Filenews 13 July 2025 - by Chrysanthos Manoli
Energy Minister George Papanastasiou is fully aware that expensive electricity is bringing households and businesses to their knees and that all the actions taken during the Christodoulides government have not yet yielded substantial relief for consumers.
However, he strongly believes that better days will come, because, according to him, the current orientation of energy policy is the public interest and the relief of the mass of consumers, on the basis of decisions that have already been taken.
In his interview with F", he explains the decisions that have been taken and are being implemented for the start of the competitive market, the installation of electricity storage in the RES parks, in Dhekelia and in the electricity network, the upgrade of the network, the strengthening of production from conventional units for the safety of the system and the completion of the natural gas terminal, which is included in the priorities.
He asks to be taken into account that decisions that have been left in the drawers for years cannot be implemented with the speed that the people themselves would like.
If domestic consumers are left out...
The 1st of October, Minister, has been set as the date for the first commercial operation of the competitive electricity market. What will happen and how will the Government react if those who estimate that domestic consumers will not benefit from lower prices are confirmed?
We need to open up the competitive market and we have done a lot of work to be at the point today for CERA to announce that the market will start on September 15, with the first commercial operation on October 1, 2025. The Transport Operator was reinforced with personnel, the testing of the software was completed, trial market operations were carried out, agreements were concluded with the CSE and the bank that will do the liquidation and much more.
As far as the functioning of the market is concerned, what is very important is that there is actually competition. Between producers and between suppliers. Licensed suppliers make sense to choose the consumers that will give them the greatest profit margin. There are customers who consume only during the day, for example large industrial ones, and they are attractive customers, because for their needs the supplier will be able to buy cheap electricity from RES during the hours of sunshine.
However, if the consumer-customer is on a 24-hour basis, then his profile changes and the supplier will have to buy more expensive electricity outside of the hours of the day, in order to serve him. As a result, residential consumers are not as attractive as large commercial consumers, because they are small consumers and require more expensive electricity purchases.
Therefore, if the phenomenon arises that suppliers prefer large consumers and do not choose to cooperate with domestic consumers, you understand that we should deal with it by making interventions in the direction of finding a legal way for all suppliers to serve a percentage of domestic consumers.
Are we ready for this big step?
I must emphasize that the new environment of the electricity market is coming to Cyprus along with many other changes. Some of the things that are being done now should have been done a long time ago, but unfortunately we have been inactive as a country for a long time.
I would like to remind you that electricity storage is coming soon, after many efforts by the Christodoulides government and after a long delay that preceded other governments. Storage will be a very important development, both in relation to its operation in existing RES parks (hybrid storage), as well as to the storage that will be integrated into the grid, but also to the storage that will be integrated into the EAC production.
All this is unprecedented for the electricity system of Cyprus and consumers. We have been in the phase of installing thousands of smart meters from EAC for months, when this investment was also very delayed, but investments for a smart electricity network are also progressing.
Many needs had been accumulated, due to the old delays, and now, suddenly, we are obliged to change many things on many levels. And these changes are unprecedented even for the players in the electricity market, which is why it needs to be very carefully managed. And fortunately - and I must say this - we have a good Transport Manager.
I experienced the Operator's staff in the conditions of February 24, 2025, a date I will never forget, and I tell you that, indeed, these people who were in the control room that very difficult night for our electricity system – a very cold night with a high demand for electricity – prevented a blackout in the place. And I must also refer to the EAC staff at the production stations, who kept the units running tooth and nail, so that we do not have blackouts.
We found ourselves in front of dilemmas
Your ministry, Minister, is accused of not responding immediately to the warnings of technocrats that there are no conditions of real electricity adequacy and adequate reserve and of not taking urgent measures to avoid serious electricity supply problems.
Yes, the ministry is blamed, but this government or previous governments? Because in order to be able to boost the production of conventional energy and have adequacy and reserve, you cannot look forward to a magic wand. There should have been plans for years that were implemented. They did not exist and we are now trying to do what should have already been in operation.
It takes time, but they cannot be done overnight. Neither the new generators in Dhekelia, nor the storage and upgrade of the network, nor the assurance of its balance. The ministry has been faced with dilemmas and takes decisions on storage, claims and secures derogations from the European Commission, which will prove in the future how important they are, and we are promoting the strengthening of conventional production. Because it has recently been proven with the blackout in Spain that conventional production is absolutely necessary to ensure balance in the system, no matter how costly and polluting it may be.
But, Mr. Minister, an ordinary citizen who hears about the decisions you have taken, may tell you "the OKA four hundred". He does not see any change in his daily life, electricity remains expensive.
I know it and I understand it. We see that many things that have been frozen for years have been pushed for implementation in these two and a half years of the Christodoulides government. People may not yet have seen tangible benefits from their implementation, but they will see them in a few years, when this minister will probably not be in the ministry. But I am glad that the foundations have come in and gone, the water has entered the groove and soon, when all these decisions we have taken work, consumers will see the benefits.
