ENERGY: Greek double-speak on electricity link baffles Cyprus and Brussels

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By Makis Georghiou

When news of a ‘breakthrough’ in the Crete-Attica electricity cable deadlock was announced by the Ministry of Energy in Athens, it seemed as if it was dictated by the transmission operator ADMIE.


It emulated the same tone of language used over the past 12 months by the previous Syriza administration and the Chinese-controlled company that wanted to build the cable on its own.

The ministry’s announcement tried to point a finger at the EuroAsia Interconnector, the EC-approved project promoter of the €3.5 bln electricity link, that until a year ago, enjoyed the blessing of all successive Greek governments ever since it was conceived in 2012 and inducted into the EU’s Projects of Common Interest (PCI) programme for major infrastructure works.

It hinted the Cyprus-based company had been uncooperative in reaching a compromise deal, justifying its decision to declare the Crete-Attica interconnector a ‘national’ project, but said it would help end Cyprus’ energy isolation as the last non-interconnected EU member state, by affording the PCI designation to the remaining Crete-Cyprus and Cyprus-Israel links.

This baffled the official promoter of the project, as well as energy officials in Brussels, who have yet to contemplate ADMIE’s insistence to take over the project and influence the Ministry of Energy’s decision, which will cost the Greek taxpayer more and take longer to complete.

By demoting the Crete-Attica link to a ‘national’ project, ADMIE will not be eligible for funding from the ‘Connected Europe Facility’, burdening Greek consumers with at least €350-375 mln more during the cable’s lifespan, while maintaining the PCI status for the EuroAsia Interconnector means the latter will be able to tap into the CEF funds.

Annoyed by the Greek government’s change of heart, Klaus Borchardt, head of DG Energy, demanded all sides submit a joint declaration assuring the interoperability of the entire cable system, connecting the grids of Greece, Cyprus and Israel to the European network.

According to Kathimerini, the EU official demanded reassurances of interconnectivity from ADMIE as well as the Cyprus transmission system operator, the energy regulators of Greece and Cyprus (RAE and CERA), and from the project promoter.

EuroAsia has said it was willing to cooperate with the Greek side, as long as the technical issues of interoperability could be guaranteed.

ADMIE rejected these approaches after which malicious reports appeared in some Greek media regarding the finances of EuroAsia Interconnector, an issue that had never been raised by the European Commission.

Kathimerini said Energy Commissioner Miguel Arias Cañete, as well as the European Commission DG Energy, have expressed their “intense dissatisfaction” with Greece’s stance so far.

Greece rejected the EU’s and Cyprus’ proposals for meetings on the matter to be held in Brussels.

Brussels clarified that no help should be expected from the EU if the Crete-Attica connection becomes a national project and not part of the EuroAsia Interconnector, meaning consumers in Greece will burden the high costs of electricity charges.

The issue is expected to be clarified on Tuesday, however, according to the report, Cypriot officials expressed their concern over the impact on Cyprus, particularly amidst the ongoing provocations from Turkey in the Cypriot Exclusive Economic Zone (EEZ).

Even Belgian transmission operator Elia tried to defuse the situation by offering to assist the project as a strategic partner and taking a 39% stake in the contractor for the Crete-Attica link, a proposal that does not suit the interests of ADMIE’s management.

George Kentas, Associate Professor in the Department of Political Science and Governance at the University of Nicosia said Greek Prime Minister Kyriakos Mitsotakis “cannot seek European solutions a la carte”.

“It is urgent that President Anastasiades should raise this issue with Mr Mitsotakis and persuade Greece to return to the project. If the EuroAsia Interconnector collapses, another axis of energy dependence will be added to the Turkish strategic control of Cyprus,” said Kentas.

“Electricity networks of the free and occupied areas are interconnected and should the EuroAsia Interconnector sink, the energy security of the Republic of Cyprus regarding the uninterrupted supply of electricity will depend, sooner or later, on Turkey,” he added.

Kentas said there was information that Greece is leaving the project because of “some business interests in the domestic electricity market”.

Centre-left newspaper Foni Ton Syntakton criticised the Athens government saying “the decision of former [Energy] minister Yiorgos Stathakis to proceed with the [Crete-Attica] interconnection using national funds, in order to overcome the delays created by strong economic interests that had access to DG Energy, was opposed by the then-opposition, accusing SYRIZA it had delisted it from Projects of Common Interest (PCI).”

Foni added: “[Energy Minister] Kostis Hatzidakis sufficed to declare the negotiations ran aground and that the project will proceed with the initial financing plans, without making any reference to the opposing views maintained by New Democracy.”

The harshest critics at the time of the SYRIZA U-turn were New Democracy’s then-parliamentary spokesman Nikos Dendias and the party’s energy commissioner Costas Skrekas, who have since been appointed Foreign Minister and Deputy minister on Common Agricultural Policy, respectively.

Cypriot daily Phileleftheros, in a report headlined “Energy boycott of Cyprus”, added that the director of the Cyprus Ministry of Energy, the leadership of the Cyprus Energy Regulatory Authority and the management of the EuroAsia were in Athens in a “last-ditch” attempt to salvage the Israel-Cyprus-Crete-Attica connection and lifting Cyprus’ energy isolation.

The lone voice of reason came from KINAL deputy Vassilis Kengeroglou, who, worried that his constituency in Crete is at risk of energy isolation and lack of supply, submitted a parliamentary question to Minister Hatzidakis demanding that the electricity interconnection to Crete be secured in the next few years.

“The previous SYRIZANEL government implemented an ineffective energy policy, which in fact, because of its ideological views, rejected the ready-made project it had received, effectively leading the energy sector to a dead end.”

“A striking example is the energy interconnection of Crete, which since 2013 had been included as a subproject to the Israel-Cyprus-Attica interconnection funded by the Projects of Common Interest (PCI) initiative, for which the SYRIZANEL government decided to delist from the PCIs, with no justification, as a result of which our country lost all the provisioned EU funding.

“Today, six years later, the New Democracy government continues to follow the wrong choice of the former government which is very costly for our country and leads Cyprus to electrical isolation.”

“As time goes by, serious failures are costly for consumers, as it means more than €1 bln in additional costs for all households and businesses [in Crete and Greece], due to ongoing utility bills under the Services of General Interest (SGI),” Kengeroglou said.

 

The writer is a regular columnist on energy, geopolitical and maritime affairs