Under the umbrella of the OEB (Federation of Employers & Industrialists) are housed dozens of other associations with hundreds of members, making it understandable that their positions on the Cyprus-Crete electricity interconnection may sometimes be conflicting, according to the announcement from the OEB member associations related to energy who have signed it.
The letter is co-signed by the Electricity Market Association (EMA), the Cyprus Energy Saving Association (CESA), the Cyprus Renewable Energy Companies Association (CRECA), the Wind Energy Alliance, and the Cyprus Hydrogen Association (CHA).
Regarding the OEB memorandum on the electricity interconnection, they state: “While we agree with some of the points mentioned in the OEB memorandum, we wish to differentiate our position that the cable must be built “at all costs” and to reiterate our key concerns, some of which have been partially adopted in the OEB memorandum.”
“We believe that the way the project’s implementation is being promoted carries serious risks and a multitude of problems, which we cannot overlook; on the contrary, we are obligated to highlight them.”
Announcement of the Associations
As associations related to energy within the OEB, we wish to clarify that we do not dogmatically oppose the interconnection of Cyprus with the rest of Europe’s network. We recognise that such an interconnection would bring significant benefits to our country, as highlighted in the memorandum sent by OEB to the President of the Republic of Cyprus, Nikos Christodoulides, on Friday, August 2, 2024, regarding this issue.
Beyond the energy-related associations, the OEB umbrella houses dozens of other associations with hundreds of members, making it understandable that their positions may sometimes be conflicting. In this context, OEB’s views do not always reflect those of all its members, which is both understandable and respected in a democratic federation.
While we agree with some of the points mentioned in the OEB memorandum, we want to differentiate our position that the cable must be built “at all costs” and to reiterate our key concerns, some of which have been partially adopted in the OEB memorandum. We believe that the way the project’s implementation is being promoted carries serious risks and a multitude of problems, which we cannot overlook; on the contrary, we are obligated to highlight them.
1. Risk assumption
The risk and burden of any impacts arising from potential changes in the project’s implementation, along with any technical and geopolitical risks, should be borne by the private investor and not by the consumer. The final construction cost of the project must be finalised, ensuring that any cost overruns will be the investor’s responsibility.
Additionally, according to IPTO, the project is expected to be completed by 2030. In case of delays in implementation, the organisation should face the corresponding penalties. The Cypriot Government must secure the necessary guarantees and safeguards from the investor, ensuring that the financial responsibility and risks do not fall on Cypriot consumers.
2. Viability during operation
We consider it unjustified and unreasonable for Cypriot consumers to pay any fixed fee before the project’s commercial operation begins. Moreover, the project’s financial viability and revenue should come exclusively from its commercial use and activity. Cypriot consumers cannot bear the enormous and uncontrolled costs of this usage. Any promised benefits for consumers must be clear and measurable.
3. Government participation
Before a decision is made for the Government to participate with €100 million in capital, the significant uncertainties of the project regarding the total cost, completion timeline, benefits for Cypriot consumers, and the risks of increasing public debt in case of failure or delays must be seriously evaluated. While awaiting the results of the cost-benefit analysis, it would be useful for the Government to consider whether a grant is a preferable option over investment participation, as this avoids assuming the associated risks.
4. Cost sharing
We believe that the cost-sharing, with Cyprus bearing 63% and Greece 37%, is unfair and unjustified, as the project’s operation will primarily benefit Greek producers who will export their excess energy to Cyprus.
5. Terms of operation and protection of National Energy Security
The implementation and uncontrolled operation of the Great Sea Interconnector project pose serious risks to Cyprus’s energy self-sufficiency and security while endangering the viability of many investments made in Cyprus so far, rendering them redundant with undefined economic impacts.
The Cyprus Energy Regulatory Authority (CERA) and the Cypriot Government must establish the appropriate provisions and set limits on energy imports into Cyprus, to ensure the above, and to achieve the national goals for the green transition. Every state must be self-sufficient in energy production as it is a matter of national security.
In conclusion, we emphasise that the implementation of the Great Sea Interconnector project must be done with careful assessment of the risks and consequences for Cypriot consumers.
The concerns we express are not intended to hinder Cyprus’s development or its interconnection with Europe but to ensure that this development is carried out in a way that protects the interests of citizens and the domestic market.
Cyprus cannot afford another project that will create inequalities and impose financial burdens on consumers.
We, therefore, call on the Government and the relevant authorities to seriously consider the consequences before proceeding and to ensure that the terms of the project’s implementation are such that they protect the interests of the citizens and genuinely contribute to the energy security and economic viability of our country.
