We are entitled to ask for an updated cost-benefit analysis of electricity interconnection, Energy Minister says

The Republic of Cyprus is entitled to request from the implementing entity (Independent Power Transmission Operator - IPTO) the updating of the cost-benefit analysis regarding the electricity interconnection between Cyprus and Greece as well as the updated business model, Minister of Energy, Commerce and Industry, George Papanastasiou, has told CNA.

Speaking to CNA from Tokyo, where was paying an official visit, at the end of last week the Energy Minister said that the sooner these studies are submitted by the IPTO, the sooner the Cypriot government will take the final investment decision to join the project with €100 million.

He also stressed that the government does not wish to implement the project for the sake of it, but because it has the Cypriot consumer as its primary concern.

Cyprus' Council of Ministers has taken a decision in principle to participate in the project with €100 million but has requested an updated cost-benefit analysis before taking the final investment decision.

"The Cypriot government is entitled to request an updated cost-benefit study, as well as an updated business plan", Papanastasiou told CNA, stressing that the last study was done in 2017 by the previous implementing entity (EuroAsia) and things have changed since then, while the business plan was prepared in 2017 with a slight update in 2023, as he said.

These two studies, he added, which are very important and which the developer is obliged to do, should be done so that the Republic of Cyprus can take the final investment decision.

He noted that the government's decision is clear: in principle, the Republic of Cyprus will participate in the equity scheme with €100 million, but the final investment decision will be taken after a positive assessment of the two studies. "The government will not take any decisions before the studies are completed", he said.

"Our decision has to be substantiated and this will be done through the updated cost-benefit study by a recognized firm and the business plan which the implementing entity has to submit immediately. As soon as these two documents are submitted, the final investment decision of the Republic of Cyprus for participation in the equity capital will be taken as soon as possible", he continued.

As he said, three issues are of primary importance. "What electricity interconnection means for the consumer and how much it will reduce the cost of electricity, how much renewables will penetrate the electricity mix so that we can channel the surplus electricity, and ending energy isolation and security of electricity supply", he said, noting that consumer benefits are the top priority.

Sources have told CNA that the European Commission, which is subsidising the project with €657 million, understands the position of the Cypriot government. At the same time, the Commission wants the two regulators, Cyprus Energy Regulatory Authority and the Greek Energy, Waste and Water Regulatory Authority, to immediately approve the transfer of the project to IPTO, which is expected to be completed next week, since the IPTO submitted the required documents to them a few days ago.

The Commission is also asking the two regulators to decide when to start recovering the costs of the implementing entity, by imposing a charge on electricity consumers in the two countries, split 67% to Cypriot and 33% to Greek consumers.

(Source: CNA)