Op-ed by a reader/contributor to this blog, Dean Plassaras, a Greek-American entrepreneur living in California.
As we are all observing Greece looking for factors that might make a difference, I wish to bring to your and blog readers' attention 3 energy projects with promising potential. They are:
EuroAsia Submarine Interconnector Cable: The EuroAsia Interconnector is a leading European Union Project of Common Interest (PCI) that will link the electricity grids of Israel, Cyprus and Greece (Crete-Attica) through a 2,000MW sub-sea cable and converter stations at each connection point. The total budget of Stage 1 of the project for the initial 1000MW interconnector is estimated at 3.5 billion euros.
EuroAfrica Submarine Interconnector Cable: EuroAfrica will link the electrical systems of Egypt, Cyprus and Greece (via Crete) through sub-marine DC cables and HVDC onshore stations in each country/location, and have a capacity of 2000 MW. The EuroAfrica creates an energy bridge between Africa and Europe with a total length of the interconnector being approx. 1648 km, and creates a reliable alternative corridor for transferring electricity to Europe.
East Med Gas Pipeline Project: The Eastern Mediterranean (EastMed) pipeline project relates to an offshore/onshore natural gas pipeline, directly connecting East Mediterranean resources to Greece via Cyprus and Crete that could: i) enhance Europe's gas security of supply via diversification of counterparts, routes and sources; ii) develop EU indigenous resources such as the offshore gas reserves around Cyprus and Greece; and iii) promote the development of a South Mediterranean Gas Hub.
Mindful of the well known "resource curse" or the "paradox of plenty", I am not so much interested in suggesting that hydrocarbon discoveries could solve the problems of Greece. Rather, I wish to focus our attention on the interconnectivity issue and energy performance improvements delivered by such systems.
Of utmost importance and leading the pack is the EuroAsia submarine electric cable with a parallel fiber-optics cable component. Cheap electricity, whether produced by gas-fired plants or solar installations, could cut current electric costs by half and end the energy isolation of the Greek islands which currently produce electricity on demand through burning of dirty and expensive mazout (heavy petroleum) which needs to be imported (we both agree that Greece needs to cut its imports and increase its exports).
The EuroAsia interconnector has now reached its implementation phase and I hope it becomes the proverbial "win-win" for better Greek economic results and greater EU energy security.
Regrettably, this topic is not sufficiently covered and on the rare occasions it is, perhaps not sufficiently explained.
Facebook Group
As we are all observing Greece looking for factors that might make a difference, I wish to bring to your and blog readers' attention 3 energy projects with promising potential. They are:
EuroAsia Submarine Interconnector Cable: The EuroAsia Interconnector is a leading European Union Project of Common Interest (PCI) that will link the electricity grids of Israel, Cyprus and Greece (Crete-Attica) through a 2,000MW sub-sea cable and converter stations at each connection point. The total budget of Stage 1 of the project for the initial 1000MW interconnector is estimated at 3.5 billion euros.
EuroAfrica Submarine Interconnector Cable: EuroAfrica will link the electrical systems of Egypt, Cyprus and Greece (via Crete) through sub-marine DC cables and HVDC onshore stations in each country/location, and have a capacity of 2000 MW. The EuroAfrica creates an energy bridge between Africa and Europe with a total length of the interconnector being approx. 1648 km, and creates a reliable alternative corridor for transferring electricity to Europe.
East Med Gas Pipeline Project: The Eastern Mediterranean (EastMed) pipeline project relates to an offshore/onshore natural gas pipeline, directly connecting East Mediterranean resources to Greece via Cyprus and Crete that could: i) enhance Europe's gas security of supply via diversification of counterparts, routes and sources; ii) develop EU indigenous resources such as the offshore gas reserves around Cyprus and Greece; and iii) promote the development of a South Mediterranean Gas Hub.
Mindful of the well known "resource curse" or the "paradox of plenty", I am not so much interested in suggesting that hydrocarbon discoveries could solve the problems of Greece. Rather, I wish to focus our attention on the interconnectivity issue and energy performance improvements delivered by such systems.
Of utmost importance and leading the pack is the EuroAsia submarine electric cable with a parallel fiber-optics cable component. Cheap electricity, whether produced by gas-fired plants or solar installations, could cut current electric costs by half and end the energy isolation of the Greek islands which currently produce electricity on demand through burning of dirty and expensive mazout (heavy petroleum) which needs to be imported (we both agree that Greece needs to cut its imports and increase its exports).
