The Great Sea Interconnector (GSI) could generate annual electricity cost savings of between €123 million and €138 million for consumers in Cyprus and Greece, according to a study examining the planned electricity link between the two countries.
However, the financial benefits for Cyprus could be significantly reduced if the country secures cheaper natural gas for electricity generation.
The findings were presented by Professor Pantelis Biskas at a conference organised by the Institute of Energy for South-East Europe (IENE). They are based on simulations of the electricity systems of Cyprus and Greece in 2035.
According to MonoNews, the study examines three scenarios for the cable’s transmission capacity: 500, 750 and 1,000 megawatts (MW). It compares electricity supply costs, imports and exports, and the utilisation of renewable energy sources.
The results suggest that Cyprus would receive the largest share of the financial benefits, as the interconnector would allow it to import cheaper electricity from the Greek market.
The average electricity procurement cost in Cyprus could fall by approximately 18%, or €21.3 per megawatt-hour (MWh), even after accounting for GSI charges included in the study.
The simulations indicate that Cyprus could cover around 26% to 27% of its annual electricity demand through imports from Greece, reducing its reliance on more expensive domestic power plants.
First 500 MW deliver most of the benefits
One of the study’s key findings is that a substantial share of the potential savings could already be achieved with a transmission capacity of 500 MW.
Under this scenario, the cable would operate at its maximum transmission capacity for 609 hours per year.
However, when capacity increases to 750 MW, the number of hours during which the cable operates at full capacity falls to just 35.
This suggests that, under the assumptions used in the study, increasing capacity beyond 500 MW would deliver smaller additional financial benefits, although it would still allow greater electricity exchanges between the two countries.
GSI could reduce solar energy cuts
The electricity interconnector is also expected to help reduce renewable energy curtailment, particularly from solar power generation.
In Cyprus, the share of renewable energy production that would have to be curtailed is projected to fall from 11.8% without the interconnector to approximately 4.5% once the cable becomes operational.
In absolute terms, unused renewable electricity would decrease from 317 gigawatt-hours (GWh) to approximately 79–95 GWh annually.
A smaller but positive impact is also projected in Greece, where renewable energy curtailment would decline from 3.1% to around 2.9%.
The ability to exchange electricity between the two systems would allow better use of renewable generation, particularly during periods of high output from solar and wind farms.
Cheaper natural gas could change the equation
The future cost of natural gas in Cyprus emerges as a key factor affecting the project’s financial performance.
The study’s baseline scenario assumes a natural gas price of approximately €28 per MWh in 2035.
An alternative simulation examines what would happen if Cyprus secured natural gas at around €18 per MWh.
At that price, domestic power plants would become more competitive, reducing net electricity imports from Greece by approximately half.
As a result, annual savings for consumers would fall to between €40 million and €50 million, compared with €123 million to €138 million under the baseline scenario.
The study clarifies that the lower gas price is an alternative assumption used to test how sensitive the results are to fuel costs. It is not a forecast of the price at which Cyprus will be able to purchase natural gas in 2035.
The findings highlight how the financial performance of the Great Sea Interconnector will depend on future fuel prices, the composition of the electricity generation mix, the development of energy storage systems and the operation of conventional power plants.
The projected savings are based on specific modelling scenarios and do not guarantee equivalent reductions in the final electricity bills paid by households.
Also read: Proposed law seeks clearer disclosure of fuel taxes to consumers
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