Cyprus faces crucial energy decisions in Nicosia meeting

Cyprus' political leadership is poised to make pivotal decisions about its energy future in a major meeting set to take place at the Presidential Palace tomorrow, according to Kathimerini's Apostolos Tomaras. The gathering is expected to address and resolve several critical issues regarding Cyprus' electrical interconnection with European grids via Greece.

The meeting will be attended by Cypriot President Nicos Christodoulides, along with Energy Minister Giorgos Papanastasiou, Finance Minister Makis Keravnos, Deputy Minister to the President Irini Pikkis, representatives from the Cyprus Energy Regulatory Authority (RAEK), and the Legal Service. Greek officials include Environment and Energy Minister Theodoros Skylakakis, ADMIE CEO Manousos Manousakis, and members of the Greek Energy Regulatory Authority (RAEAEY). A representative from the European Commission, which is funding the €657 million project, and NEXANS, the company constructing the cable, will also be present.

The central issue at hand is the proposed interconnection project, which aims to alleviate Cyprus' energy isolation, a concern for the EU's last member state without direct linkage to European electricity grids. A successful outcome could end annual worries about electricity supply adequacy, balance Cyprus’ high electricity tariffs with European rates, and reduce reliance on polluting fuel oil. Conversely, a negative outcome would prolong the use of costly and environmentally damaging fuel oil and impose an additional €240 million burden on the state for pollution.

The Cypriot delegation is expected to address several points, including the financial viability of the project, consumer impact, and geopolitical risks. Discussions will focus on a recent agreement to draw €100 million from the Pollutant Release Fund to mitigate the project's impact on consumers. The Cypriot side will also seek clarification on concerns related to statements from Greek officials, including ADMIE’s CEO, who previously threatened to halt the project if cost recovery decisions were not altered.

Recent interventions from the U.S. and a report by Greek Prime Minister Kyriakos Mitsotakis are anticipated to positively influence the geopolitical risk aspect. Mitsotakis assured that if the project proves economically viable, it would proceed and address any geopolitical concerns.

Greek interest in the project remains high, with Minister Skylakakis expected to push for a final decision. However, his recent public statements, which have expressed dissatisfaction with progress, have raised some concerns.

The outcome of this meeting will be crucial for Cyprus, potentially reshaping its energy landscape and addressing long-standing issues related to electricity supply and pricing.