Our View: Three years on, still no energy plan
Next Sunday President Nikos Christodoulides will have completed three years in office. In those three years his government has proved incapable of dealing competently with the biggest problem facing households and businesses – the high price of electricity and limited production capacity. What is worse is that, in these three years, it has done nothing to suggest it has a plan that will yield results in two, three or six years’ time.
In these three years, all it has done is introduce small discounts on electricity bills and offered subsidies for the installation of photovoltaics in households, which can only be described as a drop in the ocean. Yet it is celebrating about the record number of tourists that will arrive this year and boasting about the businesses moving to the island without any thought about how this will impact the power supply. With more people – not to mention the continuous use of ACs – demand for electricity is certain to be higher than last year but the power supply will not increase.
How the power needs of households, hotels, businesses and shops will be covered is anybody’s guess. What we do know is that the EAC power production units, some of which are not very reliable because they should have been replaced several years ago, are still in operation. Earlier this week a representative of all the EAC unions, D. Constantinou, warned of the possibility of blackouts in the summer because of the situation at power stations.
The process for the replacement of electricity production units began in 2022-2023, but it still has not been completed. “Such is the delay that the companies that would have delivered the units to replace the old ones will not be able to do so on time,” Constantinou was quoted as saying by Haravghi. He did not stop there. He also accused the transmission system operator of unjustifiably delaying finalising the agreement for securing power storage facilities that would improve the situation by making more efficient use of electricity from RES. But storage, which would have been introduced a couple of years ago, if there was anything resembling a plan, is also on hold.
Apart from the possible supply shortage, electricity rates are also set to increase. Writing in this paper, two weeks ago, energy expert, Charles Ellinas reported that EU energy allowances were expected to rise from €75/tonne last year to an estimated €95/tonne this year. While in 2025 the total cost incurred by Cyprus to comply with the EU Emissions Trading System was in the region of €390m, this year, according to Ellinas, it is set to increase by €100m, and the extra cost will be passed on the households and businesses. In fact, Cyprus has the fourth highest tax component of household electricity price in the EU at 35 per cent; the average is 27.6 per cent.
Meanwhile, nobody has a clue when LNG will be imported via the Vassiliko terminal. The contract with the Chinese consortium was terminated 18 months ago (the government is already returning €67m to the European Commission because of the irregularities), but nobody knows what will happen to the project. Technip, the project manager hired by Etyfa, has provided a ‘gap analysis’ about the stage at which the project is, but nobody has given a timeframe for possible completion. Given the astonishing ineptitude displayed so far, we might have to wait until the next decade for LNG to arrive.
And as if this uncertainty were not bad enough, the government has also put on hold the Great Sea Interconnector project that was scheduled to bring electricity from Greece by 2029. While this seems a long time away, we suspect it would still be earlier than LNG arrives, or the government introduces storage facilities for RES. It is incredible that the president spends so much time abroad, instead of spending more time in Cyprus dealing with the big problems facing the country. Apart from blackouts we will also have water-cuts to look forward to this summer, thanks to the government’s well-documented inability to offer practical solutions to the big problems facing the country.