Filenews 17 July 2022
By Kostas Ioannou*
Seeing, listening to and reading all these endless discussions and controversies around energy and especially about RES, photovoltaics and EAC, I would like to express my own views on this issue and record some thoughts and suggestions that perhaps, if discussed with an open mind around a table, without prejudice, they will help solve the problems that have arisen.
This article is not directed against anyone, nor does it try to throw "blame"! Any responsibility is collective.
First of all, it is important to define and agree on the essential objectives, which in my opinion, cannot be other than:
(1) To offer electricity, uninterruptedly, to the final consumer, at the lowest possible price - thus helping all sectors of development and economy - industries, commerce, agriculture, hotels, tourism, etc.
(2) To achieve, as soon as possible, a cleaner environment, with as much decarbonisation as possible, thus helping climate change and our health - as we know, the EU's goal is to completely phase out these harmful fuels by 2050.
(3) To maintain the technical reliability of EAC's Electricity Generation, Transmission and Distribution system and the security of supply.
- The fact that, supposedly, priority is given to the operation of the Electricity Market and what some people in the EU say and the supposed safeguarding of competition (mainly against the EAC, which is the property of all of us) and the alleged dominant position of EAC, is in my humble opinion "pretexts in sin", to avoid taking bold corrective decisions, that are in the interest of Cyprus and only Cyprus.
I record from the outset that the EU is always ready to listen positively to the particularities that we may have, as long as there is the possibility of competition.
With the suggestions that will follow, not only will there be opportunities for competition, but competition is helped.
FACTS AND ADVANTAGES OF CYPRUS:
In the long term, the solution to Cyprus' energy problems is without a doubt the progressive and prudent use of solar energy.
We have enough sunshine to produce up to 1800 kWh per year from a photovoltaic panel of one KW.
- If this free energy offered is used correctly and wisely, then the gradual achievement of our goals is almost certain.
We have large areas of untapped land, much of which is barren, which lends itself to this purpose. We have thousands of unused roofs of houses, factories, hotels, etc. We have a "fairly" extensive EAC electricity distribution system, on which we can rely (see below).
We have many entrepreneurs, locals and foreigners, who would like to invest in this area.
We have banks that have a lot of liquidity and are willing to lend the relevant projects, as long as they are financially viable.
We also have European funds for the energy sector.
We also have the huge revenues of the RES fund, to which we all contribute, which should be used properly for common benefit.
WHERE WE WENT WRONG - WHERE WE FAILED:
- We have not taken the right and timely actions. In order to achieve the desired goals, it is primarily necessary to strengthen, upgrade and expand the Transmission / Distribution System of EAC. This should have been done at least a decade ago. Unfortunately, this has NOT HAPPENED. Without a strong in all respects EAC, no RES target will be achieved. (On November 24, 2003, before the author left the EAC, he gave the Board a document with 76 actions that EAC would have to implement in the coming years, in order to succeed - unfortunately for various reasons little of them were done!).
- The procedures for the approval and licensing of RES projects are complicated and time-consuming.
- We suffer from irresponsibility and we do not make practical decisions and we are stuck in the wrong decisions of the past. The original Electricity Market Model, on the basis of which the market "opened" in May 2004, was a simple and relatively easy to implement model: Are you an aspiring producer? Can you compete with EAC? Then you sell. Otherwise you will fail. After some years, the model changed (who decided it? with what studies? with whom the approval? who recommended it? were consultations and with whom?) it became a new complex model, with the introduction of wholesalers, etc., which even after 12 years we are trying to implement and "re-open" the market!!! (Really, in what other area of trade did one see wholesalers, brokers and intermediaries being imported and prices falling to the final consumer, since all of them will have to make their own profit first?).
RES licensing without a permit or - as the case may be - with a fast-track procedure
Always in my opinion, in order for there to be a chance of success and to ensure the achievement of the desired goals, all those involved (Ministry of Energy, Ministry of Interior, Parliament, ETEK, CERA, TSO, EAC and EAC Guilds) must immediately coordinate and agree on the following or a similar general outline of "solution" (vaccination, enrichment, improvement, etc. of this contour is welcome).
By referring the matter to Working Groups we will remain at zero.
* The Minister of Energy should chair 2-3 sessions herself, until final decisions are made:
(1) RES systems, for self-production, for the purpose of using in premises the one who installs them, NO INSTALLATION LICENSE OR OPERATING LICENSE SHOULD BE REQUIRED FROM ANYONE (such as solar water heaters).
(2) Similar systems in premises that in some hours will be connected to the EAC network, for their own consumption, should be approved only by the EAC, based on some simple technical criteria.
(3) Applications for the construction of RES systems up to 5MW (with or without storage) to be considered fully approved, by ALL AUTHORITIES, within 30 days from the date of submission of the application, based on predetermined simple criteria, unless a documented rejection is issued, by any Authority. The coordination will be done by CERA and will include a response / costing by EAC for the connection to the network.
(4) For applications over 5MW, a storage system should be requested or their coverage should be examined at times and periods of inefficiency of their own production by EAC with a special tariff (also advantageous to the EAC) and the current licensing process should be followed with relevant simplifications that should be introduced.
EPILOGUE
The purpose of this intervention is serious reflection by all stakeholders, in the hope that they will act immediately to quickly achieve something better in the field of electricity production and consumption.
The content of this public intervention does not lend itself to public controversies, which do nothing to achieve.
If any of the relevant bodies need more explanations of these ideas, I am at their disposal.
The Working Party on the Market Model
"F" wrote in last Tuesday's edition that the Ministry of Energy decided to establish a Working Group, consisting of ministry officials, CERA, the Cyprus Transmission System Operator and ETEK, to discuss the objections and suggestions of the Chamber for the competitive electricity market. ETEK had sent a letter to CERA with its disagreements and concern that the chosen competition model does not ensure cheaper prices for residential consumers and small businesses, while allowing sub-profits for producers from Renewable Energy Sources. CERA asked for specific suggestions, ETEK responded and now a dialogue is expected to take place within the framework of the Working Group that was established, by decision of the Minister of Energy, Natasa Pilides.
* Former EAC General Manager
Former CERA President
Former Executive President DEFA
