Filenews 22 September 2022 - by Chrysanthos Manolis
Faced with a critical dilemma - or a contradiction - are the Government and the authorities responsible for electricity: On the one hand, they must manage the intense - and justified - criticism of the long delay in the start-up of the competitive electricity market and are called upon to speed up actions in this direction. On the other hand, they must protect consumers from the implementation of a model of competition that has been applied for years in the EU, but today it is being accused everywhere of contributing to a huge over-indebtedness of domestic, commercial and industrial electricity consumers and allowing - or producing - inconceivable super profits, particularly for electricity producers using renewable energy sources and nuclear energy. As we have repeatedly written, in the stock-type electricity markets in the EU, the production of cheap electricity from RES and nuclear energy is charged to consumers at the price of today's expensive natural gas, with the result that consumers do not benefit from cheap production from photovoltaic, wind, hydroelectric farms and, on the contrary, that the production companies benefit with huge over-profits.
The government's dilemma becomes more excruciating, provided that the European Commission has already officially announced its intention to submit proposals in early 2023 for the redesign of the model in force in the EU and which Cyprus is also promoting for implementation. European governments are calling for a change in the model even more strongly, with the Austrian one having recently described as "absurd" the way prices are set on the basis of this model.
Therefore, there is a visible risk - and it is also pointed out by players in the Cypriot energy sector - that the operation of a competitive electricity market, based on this model, will eventually lead to an even greater increase in electricity prices, especially for domestic and small and medium-sized commercial consumers. It is quite possible, however, that large industrial or commercial consumers will benefit at relatively lower prices, compared to EAC prices, through bilateral contracts with producers.
