€200 million power station could get stuck in limbo

Worries also raised about ecosystem near the private facility that would create electricity from natural gas

Construction at the first private power station in Cyprus has come to a halt, after the Department of the Environment raised environmental and other concerns over the infrastructure being built in the already highly congested industrial area at Vasilikos. Clarity on the issue may or may not come during an upcoming meeting scheduled for early October, otherwise the €200 million facility could get stuck in limbo.

The information, exclusive to the Cyprus Mail, was confirmed by Theodoulos Mesimeris, acting director of the Department of Environment.

Two to three weeks ago Mesimeris issued a stop order to the company – Power Energy Cyprus Ltd – relating to ongoing works on the shoreline. The order concerns a pipeline system that will draw water from the sea to cool the turbines at the power station.

“All the works on that segment of the pipeline have now ceased, and can only resume once they [the company] have complied with our recommendations,” said the official.

The department has ordered PEC to install protective screens around the area of the works on the sea line. That would stop any mud churned up from the works getting into the cooling pipelines of the neighbouring power plant belonging to the EAC and/or the pipes of the desalination unit inside the EAC power plant.

Inside the premises of the EAC power plant at Vasilikos, outside Limassol, there is a desalination unit producing some 60,000 cubic metres of water daily.

“It’s not a question of pollution per se, but rather that the PEC works on the shoreline could potentially burden the cooling/desalination systems of the EAC, given that the sea water being used has to meet certain specifications,” explained Mesimeris.

The Cyprus Mail heard from other sources that the Department of the Environment had earlier – during the previous administration of Nicos Anastasiades – advised the works in question to stop, but their recommendations had been simply ignored.

This, it is said, forced the department’s hand in issuing the recent stop order.

Given that the matter of the protective screens is now being attended to, why the need to call a meeting of all involved agencies in early October?

“At the meeting we will discuss in general the situation in the Vasilikos industrial area, to try to put things in order – who is responsible for the various permits, who’s got jurisdiction and so forth,” Mesimeris said.

The general Vasilikos area is crammed with all sorts of facilities – the EAC power plant, the Chinese-owned LNG terminal, petroleum storage, and the Mari naval base – the site of the deadly 2011 explosion.

The official added pointedly: “Because of the presence of the military, this vicinity has long served as an ‘alibi’, a grey zone, if you will, for construction works might otherwise not have been approved.”

The October gathering will bring together the Department of the Environment, the Fisheries Department, the district officer (responsible for granting final building permission) and the defence ministry.

The defence ministry is involved because a segment of the 700-metre long underground PEC pipeline ending up on the shoreline transits through the naval base.

As such, that stretch of the pipeline had to get an access permit from the military.

Sources at the defence ministry told the Cyprus Mail that the PEC pipeline is in fact situated on a strip that “borders” the respective plots of the Mari naval base and the EAC power station.

“The defence ministry does not grant building permits,” the same sources qualified. “All we did is give the company the green light letting their pipeline cross over into an area of our jurisdiction.”

We asked the sources, who requested anonymity, about reports that the sea water just off the shoreline is boiling hot as a result of the industrial activity there.

While confirming this, they said that this has already been going on for some time due to the discharges of treated water from the various plants in the area.

But the Cyprus Mail also understands that other concerns have been raised relating to the ecosystem – specifically regarding the species Posidonia oceanica, commonly known as Neptune grass or Mediterranean tapeweed – a seagrass endemic to the Mediterranean Sea.

The seagrass functions to protect the sandy coastline against erosion, and is a reserve of biodiversity due to the large number of animal and plant species that find within the habitat a place for feeding, protection and nursery for juveniles.

It’s understood that the October meeting of the involved departments should give clarity on this aspect as well.

Essentially, as it was explained to us, “we want to sort out who should be doing what and where in the area.”

As for the PEC power station itself, it’s understood that the main building is almost done. The foundation stone for the project was laid in February 2019 by then President Nicos Anastasiades.

Cyfield, one of the biggest contractors on the island, is the majority shareholder in PEC.

The entire project has been costed at €200 million. Generating electricity from natural gas, the facility will be the first private power station on the island – breaking the monopoly held by the EAC in the production of energy from fossil fuels.

Moreover, the PEC plant will have a capacity to generate up to 260 megawatts – about a quarter of electricity needs. It’s a big slice of the pie.

That may explain why – as the Cyprus Mail hears – the complaints regarding the PEC infrastructures were at least partly instigated by the EAC itself.

A great deal is riding on the project and for its backers. But other than the temporary bump in the road due to the stop order issued by the Department of the Environment, the project could face far bigger trouble – it will run on natural gas, but currently there is no natural gas to be had for electricity generation.

As reported earlier by the Cyprus Mail, the Chinese-led consortium with the contract to build a liquefied natural gas (LNG) terminal at Vasilikos will deliver the project no earlier than July 2024.

Should the PEC power plant finish anytime soon, it would therefore have to remain idle for several months before the natural gas gets here.