Filenews 30 July 2021 - by Chrysanthos Manolis
The cost of buying greenhouse gas emission allowances for EAC increased by €7,6 million in 2020. (11.4% increase) compared to 2019 and amounted to €74,660,000. It corresponds to 10.8% of the Authority's total operating costs! By comparison, wages and employer contributions to EAC employees amounted to €92.6 million in 2020. (13.5% of operating expenses).
According to the president of the organisation, Michalis Komodromos, who took stock yesterday of his departure and the taking up of the new board of directors, the increase in the cost of purchasing greenhouse gas emission allowances (ie as a penalty for the polluter) is due "primarily to an increase of about 11% in the number of allowances purchased during 2020. , as a result of the fact that, on the basis of a decision of the European Commission, 2019 was the last year in which the EAC was granted free rights by the Competent Authority'.
It follows, in other words, that the cost of greenhouse gases (which is transferred to the accounts of Cypriot consumers) will continue to be high, with the risk of even increasing further, as the economy recovers and electricity consumption increases. Moreover, costs are likely to increase anyway (as will the burden on consumers), through the expected increase in the selling price of allowances, as a deterrent to the use of fossil fuels, on which Cyprus still depends at close to 100%.
If, however, the government and DEFA's commitments to import natural gas for electricity generation towards the end of 2022 are implemented, then a reduction in gas emissions should be expected, thus also a reduction in the cost of buying the relevant emission allowances.
Losses of €20 million
From the (preliminary) financial data published yesterday by Mr Kodromos, it appears that the coronavirus also hit the EAC, leading the organisation to losses of €20 million in 2020, without excluding losses occurring in 2021.
According to Mr. Kodromos, the main factor that interrupted the profitable course that the organization had in recent years was the 10% discount granted over a period of six months to all electricity consumers, following decisions of RAEK and EAC, in order to immediately reduce the cost of electricity, during the early stages of the pandemic.
According to EAC's (preliminary) data, if the deduction were not granted, the Authority's revenue in 2020 would be €700 million and the costs of €688 million. There would therefore be a marginal profit of €12 million. In a very difficult year, with reduced (by 21%) revenues from the sale of electricity, due to the 5% downturn in the economy.
The total cost of the 10% discount for six months was €31,9 million, so EAC's revenues fell to €668,5 million. and a loss of €19,8 million was recorded.
Increases and decreases in revenue - expenses, after the pandemic
Compared to 2019, electricity sales revenue in 2020 decreased by 21%: Net electricity sales revenue for 2020 was €613,248,000 and decreased €161,322,000, compared to 2019. According to Mr. Kodromos, the decrease in sales revenue was mainly the result of a 7% decrease in the units sold, the decrease in the selling price as a result of the automatic adjustment due to a decrease in the price of fuel, as well as the total discount of €32 million. granted to customers as a result of the pandemic.
- Operating profits for 2020 decreased by €78 million, compared to 2019, and resulted in a loss of €19.8 million.
- According to the President of the Agency, operating costs were reduced by €93 million. in 2020. This has been a drastic contribution to the reduction of €112 million in the budget for the period 2000-2006. (-27%), expenditure on the purchase of fuel (reduction of consumption, reduction of fuel quantities, reduction in purchase costs), which in total cost €304.9 million.
- The cost of salaries and employer contributions to EAC employees in 2020 amounted to €92.6 million. (13.5% of operating costs), recording an increase of around €5 million. or 5.5% of the corresponding expenditure in 2019.
- For 2020, EAC spent €46.4 million on the project. 6% to buy electricity from private individuals (Renewable Energy Sources) at the price of the fuel cost (avoidance) itself, an increase of 6% compared to 2019.
End of 2022 ends infrastructure at The Royal
At the end of 2022, Energy Minister Natasha Pelidou will complete the project to develop the necessary infrastructure and the process of supplying natural gas to the domestic market for electricity generation purposes. The Minister welcomed yesterday's report by the EAC Board of Directors with a view to replacing it.
Ms. Pelidou welcomed the fact that EAC signed an agreement with DEFA and paid €43 million for its participation in the share capital of ETYFA, which corresponds to 30%. ETYFA is the subsidiary of DEFA which took responsibility for coordinating the construction of the gas re gas infrastructure in Vasilikos. Although the minister spoke of completing the project by the end of 2022, the possibility of a new extension of a few months is real.
It called on EAC to implement immediately the modernisation and upgrading of the network, in order to remove the technical obstacles associated with the further penetration of dispersed electricity generation from Renewable Energy Sources. Finally, it pointed out that in 2020 EAC completed all preliminary work on the installation of photovoltaics in schools and some individual projects had already been completed.
