want reducing from a 500kV system to 320kV to match their manufacturing capability.
However, this money cannot be diverted to other projects, such as ADMIE’s Crete-Attica cable, for which only the Chinese have shown initial interest to finance.
The same technical specifications are being imposed on ADMIE for the bigger Crete-Attica cable, which will create major interoperability concerns as this would not be compatible with the 1,000-megawatt EuroAsia cable.
All eyes are now on RAE which needs to give the green light to ADMIE to proceed with its own tender process, but is dragging its feet fearing legal repercussions, which the Energy Ministry tried to deter in February by tabling a bill in the Greek parliament that would release RAE board members from legal liability for all past and future actions, a proposal that deputies unanimously rejected.
The writer is a regular columnist on energy, geopolitical and maritime affairs
