The cost of the Cyprus-Greece electricity interconnection, known as the Great Sea Interconnector (GSI), is expected to exceed €1.9 billion, with the figure relating mainly to the cable itself and excluding other aspects of the project and operating expenses.
The House Energy Committee examined the progress of the GSI in the presence of Energy Minister Michalis Damianos and Finance Minister Makis Keravnos.
According to Damianos, the revised European Investment Bank due diligence study, which will address the project’s viability, is expected to be completed by the end of 2026.
Responding to MPs, Keravnos clarified that the €1.9 billion figure mainly concerns the Cyprus-Greece interconnection cable and does not represent the project’s total cost.
“There are construction works, there is the agreement for the construction of a substation. These projects also have insurance, which comes at a high cost. They also have maintenance costs of several million [euros]. All of these are part of the updating of the studies,” Keravnos said.
Operating costs not included
The Cyprus Energy Regulatory Authority (CERA) subsequently noted that operating expenses are not included in the €1.9 billion figure.
CERA Vice-President Akis Hadjigeorgiou described it as “naive” to assume that the project’s total expenditure would be limited to that amount.
He added that if the project is implemented, it would operate from 2031 onwards, while stressing that energy investments being promoted in Cyprus are not expected to reduce electricity prices.
Meridiam’s role in GSI
Energy Minister Michalis Damianos placed particular emphasis on the entry of French company Meridiam into the GSI.
He said the project concerns Cyprus’ energy security but does not necessarily mean lower electricity prices.
Damianos also highlighted the geopolitical dimension of the interconnector, noting that the project would connect Cyprus with the EU and Israel. He also referred to the support the project has received from both the EU and the United States.
Asked whether the Republic of Cyprus could withdraw from commitments already undertaken in relation to the project, Damianos said this would not be straightforward because of complex legal issues.
CERA seeks answers on ADMIE’s role
CERA is awaiting clarification regarding the agreement between Greece’s Independent Power Transmission Operator (ADMIE) and Meridiam, particularly concerning ADMIE’s future role.
CERA President Polys Lemonaris said the authority was informed in writing on August 11 that ADMIE and Meridiam had reached an agreement.
“One of the clarifications we requested is what ADMIE’s role will ultimately be. Whether it will be the project implementation body and Meridiam the owner, whether it will also be the operator, and what ADMIE’s role will be at the end of the day. We do not yet have an answer,” Lemonaris said.
He added that CERA and the Regulatory Authority for Energy of Greece had jointly sent a letter seeking questions and clarifications regarding the agreement, but had yet to receive a response.
EU ministers discuss clean energy
Keravnos also referred to discussions at European level regarding the cost of electricity interconnections and the EU’s future energy strategy.
He noted that 25 of the 27 EU member states have electricity interconnections, while arguing that during the current energy and economic crisis, interconnections alone have not proved sufficient to address issues surrounding costs and supply adequacy.
He also said the construction cost of electricity interconnections has increased significantly in recent years, an issue he said is recognised and discussed at almost every Ecofin meeting.
According to Keravnos, several European finance ministers, including the French finance minister, have expressed concerns over the high cost of interconnections.
At the same time, discussions on the EU’s future energy policy are increasingly focusing on clean energy sources, including nuclear power.
“The discussions are moving in that direction,” he said.
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