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Cyprus

Electricity market may not be opened up until 2020

It could take until 2020 to open the electricity production market to competition, MPs heard on Tuesday.

Lawmakers were discussing for the umpteenth time the mooted liberalisation of the electricity market, which government officials had earlier said would have been completed by June of 2016.

Now, officials are pushing the date back to 2019 or 2020.

The discussion at the House energy committee was held behind closed doors.

Speaking to reporters after the session, committee chair Angelos Votsis (Diko) said MPs were aggrieved at the delays, and spoke of a lack of coordination among the involved departments – the Cyprus Energy Regulatory Authority (Cera), the

Transmission System Operator (TSO) and the energy ministry.

Without going into detail, Votsis said officials from those departments promised to now “study” the possibility of a stopgap or interim arrangement towards the full liberalisation of the energy production market.

The House committee, he added, will be revisiting the matter in late November, when MPs will be expecting final developments from officials “on this very serious issue, as there are many things that trouble us.”

Akel MP Costas Costa was only slightly more illuminating about the hold-up, attributing it to the fact that a translation of a study had yet to be finished, and to delays in designing the necessary software for the transition needed by the TSO.

According to Costa, 23 new positions were expected to be opened up for TSO staff although under current regulations these personnel would be hired first by the Electricity Authority of Cyprus (EAC) and then transferred to the TSO.

MPs’ explanations about the delays left a lot to be desired, likely because none addressed the elephant in the room – opposition from the unions of the state-run power company.

The unions do not want the electricity market to be opened to competition because this would lead to pressure for the privatisation of EAC.

Legislation making the TSO an independent entity has not even been prepared yet and the body operates as a branch of the EAC with workers employed by the state-owned electricity authority.

The energy regulator wants the TSO to be completely independent of the EAC, but the relevant legislation is only just being prepared. This is because the EAC unions are opposed to the independence of the TSO as they see it as a stepping stone towards privatisation.

In early September, the energy regulator stated that sometime in December the EAC would be split into two with a final draft of regulations for a new model in the energy market expected to be ready by the end of the year.

This relates to the unbundling of operations and accounts of the state-owned power producer.

Following threats of strike action by EAC workers earlier this year, the government decided to put on ice plans for privatising the state power company.


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