16 Apr Interview with Manousos Manousakis, Chairman and CEO, Independent Power Transmission Operator (IPTO/ADMIE), Greece
IPTO is involved in a multitude of projects, including the giant Great Sea Interconnector project linking Greece to Cyprus and Israel. The company is also aiming to upgrade existing connections, with a second 400 kV line with Bulgaria completed last year and plans to enhance connections with Italy and Albania set under your 10-year plan. You’ve just been awarded by the Institute of Energy for Southeast Europe (IENE) for your implementation of the country’s electrical interconnections. Tell us about the latest progress made in Greece’s interconnection projects, what impact will these have on the energy market in the region?
We own 100% of the whole Great Sea Interconnector project. The transaction took place between IPTO and the previous project promoter. It is an electrical interconnection of 1 Gigawatt between Greece, Cyprus, and Israel: more specifically between Crete, Cyprus, and Israel. The purpose of the project is to secure the power supply to Cyprus which is the only country of the European Union which is not interconnected to the European electrical system. Also, the other purpose is to secure the supply to Israel. In recent years, Israel has faced severe climate conditions and a lack of energy. This Interconnector could serve Israel in intense times, to cover its needs. Energy would primarily be exported from Greece towards Cyprus and Israel, but at the same time, it will give the opportunity to develop new renewables in Cyprus. Therefore, in the mid-term it would be a bidirectional flow of energy. Also important for Cyprus is that the energy will be cheaper after this interconnection is implemented. Currently, they use petroleum, and the CO2 policies of Europe make it expensive. Roughly calculating the statistical cost of energy produced in Greece and adding the cost that the transmission will add to this when exported and comparing it with the current energy cost in Cyprus, it is a lot cheaper. Therefore, the cost benefit analysis by the European Commission regulators demonstrated that this project is viable and positive for Cyprus. This is the case for the Interconnection, which is geopolitically important for the European Union as Israel will be technically connected to the European system.
IPTO has signed an MoU declaring its intention to seek a 33% stake in the proposed GREGY Interconnection project planned between Greece and Egypt. What is the geopolitical significance of this project (especially today with the regional tensions that we see), and how will it help to position Greece as a transmission hub for the wider region?
Indeed, we declared our interest to participate in discussions with the Copelouzos Group and see if we can after the negotiation find common ground to become stakeholders with 33%. Copelouzos Group is the project promoter of this Project of Common Interest. This project is not as mature as the Greek-Cyprus project, so it is still in the preliminary study stage. They will seek financing from the European Commission for these studies. What is IPTO’s role up to now? When the electrical systems of two countries are interconnected, regardless of who the project promoter of the interconnection is, there must be a committee where the two TSOs of the electrical systems, together with the project promoter of the interconnector, sit together to discuss all the technical issues of the project.
We have progressed far beyond that. The political will in Greece and Egypt is such that they have created an official committee between the ministries, the regulatory authorities, the TSOs, and the project promoter. This committee is the official body discussing how this project is going to be structured technically and put in place in the future. We are considering participating in this as an investment opportunity, but we are not there yet. We believe that connecting Egypt with the European electrical system through Greece will bring cheaper energy than that produced in Europe. This will be green energy as it will be produced by solar or wind. In Egypt we have huge potential in terms of solar and in some specific places, strong potential in terms of wind. The fact that is has become a project of common interest shows the political direction of the European Commission, to support this kind of interconnections.
In September, IPTO agreed to establish the Saudi Greek Interconnection. What development possibilities are being planned between Saudi Arabia and the Greek market, and what implications does the partnership have on the newly proposed economic corridor from Greece to India?
There was a political initiative again when the two heads of state met 1,5 years ago. The result of it was a bilateral committee where cooperation was established between the two TSO’s of the country. The committee subsequently signed a MoU in September 2023 to form a joint company which will study a possible interconnection between Greece and Saudi Arabia and this company, Saudi Greek Interconnection, where IPTO and Saudi Grid of Saudi Arabia participate with a share of 50% each, was subsequently established. Given that Greece does not have borders with Saudi Arabia the studies that will be conducted will have to assess the routing and the financial viability for this kind of project and the use for both these countries. This newly established company will conduct the study and present it to the two governments to decide if this project is going to work and if it will be constructed. It is like the interconnection with Egypt, but with one advantage.
There is a time difference between Greece and Saudi Arabia which, in terms of solar, is important because, when you don’t have sun, you can get energy from where there is still sun and vice versa. This is the situation. It is one of many initiatives all over the world that are taking place. I believe that High Voltage Direct Current (HVDC) Interconnections are going to explode in the coming years. The reason for this is the greening of the electricity mix that makes these kinds of interconnections important for the stability of the systems and for the security of the power supply of four countries, which was not the case when we had the flexible power units with gas, petroleum, and all the conventional fossil fuels.
