An increase in the budget of the Electricity Authority (EAC) that will be passed on to consumers was necessary because of changes from the EU, authority spokesperson Christina Papadopoulou said on Friday.
It became evident during the presentation of the EAC budget for 2019 at the House on Thursday that consumers would have to foot the €38.9 million bill for the purchase of carbon credits, an amount more than double than that of 2018.
In 2017, the EAC’s budget for the purchasing of greenhouse gas emission rights, or carbon credits, which is passed on to consumers, amounted to €12.2m. This was raised to €19.3m the following year, before increasing 101 per cent to reach €38.9m in 2019.
This steep increase was necessary for three reasons, Papadopoulou said.
Firstly, she told the Cyprus Mail, until today the EU had provided the EAC with a certain number of free carbon credits, though these are significantly decreasing, and will be eliminated completely as of 2020, by which time the Commission aims to reduce its domestic emissions by at least 20 per cent.
“As such,” Papadopoulou said, “the EAC must purchase more carbon credits.”
The second reason, is that the EU has also increased the price of purchasing carbon credits, also in view of meeting its 2020 environmental, energy and climate targets, Papadopoulou said.
And finally, the EAC expects an increase in demand for electricity in 2019, so will be required to step up electricity production, which in turn increases the released emissions, Papadopoulou added.
From the total budget of €882m allocated for 2019 the largest chunk – €564m or 64 per cent – will be spent on the purchase of fuel for electricity production, on which €50m more will be spent this year compared to 2018.
“The EAC is making steps towards decreasing the emissions it releases,” Papadopoulou noted, such as through the instalment of emission control systems in older power plants.
“We are also restructuring power plants to allow electricity production through the use of natural gas, which may still release emissions but can bring a significant decrease which will allow us to be within the EU 2020 limits,” Papadopoulou said.
The EAC is also making strides towards installing photovoltaic technologies for the production of electricity through renewable energy sources, she added.
Further expenses in the EAC’s budget concerned salary expenses, which were budgeted at €99.8m (11.3 per cent), and financing and taxation costs will amount to €15.3m, €9m of which will be given as a donation to the military.
From the sale of water produced at the desalination plant within the Vasilikos power station, EAC expects to receive €15m in 2019.
The budget foresees a total income of €927m, leaving it with a clean profit of €35.6m, which may be a step down from the €50m profit made in 2017, but is almost double last year’s profit of €20m.