EDITORIAL: Cyprus Stock Exchange beginning to join the energy dots

20 April, 2019 | Posted By: Financial Mirror

The Cyprus Stock Exchange has announced its intention to become the primary electricity and energy financial market, where this new commodity would be traded once the sector is fully liberalised, similar to what is happening on the Hellenic Energy Exchange (HEnEx), a collaboration with the Athens bourse and other stakeholders.

HEnEx, in which the CSE is a 10% venture partner, has been trading for about a year and promises to grow further, simply because the Greek electricity grid is already linked throughout the country to state-owned, as well as private power producers, and cross-border to the European network thanks to a web of interconnectors.

The European Commission is encouraging power generators, especially those from solar parks and wind farms, to cut back on carbon-emitting coal or diesel-fueled stations, as trading electricity across the continent, even beyond, satisfies multiple targets for security of supply, sustainable energy production with a low cost to the consumer, and keeping the environment clean.

Cyprus remains the last “energy isolated” EU member state, a situation that will change once the EU-backed EuroAsia Interconnector project hooks up with Israel’s electricity grid to the east and with Greece in the west, through Crete, another energy-isolated island that suffered power outages in March when a transformer at an outdated power plant blew up.

Once the Greek transmission operator ADMIE makes up its mind on whether it wants to stick to the plans of the past six years and partner with the Cypriot company or go it alone on the Crete-Attica sector of the project, simply to satisfy the interests of its Chinese controlling shareholders, then Cyprus, too, will eventually be linked to the European network of trading electricity through the CSE.

This will give the Cyprus bourse an added mission, improving its credibility and identifying new markets where the CSE could leave its mark and develop new areas in the economy, after becoming an innocent bystander in the blockchain movement and the maritime market.

With property developer Cyfield announcing it will operate a 200MW power station in a few years’ time, and with private solar and wind producers already competing with the state-owned EAC, the CSE’s energy market will gain importance not only locally, but internationally as well, as foreign transmission operators will turn to mature markets to trade in power supply, reaching out to the most financially viable producers for the cheapest possible electricity commodity.

And this is where the Greeks’ attitude of viewing Cyprus like a colony should end.

The fact that Chinese-controlled ADMIE is a significant shareholder in HEnEx means that the Greek exchange will probably fall victim to political manipulation when it comes to dealing with the EuroAsia Interconnector, a project it has abandoned in order to pursue a far more expensive cable link, probably by orders that came from further up the food chain and in total defiance of European rules.

The fact Cyprus and Athens bourse officials admitted this week that a competitive energy market cannot be created in Cyprus without the island being interconnected with the electricity grids of neighbouring countries and Europe via the EuroAsia project, is a first step that hopefully political ambitions in Greece will not trump the national interest of Cyprus to leave the island energy isolated.