Filenews 27 July 2025 - by Chrysanthos Manoli
The past week was very difficult for EAC as well as for the whole of Cyprus. Hundreds of employees of the organization are scattered in the burned areas of mountainous and semi-mountainous Limassol, trying to replace the 500-600 stakes and dozens of transformers that are estimated to have burned on Wednesday and Thursday and to replace many kilometers of cables, in the hope that the electricity supply of about 20 villages will be fully restored as soon as possible.
Sooner or later, the new troubles for the Electricity Authority and its customers will be overcome, but not many other hot issues that the organization is called upon to address.
With the most important of all the assurance of electricity sufficiency, an issue for which the Energy Regulatory Authority of Cyprus is formally competent by law, but in practice it is the EAC that is called upon to extract the chestnuts from the fire.
However, as the commercial operation of the competitive electricity market approaches (1 October), EAC's primary obligation could be said to be its economic survival in conditions of competition that does not develop on equal terms.
The state organization was condemned to produce electricity with the most expensive fuel in the world and will face producers with RES systems, with theoretically lower production costs, even though the market model that will be applied will allow them to sell their electricity at prices similar to those of the EAC, with a very high percentage of profit.
Under these circumstances, which consumer would choose EAC as an electricity supplier? None. But this is not the case: The much-advertised free choice of electricity supplier will not be for everyone. Hundreds of thousands of consumers – mainly households – will continue to be contracted with EAC under "free market" conditions. Because they will not be able to do otherwise.
The electricity that photovoltaic parks will be able to produce very cheaply is not enough - and will not be enough for many years - for residential consumers as well. Maybe for a small part of them. Those who will benefit from the (at least slightly) cheaper electricity of private "green" producers are a portion of large commercial consumers (factories, malls, large stores, large organizations).
The rest will be obliged to cooperate with EAC Supply and it is quite likely that they will be charged higher costs per kilowatt hour. Because EAC's customers (mainly the large ones) will decrease.
However, EAC is a regulated organization, by CERA. What does this mean? Theoretically, it means that whatever costs it has for the production, supply and production of electricity, it is entitled to recover it through electricity bills, with a maximum profit of 4.6%. In fact, EAC rarely receives a return on capital at this rate, it is much lower.
However, this makes little difference for consumers and especially households. EAC electricity is and will remain de facto very expensive and may become even more expensive. For those who will not be able to avoid it.
And what does the domestic consumer care about if the economic survival of the EAC is theoretically assured? He should be interested, because with an EAC that would collapse under conditions of unequal competition, who would ensure the adequacy of electricity and its supply even there - and to them - that private producers and suppliers would not even want to look?
In short: It is urgent for the country to produce more electricity from conventional units, in order to meet the needs of winter – summer, day and night. The two new generators destined for Dhekelia are a drop in the ocean of the real needs of the country. Who will meet these needs? In the absence of natural gas, which could activate the private conventional producer that has been licensed for years, only EAC can and only EAC can be obliged by the state to do so.
And -no matter how late it may be- it will do so. But who will pay the cost of the millions required for the new infrastructure? If the answer is "EAC", it automatically means that households will eventually be burdened with it. The necessarily loyal customers of the state organization.
Will the Government and the EU allow such a thing? Will the householders accept it?
