Announcement of EAC Management and Directorate – ; “Competitive Electricity Market: The aim is to reduce the price of electricity”
The demands of the Electricity Market Association are surprisingthat were submitted to the President of the Republic of Cyprus says the Cyprus Electricity Authority saying that it considers that the goal of all those involved in the Competitive Electricity Market is to reduce the price of electricity. as it states, its support for a competitive electricity market in which participants will trade and trade freely.
“Restrictions on contracting between producers and suppliers work against free competition and increase costs for consumers. As a matter of principle, the EAC has always supported and still supports the universal equal treatment of all market participants. of place”.
This announcement:
The Cyprus Electricity Authority (ECA) i, is the contribution to, as far as possible, that the goal of all those involved in the Competitive Electricity Market is the lowest price of electricity for all consumers, households and businesses.
In this context, they cause surprise the requests of the Electricity Market Association (SAAH) submitted to the President of the Republic of Cyprus. With reference to the requests of the SAH, the Administration and Management of the EAC note the following:
- SAH's request for a review (cancellation) of the Functional Separation in the EAC (Production-Supply-Transport-Distribution), with a legal (proprietary) separation of the network management from the rest of the EAC.
It is recalled that according to the European Directive and the relevant decision of the Cyprus Energy Regulatory Authority (CERA), EAC has been separated into 4 Independent Basic Regulated Activities (BRD): Production, Transmission, Distribution and Supply of electricity. As of 2019, EAC was officially certified by CERA as an Operationally and Accounting Separated Vertically Integrated Electricity Company regulated by the competent Authority, CERA. The Operational and Accounting Separation of the EAC was the prerequisite for the independent operation of the electricity market. In order to achieve this, EAC has modified and certified all its relevant processes and has adopted a completely new mode of operation based on international quality standards, the implementation of which fully guarantees Operational and Accounting Separation.
- SAH proposes that existing RES projects that have already secured all the required permits be exempted from the obligation to go through the entire permitting process for the installation of energy storage systems.< /li>
All required permits are determined and issued in accordance with State Regulations and Legislation, which all parties must apply.
- < strong>SAH requests that the provision in the draft of the Plan for hybrid systems (production from RES and storage in the same area) and which obliges the owners to enter into bilateral contracts with EAK Supply.
The purpose of the plan of the Ministry of Energy, and by extension the State, is primarily to reduce the price of electricity for all consumers. The reduction of the price and the transfer of the benefit of the Plan to the consumer is achieved only through EAC Supply which is a Regulated Activity and the pricing is controlled and approved by CERA.
It is clarified that the retail sale price of electricity from RES by private Suppliers to their customers is largely based on the bilateral contracts concluded between private Producers and Suppliers, without thus ensuring the corresponding transfer of the reduced cost of production from RES to consumers. It is worth noting that EAC Supply buys the energy from RES at 11 cents per kilowatt hour and integrates it into the total cost of energy, for the benefit of its consumers.
- The SAH also requests from President Christodoulidis compensatory measures for the cuts in electricity production from photovoltaics.
Cuts in production from Photovoltaic systems are seasonal due to low energy demand from consumers and the need to ensure the stability and security of the entire Electricity System. The proposal of SAH to provide compensatory measures for the cuts in electricity production from RES, would lead to an immediate increase in the price of electricity to the consumer.
It is clarified, once again, that the more energy from RES is included in EAC's production mix, the cheaper the energy will be for all consumers. For example, EAC produces green energy from the PV Park at Akrotiri Limassol, at a cost of just 5 cents per kilowatt-hour, which is included in the production mix, resulting in a price reduction for all consumers.
EAC does not participate in the Transitional Regulation of the Electricity Market, since it is not allowed to conclude bilateral contracts, either for the purchase or sale of electricity with independent RES producers and independent Suppliers. It is a fact that the cost of energy production from RES is currently around 5-7 cents per kilowatt-hour, while it is sold by private suppliers to their customers at much higher prices by about 8-10% below the price of a kilowatt-hour which is produced with conventional fuel mixture.
