Tuesday, May 21, 2024
 
 

Is “cable diplomacy” shaping energy policy in the Mediterranean & Middle East?

Electricity interconnections to boost decarbonization and energy security

Hitachi ABB Power Grids
The electricity transmission companies of Egypt and Saudi Arabia have signed contacts aiming at the exchange of electricity (3.000 MW).

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The transition towards a carbon neutral economy has become a priority for many governments around the world. Using the UN’s 17 Sustainable Development Goals agenda for 2030 as their guide, a thorough transformation of the global energy landscape –  namely, decarbonization by 2050 – will be based on the use of clean energy via power generation from renewable sources like wind and solar, as well as hydrogen production.

The ongoing energy crisis caused by the Russian Federation’s invasion of Ukraine has stalled the global drive towards decarbonization. But Russia’s actions have also, inadvertently, promoted private investment in clean energy projects in wind and solar power production.

Regional power grids that are interconnected – i.e. those that provide for the transmission of electricity to companies or countries that have been linked for the purpose of sharing electric power resources – are increasingly seen as facilitators for the production of renewable energy.

Cross-border high-voltage cables that connect the electricity systems of neighboring countries are promoted in the Mediterranean with the aim of boosting both trade and the integration of electricity markets. At present, the European Union actively supports joint projects with third-party nations outside of the EU to enhance regional integration and promote an energy transition using renewable sources that helps meet both supply and demand.

In the whole of the Mediterranean region, there are currently only two existing electricity interconnections – Turkey’s transmission grids with Bulgaria and Greece (1.9 GW) and Morocco’s undersea cable with Spain (1.4 GW).

A link from the Maghreb to the Mezzogiorno

Within the framework of Brussels’ Projects of Common Interest, the European Union is currently financing an advanced undersea Italy-Tunisia cable interconnection. The project is still under construction and is expected to come online by 2027, with a capacity of 600 MW. When completed, the new connector will create a second electricity link between an EU nation and North Africa; a development that is widely seen as a significant boon for Southern Italy and Sicily.

Cyprus, Greece and Israel are aggressively promoting the development of a Euro-Asia interconnector by 2027. The main goal of the three Eastern Mediterranean littoral nations is to create a 1,208 km-long submerged cable, with a 2,000 MW of capacity; at a sea depth of 3,000 meters. It has been included in the European Union’s list of Projects of Common Interests as a so-called “electricity highway”, with €1.2 billion already approved by the EU’s flagship initiative, known as the Recovery and Resilience Plan, which is aimed at mitigating the economic and social impact of the COVID-19 pandemic by making the economies of the 27-member bloc more sustainable and fully prepared for a green and digital transformation.

Additional developments in the Middle East

In 2021, Egypt, Cyprus and Greece signed an agreement that could result in the supply of power to other European countries by way of Egypt’s vast resources of solar energy.

The Egyptian government, along with their Greek counterparts, have also signed a bilateral Memorandum that provides for a subsea cable that will transmit power from renewable energy sources from Egypt to the EU.

The so-called ‘GREGY Interconnection’ – an exclusively private investment project – was officially presented at the Climate Change Conference, or COP27, in November 2022, which was held in Egypt’s Sinai Peninsula resort city of Sharm el-Sheikh. The project envisages the laying of a 1,373-km long undersea cable with 3,000 MW of capacity from Egyptian solar energy from the country’s Wadi El Natrun, a desert valley located west of the Nile Delta, to Greece’s Attica region, home to the Greek capital Athens.

The cable will cross through the already agreed-upon exclusive economic zone between the two countries, and will also have the future capacity to transmit hydrogen.

Regional electricity hub in the Arab World and wider Middle East

A $1.8 billion deal between Saudi Electricity Company and Egyptian Electricity Transmission for two joint ventures with Cairo-based Orascom Construction, Japanese technology conglomerate Hitachi Energy – following the latter’s acquisition of Switzerland’s ABB Power Grids – and Saudi Services For Electro Mechanic Works for the exchange of 3,000 MW of electricity.

The contract, signed in October 2021, calls for several joint projects that include the construction of 1,350 km of overhead power lines and 22 km of undersea cables, as well as the construction of three high-voltage substations, two of which will be located in the Saudi cities of Medina and Tabuk, and one east of Cairo. The project is expected to be completed in 2024 and is part of Saudi Arabia’s Vision 2030 program. Riyadh hopes the endeavor will establish the Kingdom as an energy hub in the Arab World.

These joint projects are also expected to strengthen the ties between two of the Arab World’s main powers, and also help both implement their respective energy strategies. Given that Egypt and Saudi Arabia have the two largest networks in the region, if the project is successful, it will produce significant economic and developmental benefits through the export of surplus energy quantities to neighboring countries, namely Greece and Libya.

Egypt, in particular, has set a target to produce 10 GW of “green” energy by 2023 and wishes to become a regional hub for electricity transmission by 2030, connecting the country with Europe.

Some outside observers also believe that a transition to a clean energy strategy by the Egyptian and Saudi governments will better position Egypt and Saudi Arabia to negotiate with the  European Union about the potential of including the projects on the EU’s list of Projects of Common Interest. In the event that both nations see their projects listed, both Cairo and Riyadh could expect some form of co-financing from Europe for their future energy plans.

“Cable Diplomacy” emerges as a byword for regional security & cooperation

With Egypt, Cyprus, Greece, Israel and Saudi Arabia as key players in the Eastern Mediterranean and Middle East, all eyes in Europe have turned to North Africa as an area of interest in the push towards a transition to a green economy and the promotion of electricity production from renewable energy sources and electricity exchanges.

Of the aforementioned five countries, Egypt and Greece are emerging as the nexus points for all future projects. As previously stated, undersea cable networks originating in the Middle East and North Africa are currently being designed to transport – aside from gas – electricity and hydrogen to Europe.

All of these current and future projects are designed to accelerate the exploration, development and export of hydrocarbons and simultaneously boost energy security in the region.

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Energy expert, Petroleum Institute, Visiting Lecturer- IHU (International Hellenic University)

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