Filenews 5 July 2022 - by Chrysanthos Manolis
Asked by "Phileleftheros" to comment on the criticisms of the Government for not taking specific decisions to immediately reduce electricity charges, at Friday's meeting at the Presidential Palace, Finance Minister Konstantinos Petrides did not mince his words. He said, in short, that there are no ways to substantially reduce the cost of electricity and that de facto the Government should focus on some relief measures for vulnerable groups.
The minister said: "We are entering a new era, the characteristic of which will be the high prices of fuel and electricity, since it is produced from fossil fuels''.
''This new situation is not only due to the war in Ukraine or the pandemic, it is largely the result of a conscious EU policy called the green transition. And people need to know that even higher taxes on conventional fuels are being promoted and provided for, which will lead to greater prices."
Mr. Petridis stood on the importance of energy saving: "It is for this reason that the official policy of the EU, its targeting, is the "I save". We must all realize that we are entering an era of more expensive electricity and what the state can do is to implement policies to prevent energy poverty, with targeted relief measures for vulnerable groups.
Within this policy framework, he pointed out, "horizontal tax breaks for electricity consumption are contrary to the green transition policy. Already some countries have imposed or are studying to impose additional taxes to prevent large energy consumption, pushing for savings." He reminded that "we took some horizontal measures to relieve all electricity consumers (e.g. the current reduction of VAT on electricity to 9% and previously the reduction of charges for the use of the EAC network) and we received criticism from some economists".
We lagged behind in Renewables
But what is the Government doing to promote electricity savings? Mr. Petridis said that "hundreds of millions of euros are provided for both in the state budget and through the National Recovery Plan for various projects that are running and will run to improve the energy efficiency of buildings, for the installation of photovoltaics in homes and businesses and in the final result in saving electricity. It must be made clear to all of us that more Renewable Energy Sources (RES) must enter our lives. And yes, we have to recognise that we are lagging behind in this area, not just ourselves. Other countries have not properly planned the high penetration of renewable energy sources and are now being forced to speed up. And it was precisely in this direction that Friday's meeting moved: Decisions were taken for significant investments by EAC, in order to upgrade the transmission and distribution network and facilitate the installation of more RES, in more areas, by individuals and by the EAC. This must now be a priority for the state."
Let's not forget: Public finances under pressure
Asked to explain what the decision of Friday's meeting at the Presidential Palace consists of to consider the possibility of giving, after August, vouchers to vulnerable households, so that they can breathe some breathing space from the unprecedented accuracy of electricity, the Minister of Finance told "Phileleftheros" that the one-off support for vulnerable households has already been decided and implemented, in the context of relief measures for the consequences of the continuous rise in inflation, and on Friday the choice of vouchers was also discussed, again as a targeted measure for specific groups of the population.
However, he pointed out that the procedure under which the measure of granting vouchers to alleviate the burden on electricity bills will be implemented should be examined.
Speaking more broadly about the possibilities of the state to support the population under the current special conditions, Konstantinos Petrides pointed out that we must always bear in mind that we come from a huge epidemiological crisis, which forced the state to huge expenditures to support workers, businesses and society in general and, as we are now affected by the geopolitical - economic crisis caused worldwide by Russia's invasion of Ukraine, inevitably public finances are under great pressure. He also pointed out that the upcoming increase in interest rates by the ECB must also be taken into account because it will be a difficulty that will also affect the public sector.
The minister added that, in these circumstances, the Ministry of Finance and the government in general have an obligation to ensure the continuation and if necessary the strengthening of the social and benefit policy for those who are in dire need of it. What Mr. Petrides told "Phileleftheros" about how to manage punctuality in fuels and especially in electricity, in the context of the effects of the pandemic and the war in Ukraine, but also of the green transition policy of the EU, are listed below.
INTERVENTION
Best when they are cheaper
The Minister of Finance is right when he acknowledges that we have lagged behind in promoting the installation of Renewable Energy Sources. And he is also right when he states that the Government is offering millions of euros in sponsorships to promote the installation of photovoltaics on roofs of homes and businesses. The use of photovoltaics is the safest and fastest way to cheaper electricity and it is worth the investment the money needed to install the panels. However, there is still one problem in Cyprus: We did not find that policy framework that will allow the commercial exploitation of RES in the cheapest possible way. No over-profits to producers and suppliers. H.M.
