The governments of Greece, Cyprus and Israel have signed an initial deal to develop the 2GW EuroAsia interconnector, a year after Athens revived stalled plans to participate in the project.
The 1,208km link will be the world's longest sub-sea interconnector, and is eligible for up to €8.7bn ($10.3bn) of EU funding as part of the Projects of Common Interest framework. It will run from Hadera, Israel to Kofinou, Cyprus and from Kofinou to Korakia in Crete.
The project's financial eligibility was brought into doubt in October 2019, after Greece decided to go it alone on the first phase — a power link between mainland Greece and Crete. Athens said at the time that negotiations with Cyprus to implement the EuroAsia project had "failed".
Greece completed the first phase last year, after fast-tracking the project because Crete's oil-fired power plants — with greenhouse gas emissions exceeding those allowed under EU legislation — have to be decommissioned by the end of 2022.
The Greek and Cypriot governments then revived their support for the full EuroAsia project last June.
EuroAsia's first phase will have 1GW of capacity and is scheduled for commissioning by December 2023. The second phase will bring capacity to 2GW by 2025.
The interconnector is of strategic importance to Cyprus, which is isolated from European and Asian electricity markets. The link will allow the island to phase out fossil fuel-fired power generation and improve its energy security.
It will also quicken the development of renewable generation capacity in Cyprus and bring down power prices, the country's energy ministry said. The government is aiming for 20pc of its generation to come from renewable sources by 2030, according to its National Energy and Climate Plan.
The EuroAsia interconnector, together with the Crete-mainland Greece interconnectors, will also boost renewable additions in Crete, as the island's current autonomous grid allows for only 30pc of its capacity to run on renewables because of system congestion.
