Cyprus Mail

Cyprus wants exemption from EU’s mandatory energy reduction target


Cyprus will request specific exemptions from the measures concerning the mandatory reduction of energy demand during peak hours, as well as the imposition of a cap on the additional profits of energy companies that produce energy using lower-cost sources.

The request will be made during the discussion of EU energy ministers that will take place on Friday, the Cyprus News Agency (CNA) reported on Thursday.

According to government sources, Cyprus is asking that the provisions concerning the mandatory reduction of energy demand be implemented on a voluntary basis in member states.

Regarding the measure to impose a cap on profits from the production of cheaper energy with sub-regional (inframarginal) technologies, Cyprus is asking for an exemption for the Electricity Authority of Cyprus (EAC) for the production of electricity from oil, but says it is ready to implement the measure to cap profits from renewable energy production.

The measures for which Cyprus is seeking exemptions were proposed in mid-September by the Commission and political decisions are expected on Friday. Energy ministers will also exchange views on the new measures proposed this week by the Commission, with a view to submitting concrete proposals next week.

More specifically, regarding the first measure on mandatory reduction of energy demand during peak hours, Cyprus’ position is that the competitive electricity market has not yet been implemented in the country and the smart meters with which to determine peak hours do not exist.

Therefore, Cyprus will request to retain the right to apply this measure when it becomes feasible.

The Commission proposed the introduction of a mandatory 5 per cent reduction in electricity consumption during selected peak hours. It is up to member states to define the 10 per cent of hours when prices are expected to be at their highest and to reduce demand during those hours. It is also proposed to reduce overall electricity demand by 10 per cent by March 31, 2023.

Meanwhile, the second measure, to apply a cap on excess profits of companies that produce energy from sources with lower costs than gas (sub-regional technologies/ inframarginal technologies) and which concerns production from renewable energy sources, nuclear energy, lignite and oil, Cyprus has pointed out that in other countries the option of natural gas exists.

Cyprus seeks assurance that if it implements this measure, it will only concern the production of electricity from renewable energy sources by the EAC, and not the production of electricity using oil, which the government considers could cause a viability issue for the EAC.

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