Filenews 29 November 2024 - by Chrysanthos Manoli
A stern announcement by the Cyprus Transmission System Operator (TSO) highlights the reluctance of private producers – or suppliers – of electricity from renewable energy sources to cooperate with state authorities for the commercial operation of the competitive electricity market in the second half of 2025.
Despite its continuous appeals since last April to private producers and suppliers to submit the application for the inclusion of their businesses in the 3rd trial period of the competitive electricity market, interest remains subdued. Almost non-existent, as Fileleftheros is told.
The reluctance to respond to the Operator's calls may be due to some extent to the procrastination of some producers to "run" the procedures for their registration in the trial operation of the market. However, in several other cases the non-attendance to submit the application for the trial period indicates a lack of real interest in the functioning of the competitive market, as these operators are completely satisfied with the operation of the transitional electricity market arrangement, which gives them large percentages of profits.
Although there are concerns from technocrats of the state apparatus, but also of the private sector, that the commercial operation of the competitive market (on the basis of the pan-European controversial EU Target Model) in the short or medium term will not lead to a reduction in prices for domestic consumers - on the contrary it may lead to increases in the charge of kilowatt hour - Many producers believe that with the current regime of bilateral contracts, in the context of the transition, they ensure certain viability and serious profitability, offering prices many times higher than the total cost they have in photovoltaic parks, with a small discount to their commercial customers against the charges of EAC, which produces at a much higher fuel cost.
Since April... He begs them
In its announcement yesterday, entitled "Subdued Interest in Submitting Membership Applications", the Transmission System Operator warns participants in the transitional arrangement (which started in 2017 to operate for 1-2 years and is still operational) that "in case of delay in submitting an application or delay in submitting the necessary documents and certificates, the inclusion in the 3rd Running/AAH Period will be delayed, depending on the volume of processing of applications received at that time. Despite its efforts to examine all applications in a timely manner, TSOC cannot guarantee the completion of the applicants' integration process before the commercial operation of AAH."
This means, firstly, that some producers – suppliers may not be integrated into the commercial operation of the market in time, with financial consequences for themselves but also with inconvenience to their current customers, and secondly, that a new delay may be caused in the operation of the market.
According to the Transmission Operator, "on 30/04/2024, TSO presented to interested parties the Integration Process in the 3rd Trial Operation Period/Competitive Electricity Market (AAH) and then posted on its website the Directive for Integration into the Contractual Framework of Electricity Market Rules, the Application for Integration and all relevant forms. TSOC started accepting applications for membership from 01/06/2024 (with minimal response, as we are informed, with applications from 5-6 participants, out of the dozens participating in the transitional arrangement)".
The TSO adds that "from the end of April 2024 until today, the TSO repeatedly pointed out to the interested parties and especially to the participants of the Transitional Regulation of the Electricity Market (MPAI) the necessity of submitting an application for inclusion in the 3rd Trial Operation Period / AAH through informative presentations and announcements.
Why it's important
At the same time, the Cyprus TSO stresses the importance of the participation of producers/suppliers in the 3rd Trial Operation Period, highlighting its advantages, including:
– familiarization of participants/users with the Market Management System (MMS),
– a better understanding of the provisions of the Electricity Market Rules (EIC),
– carrying out effective audits of participants' systems and of the systems' interface with MMS,
– gaining experience to better manage the way participants participate and improve their internal procedures,
– the resolution of any problems for their subsequent unhindered activity in AAH,
– the processing of the various results from the individual markets for better management of bids, any contracts with contractors, i.e. the economic evaluation of the financial results from their participation in AAH".
Agron led – "You will be left out"
Despite TSOC's efforts, "the number of applications received is not as expected. The participation in the 3rd Trial Operation is the appropriate route for the smooth transition of the participants to the commercial operation of AAH and the uninterrupted operation of the operations of the Participants, who are already active in MPAI.
During the examination of applications, the TSO adheres to a strict order of priority. In case of delay in submitting an application or delay in submitting the necessary documents and certificates, the inclusion in the 3rd Trial Period/AAH will be delayed, depending on the volume of processing of applications received at that time. Despite its efforts to examine all applications in a timely manner, TSOC cannot guarantee the completion of the applicants' integration process before the commercial operation of AAH."
The Cyprus TSO warns that, with the launch of the AAH, MPAH Participants who did not secure their participation in AAH, based on the above, will find themselves out of the market, with the result that they will not have revenues from their energy produced and/or will not be able to serve their contracting customers/owners of generating facilities depending on the capacity they hold.
The 3rd test operation (the previous two were not successful) includes almost all the procedures and functions that will run in the normal operation of the market (day market, energy offers with real prices, etc.) and through it will be shown how ready the system is to proceed in the commercial competitive market. It will also become clear whether market expectations for reduced prices will be confirmed or whether those who predict a persistence of high prices per kilowatt hour will be confirmed.
