Saving at least 30% in the electricity bills of Cypriot consumers will bring the operation of the Greece-Cyprus “Great Sea Interconnector” electrical interconnection in 2030, according to the updated cost-benefit study prepared by the company Exergia in collaboration with the National Technical University of Athens.

The relevant study (CBA), as informed by ADMIE, was presented today Tuesday to the Minister of Energy, Trade & Industry of Cyprus George Papanastasiou, in the presence of the president and CEO of ADMIE Manos Manousakis.

As the scholars reported at the CBA presentation, the social benefit resulting from interconnection (€8 billion) is many times the cost of its construction (1.9 billion euros), which means that the net social benefit resulting from the interconnection exceeds 6 billion euros.

The object of the study is to investigate the economics of the solution of the electrical interconnection of Cyprus through GSI against its isolated development under the objective targeting of high penetration of RES in its energy balance at levels of at least 70%-80% by 2040, in the context of the European Green Agreement to achieve climate neutrality by 2050. In this way, the energy autonomy of Cyprus is ensured, with domestic clean RES production which will be able to be exported in times when domestic demand is exceeded.

The study examines two scenarios:

  • The first scenario is the electrical interconnection of Cyprus with Europe, via Greece, joining the last non-interconnected EU state in the European electricity market and with a limited installation of batteries.
  • The second scenario is the isolated development of the Cyprus electricity system through the installation of large battery units.

According to the update from ADMIE, the study showed that the electrical interconnection is not only the most sustainable scenario in economic and environmental terms, but also the most beneficial for Cypriot consumers – both domestic and corporate.

Specifically:

  • Cost: The batteries that will be needed until 2040 (in addition to those that will be used anyway in the interconnection perspective), will cost about 4 billion euros while the corresponding total cost of the electrical interconnection is 1.9 billion euros. Furthermore, the operating cost of the batteries is many times the corresponding operating cost of the interface. Thus it follows that the cost savings in the case of electrical interconnection is more than double.
  • Benefit: The interconnection will bring a total social net benefit of €6 billion through savings from fuel substitution, reduction of greenhouse gas emissions, etc., which far exceeds the costs of the interconnection project. This means that the interconnection will have more than twice the benefit index for society as a whole (~19% versus ~6% for the case of isolated development).

Burden: During the construction of the project (until 2029), the average burden on the Cypriot consumer is minimal, as it will not exceed on average 0.6 euro cents per kilowatt hour (or 6 Euro/MWh). Since the start of the operation of the interconnection, the burden on the Cypriot consumer is calculated (on average) at 0.7 euro cents per kilowatt hour (or 7 Euro/MWh).

In total, the amount that the Cypriot consumer will incur in total over the five years of construction (150 euros), will be saved from the first five months of operation of the interconnection (thanks to the reduction of the bill by 425 euros per year or 35.5 euros/month ).

Additional benefits listed are:

  • Security of supply: Entry into the European electricity system ensures an uninterrupted supply of electricity and shields the electricity system from the risk of blackouts – especially during times of increased demand (eg peak summer tourist season or cold weather). It is emphasized that the electrical interconnection is what will strengthen the security of the operation of the electrical system and the security of supply of Cyprus with clean electricity.
  • Economic viability: The study certifies the social benefit produced by the electrical interconnection, a fact that has already been accepted by the European Commission with its participation in the financing of the project and also by the US state fund DFC which wishes to participate in it. Equally important is the fact that the study will be used to finance the project by the EIB.
  • Green transition: Cyprus is completely greening its energy mix with multiple benefits both for its industry and for the improvement of its tourism product, through strengthening security of supply and achieving more competitive prices.
  • Geostrategic role: Cyprus is turning into an energy crossroads of Europe and the Middle East, since Israel has shown an active interest in its interconnection with Europe, through Cyprus.

Finally, the ADMIE emphasizes that since October 2023, when the implementing body of the project took over, it has taken all the necessary steps, in cooperation with the Cypriot authorities, in order to ensure the timely implementation of the emblematic strategic energy project of Cyprus in terms of sustainability and transparency.