The EuroAsia interconnector has now reached its implementation phase and I hope it becomes the proverbial "win-win" for better Greek economic results and greater EU energy security.
Regrettably, this topic is not sufficiently covered and on the rare occasions it is, perhaps not sufficiently explained.
Facebook Group
As I expected it, this topic is not understood and actually very easily misunderstood.
ReplyDeleteSome (most), associate it with geopolitical advantage, energy riches and even a mechanism of repaying the country's debts, in other words a pure political instrument which borders nationalism. Yet it is not.
In its essence, this is an environmental issue and an energy efficiency issue. In its core, it represents the better way to consume energy and improve the quality of life of the citizens of the countries cooperating in such projects. Plus electricity is the wave of the future.
And there are more energy projects coming Greece's way with all the beneficial GDP factors associated with those projects.
By the way, thank you very much Klaus for your courtesy and blog hospitality on the energy issue.
Dean Plassaras.
Dean Plassaras sent me this article from DER SPIEGEL and commented on it as below:
ReplyDeletehttp://www.spiegel.de/politik/ausland/gas-im-mittelmeer-streit-zwischen-tuerkei-und-zypern-israel-und-libanon-a-1193535.html
Here is my criticism towards this incredibly bad job of an article:
1. When you are an author born in 1987, so barely 30 years old, and you like to watch Game of Thrones this is the sort of nonsense that excites you (treasure hunts, multiple players doing battle, dragons and other exotic animals).
2. These are EU energy reserves we are talking about and to even suggest that non-EU countries have false claims over them, then you promote the propaganda of the enemies of the EU.
3. The EEZ of Cyprus is not in dispute because the coordinates of the EEZ have been submitted to the UN in 2003 and it also shows you by which agreements/treaties it comes into force: http://www.marineregions.org/eezdetails.php?mrgid=8376
4. I really hate it when they send a kid to do a man's work and messes the whole thing up. (o.k. the famous Plassaras temper is back).
5. What is remarkable in the Cyprus case is that a country with no army, navy or other means of enforcement has been able by strictly using international and EU law to pioneer a new approach of how countries need to safeguard their hydrocarbons and create positive GDP effects in the process. In fact, I would suggest in the future that the Cyprus case is studied very closely in international relations classes/courses throughout the world because it's a textbook case of how to do it the smart way.
6. When I said in your commentary section that the hydrocarbons case is very easily misunderstood; I wasn't kidding. Here is your proof.
Klaus, I seem to need a more detailed critique of Dominik Peters' article. What statements/suggestions exactly is Plassaras challenging. That Peters assumes there could be Turkish or Lebanese rights?
DeleteLeaNder
I presume Plassaras will respond directly, I have now read the article and come away with the feeling that this is really complicated...
DeleteKleingut:
DeletePlease specify the "complicated part" so that we could reason it away.
LeaNder:
DeleteThis was part of a private conversation; it was not meant for publication. I thought I were very explicit when I said that the projects I was presenting are 3 EU projects of common interest and specifically warned about the "riches" typical nonsense that might be attached. The GDP effect of the 3 projects is immediate to both the Cypriot and Greek economies. Gas discoveries in East Med are for the next generation (25 years down the road at least) and not an area of interest in my analysis.
Dean Plassaras
Dean, could you define/list the enemies of the EU and their propaganda for me in this specific context? No need to deel with the inner EU enemy in this context. That's something I expect from you by now. But yes, I wonder to what extend it color's your interpretation of 'the' Spiegel article.
DeleteWhat's wrong with me if I do not care much if the gas we consume is Israeli, Greek, Cypriot, Lebanese, Turkish, Iranian, Russian, or from Egypt or Qatar? Should I pay more attention on national/collective EU interest?
What exactly does "the 'riches' typical nonsense" mean?
And last but not least, I look closer at your suggested EU projects and you tell me what's wrong with Dominik Peters and/or his article?
LeaNder
LeaNder:
DeleteWhat is disturbingly wrong with the Der Spiegel article is that:
1. The gas deposits of East Med have been known for years now, including their exact location and whose EEZ (Exclusive Economic Zone) belong to. The only thing that is not known is the size (i.e. column depth) of these deposits where you need some exploratory drilling to assess true volume. When you know something exists and where it exists, unfortunately, you can not use the term "treasure hunt" to describe it. You can use the term "scientific discovery" or "quantitative assessment" or similar but not the term "treasure hunt". A treasure hunt is when a bunch of kids run around an open field at Easter time looking for chocolate eggs and whoever finds them first then we say that such child had a successful treasure hunt.
