Cypriot consumers are in uproar over new increases in the price of electricity while environmentalists blame the situation on the government’s lack of a green energy policy.
The price hike comes on top of other increases over the past few years, with electricity prices spiking by almost one third since October 2016.
Consumers are to receive another “electric shock” as an increase of 6.72% will be slapped on bills for the months of August-October, a period during which electricity consumption was at its highest due to the high temperatures prevailing in Cyprus.
According to data released by the Electricity Authority of Cyprus, the increase is calculated taking as base average households consuming around 800 kWh.
Meanwhile environmentalists have criticised the EAC and the government for not having an alternative energy strategy. EAC announced that the recent increase was caused solely by the rise in international oil prices but said November bills could be cheaper.
The Greens said governments failing to act over the past 20 years have left Cyprus hostage to the fluctuations in oil prices as they did not invest enough or in a timely manner to utilise Renewable Energy Sources (RES).
Cyprus Greens Party MP Charalambos Theopemptou told the Financial Mirror, that at the heart of increased electricity prices lies the energy and RES policies over the last two decades.
He said that before going into to detail on how the lack of green energy policies have led to today’s high prices, we need to take a look at how the change in EAC’s pricing policy has affected consumers’ pockets while discouraging households from installing photovoltaic systems.
Theopemptou said 30% of the EAC bill sent to consumers regards the usage of the network.
“Whereas before the EAC would charge a fixed fee of €30, now consumers are charged according to how much use they make of the network, which is inflating their bill. Based on calculations a household with a lower than average consumption will have to pay at least €35 for the use of the network”.
New pricing method
He said that EAC’s new pricing method, introduced in September 2017, is also putting off people from wanting to install photovoltaic systems on their rooftops.
Photovoltaics produce electricity during the day when people are not at home.
“At night there is no production and people coming home from work turn on their TVs, do the laundry will have to connect to the network, they are being charged more than previously, minimizing benefits from the installation of photovoltaics,” Theopemptou said.
He added: “The Cyprus Energy Regulatory Authority has taken some decisions regarding the matter which will hopefully amend the injustice somewhat.”
“This does not change the fact that, as a country, we have done nothing to promote the introduction of renewable energy sources. We have not adopted measures to encourage people to install such systems, nor have we laid down the necessary infrastructure.”
Theopemptou said Cyprus should be conforming its energy policy EU rules and regulations. He said that the EU has instructed members states to primarily aim at cutting down on electricity consumption.
“This means that you have to identify which sector of the economy is using the biggest amount of energy and take steps to minimise consumption. As households are the number one consumers, the government should be looking at ways of encouraging people to build more energy efficient houses,” he said.
He said that would mean going further than just providing people with light pulps financed by the EU.
“It would mean financing people to make upgrades to their homes to save on electricity. Every new house, by law, should be built with plans that foresee a future installation of a photovoltaic system.”
Theopemptou said, the government has an obligation to upgrade 3% of state buildings every year in order to make them energy efficient. “We have done absolutely nothing!”
He also said that Cyprus should be looking into the introduction of electricity production using organic fuel.
“The big advantage of organic fuel compared to other RES, is that whereas you cannot produce solar and wind power on demand, with organic waste you can produce energy at peak times. This way we could be leaving offline units producing energy with liquid fuel,” he explained.
Fines
The lack of an energy policy results in yearly fines of EUR 15 mln to 17 mln, as Cyprus fails to meet international targets regarding emissions.
“These fines are of course rolled over to consumers, with bills being inflated by 1.5%-2% according to the amount of the fine,” said Theopemptou.
Absence of an environmentally sound policies means Cyprus is not going to meet is EU 2020 targets.
“From what has been discussed in Parliament, we will probably be faced with serious fines from the EU, which the government will have to pay. It is expected that it will then seek to rollover the cost to consumers through a tax on petrol,” warned Theopemptou.
“Conservative estimates talk of a 2 to 7-euro cents increase on petrol prices in 2020. And of course, this cost will also cause a rise in the price of electricity,” he added.
EAC argues that the price increases are solely due to the rise in oil prices on the international market and refers to official figures and instructions issued by the Cyprus Energy Regulatory Authority.
Talking to the Financial Mirror, EAC spokesperson Christina Papadopoulou, pointed to “significant reductions which benefited consumers, that preceded the increases of the past two years due to the drop in oil prices”.
She said that according to EAC records fuel bought by the authority has seen significant increases. “
According to data provided by the EAC, between August 2018 and October 2018 the fuel used by the EAC increased 11.26%. Between October 2017 and October 2018, the fuel price increased by 44.73%.
Between October 2016 and October 2018, the increase in the price of fuel was 68.07%.
Between October 2015 and October 2018, the increase in the price of oil was 46.50%.
“Fortunately, the continuous price increase was halted between September 2018 and October 2018, after a 1.06% decline,” said Papadopoulou.
She said the authority is working hard on meeting the EU 2020 targets which have to do with their operations.
Papadopoulou said that the EAC is working on building infrastructure so as to be ready as of 1 January 2020 to produce a significant part of its energy from natural gas. She said that the authority is to spend EUR 19 mln on natural gas infrastructure which should be operational by 2020.
“We already have three units which can operate with natural gas, but they are not used as there is no supply,” said Papadopoulou.
She added that the authority is also engaging in big RES projects such as the 66 MW solar park planned to be built in Ahera in cooperation with the Church of Cyprus and the 20 MW solar park to be built in Akrotiri, Limassol.
“These solar parks are to provide electricity for tens of thousands of households.”
On Wednesday the Cabinet decided to allocate EUR 3 mln for a scheme to finance roof insulation on homes already built.
"It is a project anticipated by a lot of people and will be launched next Monday with a budget of €3 mln and will run until the amount is exhausted. The plan provides for funding of 25% of the eligible costs of each application with a ceiling of € 1,250, " said Energy Minister George Lakkotrypis.
