*Press Release: Electricity Market Association
Cyprus’s electrical interconnection with Europe is a strategic goal that the Electricity Market Association (EMA) considers crucial for the country’s energy future. Electricity interconnections are crucial for both energy security and political stability. Overcoming energy isolation can strengthen security of supply, create new opportunities for the electricity market, and integrate Cyprus more fully into the European energy system.
ΣΧΕΤΙΚΑ ΑΡΘΡΑ
However, an energy infrastructure project of the scale of the Great Sea Interconnector (GSI) must be evaluated based on realistic and up-to-date economic, technical, and energy data. In other words, it should not be judged solely on whether it can be built, but rather on whether it can operate and pay for itself without undermining the economy’s competitiveness and citizens’ standard of living. From the outset, the SAH had publicly stated that this is a project of uncertain viability, characterized by high costs, technical difficulties, ambiguities, and a lack of transparency.
Critical questions that remain unanswered
Most importantly, the actual cost is still unclear. According to recent statements by the Ministers of Energy and Finance, as well as PAEK, the cost will far exceed €1.9 billion. This amount does not include expenses related to the project’s operation, safety, and maintenance. This means that the final picture may be completely different from what the current estimate reflects. The EIB’s revised study, which is expected to “shed light” regarding the GSI’s viability must include all costs, insurance coverage, support infrastructure, maintenance, and other construction or operational expenses. At the same time, it must be clarified which costs consumers will ultimately bear. After all, we must not forget that, according to the current allocation, Cyprus is expected to cover 63% of the depreciation costs.
The statement by the Minister of Finance, Mr. Keravnos, that if the costs are borne by the state, there will be repercussions on public finances and the fiscal limits within which the Republic of Cyprus is required to operate under the European economic governance framework. So, what does this mean in practice? That consumers will bear the cost—and what will that cost be? An earlier estimate by the Cyprus Energy Regulatory Authority (RAEK) had calculated the additional cost to consumers at approximately 3.7 cents per kilowatt-hour, depending on cable usage and the repayment schedule. This cost does not include the cost of reserve capacity in Cyprus, which amounts to approximately another 0.7 cents per kilowatt-hour. This amount, following the arrival of natural gas and the installation of storage facilities, will correspond to a 30% increase in the wholesale price of electricity. This is unacceptable, in a country where the particularly high cost of electricity affects the viability of households and businesses, for there to be any additional burden on electricity bills.
At a time when all connected countries are facing power cuts, no significant tradable quantities of electricity are expected to be available. Therefore, there is no scenario in which any import of discounted electricity from Greece could yield more benefit than the aforementioned increase in electricity bills. The recent statements by the government and the relevant authorities are in line with this, confirming that there will be no reduction in the price of electricity.
Energy Security on Sustainable Terms
For SAE, the public debate must not devolve into a “interconnection or energy isolation” dilemma. There are also the well-known geopolitical risks, the danger of energy dependence, and enormous technical difficulties, as no comparable project of this scale has ever been undertaken.
What Cyprus needs is for the interconnection to be part of a comprehensive and sustainable energy plan—and not as a substitute for the development of a strong and efficient domestic market. Under no circumstances should Cyprus’s local energy production and energy independence be undermined.
The government needs to strengthen domestic production, grid infrastructure, energy storage, renewable energy sources, and competition in the electricity market, as these are essential prerequisites for cheaper electricity.
