EAC is ‘choking off competition’

Independent energy producers on Monday accused the Electricity Authority of Cyprus (EAC) of keeping a chokehold on competitors by placing obstacles in the way of the full opening up of the market.

Fanos Karantonis, head of the Electricity Market Association, said the EAC is “choking off the competition” and undermining the growth of the energy sector, to the detriment of businesses and consumers alike.

Speaking to the state broadcaster, Karantonis complained that despite promises that the electricity market would be fully liberalised by 2025, they still have no clear roadmap – which prevents independent producers and suppliers from planning ahead and making the necessary investments.

“We object to any action of the EAC to expand its living space in the field of electricity production and to grow its size against the competition,” he said.

“If we are to have competition, this living space in electricity production must also be given to new entrants. New entrants should not be stifled to the benefit of the dominant organisation,” he added, evidently alluding to the EAC.

In speaking about ‘living space’, the businessman was referring to the EAC’s attempt to branch out into the renewables sector.

According to Karantonis, the set-up of the electricity grid means that at times up to 30 per cent of energy generated by renewables is discarded.

This is the result of faulty planning of the infrastructures across time.

Meantime, he asserted, the EAC maintains control “over those who manage the grid” – meaning the Transmission System Operator.

Karantonis also claimed that officials are bottlenecking independent producers, keeping them “trapped” in a transitional regime which does not allow them to expand their portfolio.

“We ask that the competitive electricity market be implemented as soon as possible. Now, if certain quarters don’t want that, let them explain why they don’t want it and why they have already delayed by five years.

“This goes for the [energy] ministry, the EAC and any other involved parties.”

The transitional regime is a set of rules governing the participation in the electricity market of new entrants. Various restrictions apply for new entrants.

Karantonis moreover sought to dispel the myth that the EAC’s intended expansion into renewables would drive down the cost of electricity.

He said that since 2021 the private sector and independent suppliers serve approximately 9 per cent of consumers, who pay less than EAC customers do.

“What we have never heard, is whether all these electricity producers, the investments made by the private sector and which serve consumers through private suppliers, whether if all these investments had instead been done by the EAC, what the impact would be on the final price of electricity today?

“I tell you that in that case, electricity would be more expensive.”

Established in October 2018, the Electricity Market Association is a member of the Employers and Industrialists Federation. It includes producers and suppliers. Many of the association’s members trade in energy generated from renewables such as wind and biomass, although there are some who trade in energy produced from fossil fuels.