Cyprus Mail
Energy

Little chance of cheaper electricity any time soon MPs told

Cyprus wind farms and solar parks receive generous state aid

Electricity prices are not expected to drop anytime soon, lawmakers heard on Thursday.

During a parliamentary discussion on ways in which the state could reduce electricity rates – which are on the rise along with increasing oil prices – officials told MPs that three things needed to happen.

These were: opening up the electricity market, increased penetration of renewables into the grid, and switching from heavy fuel oil to natural gas for power generation.

Neither of the three conditions looked like being met.

On the much-hyped import of the cheaper natural gas, an official from the commerce and energy ministry told legislators that “if all goes well, we can expect natural gas to come to Cyprus by June 2020.”

But as the first tender for the construction of infrastructures receiving liquefied natural gas was issued only weeks ago, and given past experience with tenders in Cyprus, MPs were sceptical about the timeframes set.

As for the opening up of the energy market – currently a monopoly – officials have now pushed the date back to mid-2020.

But given repeated delays, auditor-general Odysseas Michaelides suggested that 2020 was no longer a realistic target. More likely, the switch to an open market would happen no sooner than 2021, he said.

MPs asked government officials whether there was any room for decreasing the high renewable energy sources (RES) tariff foisted on consumers via electricity bills.

Officials said this was not easy, because the 20-year contracts signed back in 2008 between the government and operators of wind parks guarantee the latter a fixed fee per kilowatt-hour generated.

The contracts stipulate that the kilowatt-hour rate is not renegotiable.

In parliament, a representative of a consumers’ advocacy group distributed a sample of an electricity invoice where, of the €59 total, only €23 related to actual fuel consumption and the rest consisted of various other charges.

Chairman of the House watchdog committee Zacharias Koulias said they would be asking the state-run power company to explain the bevy of charges unrelated to fuel.

To date, Cyprus has paid the European Commission some €200m in fines for exceeding carbon dioxide emissions targets.

We have been informed that the above sentence, in bold, is factually wrong. Cyprus has not paid any fines in relation to CO2 emissions. Unfortunately, we had assumed that the information presented before the House watchdog committee was correct and quoted what MP Zacharias Koulias had said.


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