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12° Nicosia,
24 May, 2024
 
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Energy gamble or gain? Cyprus' big plans under scrutiny

EIB's verdict triggers a green energy revolution debate in Cyprus

Apostolis Tomaras

Apostolis Tomaras

The reluctance of the European Investment Bank (EIB) to financially support a part of the project, such as the Israel-Cyprus-Greece electric cable, should strongly concern Cyprus regarding its energy plans. The reasoning behind EIB's stance, evaluating only a portion of the project rather than the whole, essentially confirms the opinions persistently held for 15 years that the announced energy projects are economically unprofitable investments. In simpler terms, one could argue that Cyprus is distant from Europe and its energy systems, with which it aspires to connect.

The evaluation of the EuroAsia cable by EIB doesn't imply the project's failure, but it does indicate to Cyprus that other ambitious projects, like the EastMed natural gas pipeline, are likely to face challenges in implementation. Even if the electric cable project from Cyprus to Crete moves forward with alternative resources, the same might not apply to other more ambitious projects from an economic standpoint. Cyprus' government, beyond necessary public assurances about the Cyprus-Crete project, needs to carefully reconsider previous decisions to avoid a similar situation. The assessment by EIB confirms concerns expressed in Athens, leading to the independence of the third phase of the project concerning the Crete-Greece mainland segment. This project's completion secured energy self-sufficiency for Crete, a political decision that almost caused significant issues in its relationship with Greece.

Undoubtedly, the cable will free Cyprus from energy isolation and provide security enjoyed by all European continental states. However, the pressing need for electric security shouldn't rely on uncertain investment choices, especially when other options like green energy exist. For example, the production of green energy, like solar power, isn't at optimal levels. Attention should be on sustainable energy sources while other parts of Europe are already focusing on clean energy production.

EIB's assessment of EuroAsia clearly directs Cyprus' attention. Upgrading the electric grid for solar energy absorption, storage, and supporting green investments, private and public, is vital. Given that governments make political decisions, caution should also extend to projects involving Cyprus' energy resources. Cyprus' role in the energy landscape should be localized and realistic, different from the grand ambitions of the past. Soon, Cyprus will need to utilize additional natural gas reserves beyond "Aphrodite." Strong relationships with Israel and Egypt could elevate Cyprus as a key energy player in the Eastern Mediterranean. Persistence with projects like EastMed, beyond positive political climates, might struggle to materialize, particularly in a changing geopolitical environment.

If Cyprus doesn't abandon the logic of becoming a major energy player, considering sizes and distances, it might find itself reacting to events rather than shaping them. Cyprus' position is in the Eastern Mediterranean, adopting a strategy similar to Israel's—prioritizing its own energy resources. The electric cable isn't the only solution for desired energy sufficiency and security, especially when other nations with less solar exposure invest in renewables. Egypt is poised to capitalize on hydrocarbons, and options like EastMed and EuroAsia could operate in a supplementary role without being dictated by events.

[This article was translated from its Greek original]

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Cyprus  |  energy  |  electricity  |  bank  |  invest  |  opinion

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