2. The second and most important reason you can not call the assessment of well-known, existing gas fields as a "treasure hunt" is that none of these fields could be monetized. To make them a treasure, corresponding international gas prices must exist otherwise these deposits stay where they are. When deposits stay where they are the last thing one could speak of is a "treasure hunt". International gas prices need to improve by at least 30% to even speak of considering these East Med gas fields towards monetization.
Therefore the Der Speigel article is pure nonsense designed to envoke sensationalism because it promotes unfounded concepts which no one follows in the oil and gas business.
I believe that I was very careful when I wrote the piece to speak nothing of gas potential which would have made me a fool. If for whatever reason, you wish to engage in a fool's game then please count me out.
As to your other question of who are the "enemies of the EU" here is my definition. Enemies of the EU are any and all non-EU states which lay false claims upon well known EU energy assets already belonging to the member states EEZ or the overall EU EEZ.
D.
Anonymous said...
DeletePut another way, so the use of the metaphor treasure hunt triggered by Turkish warships preventing ENI's "'scientific discovery' or 'qualitative assessment'", it seems, does not allow the use of such a metaphor? Not even considering the background he alludes to in his first lines? Turkey and Tayyip more generally? The Munich Security Conference. Turkey in Syria's Idlib province? See for instance:
http://turcopolier.typepad.com/sic_semper_tyrannis/2018/02/a-plethora-of-events-in-northwest-syria-ttg.html
Not sure either how "International gas prices need to improve by at least 30% to even speak of considering these" can possibly square with, as you write above, "Cheap electricity, whether produced by gas-fired plants or solar installations, could cut current electric costs by half"
Mazout (heavy petrolium), I suppose, might be a reference to Russian oil versus much more ecological beneficial US fracking oil? To bring in the larger unilateral versus multilateral geopolitical scene?
Concerning Dominik, never mind his age, grown up in the post 9/11 universe, he did choose interesting subjects in his studes. None of those suggests on first sight he is hooked on fantasy fiction. But who knows. I surely bow to your superior polemical expertise.
The EU "directive" looks like a "regulation" on fast check:
http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32013R0347&from=EN
LeaNder
LeaNder:
DeleteIt was not my intention to get into geopolitics but seeing you have questions on the subject here is an explanation which is given as a pure courtesy and is 100% outside the scope of my original posting. Because you seem to think that certain subjects are interrelated and certainly I don't.
The EEZ (Exclusive Economic Zone) of any country is by definition on international waters. Free passage is allowed but exploitation rights only accrue to the EEZ country in question.
So, when Turkey issues a NavTex (a navigational warning) in part of Cyprus's EEZ for supposedly military exercises it has every right to do so. The current Turkey Navtex expires on February 23 and a new one by Cyprus will replace it starting the next day and will be in effect for 4 months.
Whether this theater (because Turkey, Greece and Cyprus play the Navtex game all the time and as you know in every game sometimes you come in first but a few times second) means anything of value, I truly doubt.
Turkey at present is being humiliated in Afrin by a group of well organized and battle-hardened Kurds and as such Turkey is seeking to divert attention elsewhere. Part of that "elsewhere" is Cyprus via the NavTex game which by nature is transitory.
Some want to see special "meanings" in the behavior of Turkey. I only see a frustrated player which is very late in the hydrocarbons game in the East Med and a player who has already lost but for obvious reasons can not openly admit defeat for internal purposes.
Some might argue this is a fascinating development to watch with special meanings attached. My position on the Navtex game is that is a loser's game and changes nothing on the ground. I don't expect you to convert to my position but I thought you might know since it is so evident that you do not want to take the peaceful message of my original blog entry sitting down.
Enjoy the show. You may be disappointed though because this is a fool's game.
D.
Therefore the Der Speigel (sic) article is pure nonsense designed to envoke sensationalism because it promotes unfounded concepts which no one follows in the oil and gas business.
