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Energy ministers ready for EuroAsia MoU

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By Makis Georghiou

Energy ministers of Cyprus, Greece and Israel will put the final touches this week to a long-awaited trilateral agreement seen as the final step before construction begins on the €2.5 bln EuroAsia Interconnector electricity cable.

The wording of the Memorandum of Understanding between Cyprus’ Natasa Pilides, Yuval Steinitz in Israel and Greece’s Costas Skrekas is expected to be finalised during a videoconference on Wednesday.

The timing is significant as it comes on the eve of the European Commission opening up a new round of applications for Projects of Common Interest (PCIs), a programme that has included the EuroAsia in the last three rounds.

“This MoU shows political will and that all three ministers are committed to the project ending the energy isolation of Cyprus, which relies heavily on fossil fuel imports for power generation,” said a source at the Cyprus Ministry of Energy.

The official added that as an ongoing PCI, the EuroAsia Interconnector is a priority within Commission President Ursula von der Leyen’s ‘Green Deal’ vision and is eligible for funding from the Connecting Europe Facility.

The CEF has abandoned hydrocarbon projects to drastically reduce emissions by 2030 and promote ‘clean energy’ projects and renewable sources of energy, such as electricity generated from solar farms and wind parks.

The aim is to transform the entire European Union into a zero-emission community by 2050.

The ministry source said that applications for the next round of PCIs will open in April and EuroAsia has already received construction permits, has the manufacturers lined up and on target to be commissioned by December 2023.

It will interconnect the electricity grids of Israel, Cyprus, and Greece through a 1,000MW undersea cable, increasing at the next stage to 2,000MW.

It will carry electricity from clean energy producers to Europe via a 1,208km ‘electricity highway’ through converter stations built by Siemens.

The cable will also satisfy the demands for ‘energy security’, as Europe is often at the mercy of natural gas producers outside the bloc that can switch the flow at any given moment.

Wednesday’s teleconference between the three ministers will finalise the text of the MoU that, according to the Cyprus News Agency, will incorporate Israel as a stakeholder in the entire process.

Israel will thus comply with EU regulations for PCIs, allowing it as a major producer of clean energy, to become an electricity exporter to Europe.

These regulations range from a fast-track licensing process, to ensure funding determined by the relevant national energy regulators.

Energy Minister Pilides told CNA that the EuroAsia project “is considered of great importance for the further penetration of Renewable Energy Sources (RES) and the export potential of electricity and will increase interest in Cyprus RES.”

A similar trilateral MoU is also underway involving Cyprus, Greece, and Egypt for a parallel electricity project, the 1396km EuroAfrica Interconnector.

Energy strategy

On Sunday, Pilides and Steinitz had a face-to-face meeting in Jerusalem on the sidelines of President Anastasiades’ visit to Israel.

“This was an excellent opportunity to continue to coordinate the promotion of the Israel-Europe gas pipeline, the interconnection of the electricity system between the countries and the attempt to reach an agreement on the Aphrodite natural gas reservoirs,” Pilides said.

“Cooperation between Israel and Cyprus in the field of energy has never been better,” Steinitz added.

The Israeli minister had a similar conference call two weeks ago with his Greek counterpart, Costas Skrekas.

They “reaffirmed the strong interest and support of the two countries in the EastMed gas pipeline and the EuroAsia Interconnector electricity project, which will be a strategic energy coupling between the eastern Mediterranean and Europe”.

A recent Commission staff working document on the assessment of the final national energy and climate plan (NECP) for Cyprus said the island’s energy security will be improved by the EuroAsia Interconnector and by an increased share of domestically sourced renewable energy.

“Cyprus aims at an interconnectivity level of 15% for 2030, which is compliant with the target set at EU level,” as it is currently an energy island with no interconnection capacity, the NECP assessment said.

Greece’s former Energy Minister Yannis Maniatis said: “The Euro-Asia Interconnector is a leading project of pan-European interest, which upgrades Greece geopolitically and has been part of EU financing schemes since 2013.”

European industrial news sources said EuroAsia Interconnector has invited cabling players to apply for engineering, procurement, construction, and installation (EPCI) on the HVDC cable system between Israel, Cyprus, and Greece (Crete), with an estimated value of €1.7 bln.

According to Italian media reports, the cable manufacturing colossus Prysmian saw its Milan-listed stock price rise by about 10%, boosted by news that it was issuing convertible bonds on the back of major projects on the horizon.

Analysts at Banca Akros said the Italian group “should be close to acquiring two important contracts.

“One is the EuroAsia interconnector submarine cable for the Israel-Cyprus-Crete electricity link, and the other is for the supply of 10,000 kilometres of fibre optic cables to the U.K.”

Meanwhile, two separate reports also place the EuroAsia Interconnector as being implemented on time, as opposed to the EastMed natural gas pipeline.

The German Association of Energy and Water Industries (BDEW) said in a Cyprus country profile on February 10 that through the EuroAsia Interconnector, excess electricity from renewables will flow outwards and, in return, electricity can flow to Cyprus from neighbouring countries if required.

“However, the EastMed pipeline, to transport natural gas off the coasts of Cyprus and Israel, to Greece and Italy faces obstacles from Turkey. Test drilling is progressing more slowly than planned, and completion of the pipeline has been postponed for two years after 2027.”

Mitvim, the Israeli Institute for Regional Foreign Policies think-tank published a paper this month describing “Israel’s pursuit of energy interdependence”.

Gabriel Mitchell, a policy fellow at Mitvim and author of the report, argued that Israel is interested in the EuroAsia Interconnector and the undersea electricity cable may be more feasible than the EastMed pipeline.

“Ironically, there is a greater chance that the lesser-publicised interconnector will successfully link Israel and Europe in the eastern Mediterranean, and not the more recognisable natural gas project.”

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