Great Sea Interconnector Powers Island Tourism Future With Energy Security and Sustainable Growth Across the Mediterranean
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The traditional energy profile of island destinations across Southern and Insular Europe has long been defined by geographic isolation, heavy reliance on imported fossil fuels, and structural exposure to global market volatility. For decades, island power grids operated as closed, autonomous systems. To meet domestic demand, local utilities relied on localized thermal power plants fueled by heavy fuel oil (HFO) or diesel. This isolated operational model created a direct link between volatile global commodity prices and domestic retail electricity tariffs, imposing a heavy economic burden on commercial energy consumers, particularly within the hospitality and leisure sectors.
Energy systems authority and former Chairman of the Cyprus Energy Regulatory Authority (CERA), Dr. Andreas Poullikkas, has articulated a framework for overcoming this structural vulnerability. Dr. Poullikkas emphasizes that public and corporate evaluations of cross-border subsea energy infrastructure—most notably the Great Sea Interconnector—must move beyond narrow assessments of upfront capital expenditure to examine total socio-economic net surplus and long-term energy resilience.
Under the European Union energy market framework, specifically EU Regulation 2019/943, the financial architecture of cross-border high-voltage direct current (HVDC) interconnectors does not directly transfer total construction costs onto end-user utility bills. Instead, capital expenditure recovery is structured through Cross-Border Cost Allocation (CBCA) mechanisms, co-funding grants from the EU Connecting Europe Facility (CEF), and the collection of congestion rents generated by cross-border electricity trading.
By decoupling initial capital expenditure from end-user tariffs, subsea interconnectors operate as strategic economic infrastructure. They allow isolated island nations to shift from high-cost energy importers into interconnected, regional energy trading hubs.
Source: Wikipedia