Competitive electricity market key to lower prices, says minister

The only viable way to reduce the price of electricity bills in Cyprus is to open up the electricity market to private companies, Energy Minister Natasa Pilides said on Tuesday.

Her comments after a meeting of the House energy committee come amid a 38 per cent annual hike in electricity bills which has prompted consumer associations and political parties to urge action to protect the public.

The House committee met to discuss bills regulating the electricity market, the natural gas market and Cera (Cyprus energy regulatory authority).

Pilides confirmed that the government is currently in talks with stakeholders to find solutions to the issues related to the efficient and smooth functioning of the market, which will also ensure harmonisation with remaining European markets.

“There is great interest from private companies wishing to operate in the electricity sector. By fully opening up the market, we will be offering more solutions to customers and at the same time create opportunities for the renewable energy market to make its mark in the island,” she said.

Regarding the last point, Pilides said the energy ministry is fully focused on the transition to green energy, which she said will significantly reduce the price of electricity bills for households and businesses alike.

Moreover, she said that other government plans regarding the transformation of the energy market in Cyprus include passing a bill that will make the Natural Gas Public Company (Defa) a legal entity under public law, considering the increasing importance of natural gas (LNG) in the island.

“The construction of infrastructure for LNG is progressing and the aim is to be completed around the end of 2022,” Pilides said.

Other projects include the promotion and improvement of energy storage technologies that will help renewable energy compete on an equal footing with conventional energy technologies.

“The framework of this incentive plan has already been prepared by the energy ministry and will be officially discussed this week with the state aid commission. The budget available for the promotion of storage technology is €40m and may be increased to €89m,” she said.

“The environmental impact study carried out by the department of environment, will clearly show us where renewable energy projects could have greater penetration.”

A budget of €334m in the next seven years is reserved for green projects. In 2021, over €127m were used from the budget.

Finally, Pilides said that between 2022 and 2025, around 400,000 smart meter readers will be installed in the country and a framework for renewable energy communities promoting microgrids, will also be implemented.