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EIB loan to finance power cable between Crete and mainland Greece

Underwater electricity interconnector to help end Greek island's energy isolation

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ATHENS – The Greek island of Crete took a step closer towards energy independence and cutting CO2 emissions on 9 May, following a deal between Greece’s Independent Power Transmission Operator (IPTO or ADMIE) and the European Investment Bank (EIB) with the latter agreeing to provide a €178 million loan to finance an underwater cable power interconnector between Crete and the Peloponnese.

The new 132-kilometer underwater interconnection will ensure the energy security and provide one-third of Crete’s electricity needs, reducing the use of oil-fired plants, ADMIE said in a press release posted on its website on 10 May, adding that the interconnection is also crucial for the development of renewable energy sources in Crete.

“This is the small electricity connection. In the overall plan of interconnecting mainland Greece with the islands the priority is to connect Crete in two phases,” IENE Executive Director Costis Stambolis told New Europe in an interview on 9 May in Athens, following a workshop Challenges and Opportunities in Greece Electricity Market organized by Institute for Energy in South East Europe.

“First of all, is the small electricity connection, the agreement the funding for which was signed today (9 May) between EIB and ADMIE or IPTO and this connects the southernmost part of the Peloponnese to Crete, on the west side of Crete, and construction of which could well start by the end of this year,” Stambolis explained. “Following that, there is the bigger interconnection between Attica and Crete, which is a lot bigger in terms of capacity. The one, which was signed today, is small capacity – I think about 200-250 megawatts (MW) – whereas the big interconnection is about 1 gigawatt (GW),” he added.

Stambolis stressed the technical complexity of the AC power interconnection from the Peloponnese to Crete due to the great length and big depth. This is a very demanding and challenging technical infrastructure work.”

Regarding the much bigger Crete Interconnection Phase 2 between Attica and Greece’s largest island, Stambolis said the project, which he forecasts to be implemented by 2022-23, would fully solve the energy supply of Crete in terms of electricity. “Crete will be fully interconnected with the mainland,” he said.

Connecting Crete to the mainland electricity grid will ensuring a safe and dependable energy supply, which is one of the goals of the European Commission. “It’s an overall EU plan to interconnect islands so islands stop being energy islands because being an energy island means that you have to consume oil. There’re several islands not only in Greece but also Spain and Italy which consume fuel oil, which is heavy oil, which means a lot of emissions,” Stambolis said, reminding that the overall strategy of the EU “is gradually to end all these energy islands through interconnections.”

Asked if the electricity interconnections between Crete and mainland Greece will also help the Mediterranean county meet its CO2 emissions targets, Stambolis quipped, “Absolutely because then you will have a lot less oil consumption for power generation in Crete. They will still retain some units as sort of backup, but they will not be operating. They will only be operating only in times of peak demand. So it’s a big step, it’s a really big step because Crete, which has a total installed capacity of almost one gigawatt, will be fully interconnected to the main grid.”

Turning to hydrocarbon exploration off the island of Crete, Stambolis said prospects for gas discoveries south and west of the island in carbonate formations, similar to Egypt’s massive Zohr field, are good. “South and southwest of Crete there are blocks, which have been allocated to ExxonMobil and Total and Hellenic Petroleum and over the next three-four-five years they will carry out exploration work, eventually exploration drilling. Hopefully they will find some gas deposits because the geology of the broader region indicates that there some deposits and this has been sort of proven through the seismic work that has been taken place,” Stambolis said, adding, “The concessionaires are hopeful that they will be able to find commercially exploitable gas.”

Asked if possible discoveries would also enhance plans to build the EastMed gas pipeline to carry hydrocarbons from Israeli and Cypriot fields to mainland Greece and onto Europe, Stambolis said, “They don’t count on EastMed. But, of course, if the EastMed happens that will provide an extra channel for transmitting this gas to mainland Greece and Europe.

It remains to be seen exactly what they will be drilling, what sort of quantities they will find, if they find. Whatever the case is, some substantial infrastructure will have to be built in the area south to southwest of Crete. Regardless of EastMed, they will have to build some infrastructure.”

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Co-founder / Director of Energy & Climate Policy and Security at NE Global Media

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