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Our View: EAC poised to extend its monopoly into renewables

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HAVING fought off government plans to open up the electricity production market, through a combination of blackmail, political pressure and delaying tactics, the Electricity Authority of Cyprus (EAC) is now focusing on ensuring against competition in the future. When the energy market finally opens to competition, in two, three or five years, depending on when the EAC unions and board run out of excuses for preventing it, there will be no companies left to compete with this state-protected monopoly.

The latest trick thought up by the EAC was to invite expressions of interest from businesses with licences for operating photovoltaic parks, for cooperation with the authority. In other words, it would be paying to become a partner in renewable energy operations or to buy them outright. According to press reports, it would be using its financial muscle to clean up its potential competitors, many of whom cannot secure funding for the big projects for which they had secured licences from the authorities. The state monopoly claimed it wanted to participate in setting up renewable energy projects in view of the 2020 target Cyprus has to meet.

No matter what the EAC might say, this is a clear attempt to suffocate its future competitors by taking control of renewable energy production. If this initiative is not a blatant abuse of dominant market position – in fact ‘dominant’ is an understatement because the EAC is a state protected monopoly – then what is? And what is the commission for the protection of competition doing about this? Is it acceptable for a monopoly to take over potential competitors before the market is opened up to competition?

The newly created Association of Participants in the Competitive Electricity Market wrote to President Anastasiades asking him to intervene to stop the EAC from dealing a blow to competition. The board and management of the authority will be invited to the presidential palace for a meeting but this should not be necessary. Do we not have the state services with the legal authority to stop this blatant attempt to crush competition by a big monopoly that has for decades been abusing its position to overcharge subscribers? Cyprus had the highest increase in electricity rates in the EU over the last two years, not to mention that the rates were already among the highest.

The situation is now beyond a joke, with the politicians allowing the EAC management and unions a free rein not only to keep delaying the opening of the energy market but also to take over its potential competitors before competition arrives. In short they are helping a monopoly ensure it would be in a position to carry on overcharging its customers for as long as it likes.

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