Filenews 7 June 2022 - by Chrysanthos Manolis
Speaking yesterday in an interview with CyBC1 and Paris Potamitis, the President of the Republic said that the government's intention is to tax the super-profits made by companies that operate photovoltaic parks lately. When asked whether the tax rate chosen by the Greek government (and governments of other countries) will be chosen for the super-profits of electricity producers from Renewable Energy Sources (90%), Mr. Anastasiades said that he has not yet discussed this aspect with the Finance Minister and that the tax rate will depend on the super-profits that companies have made.
According to the recent draft regulatory decision of CERA, the companies that have over-profits from the sale of electricity to EAC were active after 2018, on the basis of the RES promotion plan approved by the Ministry of Energy in 2017. In total it is estimated that these companies produce a total of about 67 megawatts. Other companies, which were active in RES under the second plan of the Ministry of Energy, participate in the transitional regulation of a competitive market and sell their production under bilateral contracts with large energy consumers, at a price of about 10-15% cheaper than the EAC, but significantly higher than their own cost.
When the companies of the first RES promotion plan were activated, which were agreed to be paid at the level of each EAC avoidance cost (fuel cost), this was around 7 cents per kilowatt-hour. However, a continuous upward trend followed during the pandemic, with the result that today, after Russia's invasion of Ukraine, the cost of avoiding soaring to 20 cents per kilowatt-hour, with a continuous upward trend. If we take into account that for these RES parks it was considered profitable to operate at a cost of avoiding around 7 cents per kilowatt-hour, it is obvious that today, with 20 cents of avoidance cost, they record significant over-profits, provided that their cost does not exceed 4-5 cents per kilowatt hour. The association of competitive energy producers also recognizes the super profits, according to recent statements by its president, Phanos Karantonis. He told CyBC that they could also accept taxation of their super profits, provided that a formula is found for their reliable recording. The association has welcomed the draft decision of CERA, a fortnight ago, according to which these RES parks will be paid with 11 cents per kilowatt-hour, a price that continues to ensure significant profits.
Independent CERA
In the context of his interview that was broadcasted yesterday by CyBC, President Anastasiades was asked to comment on the uproar caused in recent days, around the draft decision of CERA not to grant any more licenses for the production of electricity from photovoltaics. Mr. Anastasiades said that CERA is an independent authority and no one can interfere in its decisions. But he said that he, in an advisory capacity, would seek some intervention to discuss the issue of EAC's involvement in renewable energy production. EAC has stated through its spokeswoman Christina Papadopoulos that it is continuing its licensing efforts for the 60 megawatts it secured a license from CERA, but is demanding much more megawatts, so that there is a substantial reduction in charges to consumers. As can be deduced from market data, EAC could produce (or buy private production) at 4-5 cents per kilowatt-hour and channel production into the mix of its conventional production, in order to reduce the average price to consumers. On the contrary, private individuals for the time being seem to be selling to large consumers to the EAC or to private individuals at a multiple price much higher than their actual cost.
At the same time, EAC and its customers are charged with costs for the disconnection of photovoltaic or wind farms from the grid and the reconnection of oil-burning units, either during the afternoon hours when the production of photovoltaics stops, or at any other time when the production of wind turbines suddenly stops.
CERA invites participation in the consultation
Moreover, yesterday, the Regulatory Authority for Energy of Cyprus (CERA) issued a statement, in which it states that, on the occasion of recent publications, announcements and letters, it announces that regarding the Draft Regulatory Decision entitled "Regulation of the Development of Renewable Energy Projects for Electricity Generation by the Electricity Authority of Cyprus", which was published in the Official Gazette of the Republic of Cyprus on May 27, 2022, for public consultation, the views of all affected parties will be heard, as specified in the relevant legislation. CERA invites all interested parties to submit their comments during the public consultation. He adds that he will proceed with the issuance of the (final) Regulatory Decision after a thorough study and evaluation of all comments that will be taken during the public consultation, always aiming at the benefit of the final consumer.
Comments, objections and / or representations on the draft of the above Regulatory Decision may be submitted in writing to CERA, on the website or sent via fax to the 22667763 until June 24, 2022.
The information of "F" indicates that there is an intention by many directly or indirectly involved in power generation issues, to participate in the public consultation, to an extent that there may be a record attendance record.
