Filenews 1 June 2025 - by Chrysanthos Manoli
In the energy sector, some of the most important changes in political direction are identified in the 26 months of the Christodoulides government. In recent months, the implementation of decisions in order to comply with the new political choice has also been launched.
The road is long, the problems are many, the distortions more and the rates of transformation of decisions into projects, excruciatingly slow. And, in addition, there are very intense and multi-layered reactions of private interests that are affected. Which in turn attempt to influence political power bodies.
The reactions are likely to be brought soon, by eminent lawyers, to justice.
CERA's commitment on Thursday to start the commercial operation of the competitive electricity market on September 15 puts an end to a ten-year period of delays and postponements. And it sets a binding timetable for the end of a distorted rudimentary electricity market, which was called transitional but consolidated for a few years very large profits for a group of private producers and suppliers of electricity from photovoltaic parks and deprived hundreds of thousands of households of the right to use cheaper electricity from renewable sources.
The commitment by the state to start a competitive electricity market is an important development. At the same time, contrary to the certainties expressed by previous governments, the current government declares through the competent minister that the satisfaction of the great goal of substantially reducing the price of electricity through the competition allowed by the Target Model, which was chosen since the mid-2010s, is questioned by the actual facts and particularities of the Cypriot energy sector. And he warns that, if the reservations about the operation of real competition in favour of consumers are confirmed, he will intervene to change the rules of the game.
At the same time, the Government has chosen to link the subsidy to businesses for the installation of green energy storage with the sale of stored private production at predetermined prices to EAC Supply, so that consumers and not only the owners of RES parks and their large customers benefit in their entirety.
And while the private energy sector took its subsidy for granted to reduce its production losses from the cut-offs, it was surprised to find that it would have to invest its own capital to secure or increase its sales and profits.
And the remaining available European funds for storage subsidy (about €30 million) are directed by the Government to storage within the electricity grid, in order to ensure its proper and adequate operation at regulated prices and the limitation of the loss of green energy as a priority by the owners of residential photovoltaics. To make this possible, the Ministry of Energy and the minister fought to secure a derogation from the Commission.
The independent Transmission Operator has already submitted to CERA the application for state storage within the network – in three EAC substations – and is preparing the terms of the tender.
At the same time, EAC seems to be waking up - at the suggestion of the government - from the lethargy to which it had been condemned by previous government and regulatory choices. The train of its substantial penetration into photovoltaic production has probably passed irreversibly for EAC. At painful costs for all consumers. However, not the train of assuming a leading role - within a competitive market - in energy storage but also in the production of cheaper and more competitive conventional energy, after the import of natural gas in two years perhaps, but also after the promotion - at a slow pace - installation of new flexible generators in Dhekelia (after many years of setbacks) and storage systems in Dhekelia.
Dramatic changes were imposed, out of necessity, by the government on the great project of importing natural gas. Which was received by the previous government in a vast "swamp".
The humiliation of the state in case of seizure by the CPP of the ship "Prometheus" paid with state money was avoided. Already, through a tender, a giant company in its field (Technip Energies) has undertaken the coordination of the project and a contract with a consortium (VPSM) for the completion of the pier is expected soon. When? Unknown. Maybe in 2027. Perhaps in the presidential elections of 2028. But the chances of the project being implemented are now higher. It is enough for the natural gas purchase procedures to move quickly.
Risk management for electrical interconnection
Through the Liberal Party, on May 31, 2025, former Auditor General Odysseas Michaelides said that "for about ten years, the Anastasiades Government promoted the project of the electricity interconnection in a scandalous way, by a private individual who in his history had only the opening and closing of betting companies and other high-risk companies".
Under the Christodoulides government, the implementing body was changed and IPTO, controlled by the Greek state, took over. Although the current government committed to pay, under certain conditions, €125 million. By 2029, if the project is under construction, fortunately... did not have time to complete the process for the entry of the state into the investment of €2 billion. The project has been frozen, as have thoughts of opening up to investment in GSI. The Government's concern is now focused on minimizing the economic damage.
