22 Jul 2021 | Evyenia Epaminondou
Making Cyprus an Energy Hub
Due to its strategic potential, derived from significant discoveries of natural gas offshore, as well as due to significant other geographical and climatic advantages relevant to the island, Cyprus aspires to become an alternative source of energy for Europe.
Cyprus has a variety of incentives which support its steady development and evolution in energy exploration and exploitation in Europe. Among others, Cyprus’ strategic geographical position and geographical features can be seen as two of the most significant and vital incentives. The island is positioned in a very stable and attractive location as it is in the Eastern Mediterranean at the crossroads of Europe, Asia, and Africa. The three continents play a key role in the exploitation of energy, set up of headquarters and as an energy interconnection node. Importantly, Europe is a target market for new energy resources, especially as Europe’s demand for natural gas is likely to increase further in the near future.
One of the island’s most current and important energy projects is the EuroAsia Interconnector which aims to bring an end the island’s energy isolation by taking advantage of the island’s strategic position and create a reliable alternative route for the transfer of electrical energy to and from Europe. It will constitute the 1st energy bridge that will comprise the electricity interconnection between the grids of Israel, Cyprus and Greece through a subsea cable with HVDC onshore converter stations at each connection point. Certainly, this is a historic decision for Cyprus that will provide partner countries significant socio-economic benefits which will derive from using alternative and efficient methods of power generation, including natural gas and renewable energy sources and that will help decrease electricity cost. Further, the project will connect European energy networks, increase security of energy supply as well as enable the integration of additional Renewable Energy Sources (RES) in Cyprus’ energy supply mixes.
Over the years, Cyprus has upheld its reputation as it keeps discovering natural gas reserves throughout its Exclusive Economic Zone. This attracts major players who wish to be involved in exploitations in the Eastern Mediterranean. These include the discovery of Calypso gas (Block 6) field by Italian ENI in late 2017 and the Glaucus (Block 10) gas-field by the ExxonMobil and Qatar Petroleum consortium. This had a great significance for Cyprus as the exploitation was adjacent to Zohr geographical model meaning that the model is extending to the Eastern Mediterranean region. Zohr holds a strong incentive in Europe’s future energy landscape as it is the largest natural gas field in Egypt and the Mediterranean. It is undeniable that Cyprus has a geopolitical position that enhances its future opportunities in gas and oil exploitation and therefore ensures that the sector will develop as a key driver of economic growth.
Cyprus’ relations with EU as well as its business and headquartering models have turned the island into a strategic player within the Eastern Mediterranean. The possible future discoveries along with cooperation from key international players ensure a promising future for Cyprus’ development and economic growth. Hence, Cyprus has evolved, and it has adjusted its technology and operating systems to the current needs, so that it can become a trustworthy and powerful energy hub ally.
Authors: Evyenia Epaminondou and Maria Loizou