Political and regulatory frameworks hinder electricity interconnections

The need to strengthen electricity interconnections as a tool for energy security and stability was highlighted by Ioannis Margaris, Vice Chairman of the Independent Power Transmission Operator (IPTO), who stressed that Europe continues to face significant challenges at both the political and regulatory levels.

Speaking at the “Energy Transition Summit: East Med & Southeast Europe – Building an Interconnected and Secure Regional Energy System”, organized in Athens by Kathimerini and the Financial Times, Margaris stated: “In Europe, we have not yet solved the issue of how we can build better and stronger grids,” while emphasizing that geopolitical developments in the wider Middle East region demonstrate the need for immediate decisions regarding the continent’s energy future.

As he noted, although the European Commission places emphasis on interconnections, obstacles remain in relation to the political and regulatory framework, as well as public acceptance of such projects.

“We need to go back to society and ensure that society is on our side,” he said, explaining that several projects have been delayed or “frozen” due to reactions from local communities and licensing difficulties. At the same time, he stressed that regulatory authorities should be strengthened so they can provide the right incentives to investors.

“Grids are a means of security and price stability”

Margaris placed particular emphasis on IPTO’s investment program, noting that over the past decade the operator has proceeded with extensive island interconnections and has now acquired significant expertise in complex infrastructure projects.

“We have the conditions and the technology. We have managed to interconnect at least half of the Greek islands and we have a huge program ahead of us,” he said.

According to Margaris, the current period represents an opportunity for Greece and Europe to use energy grids as “a means of security” and as a tool for maintaining energy prices at sustainable levels.

“Cost-benefit analysis supports the creation of interconnections nine times out of ten, not only from an economic perspective but also because of all the additional advantages that arise,” he added.

The IPTO Vice Chairman also referred to Greece’s role in the Balkans, noting that the region continues to face deficiencies in energy infrastructure for historical reasons. As he explained, Greece is seeking to coordinate with its northern partners in order to strengthen regional interconnectivity.

Optimism over the Greece–Cyprus interconnection

Referring to the Greece–Cyprus electricity interconnection project, Mr Margaris said that a meeting was held in Cyprus yesterday (Tuesday), during which a decision was taken to submit an official financing request to the European Investment Bank.

As he noted, this financing would significantly enhance the resilience of the project, while IPTO already possesses the necessary expertise to implement such demanding subsea interconnections.

At the same time, he disclosed that IPTO is currently in the process of a 1-billion-share capital increase, expected to be completed by June.

“The reason is that we want to accelerate the implementation of all these major interconnection projects we have undertaken, including the Dodecanese and other remote islands,” he said.

Ηe added that the organization has already invested 4.5 billion euros over the last years and, through the capital increase, aims to reach total investments of 7 billion euros by 2034.

Despite geopolitical challenges, Margaris expressed optimism about the future of the region’s major energy projects, underlining that the Greece–Cyprus–Israel interconnection remains a project of strategic importance, to which IPTO remains fully committed.

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