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Cyprus’ Pending Decision on the Great Sea Interconnector

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Cyprus is on the brink of a pivotal decision regarding its involvement in the Great Sea Interconnector project, awaiting a crucial cost-benefit analysis due by late June to determine its €100 million investment. The outcome will not only impact regional energy integration but also shape the future funding and infrastructure decisions for the project, with Cyprus contemplating shouldering 63% of the project’s increased costs.

What is the status of Cyprus’ participation in the Great Sea Interconnector project?

Cyprus is awaiting a comprehensive cost-benefit analysis before deciding on its participation in the €100 million Great Sea Interconnector project. The final decision, crucial for regional energy integration, hinges on the analysis outcome due by late June, with Cyprus considering covering 63% of the project’s increased costs.

The Interconnector Project Awaiting Analysis

The much-anticipated verdict from Cyprus regarding its participation in the €100 million Great Sea Interconnector remains in limbo. Energy Minister George Papanastasiou has reiterated the government’s stance, stating a final decision will only be made upon the completion of a comprehensive cost-benefit analysis. This crucial assessment, requested from Greece’s Independent Power Transmission Operator (Admie), was initially expected by May’s end but is now forecasted for submission by late June.

The cost-benefit analysis will be a cornerstone for the deliberation process, involving various Cypriot agencies and an international specialized body. The positive outcome of this analysis will be a key driver for Cyprus to potentially invest in the project’s equity and influence infrastructure decisions, which bear direct relevance to Cypriot consumers.

A Long-term Vision with Challenges and Opportunities

The Great Sea Interconnector project spans a projected 30 to 40 years and is marked by its complexity and the need for careful assumption management. The European Commission has already identified the project as significant, labeling it a “project of common interest.” Cyprus stands out in the European Union as the only member state whose electricity grid is not interconnected with any other member state, highlighting the project’s importance for integration and regional cooperation.

The project financing, however, presents its challenges. Cyprus is expected to cover 63% of the costs, while the remaining 37% will fall on Greek consumers. The Cyprus Energy Regulatory Authority (Cera) will determine the appropriate timing for these costs to be recouped, with cautious consideration given to the present economic climate marked by a cost-of-living crisis. Moreover, since 2017, the total estimated cost has escalated from €1.5 billion to €1.9 billion, unveiling a €100 million funding shortfall that Admie has been tasked to address.

Progress Amid Uncertainty

Despite the uncertainty surrounding Cyprus’ commitment, tangible progress has been made with 50 kilometers of cables already laid out in Create. The upcoming months are critical as a seabed survey will dictate the next steps for laying the cables, with an estimated cost of €1.4 billion for the cables alone. This underscores the progress and seriousness of the undertaking, despite the unresolved funding and participation issues.

Greek officials have applied pressure on Cyprus, emphasizing the risks of delaying participation. The financial incentives provided by the Connecting Europe facility, along with an additional €100 million from the EU’s Recovery and Resilience Facility, are not guaranteed indefinitely. Theodoros Skylakakis, Greek Energy Minister, has highlighted the collective responsibility shared by Greece and Cyprus and the potential repercussions of investment loss, which could jeopardize the entire interconnection project’s future.

The Geopolitical Stance of Greece

Greece’s stance on the project is clear; while it offers benefits such as energy network balance, it is not deemed critical due to Greece’s already interconnected energy network. The Greek government has expressed its commitment to Greek consumers and taxpayers and has indicated a dwindling patience for Cyprus’ delayed decision-making. Greece’s goodwill may not last indefinitely, and the Greek government has stressed that the project’s collapse could dramatically reduce Cyprus’ chances of connecting to the European energy grid.

What is the status of Cyprus’ participation in the Great Sea Interconnector project?

Cyprus is awaiting a comprehensive cost-benefit analysis before deciding on its participation in the €100 million Great Sea Interconnector project. The final decision, crucial for regional energy integration, hinges on the analysis outcome due by late June, with Cyprus considering covering 63% of the project’s increased costs.

What are the challenges and opportunities associated with the Great Sea Interconnector project?

The Great Sea Interconnector project poses challenges in terms of financing, with Cyprus expected to cover 63% of the costs. However, the project also presents opportunities for regional energy integration and cooperation, with the European Commission recognizing it as a “project of common interest.” The project spans a projected 30 to 40 years, emphasizing the long-term vision required.

What progress has been made on the Great Sea Interconnector project amid uncertainty?

Despite the uncertainty surrounding Cyprus’ commitment, progress has been made with 50 kilometers of cables already laid out in Crete. The upcoming seabed survey will dictate the next steps for laying the cables, with an estimated cost of €1.4 billion for the cables alone. This progress underscores the seriousness of the undertaking, despite unresolved funding and participation issues.

What is Greece’s geopolitical stance on the Great Sea Interconnector project?

Greece views the Great Sea Interconnector project as beneficial for energy network balance but not critical due to its existing interconnected energy network. The Greek government has expressed commitment to Greek consumers and taxpayers, highlighting a dwindling patience for Cyprus’ delayed decision-making. Greece has emphasized the potential repercussions of investment loss, which could jeopardize the project’s future and Cyprus’ connection to the European energy grid.

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