In November 2023, Greece signed an MoU with North Macedonia, Albania, and Kosovo to couple their day-ahead electricity markets to improve energy security. What advantages will the merging of electricity markets in the Balkans have on energy security in Greece and what impact will it have on local players such as IPTO?
In a nutshell, the merging of the electricity markets in the Balkans is going to be good for the consumers because when the market and the regulatory frameworks are aligned it means that the markets are going to be more coupled. The prices are going to stabilize at a better level for all the consumers, considering the competitive environment in the region. Otherwise, when there are restrictions and differences in the market frameworks, then it is the decision of traders what the prices will be at the end. The more unified a market is, the better competition operates. Based on our knowledge and expertise in this, we are helping these countries in the Energy Community, as it is called, to align their market frameworks with the European one. We are an EU country and we are near the Western Balkans, so in cooperation with USAID, we decided to participate in this project.
What other specific projects is the company currently working on to enhance the current connections between Greece and its European neighbors such as Italy?
This is a decision already made between the two TSOs. It is already in both of our 10-year development plans to construct a new interconnection which is going to triple the capacity of the current interconnection which is 500 Megawatts. So, 1000 Megawatts more will be added when we get going on this project. Right now, we are studying it, and I think in the first quarter of 2024, we will be ready to announce a timetable for this.
After the financial crisis in Greece, the country’s electricity grid suffered from lack of investment. But now that the economy is growing, the country is heading full charge at modernizing and expanding its power generation capacity. How would you explain the challenges that IPTO is facing as the company responsible for the operation, control, maintenance, and development of the grid? What are some of the key areas that need the most attention? What is being developed in 2024 aside from the interconnectors?
Let’s start from the beginning when the country only had a mainland transmission system. When I arrived at IPTO in 2017, there was a decision to Interconnect the islandic part of the country which was not interconnected with the mainland. This was the first very important period of the transformation of IPTO. We have interconnected many islands in these past several years with the most important being the interconnection between Peloponnese and Crete. Now we are finalizing the interconnection between Attica and Crete also. As a result, we have reduced the environmental footprint for the whole country, but we have also reduced the cost of energy for all the people of Greece, because right now in the islands which are still not interconnected petroleum is being used, like in Cyprus as I said earlier.
During the recent years, due to the climate crisis and the general European move towards the green transition, we saw large investments and huge interest in renewables. It is an explosion, and we are very happy with the result. 57% of the electricity we consume is produced by clean energy sources. The target for 2030 is 80% but I believe we will reach this point earlier. This is good but from the point of view of the Transmission System Operator, there are a lot of challenges not only for IPTO but for every TSO in the world. It is more difficult to operate a system where you have dispersed power units which operate stochastically, and they are not flexible in the technical sense of the word. Big gas units are flexible because you can press a button and in minutes you have it “online” and then press a button, and it can be switched off. You do whatever you want.
Conversely, with the renewables, you depend on sun, you depend on wind, and you must find a way to always have the lights on without knowing exactly from the beginning when you have your power units in the system. It is a complex situation on which we are working on our own to create smarter systems for the operation, but also in the context of the ENTSO-E Union of all the TSOs of Europe, we are working on tools to operate in a smarter way. Here the interconnections are going to play a crucial role because when you have interconnected parts of the continent with time differences, it is easier to transfer excess energy where it is needed because of the time difference. It is also easier because of the difference in the climate especially in the winter if you interconnect densely and strongly the North with the South, you can use renewable power because you have energy that is produced mostly in the South for the North.
My belief is that we need to talk about the HVDC Electrical Systems of all Europe, meaning that we need to treat Europe like it is a country, not different countries because from an electricity point of view and, to be more precise, the green electricity system point of view, you need to have a strong core network to surpass the challenges that arise in terms of operation.
The year 2023 has been a record year for clean energy in Greece, with 57% of the energy mix covered by photovoltaics, wind, and hydroelectric power. During your speech in November at the Med-TSO, you said that “The Mediterranean basin has huge Renewable Energy potential that can feed the rest of Europe with clean and affordable energy. The exploitation of this potential is more necessary than ever in the current circumstances, in the light of the steps that Europe is taking to diversify its energy sources and routes.” Can you elaborate on that? What kind of potential does Greece have to become the renewable energy hub of Europe? How is IPTO accelerating its efforts to integrate a larger number of renewables into the local grid?
