EU to invest Eur1 billion in Green Deal cross-border energy infrastructure

EU member states have agreed to invest Eur1.037 billion ($1.16 billion) in cross-border energy infrastructure projects, with two-thirds of funds under the Connecting Europe Facility allocated to a subsea electricity interconnector to Cyprus, the Commission said Jan. 26.

Some Eur657 million were awarded to the EuroAsia Interconnector, linking Cyprus via Crete to the European grid, with another Eur297 million awarded for power grid projects in the Baltics and Nordics.

European Commission's Energy Commissioner Kadri Simson said recent months have shown "how crucial a well-integrated EU energy market is for ensuring affordable energy and security of supply, as well as the clean energy transition."

Europe's gas benchmark TTF front-month has soared to Eur90.50/MWh Jan. 26, with generation costs for price-setting gas-fired power plants up fivefold, averaging above Eur250/MWh in December 2021 for first-quarter 2022 for Northwest Europe, S&P Global Platts data showed.

The new CEF funds support the European Green Deal, granting financial aid for the construction of three electricity transmission projects, as well as expanding gas storage in Bulgaria, for Eur78 million, and a study on CO2 transport as part of the Northern Lights Phase II project offshore Norway, for Eur4 million, the EC said.

EU energy ministers pledged in June 2021 Eur5.5 billion for CEF projects for the 2021-2027 period, adopting a list of 98 projects.

EuroAsia interconnector

Funding for the 1 GW EuroAsia Interconnector, also set to include Israel, is for an undersea cable from the Greek island of Crete to Cyprus.

In 2021, the EC already awarded a Eur100 million grant under the coronavirus recovery plan, with project developers having secured the relevant permits and binding offers from cable manufacturers Nexans and Prysmian and equipment maker Siemens Energy for the 898 km long 500 kV cable.

The Crete-Cyprus leg of the project is scheduled for commissioning in 2025, the project developers said in April 21, 2021, after Cyprus, Greece and Israel signed an agreement on the project.

Greek day-ahead power prices averaged Eur122.57/MWh in 2021, but soared to a Eur216.41/MWh average so far this January, EnEX exchange data showed.

Greek plans for a 1 GW cable linking Crete with the mainland are on track for a 2023 start.

In the Baltic region, the EU awarded Eur170 million to the second phase of the Baltic Synchronisation Project for grid reinforcement in Poland and upgrading transmission infrastructure in Lithuania, Latvia and Estonia to support the integration of the Baltic States' power system with European networks.

The project already received more than Eur1 billion under previous CEF plans, it said.

In the Nordics, CEF funding of Eur120 million will support the development of a third transmission line between Sweden and Finland, supporting the integration of wind power.

Swedish and Finnish grid operators are working on a new 400 kV power link across their northern border called Aurora.

The Aurora project is estimated to cost about Eur250 million and set to start 2025, assuming concessions can be obtained by 2023.

The Commission on Jan. 26 also approved a first payment of Eur7.4 billion to France under the NextGenerationEU recovery plan, with one-third of funds allocated to Green Deal measures.