Filenews 28 May 2022 - by Chrysanthos Manolis
A draft regulatory decision that will be discussed and may provoke reactions in the EAC was published yesterday in the Official Gazette of the Republic by the Cyprus Energy Regulatory Authority (CERA), regarding the penetration of EAC in Renewable Energy Sources (GDP).
The decision was put to public consultation and those interested can submit positions and objections to CERA within four weeks.
Taking into account that EAC "is, at this stage, de facto the largest and the only vertically integrated electricity company, a fact that classifies the BRD (main regulatory activity) of EAC production in a position of power in the wholesale electricity market", the fact that "the BRD Supply of EAC is in a position of strength in the retail electricity market" and concluding that "the retail electricity market of Cyprus is classified as highly concentrated markets" and that "the BRD Supply of EAC is in a position of strength in the retail electricity market" and that "the BRD Supply of EAC is in a position of strength in the retail electricity market" and concluding that "the retail electricity market of Cyprus is classified as highly concentrated markets" and that "the retail electricity market of Cyprus is classified as highly concentrated markets" and that "the EAC's retail electricity market is classified as highly concentrated markets" and that "there is a lack of conditions of effective competition in the wholesale and retail electricity markets due to the size and position of EAC", CERA decided, inter alia, the following:
- To impose as an appropriate, necessary and proportionate measure to promote effective competition and ensure the proper functioning of the electricity market, the non-granting to EAC of any General Permit and/or Construction License and/or Exemption from a Construction Permit for commercial purposes from RES-H systems until satisfactory competition is developed in the Wholesale Electricity Market, according to the rate of decline of the Herfindahl-Hirschman Index (HHI)", as described above. That is, no new permit at this stage in the EAC for the construction of a RES park. EAC can proceed with the implementation of the licenses already approved by CERA and which in total have a capacity of about 60 megawatts.
- To invite EAC to take all necessary actions for the implementation of projects already licensed by CERA for which it is the licensee and / or participates in the ownership status of the licensee.
- The above regulation is of a temporary nature, CERA says, will be reviewed annually and will be in force until amended by CERA, after evaluating the developments regarding the conditions of the electricity market in relation to the objectives of the Republic of Cyprus for the use of RES-H and the implementation of the provisions of the European Union's Plan for the green transition "Adaptation to the 55% target (Fit for 55 Package)".
- To notify the above measures to the European Commission and to implement them after their approval by the Commission and as provided for in subsection (3) of article 11 of the Electricity Market Regulation Law of 2021. This part of the decision essentially means that the Commission is called by CERA to take a position on whether or not to limit, with an annual review, the EAC's penetration in RES, until competition is strengthened.