DeleteDean, I am not an expert in the oil and gas business, neither would I expect a Spiegel journalist to be one or on all EU programs for that matter. But I would expect him/her to inform me of troubles between a recent EU member and a still somewhat candiate state
I also would expect him to be aware of tensions between Germany and Turkey for much longer now. Which may explain his focus. Deniz Yücel was only recently released from jail:
http://www.dw.com/en/german-journalist-deniz-y%C3%BCcel-released-from-jail-in-turkey-lawyer/a-42612785
But thanks for the response, I have to admit that I am slightly prejudiced against you from my earliest encounters with you in Yanis Varoufakis blog comment section. If I understood what the "the 'riches' typical nonsense" is supposed to signify I would even admit to being your typical "riches nonsense" fool. ;)
https://www.neweurope.eu/article/gas-drilling-navtex-fuel-turkey-cyprus-tensions-east-med/
That said, yes I realized from early on that your attention as Greek American is heavily on the oil and gas business axis of Israel-Cyprus-Greece. I did appreciate you included renewable energy like "solar installations". Beyond that I wonder about your polemics and aggression patterns.
LeaNder
LeaNder:
DeleteI have no Varoufakis connection.
As far as geopolitics is concerned, even Turkey understands that it needs to apply a "hands off" policy towards the Cypriot EZZ. This is self-evident to anyone involved.
https://ahvalnews.com/cyprus/exclusive-united-states-backs-cyprus-rights-gas-exploration
By the way, if you think my replies in this particular blog entry are polemic then I am sorry to inform you that you have no idea what polemics are.
I gave you an opinion about 3 energy projects which opinion does not allow room for further interpretation. If it did, then I would not have given it in the first place.
The Der Spigel kid - who by the way studied at a Jerusalem university - was not speaking about Cyprus but about the well-known dispute of Israel and Lebanon involving an overlapping area of 850 km2. Nothing really important but sometimes the Israelis behave as if they are ready to start the 3rd Lebanese war about it. That's Israel and they can say anything they normally say. It is none of my concern and it shouldn't be yours either.
If you understand geopolitics is its most elementary form then the East Med conflict over natural resources was whether Turkey or Egypt would become the eventual energy hub. So Egypt won and that's the end of the story. What exactly Der Spiegel is trying to interpret in an geographical area that Germany has no say about it, is not even an invited EU player, I have no idea.
Now if as you say you are only innocently pursuing news in the area that might affect you then then my strong suggestion to you is never to pay any attention to Der Spiegel articles which are not translated into English such as those appearing at the Der Spiegel International website.
All of this is some friendly advice and not polemics. Polemics would be to order you to silence immediately which I haven't done yet but I have to confess I am truly tempted to put into action very soon.
Let this be our final communication on this unfortunate subject which I should never presented to a bunch of unprepared students.
What exactly Der Spiegel is trying to interpret in an geographical area that Germany has no say about it, is not even an invited EU player, I have no idea.
Deletethat's the context were I would expect you to get irrationally polemic. I doubt a French, Italian or British author of whatever age could trigger the same type of spite.
But interesting to see that apart from the fact that Germany and Germans apparently easily make you sick you seem to be a quite rational man.
Karel Whitman
Karel Whitman:
DeleteIndeed Germany and the Germans make me sick because they constitute a security threat to the entire world system.
I think Plassaras was very clear when he warned against treasure hunts and similar nonsense.
ReplyDeleteA treasure hunt is when a drunken sailor sells you an old map at a tavern that shows buried treasure.
When NASA satellites almost 10 years ago, reveal vast quantities of gas deposits in the Levantine basin and then 3-D seismic surveys accurately pin-point the exact location of these formations and then drilling confirms the depth of the gas column, in such case we are talking science.
So when a 30-year old kid is allowed to write a story about treasure hunts, it can only mean two things: either a deliberate distortion of science or someone's agenda with journalism for hire. Or both things at the same time.
This an a language issue and a sideshow: In German treasure hunt translates to Schatzsuche (treasure-seeking) yet "Jagd auf den Schatz im Mittelmeer" indicates a competition between two or more parties for a (known) treasure.
DeleteIt’s lamentable that some posters here always manage to miss the point.
Urs
Mr. Plassaras mention several advantages, let us look at them, for the project he consider the most promising, The EuroAsia Submarine Electric Cable.
ReplyDelete1."It could cut electricity prices by half". I assume he mean end user prices in Greece.
