The H₂Zero research unit at Frederick University has presented a comprehensive study entitled “Beyond the cable: Energy security, cost recovery and the Eastern Mediterranean as an emerging electricity corridor”, which reframes the public debate around the GSI electricity interconnection. 

Cyprus is currently the only EU Member State whose electricity system remains completely isolated. This entails higher reserve costs, limited ability to integrate large shares of renewable energy sources (RES), and no access to the EU internal electricity market. The study shows that interconnection via the GSI is not simply “a cable”, but critical infrastructure that changes Cyprus’s position on the wider energy map. With the completion of the electricity interconnection, all existing derogations granted to Cyprus from the EU electricity acquis in the field of electricity will be removed.

 More specifically, the study highlights four key dimensions that must be taken into account when the project is discussed:

• Real impact on tariffs, not just nominal cost: Under Regulations (EU) 2019/943 and 2022/869, market revenues (congestion rents) and EU grants are deducted first from the project’s allowed revenues. Only the small residual (“residual cost”) is allocated to tariffs through the CBCA mechanism. Therefore, simply referring to total capital and operating cost or to the 63/37 allocation ratio for the Crete-Cyprus segment systematically overestimates what ultimately burdens consumers.
• Parametric net benefit, not a single forecast: Instead of relying on one uncertain long‑term electricity price forecast, the study parametrically calculates the net benefit per kWh as “wholesale price convergence minus GSI usage charge minus reserve cost” and then converts this into annual value for the system depending on interconnector utilization. Across a broad and realistic range of parameters, the project appears capable of delivering a positive annual benefit of approximately 22 to more than 240 million euro.
• Strategic dimension: part of IMEC and Eastern Mediterranean electricity corridor: The GSI is no longer just a bilateral Cyprus-Greece cable. The planned Cyprus-Israel interconnection places Cyprus within the broader design of the India-Middle East-Europe Economic Corridor (IMEC), where the Eastern Mediterranean serves as a gateway for renewable electricity from South Asia and Gulf countries into the European market. This adds significant value for the country’s economy and geopolitical position.
• Energy security, flexibility and the complementary role of storage: For Cyprus, interconnection and storage do not substitute for one another but operate in a complementary way. Storage systems reduce intraday reserve requirements and RES curtailments (by shifting energy from midday to peak demand), but have limited impact over prolonged periods of low demand or very high RES output. Interconnection, by contrast, allows surplus renewable generation to be exported to neighboring systems for as long as there is available demand, strengthening energy security and reducing RES curtailments.

 What do these findings mean for public debate in Cyprus? The real value of the Great Sea Interconnector for Cyprus cannot be assessed using only a single capital‑cost figure or a CBCA allocation ratio. We need to look simultaneously at (a) how small the residual cost that reaches tariffs actually is, (b) under which scenarios the net benefit becomes positive and significant and (c) how the interconnector enhances energy security and the country’s role as an electricity corridor in the Eastern Mediterranean and IMEC.

 To make the discussion more transparent and understandable for citizens, the study recommends:

• Clear picture of the impact on electricity bills: Each year, together with the project’s cost figures, a simple “balance sheet” should be published showing how much is covered by EU grants and market revenues and what small residual amount is finally passed through to tariffs.
• Scenarios, not a “magic” number: The public should be presented with simple scenarios (e.g. low, medium, high benefit) for the net benefit per kWh and the project’s annual value, instead of a single, unsupported “forecast” figure that is easy to challenge.
• Assessment beyond the kWh price: Every cost-benefit study for the GSI should separately measure and present: (a) the reinforcement of energy security (reduced dependence on a single system and a single fuel), (b) the flexibility that the interconnector provides for exporting surplus renewable generation and reducing curtailments, and (c) the complementary role of storage, which covers very fast local response, while the interconnector covers longer‑duration needs.