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By Makis Georghiou
Chinese-controlled Hellenic Transmission System Operator ADMIE is using its ties with the previous Syriza administration to undermine the new government and push through its own agenda for the Crete-Attica electricity cable, a project that will cost more and take longer to build than the already-approved EU one.
ADMIE seems to be pursuing a rift between recently appointed Energy and Environment Minister Kostis Hatzidakis and state authorities, such as energy regulator RAE and ESPA, the project financing arm of the Hellenic Ministry of Development and Investments, by claiming that it has secured funds for its own project — the Ariadni Interconnection.
This is in contrast to the meeting held in Nicosia on Monday between Hatzidakis and the management of the EU-funded EuroAsia Interconnector, the project of common interest that has already secured financing and is scheduled to be commissioned by mid-2022, a good 12-18 months ahead of Ariadni.
Accompanying Prime Minister Kyriakos Mitsotakis on his first official visit to Cyprus, Hatzidakis declared that the entire Israel-Cyprus-Greece electricity link is an important priority for Athens, but of greater importance is the energy sustainability of Crete.
Observers at the meeting, which was held in “a very positive and warm climate”, said that Hatzidakis clearly supported the EuroAsia project, but said he is concerned with the delay in the implementation of the interconnector.
“What is of greater importance is the energy stability of Crete, more so because the PPC (DEH) power plant on the island has to be decommissioned, in accordance with EU commitments,” Hatzidakis reportedly said.
The same observers said the minister is worried that the delay in the construction of the project is burdening Greek consumers with an additional €300 mln a year on the services of general interest (SGI/YKO) charges, and that despite the Greek government’s obligations towards Cyprus, as the last energy-isolated EU member state, the pressures for the Crete project are mounting.
“Whatever project is chosen, this aspect cannot be ignored,” the minister said, according to observers.
The EuroAsia Interconnector has already been inducted into the list of energy projects of common interest (PCI), ensuring that as a cross-border project it continues to receive funding from the EU’s “Connecting Europe Facility” and low-cost financing from other EU institutions, while Ariadni cannot tap into these funds because it was deemed by the former Energy Minister as being “national”, insisting instead that it would secure funding locally.
Information leaked to ADMIE-sponsored media in Greece, claimed that Ariadni has secured an unknown amount from the National Strategic Reference Framework (ESPA) a division of the Hellenic Ministry of Development and Investments, funded by the European Commission’s European Structural and Investment Funds (ESI Funds).
The reports claimed that “it is not known what is the amount with which the project will be funded by ESPA, but it is estimated to be around €350 mln. However, it is clear that its integration into the NSRF marks the insistence of the Greek side (even after the change of government) to complete the project within the timeframes even as a ‘national’ project, in case there is no agreement with EuroAsia for the implementation of the PCI.”
The ESPA funding is believed to be within the framework of the “Competitiveness, Entrepreneurship and Innovation” programme, which is commonly reserved for engineering and study works, and not to fully underwrite the construction of a project.
Tapping into such funds will also irritate Commission officials further, as the Syriza administration’s plan all along was to dupe the Eurocrats in surrendering funds for projects that Athens would choose, in defiance of Brussels.
Already, the Energy and Environment Ministry is the one facing the longest list of EU regulation violations and non-conformity, forcing the Commission to resort to an ‘infringement process’, to which Brussels may soon add Athens’ newly-discovered opposition to the EuroAsia Interconnector.
With PM Mitsotakis desperately trying to rebuild bridges with the European Commission, by appointing a senior Eurocrat as Energy junior minister in Hatzidakis’ team, Athens will have to show genuine judgment to remove the thorn from the irregular establishment of Ariadni by reinstating EuroAsia’s PCI status.
This can only be done in the form of a simple letter of endorsement from Hatzidakis, now that the 4th list of PCI energy projects in Europe is currently under review.
Possibly on the orders of ADMIE, former Energy Minister Giorgos Stathakis had refused to send such a letter to Brussels, with the Energy Ministry in Nicosia disturbed that this one-sided decision would condemn Cyprus to energy isolation, with power costs remaining high and the island constantly with the fear of reliving the 2011 Mari disaster.
Stathakis’ excuse for his about-turn in supporting EuroAsia – which his own PM Alexis Tsipras had publicly embraced over the years – was that the Israel-Cyprus-Greece interconnector had no funds and could not be implemented in time.
Quite the contrary, with EU support and on the advisement of the leading energy consultants in the world (Belgium’s Elia, Italy’s CESI and Canada’s Teshmont), EuroAsia has nearly concluded its procurement process with the final bidder expected to be announced very soon, parallel to financing plans.
Ariadni, on the other hand, has not yet managed to kick-start its procurement process, delaying the tender bids several times, now pushed back to the end of August.
With so many dilemmas on his plate, it is no wonder that Hatzidakis is being undermined by some of his own, who are using the Energy and Environment Ministry’s current vulnerability to push their own agendas.
Crete’s energy grid is under extreme strain and Cyprus no longer wants to remain the last non-interconnected member state of the EU, so Hatzidakis must decide if he wants the Crete-Attica sector of the project to proceed on time and at a lower cost or juggle with riskier and costlier alternatives.
The writer is a regular columnist on energy, geopolitical and maritime affairs