Right now, Europe cannot rely on Russia. It must find other ways to secure its energy. At the same time one of its main energy policy priorities is to become as green as possible. We have the sea basins mostly of the North Sea but also in the Mediterranean as possible locations for development of offshore wind which has strong power units. There is development right now in the North Sea where a dense electrical system is being built. We know that in specific parts of the Mediterranean, there is huge wind potential. One of these basins is in the Aegean Sea where the numbers are huge. Even if we were able to exploit part of this, we could become an exporter towards Central Europe. IPTO is facilitating this by having interconnected islands. It is easier to interconnect offshore wind projects that are going to be developed because it will be part of this network that we have already created.
We are developing and promoting all these cross-border interconnections like the one with Italy, but we have another which we are promoting which is Greece directly with Central Europe through the Adriatic Sea. We believe there is going to be an excess of energy which is going to be cheaper than the one produced in Central Europe. We believe it will be to their benefit to exploit this energy.
On the other hand, we also believe that even this is not going to be enough. Because of the high demand for electricity in Central Europe where the industrial centers are located, as well as the need to strengthen energy and power supply security, we will also need to import energy either from North Africa or the Middle East, or both as time passes and all the fossil fuels are going to be phased out. This is the reason we are also developing, promoting, and helping the promoters of the interconnections between Greece-Egypt, Cyprus-Greece-Israel and the Greece-Saudi Arabia. This is the whole story in a few words.
What kind of potential does Greece have in taking part in the new green hydrogen market proposed by the EU, and what plans does IPTO have to explore the segment?
To be honest, green hydrogen is not our focus. We are the electricity system operators but, in my opinion, green hydrogen is going to be the more efficient storage technology of the future. If they manage to make it cheaper than it is now, I believe that green hydrogen is going to be the way to stabilize the electrical system. There are going to be batteries of course with the rare earth minerals like lithium, gallium, and others. I believe in the mid-term because it is cleaner and because you don’t need to find the rare earth minerals, hydrogen is going to play a quite crucial role.
In December, you mentioned the company was eyeing acquisition of regional TSOs, with preliminary talks already started with North Macedonia’s MEPSO. What kind of acquisitions is the company currently planning, and how will these purchases help to solidify IPTO and Greece as a lead regional player in energy?
The major acquisition we made is the Great Sea Interconnector (GSI) because the valuation of the Great Sea Interconnector is comparable to the valuation of the whole company. We cannot say that we want to buy everything. We have some capacity. We believe the size of MEPSO and its geographical position make sense for both Greece and Northern Macedonia and for IPTO to invest in this asset. We have better credit lines, technical expertise, and we believe that we are going to develop the network of this country and the interconnection with other countries. It is something which is needed for the consumers of energy in Greece and of the whole region. It is also a positive development from a geopolitical point of view that the electricity network of the Western Balkans is going to be strengthened through this kind of investment. That’s why we are specifically in discussions with MEPSO and we will see how it will work out in the end.
The USA has been one of the country’s largest foreign direct investors, with major players such as Google, J.P. Morgan, Meta, Microsoft, and Pfizer all participating in the market. What type of role do you think American companies or stakeholders could play in the Greek energy sector?
They already play a big role. We already have American investments here in the sector. The so-called “hyperscalers” could invest in Greece because of its geographical position in terms of the whole data system. I think it is a good opportunity for them to create data centers here. We are already in discussions with some of them because we are exploring opportunities to participate in the data center market as we have real estate adjacent to power which is the most important element of the data centers.
Also, we are seeking investors for the Great Sea Interconnector. The value of the project is substantial and IPTO wants to cooperate with investors. We are already in contact with US funds that are specialized in electrical infrastructure. This is important for us. Regarding renewables, I think we have reached the point where we know the landscape. But for the offshore it is now going to be decided which kind of foreign direct investments are going to materialize. I think because of the huge potential for offshore energy, it is a great opportunity to invest here.
You stepped up as Chairman and CEO of IPTO in 2017 almost 7 years ago. How would you summarize your vision for the Greek energy industry in the long term? What steps need to be taken for the country to live up to its potential?
Greece’s strategy is to become an energy exporter, from the energy importer it is right now. As we go green and as Greece is so rich in sun and wind, it is natural to follow this route and to have this inspiration as a country. We believe it is going to be a win-win situation for us and our partners in the European Union. Furthermore, these kinds of projects somehow mitigate the geopolitical tensions because there are big investments and strong cooperation between actors of the countries. I believe Greece is going to be 80% green before 2030. This is my projection. The next thing to worry about is to have a stable, secure grid system. For that all the stakeholders of the market must work together in close cooperation to achieve this challenging target.
What would be your final message to the readers of USA Today?
Greece has already turned around and everybody knows that because of the investment grade. I think the green future is a future of opportunity for Greece. I think it is going to be a very good investment environment in the next decade. We are strengthening the infrastructure which will allow Greece to achieve its climate targets, attract even more investments and become a clean energy exporter.