Cyprus Mail 11 February 2025 - by Elias Hazou
Electricity prices are unlikely to drop over the next two years, given the absence of natural gas and the lack of storage for energy generated by renewables, the head of the state-run power utility said on Monday.
Giorgos Petrou, chairman of the Electricity Authority of Cyprus (EAC), made the comments at the House finance committee reviewing the organisation’s budget for fiscal year 2025.
Without the further penetration of renewables into the energy mix, or the creation of storage capacity, or the arrival of natural gas, prices to the end-consumer – households and businesses – would not fall.
Petrou appeared to be echoing similar remarks by the energy minister in late January.
“In a bid to smooth out fuel cost fluctuations, the EAC is in touch with expert advisors to set out a strategy making use of tools for hedging risk…arising from the exchange rate between the euro and the dollar,” the official noted.
On the issue of natural gas in particular, Petrou said that infrastructures still need improvements in order to burn the gas to generate electricity. These works should take about a year.
Previously, the government had said it expects the liquefied natural gas (LNG) terminal at Vasiliko to be completed by the end of 2025. The facility will convert imported LNG back into its gaseous form, fed via pipeline to the nearby Vasiliko power station to power the turbines.
The re-gasification would occur on board the ‘Prometheas’ vessel – still undergoing repairs and upgrades in Malaysia.
On the vessel, Petrou told MPs that two items of necessary equipment have been purchased for it.
Regarding the EAC’s efforts to further break into renewables, the organisation has secured permits for solar parks but is facing “serious issues” in finding land.
On storage for electricity from renewables, Petrou said they will come out with tenders soon.
In other remarks, Petrou mentioned the EAC will be carrying out its own study into the impact of the Great Sea Interconnector – the mooted subsea electricity cable linking Cyprus to Crete.
Some €350,000 has been budgeted for the study, which will look at the possible financial impacts of the interconnector on the EAC itself.
During the discussion of the EAC’s budget, MPs heard the organisation will this year spend €564 million on fuel purchases alone.
The EAC’s total balance sheet features €1.9 billion in expenditures, and an estimated €1.4 billion in revenues.
Petrou said the organisation’s cash shortfall comes to €245 million, which will be covered by lending and tapping into its own equity.
Payroll expenditures during 2025 will come to €162 million. Operating expenses tally at €108 million, and capital expenditures at €357 million.
According to the official, the number of persons employed at the EAC this year will be two less than in 2024.
Meantime capital costs include spending on new turbines and storage units at the aging Dhekelia power plant. They also include investments in low-emission technologies and various upgrades to the flagship power station at Vasiliko.
On the revenues side, the EAC estimates €1.2 billion from the sale of electricity, plus another €210 million from charges to the market operator as well as charges for use of the grid and for auxiliary services.
The EAC expects to earn €24 million from sales of desalinated water.
