Energy Minister George Papanastasiou is on Thursday expected to take delivery of a cost-benefit analysis for the Great Sea Interconnector project.
The analysis is set to be handed over by Greece’s independent power transmission operator Admie. Admie is the body which will be implementing the project, and currently owns a 51 per cent stake in it.
Should the project come to fruition, it will connect the electricity grids of Greece, Israel and Cyprus.
The cost-benefit analysis study was prepared by Athens-based climate change consultants Exergia in collaboration with the National Technical University of Athens.
It claims that with a fully operational Great Sea Interconnector, electricity bills for Cypriot consumers would fall by as much as 30 per cent by 2030.
The carrying out of a cost-benefit analysis had been set by the Cypriot government as a prerequisite before making its final decision over whether to partake in the Great Sea Interconnector project and make the required €100 million investment to do so.
Once the government has taken receipt of the analysis, it will hand it on to the University of Cyprus and the Cyprus Institute, as well as to an independent consulting firm, for evaluation and analysis.
The cost-benefit analysis’ submission comes just a week after the government had expressed concerns that the European Commission may withdraw its €657 million subsidy for the project.
Papanastasiou had said that should the commission’s subsidy be withdrawn, “the project is effectively dead”.
At the same time, Admie had reportedly called the project “not viable” and other stakeholders had described it as a “sinking investment”.
The developments are a result of a decision by Cyprus’ Energy Regulatory Authority (Cera) to reject the idea of imposing a 0.6-cent levy on consumers per kilowatt hour starting on January 1 next year to finance the project.
The levy would allow Admie to recover the €1.9 billion construction cost, and Admie chairman Manousos Manousakis had promised that Cypriot consumers would “recover the cost” of the levy within the first year of the interconnector’s implementation.
He then warned that if Cera’s decision is not changed quickly, “the project will end”.
These concerns are the latest in a project which has faced multiple hurdles so far, with Papanastasiou having said last month that the government had identified a €100m gap in funding.
He said he had asked Admie to submit written recommendations for how it would recover the revenue.
The interconnector has also somewhat strained political relations between Cyprus and Greece, with Greek Energy Minister Theodoros Skylakakis having set his position out in no uncertain terms earlier in the year, warning Cyprus against delaying the project and missing deadlines.
“The case is that we took on a serious responsibility together with the Cypriot side, after the Commission had evaluated the project and had given us a huge investment in this project,” he said.
“If this investment is lost, the chance of Cyprus being connected to the rest of Europe, and of the entire cable being realised, will be dramatically reduced.”
He added, “that is something which the Cypriot government will also have to evaluate.”
He said Greece “has shown a surplus of good will on this matter to help to try to not lose this project”, and emphasised again the possibility that the whole project may fall apart if Cyprus does not make a decision.
However, he made indications that he will not be willing to wait for ever for Cyprus to come to a decision, saying “our final analysis will be based on our most important responsibility – to the Greek consumers and taxpayers.”
“For Greece, this project is positive as it facilitates a balancing of our electricity network, but it is not a critical project. Greece is not an island, in energy terms,” he added.
He ended by repeating that “it must be absolutely clear that if the funding from the European Commission is lost, the probability of this project ever being carried out will be reduced dramatically.”
