Cyprus Mail
CM Regular Columnist Opinion

EastMed: The US just stated the obvious

comment ellinas eastmed never was viable and technically it stretched the limits
The proposed route of the EastMed pipeline
The world has moved on and it’s time we did too

The news last Monday that the US State Department finally abandoned the EastMed gas pipeline should not have come as a surprise – the US stated the obvious. Sadly, instead of this announcement attracting the openminded response it deserves, much of the publicity in the Greek and Cypriot press has been negative and in cases demeaning, preferring to conjure conspiracies behind it, rather than doing the obvious and simple thing: taking it at face value.

But these responses will not detract from the fact that the future is in clean energy and electricity interconnections, that facilitate electrical stability and wider adoption of renewables in a region that has the potential and can really benefit from transition to clean energy – and not in gas exports. That is exactly what I have been advocating for years now.

EastMed never was viable and technically it stretched the limits. Since conception of this project, about ten-years ago, the world has moved on. Europe has been making a decisive switch to clean energy, with a plan to phase-out unabated natural gas by 2050, starting this decade. Any lingering hopes that the EastMed may have a future have disappeared. The EU has said as much.

The feasibility study, supported by the European Commission (EC) as a ‘project of common interest’, is due to present its conclusions before the end of 2022. Even if it declares the pipeline ‘feasible’ – at a price – the challenge it has been facing all along is the lack of investor interest and gas buyers in Europe, as well as outright skepticism in Europe.

The EC said in October last year that project feasibility must reflect EU’s decarbonisation goals and future gas demand, adding that “the Commission’s analysis from the climate target impact assessment shows that unabated use of natural gas is not compatible with the long-term decarbonisation objective.” The main focus of future support from the EU budget will be on investments in climate-friendly energy solutions, including decarbonised gases such as hydrogen.

As a Greek government spokesman told Euractiv this week, when asked about this announcement, “The government…has supported and continues to support a number of alternatives, which may be much more economically and technologically viable and technically feasible.” This includes electricity interconnectors. He added “it is not the government that decides which solution is…feasible. This is decided by the market.”

The market made its decision a long-time ago. The international oil companies operating in the East Med, such as Chevron, Shell, Eni, Total, that would benefit from the pipeline’s construction, never supported it. Why; Because it is not financially viable.

Without the intervention of the State Department, we would have kept the EastMed on life-support for years, due to political expediencies. Fortunately, the Americans came and gave it a painless ending.

We are now given the opportunity to do what we should have done years ago: to prioritise the rapid development of renewables in combination with energy storage and electric cable interconnections, supported – during energy transition – by the use of natural gas discovered in Cyprus’ EEZ. And thus bring electricity prices down.

The positive news in the announcement by the State Department is that it strongly supports such energy interconnection between the East Med and Europe. Specifically, the announcement said: “We remain committed to the energy interconnection of the East Med with Europe. We are shifting our interest to electricity interconnections that can also support the supply of gas and renewable energy sources. We support projects such as the planned EuroAfrica interconnection from Egypt to [Cyprus and then] Crete and the proposed EuroAsia interconnection that will connect the Israeli, Cypriot and European electricity networks. Such projects will not only connect vital energy markets, but will also help prepare the region for the transition to clean energy.”

Strong words that capture the essence of these projects, that make techno-economic sense, unlike the pipedream of the EastMed that ended up being politically-driven and never attracted investor interest.

The fact that the US is providing such a strong support for these electricity interconnectors will hopefully hasten their realisation.

 

Interconnectors

 

Interconnectors connect energy markets, allowing the export and sale of electricity from one to the other. But they also facilitate expansion of renewables, by contributing to electrical grid stability – by ensuring a balance between energy generated and energy consumed, thus avoiding grid imbalances and overloading. They also enable excess renewable power to be traded between the interconnected countries, instead of being lost. Renewable power generation in Cyprus now stands at 14 per cent. With interconnection in place, by 2030 this could exceed 50 per cent.

I took the opportunity to contact Nasos Ktorides, chairman of the Euro-Asia and Euro-Africa Interconnectors, and asked his views following the State Department statement, as well as how these projects are progressing.

He welcomed the statement and its strong support of the two interconnector projects, adding that “they are essential to end electrical isolation of Cyprus and aid the wider adoption of renewables.”

The Euro-Asia interconnector comprises two links: Israel-Cyprus and Cyprus-Crete. Funding of the 1000MW first-phase of the 900km Cyprus-Crete link is more-or-less complete. This will cost €1.5billion, to be funded through a 50% grant from the Connecting-Europe-Facility and €100million grant from the Cyprus’ Recovery and Resilience fund. The balance will be provided by EIB.

Ktorides said the project has now secured all required permits. Reputable international contractors have been selected and construction is scheduled to start end 2022, with completion expected end 2025. Operations will start beginning-2026. This is the biggest and most important infrastructure project in Cyprus.

The Israel-Cyprus link and the Euro-Africa interconnector projects are also progressing. They are at the stage of inter-governmental agreement formalisation.

I asked Mr Ktorides whether he expects any problems when laying cables in areas between Cyprus and Crete disputed by Turkey?  He said he does not. According to UNCLOS Article 79, laying subsea cables does not require permissions from coastal countries. Interconnector cables are not the source of friction. There are already a number of subsea fibre-optic cables operating between Israel, Egypt, Cyprus and Greece. These did not require special agreements, other than between those directly involved in the projects.

Interconnectors not only can promote the expansion of renewables, but can also facilitate electricity exports to Europe. Reverse flow of electricity from Europe to Cyprus can also contribute to security of energy supplies.

The EastMed gas pipeline is a project of the past. The electricity interconnectors are projects of the future. This is why we need to embrace clean energy and move-on.

 

Dr Charles Ellinas is a Senior Fellow at the Global Energy Centre, Atlantic Council

@CharlesEllinas

 

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