A number of factors with a prominent increase in fuel prices internationally in relation to the historically low prices of 2020, are pushing up electricity prices in Cyprus.
The upward trend in prices has started since last March, as the EAC Spokeswoman Christina Papadopoulou told KYPE, with the annual increase in the price paid by the consumer in August 2021 amounting to approximately 38%. However, these costs were also affected by the abolition of the 10% discount on EAC accounts due to a pandemic that lasted from April to September 2020, but also by the large increase in the cost of purchasing greenhouse gas emission allowances.
And while the cost of oil prices remains largely unknown even in the near future, the advent of natural gas and especially the increase in the contribution of Renewable Energy Sources (RES) to electricity production is considered the only way to reduce and stabilize prices. long term.
Ms. Papadopoulou told KYPE that the EAC constantly monitors the prices of petroleum products and buys once or twice a month depending on the price and the exchange rate and creates stocks for two months. At the end of each month, the price of the kilowatt hour is calculated according to the fluctuations in the oil prices and the previous stocks and so the difference in the customers' tariffs seems to be delayed. He added that in August, there was a slight decrease of 1% in the price of electricity compared to the previous month, since in recent weeks the price of oil seems to be declining. He also noted that last year on July 1, fuel oil was $ 255 per tonne, while on the same date this year the price was $ 472 per tonne.
"Oil prices were historically low last year. "Our accounts today are at the same levels as in 2018 and 2019," he said.
Key to reducing gas and RES prices
However, the situation would be better if there was already greater penetration of RES.
The EAC has in its development planning the utilization of large RES projects, as stated by Mrs. Papadopoulou. He noted that the construction of the large photovoltaic park of the EAC in Akrotiri will soon begin, which will offer 12 MW of clean energy in about two years, while a time-consuming process is underway for licensing large photovoltaic parks in cooperation with the Archdiocese of Cyprus in Achera. This cooperation is expected to add 66 MW to the energy mix. The EAC has also already upgraded its infrastructure and is ready for the arrival of natural gas expected in 2023.
These projects will contribute, as the Spokesperson said, to the stabilization of prices at least at low levels.
At the same time, it noted the large increase in market prices for greenhouse gas emissions. From 2020, he said, the free concession of emission allowances from the EU to the Member States was terminated, while they were in a declining course from 2013 onwards. He typically stated that in 2017 the price of a right was 6 euros and in 2020 it was 25 euros. On the one hand, he noted, the free concession of pollutants to the Member States has ended and on the other hand, the price of these rights that are negotiable in the market has risen sharply.
"These emissions," he said, "will be reduced by about 25% with the advent and use of natural gas and the further use of RES."
At the same time, responding to party announcements on the issue of increasing the price of electricity, he stated that the issue of VAT reduction is not collected or determined by the EAC but the state which handles the issue. Also, in appeals to the EAC to offer payment facilities and repayment plans in installments, he stated that there have always been these and if a customer is experiencing difficulties he should inform the local EAC Service Centers to examine the case and offer the appropriate repayment plan. He also noted that the state's social offer for a 20% discount to special groups of the population continues. Of the beneficiaries, he reported that there are about 35.000 only 17.500 have joined this rating.
Consumer Association: High costs from the non-arrival of RES
Moreover, the President of the Pancyprian Consumers' Association, Marios Drousiotis, stated that based on the data of the accounts until July, there is an annual increase of 32% in the real cost of the consumer, while a further increase is expected in August, agreeing with the 38% announced by EAC.
He noted as a particularly negative element that does not contribute to reducing the price of electricity, the delay observed for years in the development of RES despite the fact that those in charge knew from 2015 that by 2020 this issue should have progressed.
As a result, he said, Cyprus is being forced to buy greenhouse gas emission rights whose prices have risen sharply because it has not reached its RES targets. He added that having made a comparison of the prices of July 2020 with July 2021 there is around 200% increase in the charge to consumers of these greenhouse emissions.
"The only thing that could help us have cheaper electricity is RES or natural gas," he said.
However, he estimated that even with the advent of natural gas, the cost of electricity will not decrease significantly, due to the cost of infrastructure, the fact that natural gas will be managed by others and will give a percentage to the Republic and because it is not completely relieved of the purchase obligation. greenhouse gas emission allowances, in contrast to RES.
Increased consumption in the summer of 2021
Moreover, as the Deputy Spokesman of the Transmission System Operator, Rogiros Tapakis, stated in KYPE, the electricity consumption in the summer of 2021 is increased compared to the same period of 2020, mainly due to the increase of tourism and the much higher temperatures. The final data will be issued in early September.