EAC supports the termination of the Transitional Regulation and the fastest possible operation of the Competitive Electricity Market (AAH). Through the open, transparent operation of AAH and with the equal treatment of all Participants, the reduction of the price of electricity will be possible for all consumers.
- < strong>SAH requests not to utilize the derogation received by the Christodoulidis Government from the EU, in order to allow the development, management and exploitation of central energy storage systems by the independent Cyprus Transmission System Operator and cited poor planning in the development of the Networks.
The planning of the Cyprus transmission system is carried out by the independent institution of the Cyprus Transmission System Operator (TSO) and is approved by CERA. Transport, which is one of the four Basic Regulated Activities (BCAs) of the EAC, constructs the projects included in the approved 10-year Development Program of the DSMC. It is noted that the Transport has proceeded for 2024 with the issuance/awarding of tenders in the amount of more than 100 million euros.
The European Commission, recognizing the problems faced by the Electricity System of Cyprus, has granted the derogation for the management of Storage systems by the DSMC, with the aim of achieving the safety and stability of the System and, by extension, the infrastructure of the State.
The cuts seen from time to time in large solar parks, but recently also in smaller solar systems, have nothing to do with the infrastructure of the Transmission network. The cuts are made during the Spring and Fall periods, due to the electricity demand being less than the total electricity generation, which includes the generation from RES and the minimum necessary conventional generation.
The solution to the above problem is storage, so that the excess energy is stored in the time intervals when the production from RES is greater than the demand. The Directorate of Transport together with DSMK have already long ago submitted a joint proposal to the Ministry of Energy for the installation of electricity storage systems in selected Transmission substations. The proposal includes the installation of 3 storage systems with a total capacity of 120MW/240MWh, and their main purpose is to address the essential problems presented in the operation of the Cyprus Electricity System. A proposal has been made for the above storage systems to be financed by the European Funds at zero charge to the Cypriot consumer.
The above 3 systems, in case they are approved and installed, will constitute only a first small part of the storage systems that need to be installed in Cyprus, to be able to help the electrical system at zero cost to the consumer. The Transport Activity will only be involved in these systems, while the remaining storage systems, for which there is already a great need, could be developed through free competition.
The Transmission and Distribution Network is at the disposal of any electricity producer and/or supplier active in the electricity market. This is done fairly, equally and with full transparency.
It is worth mentioning here that the Network is being developed rationally in order to satisfy the new connection requests. Until now, the absence of a spatial policy from the State for RES projects, as well as the sharp increase in requests for RES systems, have led to the approval of many RES Energy production stations in areas where there is no grid and/or areas where it is not easy to develop infrastructure for satisfying the specific requests in a short period of time.
- SAH claims and asks CERA to give “the opportunity and priority to private investors to invest in conventional energy production units (eg Dekelia) and in storage projects”.
The site of the Dekelia Power Station belongs to the Cyprus Electricity Authority and any plans for the development and redevelopment of the site are designed and implemented by the EAC itself. All this is done with appropriate planning and securing all the necessary approvals from the competent State Agencies, always for the benefit of the place. The State has already recognized as a geostrategic power generation site, the Dekelia Power Plant and it has been deemed necessary as a 2nd power generation point for the orderly operation of the electrical system and the security of supply of the place, under the ownership of EAC. EAC has already submitted the relevant applications to CERA for the installation of 2 Open Cycle Units with a total capacity of 80MW, as well as a storage system.
No one is preventing private individuals from finding suitable space and obtaining the appropriate permits to develop new conventional units.
EAC clearly and unequivocally reiterates its support for a competitive electricity market in which participants will trade and trade freely. Contractual restrictions between producers and suppliers work against free competition and increase costs for consumers. As a matter of principle, the EAC has always supported and continues to support universally equal treatment of all market participants. The goal must be common: the reduction of the price of electricity for local households and businesses.