For that to be true the companies who extract the gas would have to sell it at half the market price. The companies who convert it from gas to electricity to do so at half the Greek average. The company who transport it to do so at half the present price. The Greek state to tax it at half the present rate. Most would agree that it is not likely.
2"It would cut Greek imports and increase exports".
No,if you move some of your energy conversion from fossil fuels to electricity abroad, and you move some of your energy consumption from domestic lignite to imported electricity your imports go up. As for exports, there wont be any, see later.
3."It would cause better economic results".
No, the imports would go up, and you would lose workplaces in your energy extraction (lignite) and energy conversion (electricity plants).
4."It would improve EU energy security".
Let us look at electrical energy consumption and capacity of the 1000 cable.
EU 2,771,000,000 MWh/year.
Greece 53,000,000 MWh/year.
Crete (est.) 2,000,000 MWh/year.
Cyprus 4,000,000 MWh/year.
Cable 8,800,000 MWh/year.
Since electricity is consumed close to generation, there would only be 2,800,000 MWh/year available for mainland Greece, 5,3% of consumption. That will not be able to make up for the last decades lack of investment in Greek energy conversion (capital formation).Even if Greece had transmission lines to send capacity to EU there would be no capacity to send.
Mr. Plassaras, cui bono?
Lennard.
You must look at the common good and the overall picture. There are other benefits such as global warning and CO 2.
ReplyDelete@ Dean Plasseras.
ReplyDeleteOn one hand you say that commercial extraction of hydrocarbons may benefit Greece and Cyprus in 25 years.
On the other hand you claim immediate benefits for the GDPs of Greece and Cyprus if a cable or pipeline is constructed now.
That is a PIPE DREAM that nobody will finance.
Lennard.
Lennard,
DeleteI am sorry but you seem to have a mental block which appears to be incurable.
Nowhere in my analysis I ever suggested that any of these projects require the finding and exploitation of gas resources we don't already know and/or already exploit.
Israel is connected to its own gas today and so is Egypt. Both produce electricity today and not in the future. Both can supply the EU today and not in the future and certainly not subject to additional gas finds.
The same goes with natural gas. If additional gas is found and depending on where found such new gas sources could join in towards a conveyance system to Europe.
What I spoke about is 3 CONVEYANCE systems already approved and financed by the EU today. Two of them (electric interconnectors, meaning connectors between national distribution systems) will happen for sure, the third a gas pipeline is purely a conveyance option which the EU wishes to have straight into the heart of the Eastern Mediterranean. And the EU has already paid millions of euros towards its feasibility).
I also know enough to speak about future gas findings but I chose not to do so and it appears for a good reason.
Quite frankly I am surprised at how closed minded you are unable to comprehend the basics. And my question to you is why? Why can't you understand the elementary basics and want to dwell on subjects well above your area of expertise? Do you feel that you have a better understanding of such matters? on what basis? and how did you acquire such knowledge?
D.
For those of you interested in the geopolitical aspect of gas discoveries, here is something to wet your appetite. You certainly need to find someone else to write a geopolitical analysis because clearly, I am not interested at all to write on such subject.
ReplyDeleteHowever, notice how professionals write on such topics and how differently it sounds(has been framed) from the Der Spiegel point of view, which frankly was laughable.
"The area from Cyprus to Lebanon and Egypt may contain additional gas riches, and countries in the region are eager to develop export plans. The U.S. Geological Survey estimates the area could hold more than 340 trillion cubic feet of gas, more than U.S. proven reserves.
“This is basically the moment when, finally, all the talk about turning Egypt into a regional gas hub is finally coming true,” Riccardo Fabiani, senior Mideast analyst for Eurasia Group, said."
https://www.bloomberg.com/news/articles/2018-02-20/cyprus-sees-gas-deal-with-egypt-as-cairo-weighs-israeli-supply
That's the difference between a professional written piece and a piece written by an amateur.
My analysis was for the now. This is a geopolitical assessment about the future. I hope you now kindly begin to understand the difference or at least begin to see how the two topics(electricity vs. gas exports) are not related at all. They may seem related but are not.
Dean Plassaras
P.S. I truly hope that we move on into a different subject because we are truly done on this one. Stick a fork in it, if you don't believe me.
@ Dean Plassaras.
ReplyDeleteThank you for your answer, it answered a lot of questions, none of them asked. It did not answer the two asked:
-How will Greece benefit from the cable connection?
-Who will benefit from the cable connection?
