Electricity generation in the Middle East and Africa could soon support the development of an interconnection between Greece, Cyprus, Israel and Egypt. Ilias Tsagas examines the landscape for this infrastructure mega-project, and the possible benefits for solar.

From pv magazine 03/2022

The coming of the new year saw two developments that significantly boosted the electricity interconnection potential between continents, focused on Greece, Cyprus and Israel, and the so-called “EuroAsia Interconnector.”

The first was the European Commission’s approval for €657 million of funding to actually construct the interconnector. Second, the US government withdrew its support for a natural gas pipeline that would have connected the European continent to newly discovered gas fields in Israel, Cyprus, and Egypt.The EU funding for the interconnector comes via the Connecting Europe Facility. It will finance the construction of part of the link from Cyprus to the Greek island of Crete. The total cost for this segment of the interconnection has been estimated at €1.58 billion.

Private capital is expected to flow into the project, as is additional EU funding. Specifically, the Cypriot Ministry of Energy, Commerce and Industry said in January that at this stage, it aims to grant the project an additional €100 million, stemming from the country’s national recovery and resilience plan, which in turn comprises part of the European block’s post-pandemic recovery plan.

Meanwhile, Crete was also connected to the Greek mainland grid for the first time last year. And a second, larger power cable alongside is also under construction, with operations set for 2023.

EastMed Pipeline

The second development taking place in the new year, further altering the dynamics of the energy debate in the region, is the US government’s opposition to the EastMed pipeline. The pipeline, which aims to transport natural gas discovered in the fields of Israel, Egypt and Cyprus to the European continent, is seen as strategic by all three countries.

Some analysts argue that the project could ease Europe’s reliance on Russian gas and the whims of the Russian political elite. However, others claim the pipeline, which has an estimated cost of about $6 billion to $7 billion, is unrealistic because of the cost and the changing patterns on both the supply and demand sides of European electricity markets, including the current exceptional price cycle.

The US government argued in February that the pipeline is not in line with Europe’s green energy plans. Instead, said Washington, the region should focus on the EuroAsia electricity interconnector and the EuroAfrica power line. The latter aims to deliver electricity from Egypt through Cyprus and then onwards to Greece and Europe via Crete.

EuroAsia Interconnector

Greece, Cyprus and Israel signed a memorandum of understanding (MoU) to link up their grids in March 2021. Upon completion, the interconnector will carry between 1GW and 2GW of power capacity and is expected to be completed by 2024, with operations starting in 2025.

Israel’s energy ministry said in 2021 that “the underwater cable will be laid in the Mediterranean Sea for about 1,500 km and at a maximum depth of about 2,700 meters,” making it “the world’s longest underwater power cable.”

The EU’s decision in January to finance the construction of the 900 km section linking Cyprus to Crete regards it as the longest section of the interconnector. Sections between Israel and Cyprus, and between Crete and mainland Greece are about 300 km each. The project now seems a certainty.

Israeli strategy

The Israeli government this year differs from the government that signed the MoU in March 2021. But this is not a problem, argued Eitan Parnass, the founder and director of the Green Energy Association, which is Israel’s main green energy body. Parnass told pv magazine that the EuroAsia Interconnector is seen as strategic in Israel, which is why the new Israeli government remains equally committed to it. The case is that the electricity interconnector is seen in Israel as an opportunity to import solar power, rather than export it, added Parnass.

“There is growing opposition in Israel for large-scale and ground-mounted PV, [while] wind is battled against even by the Ministry of Environment,” said Parnass, in reference to the protection of a crucial migratory path through Israel.

Israel is a sun-drenched country, but it is also relatively small and shares no electricity interconnections with neighboring countries at present. Therefore, the case is that Israel may use the power link to export electricity generated locally by rich gas resources, and import European renewable power.

Still, the project is vital, argued Parnass, as Israel is technically an energy island with no other interconnections. Like Cyprus and Crete, all three share similar energy obstacles. However, Parnass is primarily concerned with the limited capacity of the power cable, raising the necessity of energy storage and best practice energy management.

Israel’s cumulative installed electricity capacity is about 17GW, of which 3.5GW is renewable power capacity, predominantly solar. The country has also commissioned about 777MW of additional solar to be installed alongside four-hour battery systems (about 2GWh of energy storage) and has a goal of generating 30% of its electricity needs via renewables by 2030, supported by 10GWh of energy storage.

Cypriot target

The Cypriot energy ministry said in January that its studies show that utilizing the EuroAsia Interconnector, together with local energy storage plants, can help it to meet more than 50% of its energy needs with renewables by 2030.

At present, Cyprus generates only about 10% of its electricity via renewables, while the Cypriot National Energy and Climate Plan has set a target to cover at least 20% of its total energy needs via renewables by 2030, which sounds outdated and not on par with the island’s natural resources.

Green Greece

Greece has the boldest green energy policy of all three countries. It plans to phase out all operational coal plants by 2025 and is aiming for a 61% target for renewable electricity by 2030. The last figure is enshrined in the country’s National Energy and Climate Plan published in 2019, while a government spokesman told pv magazine that Greece aims to revise this plan, increasing the green power goals further. The government has also prepared an energy storage framework, which it plans to bring into consultation imminently. Greece’s national energy plan mandates 7.7GW of PV capacity by 2030, of which about 4 GW is already installed.

New connection

In October, Greece and Egypt also signed an agreement to develop a subsea cable linking the two countries. As with the EuroAsia Interconnector, hopes are high that solar power generated in Africa can be transported to Europe. However, Egypt is far from decarbonizing its electricity supply, which runs predominantly on gas and oil power plants.

It is positive that Egypt’s 2035 Integrated Sustainable Energy Strategy emphasizes the need to turn to renewable energy. Egypt aims to increase the supply of electricity generated from renewable sources to 20% by 2022 and 42% by 2035, with solar PV accounting for 22%, wind 14%, concentrating solar power (CSP) 3%, and hydropower 2%.

Will Egypt focus on its immense solar power resources or turn to gas, given that its Zohr gas field, discovered in 2015, is one of the largest in the Mediterranean Sea? Also, will Egypt export its electricity abroad or use it to satisfy its domestic needs? The answers to these questions will depend on the economics of solar power and new gas plant construction, along with the price of electricity in the four markets.

Given that all four countries have plans to increase their reliance on renewables, the benefits of interconnections, importing and exporting power to balance their systems, is obvious. But more cooperation is required, as the new era of green power and climate change requires strategic partnerships based on common objectives and rules.