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Cyprus

Electricity prices to drop with transitional move

A legislative proposal to introduce competition in the domestic energy market was tabled at the House Commerce committee on Tuesday and will be put to a plenary vote next Friday, chairman Angelos Votsis said.

The proposal will officially usher in the transitional period to full competition by allowing private energy producers – mainly from renewable energy sources – to sell their electricity through monthly contracts.

“We will take this to the plenum in 15 days, which we hope will be backed by all parties so that energy producers can enter the electricity market through bilateral contracts until the final solution is ready in 2019,” Votsis said.

“There will be a slight decrease in the price of electricity this way, but more importantly it will be a transition to the permanent solution so we don’t chase deadlines again in the next five years or more.”

Addressing the committee, permanent undersecretary Stelios Chimonas said the energy ministry fully agrees on a transitional period so that rudimentary competition is eased into the market.

“This step will help the market adjust to the new conditions, however much we may try to make the new framework as simple as possible, even the simplest of its provisions will be complex,” he said.

“We want the players to adjust.”

He noted that the staffing and status of the Transmission System Operator (TSO), which is fully dependent on seconded staff from the state-owned Electricity Authority of Cyprus, is detrimental to introducing a competitive market.

TSO director Christos Triaros told lawmakers that seconded EAC technicians couldn’t possibly be given access to competitors’ proprietary data.

Speaking for the EAC, which was not represented at the House session, Chimonas said the TSO can and should remain under the EAC with regard to the administration of the transmission system, whereas a new organisation could be created to regulate the market.

“We don’t want to create more state organisations, and we see synergies there,” Chimonas said.

“The TSO has been designed to be monitor transmission and production independently.”

But according to Triaros, while the TSO requires 78 staff, it currently employs 36, with the Finance ministry having approved €1.4 million for the hiring of 23 additional staff, but the appropriation remains under discussion at House Finance committee level.

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Source: Cyprus News Agency

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