To your questions about my competences on energy.
-I have knowledge well above the average, it is my area of expertise.
I have acquired it by studying it, and spending most of my long working life practicing it.
I understand you wish to move to another subject than the one chosen by you, fell free to do so.
Lennard.
Lennard:
DeleteI gave a specific answer to your 4 points but Klaus chose not to publish it. Perhaps he thought it would ignite more conflict. So, I can't answer questions when my answers are not published.
Dean, I have published everything from everyone (except for the new material you sent me today). If something doesn't show up among the comments, it was not received. If so, please resend.
DeleteKleingut:
DeleteI believe you. Maybe it was never received. But it was a lengthy reply which showed the price diferential between Kwh in Israel vs. Cyprus vs. Greece. In fact there is a video about it published by the Israeli embassy which spoke to the pricing logic of the project. In fact, I am sure it can be found in the Facebook page you already referenced if one looks at the entries for the last 12 months. So it may take some work on my part to dig it out. But I think what Lennard needs to come to terms with is that the feasibility of this project has been examined from many different angles and received a passing grade. Raising questions after the fact will not change the nature of the project. Lennard's point, if I understand it correctly, is "hold on a minute where are you going with this project?" but this is not for me to answer but simply bring to your attention its existence (due to the nature of the blog). After all both Lennard and I have access to the exact same information over the Internet, so I kind of fail to see why I should be doing all the "fetching" and Lennard all the "asking" on this issue. Is it so hard for Lennard to accept that there is already commercial reasoning behind this project? Why is that? Why anything I present as a fact needs to pass Lennard's scrutiny? That's not nice and I might say since polemics have entered our vocabulary here, it's sort of an act of war on Lennard's part.
Lennard:
DeleteYou will find the economic justification of the EuroAsia intereconnector in pages 22, 23 and 24 of this presentation.
http://embassies.gov.il/nicosia/NewsAndEvents/Documents/Doing%20Business%20with%20Israel%20(EuroAsia).pdf
Dean
Everyone forget the glass fiber cable, it is the most important future, it will make Greece stronger in communication and IT technology. It is surely the way we should go in the future.
ReplyDeleteCables, Gas Lines Connections,
ReplyDeleteI don't understand the various debates above. Really I don't. All three will happen, aside from petrol deposits as well. They only issue that remains is the boring politics behind all these huge works. Who will benefit and has rights to these benefits. For certain, Greece, Cyprus, Isreal and Egypt have all viable bragging rights to these future infrastructures. Many works on the way already.
What the later question is which other countries of the region seek to strongarm into the profit from these infrastructures. Turkey, Lebanon, Albania Bulgaria and Italy. Hence the aggression in front and behind the scenes. All meanwhile the neutral stance of the super powers, USA, Russia, Germany, UK and France, due to instability but also looking at there own interests. (The companies who will extract, build and lay).
It is fact that it will move forward as it is already. Super Corps aim to profit hugely from this while give some bread crumbs to the bragging countries of the region. However these breadcrumbs are only the start. As more and more seem to pop on the grid of energies.
The initial countries will become hubs. And of course will gain from this more or less. Any idiot can see this.
So I ask again, what on earth is the debate about?
V
The debate per Lennard is that unless Greece has increased energy needs these projects will not happen, eventhough they are already happening. These are all "pass through" projects from which Greece could use some capacity as and if needed.
DeleteYour point of supercorporations and who will profit from extraction is an entirely different question. Because extraction is an enormous investment in terms of building platforms, equipment and personnel to the tune of $3 Bil. Cap Ex(capital expenditure), the company doing the extraction will reimburse itself first until all of its expenditures are reduced to zero. At that point a sharing formula kicks in on the revenue going forward which typically allocates 60% of net revenue to the state and 40% to the private company. It will take about 15 years to pay off capex and before that about 10 years to build the platform and make it operational. That's why I refuse to get into the part about "riches and treasure hunts". Because it's not for the average person to understand the mechanics involved. And since such payoffs are 20-25 years down the road, I think it's better we don't talk about such things yet for the simple reason that they are not real with any sense of immediate expectations.
So, yes we have been engaged into a false debate because of some Der Spiegel article which is not worth the paper that is written on but it makes for a fascinating discussion with pirates, riches, treasures and of course a Treasure Island in Disneyland.
Dean Plassaras
To get the electrical cable connection in perspective let us look at the activities now.
