Cyprus Mail

Deadline to liberalise energy market passes again

Legislators warned on Tuesday that Cyprus could be liable to significant fines from the EU, after learning that the timetable for opening up the energy market has past again with the transition now being pushed back from July 2019 to ‘sometime in 2020’ in the best-case scenario.

The delay, MPs learned, is due to complications arising with a tender for the purchase of specialised software that is indispensable for the operation of the new system.

The Electricity Authority of Cyprus (EAC), which handled the tender concerning software to be purchased by the Distribution System Operator (DSO), declined the offer made to it.

The preferred tenderer has since challenged the decision with the Tenders Review Authority, which must rule on the matter before the matter can progress any further.

It is no secret that the state-run power company – currently the only producer of electricity in Cyprus – is averse to the opening up of the market.

The DSO and TSO (Transmission System Operator) are effectively arms of the Electricity Authority. But since these two bodies have been designated as monitors once the market opens up, giving them access to suppliers’ proprietary data, they need to be rendered ‘independent’.

“It appears that the goal of transitioning to a free market has been postponed to sometime within 2020,” Disy MP Andreas Kyprianou said.

The DSO, he added, would need approximately 15 to 18 months after the award of the now hung tender to be in a position to operate the system.

Akel’s Costa Costa accused the government of botching the whole matter.

“The government’s sloppy handling has been proved yet again today, confirming our concerns that there is no way we can meet our goals, which are binding from the EU, for the penetration of renewable energy sources into the electricity grid.”

The TSO and the DSO had been supposed to be ready for the switch to the open market by July 2019 and April 2019, respectively.

Under full liberalisation, an ‘electricity exchange’ of sorts will be established, where suppliers’ bids for quantities of electricity will be updated every half an hour.

The exchange will match supply and demand and fix the price for a contract.

Essentially the Electricity Authority of Cyprus will act as a pool, or cache, of electricity.

The electricity exchange platform would be operated by the TSO, which will gain the added capacity of acting as market operator in addition to monitoring security of the overall electricity supply.

The system matching bids requires complex software, which needs to be customised to the particulars of the Cyprus electricity market.

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