Filenews 24 December 2022 - by Chrysanthos Manoli
ETEK made a new dynamic intervention for specific amendments to the current policy of producing and selling electricity, especially from renewable energy sources.
In the context of a meeting of the Chamber's leadership with the Minister of Energy, Natasa Pilides, on December 21, a proposal was submitted, among other things, for the implementation of tendering procedures (tenders), so that res utilization systems with low prices per kilowatt hour can be included in the electricity balance, for the benefit of all consumers. It was stressed to the Minister that, given the extraordinary circumstances we are experiencing in the energy sector, it is necessary to amend the operating rules of the transitional arrangement in the electricity market and to set, among other measures, a cap on the selling price of electricity from photovoltaics, in order to limit the possibility of windfall profits.
We would like to point out that the request to speed up the promotion of tenders, in order to ensure green electricity at the lowest possible prices, as is the case in other EU countries (where prices close at 3-4 cents per kilowatt hour, compared to a multiple price in Cyprus), has been repeatedly submitted by other bodies and parties, especially AKEL. However, from time to time the Ministry of Energy responds by claiming that tenders are not usable at this stage in Cyprus, given the non-functioning of a competitive market, which is rejected as a position by other interested parties.
Regarding the tendering procedures it proposes, ETEK states in an announcement that it "indicated to the Minister of Energy that, under the current circumstances, the inclusion of new RES through tendering procedures, either outside the market (tenders with the definition of a reference price lower than the cost of avoidance), or in-market (contracts for difference, with a reference price of the market price) is the appropriate solution and will greatly help in reducing the price of electricity or in raising money from the State, which will be used to protect vulnerable consumers. So it's something that should be promoted immediately."
It is added that the ETEK "recommended that with the operation of the market and for as long as this extraordinary situation is maintained, the amount corresponding to the purchase of CO2 allowances be deducted from the price that the energy from RES is compensated in the electricity exchange".
Regarding the taxation of windfall profits of producers or suppliers of energy from RES, ETEK noted that it agrees in principle with the approach of the Ministry of Finance to impose a special fee on the revenues of private producers / suppliers of RES, in relation to the past. Regarding the future, however, the ETSC indicated that it is preferable to make interventions at source wherever possible, pointing to the regulatory decision KDP 223 of 2017 (transitional market).
Calls for the transitional regime to be changed as well
In addition, ETEK argued during its meeting with the Minister of Energy that the transitional market, which was a derogation / temporary arrangement (s.p. promoted by CERA), "has exhausted the purpose of its creation and has exceeded the reasonable time limits of preparation of the interested parties". Therefore, the Chamber states, "in view of the current exceptional situation and the windfall profits generated, there must be immediate intervention and corrections also on the transitional market (opening it for other new stakeholders to participate, imposing a cap on prices, decoupling the price of compensation for excess energy from the cost of avoidance, recovery of costs caused by the deferral of production - consumption in the transitional arrangement from the one that causes it, coke)".
We remind you that the Ministry of Energy had also requested in writing from CERA specific amendments in view of the operation of the competitive electricity market (possibly in 2023), in the context of a letter for which we wrote in the edition of November 22, 2022.
Stable frame, but...
The Cyprus Scientific and Technical Chamber pointed out to Natasa Pilides that she understands the importance of a stable regulatory and legislative framework in the sector, but on the other hand, she stressed that especially under the current circumstances, both the state and the regulatory authorities should listen to the needs of society, show flexibility and determination and intervene in a timely and fast manner where corrections are required for the benefit of the small and medium-sized enterprise. Consumer. She advocated the unhindered increase of small photovoltaics
