Cyprus Mail

Anger at the House as liberalised electricity market delayed again

Energy Minister Giorgos Lakkotrypis

The opening up of the energy market has once more been pushed back, this time to December 2021 – and that’s under the best-case scenario – MPs heard on Tuesday in a sometimes heated exchange.

Speaking to the House energy committee, Energy Minister Giorgos Lakkotrypis said that as things stand the system envisaged would be able to come online no earlier than October 2021, and go fully operational by the end of that year.

He attributed the delay to problems in rolling out the scheme.

Deadlines to liberalise the market have come and gone: first 2016, 2018, 2019, 2020, and now 2021.

Attention turned to the Transmission System Operator (TSO), the agency tasked with writing up the rules for a liberalised market.

Head of the energy regulator (Cera) Andreas Poullikkas said they no longer have confidence in the TSO, as time and again it has failed to deliver on the timetables set.

“At the moment we have no confidence in the manager that the schedules he gives us will be respected,” he added.

The director of the TSO was not present. He will likely attend the House energy committee next week for a follow-up discussion.

MPs also reacted angrily to further delays to a system that should have been finished in 2016.

Diko MP Angelos Votsis spoke of a “mockery” being perpetrated by the TSO, asking how the official has retained his position when even the energy regulator has lost trust in him.

Speaking after the meeting committee chairman Disy MP Andreas Kyprianou said it was unbelievable that we are talking about a delay of seven years. He also said he expected the relevant minister to make appropriate moves after Poullikkas said he had no faith in the TSO chief.

AKEL MP Costas Kostas said the party considers that the delays are due to the incapacity of the TSO and the government that appointed and controlled it, and not the EAC, which complies with all the CERA recommendations in the matter.

He also said that the new delay would result in a severe EU fine being paid by taxpayers.

Lakkotropis stressed that the government backs the opening up of the electricity market has been working towards that end since 2014. “We are all on the same side,” he said although he did admit that the tenders for the software were cancelled because the cost was three times that which had been budgeted.

The hold-up is due to the fact the TSO and the Distribution System Operator (DSO) will not be ready to deploy specialised software monitoring supply and demand by the deadlines previously set.

Today the only producer of electricity in Cyprus is the state-run power company. Currently, independent electricity producers can sell only to the Electricity Authority of Cyprus (EAC). But under the liberalised system, producers – for instance RES – would be able to sell on the market freely.

The TSO and DSO are effectively arms of the EAC. 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’. The legislation to make that happen is still pending.

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 EAC 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.

The TSO was supposed to invite tenders for purchasing the software. Tenders were issued, then scrapped. The latest tender was opened earlier this year, with the deadline for submissions set for May 16.

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