State Grid's investment in Greek power transmission operator a win-win deal

The Independent Power Transmission Operator is one of the most outstanding examples of Chinese-Greek cooperation and a major milestone in the European nation's effort to attract foreign direct investment, adding value to both parties in the fast-evolving energy landscape of Europe, according to the company.

As the owner of a 11,732-kilometer power grid throughout Greece, IPTO is the natural power transmission monopoly in the country.

In 2016, State Grid International Development, a subsidiary of State Grid Corporation of China, invested 320 million euros ($352.14 million) in IPTO. It is considered as the second-largest Chinese investment in Greece after Piraeus Port was taken over by Chinese shipping giant COSCO in 2015.

In the present structure, Greek State owns a controlling stake of 51 percent in IPTO, while SGCC is a strategic minority investor with a stake of 24 percent.

During a state visit of a top Chinese leader to Athens earlier this month, IPTO and State Grid signed an expression of interest concerning the latter's interest in investing in Ariadne Interconnection, a special purpose vehicle subsidiary of IPTO that will finance and construct the Crete-Attica Interconnection, the largest Greek infrastructure project in the pipeline.

The outcome of the strategic alliance has exceeded expectations. Within just three years, IPTO has evolved into a new company that is establishing itself as one of the leading transmission system operators in Europe.

The advanced technology and innovation that SGCC has brought to the table supports IPTO in its efforts to grow and serve the needs of the industry and the local economy. The Greek grid operator said it is now dynamically pushing ahead with investment plans and cost-cutting measures.

In the years to come, the company said it is willing to play a key role in the fast-changing energy market, not only in Greece but also in the wider region of the Southeastern Mediterranean region.

With a 5-billion-euro investment plan that runs through to 2030, it is setting up the foundations for Greece's deregulated energy market, aiming to turn the country into a regional player.

IPTO's international interconnections are also important in the context of the integration of the Greek grid with the European one.

In this context, the Greek power transmission operator strengthens its interconnections with neighboring countries: Bulgaria, North Macedonia and Turkey.

Energy networks interconnect the states instead of separating them, mitigating geopolitical tensions and enhancing transnational cooperation, IPTO executives said.

"Under the national effort to transform the Greek energy sector toward clean energy focused on renewable energy sources, IPTO is determined to play a strategic role on a national and regional level," said Manos Manousakis, chairman of the board of directors and CEO at IPTO.

"In this context, the company implements on a fast-track basis its ambitious investment program, which foresees the electrical interconnection of the Greek islands with the mainland and also the upgrade of its transmission lines throughout the country.

"IPTO will contribute with all its resources to the shift of the country to renewable energy," Manousakis said.

The islands are at the heart of IPTO strategy, according to the company.

IPTO's investment plans focus on the Aegean Islands, which represent a significant part of Greek geography but also a unique challenge for the Greek company.

By using overhead lines, underground cables and submarine equipment, IPTO is building a network that will make the supply of electricity on the islands more reliable and environmentally friendly, while helping to reduce the cost of power.

This will allow for oil combustion units on the islands to gradually switch off and the further inclusion of renewable energy sources into the national system.

Cyclades Islands

The Cyclades Interconnection is a landmark project for the Greek economy as it provides reliable and sufficient power supply to the islands with high voltage electricity.

The project improves the environmental footprint of the islands, due to the significant reduction of pollutant emissions from the autonomous production stations and the encouragement to the penetration of renewable energy sources through new investments in these islands.

Phase A of the project has already been completed, linking islands such as Mykonos, Syros and Paros with the mainland grid.

Currently, Phases B and C are under construction and the overall project will be completed in 2024 with the interconnection of Santorini, Folegandros, Milos and Naxos Islands.

Crete

The 365-million-euro Crete-Peloponnese interconnection project is entering its final stage and is expected to be completed within a oneyear period. This will be the first step toward a secure and clean energy interconnection of Crete to the mainland.

The company has taken on the implementation of the Crete-Attica electrical interconnection, one of the largest infrastructure projects in the history of Greece with a total budget of 1 billion euros.

The two tenders under this project have already entered a mature stage and the contracts are expected to be signed in the beginning of 2020.

The completion time for the Crete-Attica Interconnection is three years. As soon as the cable is electrified, all the fuel power plants in the largest Greek island will shut down.

(China Daily Global 11/28/2019 page9)