EU to invest more than €1 billion in Energy Infrastructure

EU to invest more than €1 billion in Energy Infrastructure

EU countries have recently signed off on a Commission proposal to invest € 1.037 billion (US$ 1.18 billion) in five cross-border infrastructure projects under the Connecting Europe Facility (CEF) for trans-European energy networks. Under the terms of the deal, CEF will provide financial support to 4 projects for construction and 1 study. The largest amount of funding has been set aside for the EuroAsia interconnector project (€ 657 million or US$ 746 million) which is designed to support the first electricity interconnection between Cyprus and the European grid.

Kadri Simson, the EU commissioner for energy welcomed the deal, saying “Recent months have reminded us again how crucial a well-integrated EU energy market is for ensuring affordable energy and security of supply, as well as the clean energy transition. While we have made remarkable progress in the last decade with making our market better connected, more can and should be done. I want to particularly highlight the EuroAsia interconnector that will bring an end to the energy isolation of Cyprus and link it to the rest of Europe.”

This is seen as vitally important as well-integrated energy infrastructure networks are necessary for the energy transition since they facilitate the integration of renewable energy, enhance security of supply and help keep energy prices in check. The EU deal has therefore granted financial aid for the construction of 3 projects for electricity transmission and 1 for gas storage, as well as supporting a study on CO2 transport.

EuroAsia Interconnector 

€657 million (or US$ 746 million) have been allocated for this electricity project which seeks to interconnect the transmission networks of Cyprus and Greece, allowing the transmission of electricity in both directions and ending the energy isolation of Cyprus. The ambitious project has a staggering 898 km of undersea cables and maximum sea depth of 3000 meters and will set new world records for a project of this kind. This investment marks an important milestone in the ongoing financial and political support of the EuroAsia project. 

Baltic Synchronisation Project Phase II 

Thesecond phase of the Baltic synchronisation project has been awarded €170 million (US$ 192 million) including funding for grid reinforcement in Poland and upgrading the transmission infrastructure in Lithuania, Latvia and Estonia. This investment is designed to further support the integration of the Baltic States’ electricity system with other European networks. The Baltic Synchronisation project had previously received funding under prior CEF calls leading to total CEF support of more than €1.2 billion (US$ 1.35 billion), underlining the political importance of this project.

Aurora Line

€127 million (US$ 143 million) of CEF funding will be used to support the development of a third transmission line between Sweden and Finland in order to increase electricity transmission capacity between the two countries and support the integration of onshore and offshore renewable electricity.

Chiren Expansion

A further €78 million (US$ 88.3 million) has been earmarked for this project which covers the capacity increase of a gas storage facility in Bulgaria, necessary for regional security of supply in South-East Europe, as well as reducing gas supply costs. The funding is also intended to support the phase-out of coal in the region, facilitating the clean energy transition.

Northern Lights Phase II

The final award of €4 million (US$ 4.53 million) in funding is to this study which looks into the expansion of the CO2 transport and temporary storage capacity in Norway, open to industrial clusters from across the EU, with the aim of accommodating additional demand.