Cyprus-Greece interconnector promises significant savings on electricity bills

A undersea cable, the Great Sea Interconnector, which connects the electricity networks of Greece and Cyprus, is expected to save a significant amount of money for homes in Cyprus. The Independent Power Transmission Operator (IPTO) Chairman, Manousos Manousakis, says that this project, whose construction cost was €1.9 billion, may save an average Cyprus household's yearly power costs by €400.

A revised Cost and Benefit Analysis (CBA) was given by Manousakis and IPTO representatives to Cypriot Energy Minister George Papanastasiou and other government representatives on Tuesday. Cyprus is considering an equity investment of €100 million in the project, so this analysis, which was requested by the government of Cyprus, is an important first step.

Before reaching a final investment decision, the Ministry has asked a third-party consulting company to do a thorough evaluation of the CBA, according to Minister Papanastasiou. To guarantee an impartial assessment of the IPTO's study, the Ministry intends to issue a call for tenders for this advisory role.

According to Manousakis, the analysis contrasted two scenarios: one in which the interconnector was there and the other in which it wasn't, indicating that Cyprus' power system would continue to be isolated. According to the research, with the interconnector installed, a typical Cyprus household with a yearly consumption of 5 megawatt hours could save at least €400 on electricity bills. In order to pay for the construction, users will also be assessed a €30 annual fee from 2025 to 2029, nevertheless, it is anticipated that these savings would balance this out in the first year itself.

In response to inquiries, Manousakis stressed the need of cost control and mentioned that there shouldn't be any major problems with the Cyprus Electricity Regulating Authority (CERA) over a little yearly fee of €30 for a project that saves €400.

According to a news release issued by the IPTO, by 2030, Cypriot customers might save up to 30% annually because to the CBA. The operation of the interconnector and the expenses of adding energy storage batteries have been compared in the course of the analysis. Batteries were found to be substantially more expensive than the €1.9 billion interconnector, with a construction investment of €4 billion, and also had greater operational costs.

Ultimately, the interconnector is expected to provide a total social benefit of approximately €6 billion by reducing fuel use and emission costs, far exceeding its construction cost. The IPTO stated that the interconnector’s social benefit ratio is about 19%, more than double that of maintaining an isolated energy grid.

The interconnector provides Cyprus with both financial and environmental benefits, making this development an important move to better economic and effective management of energy.