The energy sector constitutes a major economic activity for most countries in SE Europe with a significant contribution to infrastructure investment and market activity. Even more important is the geopolitical role often associated with energy issues as they normally involve bilateral or even trilateral cooperation.The energy sector constitutes a major economic activity for most countries in SE Europe with a significant contribution to infrastructure investment and market activity. Even more important is the geopolitical role often associated with energy issues as they normally involve bilateral or even trilateral cooperation. A number of major cross-border energy projects are currently under development in the region, including gas and electricity interconnections, renewable energy applications (e.g. wind farms, photovoltaic plants, geothermal plants, biomass units, etc.) and large-scale energy efficiency interventions, especially in the building sector.
The SE European region is in need of more and better electricity interconnections, something which is especially visible in island regions, such as Greece and Cyprus. Advancing international electricity interconnections especially between Italy and Western Balkans and between mainland Greece and the Israel-Cyprus-Crete axis is becoming a priority in view of the fast advancing electricity market integration in the region.
This latest Monthly Analysis by IENE, which is available here, focuses on the latest developments concerning the ongoing and planned electricity interconnections in the wider SE European region, highlighting their importance, in parallel with the increasing RES penetration, for achieving the goal of an integrated regional market.
As electricity interconnections increase in SE Europe, it is estimated that the RES penetration and hence the energy storage needs will rise. Combining interconnections with other technological innovations, such as creating an electricity highway and linking them to energy storage projects and investment in RES in the region, would allow for optimal trade in energy across the European system, given the time differences between countries.
Completing the integration of electricity networks in SE Europe will require both sufficient long-term electricity storage projects and adequate cross-border and internal electricity interconnections. Of great significance are the developments regarding the electricity interconnections of the islands with the mainland grid, such as in Greece, and improved cross-border interconnections that will enable the national electricity transmission system to cover the requirements of the new targets for RES penetration and the incorporation of energy storage systems by 2030.
Currently, planned and under construction projects for cross-border electricity connections in SE Europe (e.g. EuroAsia and EuroAfrica Interconnections, Greece-Egypt and Greece-Africa Electricity Interconnectors, etc.) are critical both to prevent market congestion and to enable the integration of electricity from RES and other sources, but their impact will become more visible after 2028. In the case of islands, the use of hybrid stations with RES, i.e. RES and storage, is another solution in cases where the electricity interconnection to the mainland grid is not economically viable, but such stations will have to be assessed as to their technical and economic viability. Furthermore, they must be compared to the existing situation, and their installation and operation to be promoted only if it is ensured that power generation costs are reduced.