ReplyDeleteThe cable would be able to transmit to Greece 4,800,000 MWh/year, Crete and mainland. The first cost is roughly projected to BEUR 3,5. The capacity can be doubled but so would first cost. Financing has not been secured. The Cyprus developers, who promote the project, state some strange facts in the info they have submitted to Wikipedia. "It will contribute BEUR 0,6 to 1,1 annually to social and economic welfare", not bad for that size of first cost. To investors it will be a hard sell, unless Klaus is willing to give an exchange rate for the "socioeconomic EUR. "It would reduce CO2 emission with 1,3 to 6,8 million tons per year", that is really a no go for investors, as CO2 emissions reductions are proportional to transmitted energy. The developer say that he don't know if the plant will run on 19% or 100% load, would you like to tell that to a potential investor in a hotel? A final gem is "using electricity from distant power stations where electricity production costs are much lower". That clinches it, I can see us sending electrical power around the world in all directions. Electricity production costs are mainly fuel.
TAP can transmit to, and through, Greece 104,000,000 MWh/year gas, the equivalent of 52,000,000 MWh/year electricity, the total Greek consumption. The first cost is projected to BEUR 4,5. The capacity can be doubled, in the same pipeline, only by adding 2 more compressor stations. Financing is secured, in Feb 2018 they got BEUR 1,5 loans from EIB, they expect another BEUR 1,2 from from EBRD later this year, and I assume consortium members have financed the remains from commercial banks. The majority of the transmission capacity has been sold at long term contracts, I don't know how much capacity Greece has bought.
Greece does need an energy plan for 2 or 3 decades, she has not yet developed one. The TAP gas has the advantage that conversion from gas to electricity is carried out inside Greece. But, let's face it Greece cannot afford to import all her energy, CO2 or not.
Lennard.
Lennard:
DeleteI really think you need to take a deep breath and calm down because you are making all the wrong associations and connections.
The logic which dictated the creation of a southern European energy corridor was to disengage Europe from overreliance on Russian gas. Turkey and Germany, totally disregarding such energy independence imperative, did exactly the opposite. They became totally dependent on Russian gas (see Nordstream for Germany and a series of new Russian gas connections to Turkey). So both Germany and Turkey blew it because instead of diversifying they went all-in total Russian gas dependence.
So, projects like TAP regarding Azeri gas sales to Europe have very little to do with Greek energy market needs. TAP will sell some gas to downstream countries but the vast majority will be sold via Italy to the European markets.
Therefore the benefit Greece gets from conveyance systems like TAP is mostly transit fees and a small degree of energy diversification (i.e. gas other than Russian).
So quite frankly, I don't understand your attempts to calculate the energy needs of Greece and whether Greece could engage in such projects because according to you "it has no energy plan". The purpose of the 5 conveyance projects Greece is pursuing is to mainly lower the energy cost for Greece and not to necessarily increase the energy consumption of Greece so that these projects become (according to you) justified.
Dean Plassaras
Well put Dean.
DeleteV
@ Dean Plassaras.
ReplyDeleteI notice you have not left the subject but only the narrative, it is now the wealt Greece will get from transit fees and tapping energy from the now 5 transmission lines. Are you not familiar with the EU rule of free movement of goods? Transmission fees are due, but to the companies who own/operate the transmission facility, just like on a train plane or ship. As for tapping the lines if and when Greece needs it, that would place her in the very expensive spot market.
Mr. Plassaras, where did your promise of halving Greek energy prices go? Are you selling hot air?
Lennard.
Lennard:
DeleteWhy would I ever promise to halve the Greek electricity cost?
The entities who own these projects promise the energy savings not me.
Why do you keep confusing me with the Greek state? And most importantly when will you realize that all the projects we spoke about are owned by more or less private entities?
We are talking the effect of these projects on the economy here under the geater topic of energy security. Which part of these 5 concrete, real projects you consider hot air?
Dean
@ Dean Plassaras.
ReplyDeleteThe statement, "cheap electricity, whether produced by gas-fired plants or solar installations, could cut electricity costs by half", is certainly yours. As an aside, the statement as such is right, it could cut the cost by 99%, or any other figure you prefer.
Out of the 5 lines only TAP is a project, financed, ongoing and part of the output sold for years. The others are in the prospect, or sales project, phase, neither owned nor concrete or real.
Lennard.