ELECTRICAL INTERCONNECTION - We expected a more dynamic EU
Let us say something very briefly, Mr. Minister, about the electricity interconnection, because a lot has been said lately and has tired the public opinion. What exactly do you want to ask of the EU at a forthcoming Council of Energy Ministers, as you said recently?
Our position is that, as a European project that is the Cyprus-Israel-Crete electricity interconnection, the role of the European Union should be more dynamic. Giving a sponsorship is a way to support a project, but giving political and diplomatic support when the project goes through geopolitical problems is also important and necessary. We expected a more dynamic EU presence in the project. It has a way of practicing more effective diplomacy. Any obstacle to the electricity interconnection should be the responsibility of the European Commission to remove it, and not just of two Member States.
How long will this wait last for the substantial promotion of interconnection, Mr. Minister?
It depends more on the implementing body. If I were a promoter and saw a project faltering, I would have to limit the exposure of consumers and shareholders to unnecessary expenses. At some point in time, you have to count as an implementing body whether the project is feasible or not. Otherwise, you are not a good implementer. You fight for the project, but you set a cut-off date and if the execution cannot proceed, you have to make other decisions. You cannot continue with a project that is not being implemented as planned and is also costly for consumers.
How Vassiliko is progressing – What Technip will do
What exactly is the case, Minister, for the time that the project manager of the terminal in Vassiliko has at his disposal to study the documents and conclude on the preparation of terms for the tender for the construction of land works in Vassilikos? The report in Parliament that these terms for tenders will be given in ten months caused shock.
This came out wrongly, there was a misinterpretation of what an ETYFA official had said when he was asked. What has been said is that our contract with Technip gives it ten months to implement some things. He did not say that in ten months he would give timetables and prepare terms of offers. In ten months, the first phase of the project manager's contract expires. Until then, a lot will be done to move the project forward. Unfortunately, what the officer said was falsified and it came out that in ten months we will have the deliverables from the consultant. But this is not the case.
I also want to say that the company we have hired is famous for such projects and specialized. He wants to very carefully carry out a few thousand documents concerning the whole process that has gone before, the specifications of parts, the designs, etc., and make the decisions on what to propose. If we rely on the scattered knowledge that exists in ETYFA and DEFA and the ministry, then I am afraid that we will have a repetition of what has gone before.
However, from the debate in Parliament on Tuesday, Mr. Minister, what came out from the statements of MPs is that there is not even a timetable for the completion of the works and the delivery of the terminal. And this caused disappointment.
Yes, but that's not the case. And I want to give it to the readers to understand it well. In such large and serious projects, when you already have problems and delays, you are not in a hurry to make decisions that can make things worse. Do you know how much we put pressure on the consultant (Technip) to expedite his decisions? And he said "no, I prefer to deliver to you a project that will be on the basis of the good reputation I have, rather than a hasty project that will damage both Cyprus and the reputation of the company". And it is the right position on the part of the consultant. This phase that we are going through now is very important for the project and no more mistakes must be made.
The difference in the private sector
The other day, Mr. Minister, speaking in Parliament about the Vassilikos project, you said that if these obstacles that you manage today concerned the private sector, the project would be completed in a year. Is the difference so big in the public sector?
When I said about the completion of the project in a year in the private sector, it is not a hypothesis or an assessment that I made, it is the reality as I experienced it. Because in a project in the private sector, of a similar nature, in which I was a party, the private owner chose to say that "I cannot wait for the completion of the project on the basis of the offer I received and I want to speed up the delivery from two and a half years to 16 months".
And indeed we entered into a negotiation, we paid more, because reducing the delivery time entails increased costs, but you will also have the benefits of the project earlier. And so we did and had the infrastructure to be used earlier.
In the public sector, now, with the experience I have gained over the last two and a half years, I believe that the procedures are labyrinthine. In addition, there is a strong element of phobia of decision-making and taking responsibility and ultimately there are long delays.
In addition, sometimes offers are issued without specialized knowledge, resulting in them being easily attacked by special technocrats exploited by the private sector. And you enter a maze of legal disputes, in the Tender Review Authority or in the judiciary, and the delay becomes much longer.
I believe that in a country with very serious energy needs, such projects must proceed with different procedures, so that decisions can be taken quickly.
We considered it self-evident, Minister, that decisions on urgent projects in the energy sector, e.g. on the introduction of new fuel, adequacy and increase in electricity production, would be taken in the context of other, fast-track procedures, invoking the public interest, by the President of the Republic, for example.
We have considered this possibility, especially in the case of the terminal in Vassilikos. We thought of various scenarios that could save a lot of time. However, there are always points in the legislation that stand in the way.
