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By Makis Georghiou
Greece is starting to feel the pressure from the government’s arbitrary decision to abandon a European electricity cable project and go it alone, with Brussels now depriving a gas storage facility of EU status and funding.
The European Commission had warned Greece that because of its recent about-turn on the EuroAsia Interconnector, linking the electricity grids of Israel, Cyprus, Crete and Attica, which it supported since 2013, it was going against the EU policy for energy security and supply, and plans to lift the energy isolation of Cyprus.
As a result, with the Greek energy regulator RAE deciding, upon the insistence of the outgoing Minister of Energy, to retract its support to EuroAsia as a “project of common interest” (PCI), the Commission warned that Athens would face infringement procedures.
Instead, RAE unilaterally awarded the Attica-Crete section of the entire project to state-controlled transmission system operator ADMIE and called it a “national” project, depriving the interconnector of EUR 300 mln in European grants and access to low-interest funding, thus burdening the higher cost on to the Greek consumer.
Kathimerini reported that the conflict with the EU Commission resulted in the removal from the PCI list of the underground Kavala gas storage, a development that the Hellenic Republic Asset Development Fund (TAIPED) "froze", as this project was set as a priority for 2019 and is not accompanied by any pending issue or irregularity that could put it out of PCI.
At the same time, despite the malicious attacks by Minister Georgos Stathakis against the Cyprus-owned project, alluding that it was “without funding” and “out of time”, the consolidated progress report for European electricity and gas PCIs issued by the Agency for Cooperation of Energy Regulators (ACER) on July 1, acknowledged that the EuroAsia Interconnector Crete-Attica interconnector is “on time”.
Furthermore, the Commission’s Enhanced Surveillance Report for Greece in June acknowledged that the Israel, Cyprus, Crete and Attica interconnection remains on the official PCI list and as such is eligible to receive EU grants from the ‘Connecting Europe Facility’.
The Report shows the EU’s full backing to PCI 3.10 EuroAsia Interconnector in its entirety, noting that despite the uncertainty created by the new ‘national’ competitive project by ADMIE, the “overall project” EuroAsia Interconnector “remains on the list of Projects of Common Interest.”
This could also be the reason why ADMIE announced that it was delaying the tender process for its ‘national’ project to beyond the July 7 elections, where the incumbent Syriza administration is expected to suffer a humiliating defeat.
News reports in Athens this week suggested senior government officials making acts of desperation and even destroying confidential files at various ministries.
The Athens Appellate Court decided to suspend the ADMIE tender for the procurement and installation of two converter stations and an electric substation, following the recourse against the tender by Euroasia Interconnector.
In its court case, Euroasia argued that Ariadne, the special-purpose vehicle set up by ADMIE operates according to decisions by the Regulatory Authority for Energy (RAE) that the European Commission has already found to be illegal.
The suspension, in the form of an injunction, is valid up until the court’s final verdict, expected in a month’s time.
On the other hand, the project promoter of the EuroAsia Interconnector announced that it has issued the final Invitation to Tender (ITT) to the pre-selected bidders in order to submit their final tenders.
The tender package is estimated at EUR 3.5 bln and includes four VSC-HVDC converter stations, and the supply of three separate HVDC submarine cable and land cable packages for the Israel-Cyprus link, the Cyprus-Crete link and the Crete-Attica link.
The company said the ITT packages were prepared by the Project Developer and its consultants, Elia Grid International (EGI), a subsidiary of Elia Group, one of the leading groups of transmission system operators (TSOs) in Europe, which acts as Strategic Consultant, Teshmont Consultants LP which specialises in HVDC power transmission systems and is leading all the other technical consultants of the Project Developer, and Clifford Chance LLP as the legal advisor.
Leading energy-sector technical engineering recruitment specialist Fircroft has included the EuroAsia Interconnector among the 10 biggest transmission and distribution projects in the world for 2019.
At $4.1 bln, the EuroAsia Interconnector has been valued as the fourth biggest project or network in the world, after China’s transmission lines development worth $33.7 bln, a Russia-Japan cable valued at $6 bln and the Atlantic Wind project, valued at $5 bln, linking the US offshore wind farms with the onland grid.
The Fircroft report said “the EuroAsia Interconnector will see the construction of the world’s longest submarine power cable between Greece, Cyprus and Israel to create an ‘energy highway’ using HVDC technology.
Construction of the project will be carried out in two phases. The first stage consists of the construction of a 500kV, 1,000MW submarine cable and eight HVDC onshore stations. The second stage will upgrade the electricity interconnector to 2,000MW.”
The writer is a regular columnist on energy, geopolitical and maritime affairs.
