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The Ministry of Finance reiterated on Thursday that it could not conduct an assessment of the proposed Cyprus-Greece electricity interconnection project as some parameters remained unknown, while a cost-benefit analysis provided by the project’s promoters was leaked to the media a day after it was shared with lawmakers.
Giorgos Panteli, permanent secretary of the Ministry of Finance, told the Cyprus News Agency The ministry’s stance on the matter will depend on the project’s impact on the economy and the energy sector. This country.
Pantelli noted that these parameters involve regulatory decisions, project financing agreements, the organization’s corporate structure and business plan, all of which have yet to be finalized.
“There is this unknown factor that prevents us from completing the assessment because having these factors is very important to assess the impact of the project on the economy, especially the energy sector,” he said.
The Permanent Secretary was referring to how the project will affect conventional energy production, the development of renewable energy sources (RES) in the country, and electricity consumer prices.
In any case, he clarified that whether or not a decision is made for Cyprus to participate in the equity of the Interconnector, its economic impact must be assessed.
“The Treasury’s position primarily relates to the implementation of the project and will be determined by us as to the impact of the project on the economy and the energy sector.”
When asked when the above items are expected to be completed, and whether they should have been completed given the current stage of the project, Pantley said:
“These should have been completed. We follow media reports that the project is at an advanced stage. But I believe there must have been financing agreements or agreements with Nexans and Siemens for the implementation of the substation and the construction of the cables. These have not yet appeared to us, so we do not have a complete picture to continue to evaluate.”
Pantelli was also asked if the ministry considered suspending the project based on the rumors, and he reiterated that “we need to have a complete understanding to make a technical and objective assessment of the project.”
The Permanent Secretary expressed his agreement with the Cyprus Energy Regulatory Authority’s (Cera) decision not to pass on the project costs to consumers before they are implemented.
“If a different decision had been made, you understand that essentially we as a country, as an economy, would have taken on the geopolitical risks associated with this project.”
Asked who should bear geopolitical risks, he said: “I think it should be investors. Investors bear all kinds of risks, whether it is construction risk, technical risk, geopolitical risk or financing risk. All these are the responsibility of the implementing agency.”
Panteli added that without evaluating the studies, he could not comment on whether this would bring benefits to Cyprus and its economy..
“Since there is nothing in front of us, no one can say for sure that anything good will come out of it.”
The day before, Pantelli and other officials participated in a lengthy discuss Discuss the interconnector issue with MPs.
According to media reports, Energy Minister George Papanasiou handed lawmakers a cost-benefit analysis of the interconnection line on Wednesday, which was completed by Greece’s independent transmission operator Admie, the project’s sponsor.
As of Thursday, local media obtained the analysis and quoted parts of it.
The analysis effectively examines two scenarios – the economic benefits of connecting Cyprus’ electricity grid to Europe’s in the coming decades, and the continued isolation of the island.
The document allegedly concludes that the former scenario is by far the most optimal – projecting “socio-economic benefits” of €7.2 billion to €8.2 billion for Cyprus over the next 25 years.
The analysis says these benefits would be twice as great as those from keeping Cyprus’ grid isolated.
Taking into account the practicality of interconnectors for importing or exporting electricity and thus promoting renewable energy growth, the analysis found that only 5% to 8% of renewable energy generation would be “discarded” by 2040 with interconnectors. If the situation remained unchanged, around 18% of renewable energy would be discarded by 2040, as per the contracts.
Admie’s analysis also lists other opportunity costs of not having an interconnector – such as expensive future investments in necessary upgrades to existing electricity infrastructure.
The file does not cover aspects such as project financing.
The energy ministry has had the cost-benefit analysis since early July and will commission a foreign consultant to evaluate it. It is understood the ministry has not yet invited the consultant to bid.
The Treasury also sought feedback from the European Investment Bank – a possible sign of disagreement between the two departments.
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