Filenews 15 September 2021 - by Chrysanthos Manolis
Today's meeting of the Ministers of Finance and Energy with the EAC's board of directors will be a significant formality, as the information indicates that the government's decision to temporarily reduce the electricity bills and the cost for the discount to be borne by the reserve fund of the Electricity Authority is taken.
There is no official information as to the exact percentage of the discount and the number of months that will apply. The discount (-10%) we recall, was imposed for six months in the early stages of the coronavirus pandemic.
During yesterday's meeting at the Presidential Palace, under the President of the Republic, it was reported, according to information, that the cost of EAC for a possible 10% discount amounts to 5 million per month. euro approximately. There seems to be an agreement among the competent government officials that the cost that the EAC will bear for a short discount (as a "social dividend") is not large, nor will it substantially affect its investment program, as it is estimated that the EAC has reserves of around 400 million euros. Its cost from a possible four-month reduction in bills of 10% will not exceed EUR 20 million.
However, the energy minister said yesterday that an effort is being made to reach a percentage that will benefit consumers at this stage, but will not cause complications to the EAC. The decision on the percentage is likely to be taken today, in the context of the meeting of the Ministers of Finance and Energy with the Board of Directors of EAC. Obviously, the determination of the final discount rate will also take into account the reduction of about 2% that occurred (compared to the invoices of the previous two months) in the bills counted in August. Small reductions, due to cheaper fuel, are expected in the coming months. It will also take into account the fact that due to the increase in the price of electricity in recent months and its contribution to the soaring inflation (5% in August, compared to August last year) public and many sectors of the private sector will benefit partially (as some "refunds") with the ATA to be paid.
Apart from the reduction through the EAC's reserves, we are informed that the possibility of CERA, with some technical modifications in tariffs/fees, was discussed at the presidential meeting, to ensure an additional reduction in the number of people's fees by about 2%. It is also possible to discuss the possibility of a temporarily increase in the discount (currently 20%) to vulnerable households.
The government's decision to apply for this disqualification is facilitated by the fact that the measure is also favoured by most parties, including the two largest parties.
The objections expressed by some members of the EAC Board of Directors are not considered a serious obstacle, as already the trade unions of the employees of the organization have also advocated the absorption of part of the increase in the accounts from the reserves.
AKEL
Yesterday, the Minister of Energy Natasa Pilidou received in her office a delegation of AKEL, under Sgt. Stefanos Stefanou, the three members of the AKEL who participate in the parliamentary Committee on Energy (Costas Costas Costas, Giannakis Gavriel, Andreas Pasiourtidis), the former Minister of Energy Neoklis Sylikiotis, the former president of CERA George Siammas, etc.
The discussion covered only for a small part the proposal of AKEL to cover part of the increase in electricity charge from the reserves of EAC. Our information indicates that AKEL touched on the need to define a comprehensive energy strategy, which will take into account Cyprus' obligations towards EU policies for a green transition, but also the urgent need to reduce the cost of electricity for consumers.
AKEL reiterated to Mrs. Pilidou its proposal to use - also from Cyprus - the method of tenders, in order to ensure the cheapest possible price of electricity from photovoltaic systems, a policy that is followed with great success by many EU countries. With the tenders, as mentioned by the delegation of AKEL, it is possible to ensure very low prices per kilowatt-hour, in order to benefit domestic consumers, as with the current system, the electricity from photovoltaics is sold to the EAC at prices more than double the cost of production from photovoltaics and any reduction (5-10%) in bills is reaped only by some large industrial-commercial consumers, who cooperate with private suppliers. During the discussion with the minister, the AKEL delegation mentioned examples of very low prices (1 to 5 cents per kilowatt-hour) that were secured through tenders in other EU states, while in Cyprus the price of photovoltaics is currently almost 12 cents.
EAC and storage
One of the most serious issues raised yesterday by AKEL was the government's planning for a tender for the operation of electricity storage, which will allow greater production from renewable energy sources. We are informed that AKEL has made clear its position that the EAC should also be allowed to take part in the competition, something that the government does not seem to see with a good eye, citing legal obstacles. Technocrats from the AKEL delegation were strong that there is nothing in EU legislation that justifies the exclusion of EAC from electricity storage. The technocrats also warned that if some measures are not taken as soon as possible (tenders, storage, import of less polluting fuel), the cost of electricity for consumers will increase further, even after the introduction of natural gas under current plans.
The production units in Dhekelia and the prospect of the EuroAsia Interconnector
Although there was no official briefing on everything discussed between the Minister of Energy and the delegation of AKEL, the information of "F" indicates that AKEL requests that, in the context of conducting tenders for the lowest possible electricity price from photovoltaics, EAC is allowed to participate in the tenders, in order to expand its presence in RES, since the aim is to gradually reduce conventional production, in which it is a monopolistic producer. It was mentioned that, given the mandatory withdrawal (for environmental reasons) by the EAC of its units at Dhekelia station, with a total capacity of 360 megawatts, it should be assumed that EAC will replace this power with production from photovoltaics.
Mrs. Pilidou and AKEL agreed that an optimistic prospect for the Cypriot economy, in various respects, would be the promotion of the project for the electricity interconnection between Cyprus and Crete (Euroasia Interconnector). To this end, AKEL believes that the government should intensify its pressure on the EU so that the project receives a generous grant at the construction stage (at least 700 million euros, as other information indicates), as Cyprus is the only EU state that remains energy-isolated and will suffer enormous financial pressure for the implementation of the Union's decisions on the transition to a green economy. The EU has already approved significant (even bigger) sponsorships for similar projects concerning other member countries. The implementing body of the Euroasia Interconnector argues that if the EU responds to the request for a grant for construction, it is able to connect Cyprus with Crete (and with the rest of Europe) in 2025, which would constitute a huge change in the Cypriot energy sector and more broadly for the economy.
