The procedure for invoking Article 34 of the Law on the Regulation of the Electricity Market, in order to enable the implementation of a power mechanism in the event of a long-term electricity supply adequacy problem, has been initiated by the Cyprus Energy Regulatory Authority (CERA), in collaboration with the Ministry of Energy and the Transmission System Operator, as reported on Tuesday before the Parliamentary Committee on Energy.
During the discussion on CERA’s actions and initiatives, its Chairman, Polybios Lemonaris, stated that the Authority examined, as part of an ongoing adequacy study through 2030, and the worst-case scenario, in which both the arrival of natural gas and the electrical interconnection are delayed. Under this scenario, there will be a power shortage of approximately 720 MW in 2030, partly due to the decommissioning of conventional power plants because of environmental restrictions.
ΣΧΕΤΙΚΑ ΑΡΘΡΑ
RAEK clarified that the power mechanism may include different technologies and methods, depending on the system’s needs, while noting that its implementation entails costs, which are ultimately borne by the consumer.
As an example, the RAEK Chairman cited Ireland, where, as he noted, there was a significant electricity shortage and a capacity mechanism was implemented for a specific period of time, until permanent infrastructure was completed.
At the same time, it was noted that previous adequacy studies had been based on assumptions regarding the operation of the electricity interconnection and the arrival of natural gas at earlier dates, which did not materialize as expected. CERA noted that it does not formulate energy policy and that its studies take into account the government’s official decisions and commitments.
The Committee’s Chairman, DISY MP Nikos Georgiou, said in remarks following the session that “on the issue of energy sufficiency, our country is in the red,” noting that the Committee was informed of the planned activation of Article 34 and the power mechanism, following the required European approvals.
He noted that such a mechanism carries significant economic costs, which will be passed on to consumers and will burden the economy, also citing the example of Ireland, where, as he said, the cost of implementing a similar mechanism amounted to approximately €1.5 billion.
He added that Cyprus finds itself, as he put it, “between a rock and a hard place,” due to growing electricity needs and the limited time available for decision-making.
Mr. Georgiou also stated that the Commission is asking all relevant agencies for a specific plan and schedule, a clear timeline, and a sense of responsibility, noting that the goal of the session was to find answers and solutions, not to assign blame.
During the discussion, DISY MP Fotini Tsiridou raised questions about how the five-year planning process is carried out and whether previous plans proved inadequate, given the problems that have arisen.
DISY MP George Pamporidis focused on the difference between nominal and actual available capacity, the potential for utilizing the energy produced, and whether existing plans are sufficient to meet the needs projected through the end of the decade.
AKEL MP Andreas Pasiourtides, in remarks made after the session, stated that CERA “sounded the alarm” regarding the adequacy of electricity supply after 2030, noting that, should natural gas not be available and a transition away from fuel oil prove impossible, it may be necessary to activate a power reserve mechanism.
Referring to Ireland as well, he said that a similar mechanism implemented there cost approximately €1.5 billion, noting that, if a similar solution is needed in Cyprus, the cost would be borne by consumers.
He criticized the energy planning of recent years, referring to delays in both the Vasilikos project and the electricity interconnection, saying that “we find ourselves today in a situation not only of pessimism, but also of serious concern” regarding the adequacy of electricity supply after 2030.
Mr. Pasiourtidis also referred to the licensing of renewable energy projects, noting that there must be broader planning so that the licenses issued translate into actual energy production and utilization and to avoid cuts.
AKEL MP Konstantinos Konstantinou raised the question during the session as to whether the import and utilization of natural gas is feasible before 2030, given that the networks, infrastructure, and power plants must be ready.
ELAM MP Linos Papagiannis, in statements made after the session, said that, in his view, the CERA presented a “rosy picture” of the situation in the electricity sector, arguing that the responsibility for the failures in energy planning is not being shouldered by the respective stakeholders.
He specifically referred to the large number of permits for renewable energy projects, noting that the country’s storage capacity has not kept pace, and added that the “cost of these failures” ultimately falls on consumers. He further noted that changes in data and forecasts cannot serve as a constant justification when previous assumptions are not verified.
ELAM MP Evgenios Hamboullas asked during the session for clarification on whether the EAC will be able to use natural gas when it becomes available, even if other licensed producers are not yet ready.
The CERA clarified that there is no such prohibition on the AHK and that the Authority’s goal is for natural gas to be available to all producers on equal terms.
DIKO MP Adamos Aspris, in remarks following the session, stated that ensuring energy sufficiency from 2030 onward is “absolutely essential” and called on all stakeholders to agree on a realistic and feasible alternative plan, in the event that neither the natural gas pipeline nor the electricity interconnection is completed on time.
“As a state, we must always be prepared for all scenarios,” he said, noting that there are long-standing mistakes which, as he put it, the current government is attempting to correct.
Odysseas Michaelides, a member of parliament for ALMA-Citizens for Cyprus, in remarks made after the session, said that CERA’s decisions carry particular weight, as they constitute secondary legislation and influence the costs borne by consumers for years to come.
He noted that there appear to be “long-standing shortcomings” regarding issues of supply adequacy and electricity interconnection, adding that, when assessing responsibility for developments in the energy sector, previous decisions by the Cyprus Energy Regulatory Authority (RAEK)—particularly those from 2022 and 2024—should also be evaluated, and their impact on consumers.
Finally, Yiannis Laouris, a member of the Direct Democracy party, raised as a key issue during the session the final cost of electricity for consumers, as well as the development of smart management systems and greater citizen participation in electricity generation and storage.
SEE ALSO: SAE and PAEK: Calling for a More Competitive Electricity Market for the Benefit of Consumers | AlphaNews
Source: CNA
