Newsroom
Important decisions concerning the Great Sea Interconnector, an electric cable linking Cyprus and Greece, are anticipated in August. Following the recent visit of the CEO of IPTO, the project's implementing body, to Nicosia and the presentation of the cost-benefit study to the government, Cyprus is expected to address the remaining outstanding issues.
IPTO's concerns about delays have also reached Brussels, where officials were displeased with the Cyprus Energy Regulatory Authority's (CERA) decision not to allow cost recovery from January 1, 2024. After IPTO's study received positive feedback, the European Commission is pressuring Nicosia to clarify the situation to expedite the project.
A teleconference held on Tuesday, including representatives from the European Commission, Cyprus and Greece's energy ministries, IPTO, and both countries' regulatory authorities, led to two significant decisions. First, CERA will review IPTO's study and make a regulatory decision. Second, a follow-up meeting will determine Cyprus's participation in the project's equity structure.
A follow-up meeting with the European Commission is scheduled for August 12, by which time Nicosia is expected to have made a decision on participation in the cable project. Cyprus needs to complete its evaluation of IPTO's study so that the Cabinet can make a final decision. However, there are concerns whether the remaining time is sufficient to complete the evaluation and draw final conclusions. Cyprus has expressed interest in investing approximately €50 million from the Recovery Fund into the project.
The teleconference also addressed geostrategic risks related to the presence of Turkish warships near Kasos, where the Italian ship "Ievoli Relume" is conducting surveys for the Crete-Cyprus interconnection. Diplomatic sources report that Turkish naval vessels appeared in the area following the Italian ship's entry into international waters. Greek naval ships are also present to ensure the surveys' completion under a NAVTEX issued by Heraklion's Hydrographic Service.
Post-teleconference, it was revealed that CERA has the study and other materials from IPTO and is expected to revisit its decision on cost recovery timing. CERA's decision is anticipated by the end of next week. Nicosia is reconsidering CERA's initial decision following IPTO's study presentation. IPTO CEO Manousos Manousakis provided satisfactory answers regarding the implications of CERA's refusal to start cost recovery from January 2024 on the project's viability.
According to sources, Manousakis indicated that without a change in CERA's decision, the Greek Energy Regulatory Authority's decision would also not be implemented. IPTO argues that CERA's initial decision would result in a negative net present value of over €100 million, affecting investment security and trust in administrative decisions. IPTO's study estimates that Cypriot consumers would bear a cost of 0.6 cents per kWh during the construction of the Crete-Cyprus interconnection, which would be offset by reduced electricity bills from the first year of operation, averaging €25 annually per bill. Greek consumers will face similar costs.
[Summary of Apostolis Tomaras' original story in Greek published in Kathimerini's Cyprus edition]
