For a Public Benefit Organisation like EAC, providing a public account of the work of the outgoing Board of Directors is an obligation, since EAC belongs to the State and serves the citizens of Cyprus. As the Board of Directors, we have a responsibility to present the results of our term in a transparent manner, in the context of proper corporate governance, providing information on our achievements, the challenges that we have dealt with and those we expect to face in the future. 

It is vitally important to note that all of us who have served EAC in positions of responsibility have a duty to ensure the continuation of its work and to strengthen its value as an invaluable asset of Cypriot society. 

What we have achieved during our term of office is a result of our close and productive cooperation with the Authority's Management, Trade Unions and staff. The contribution of EAC's people is a crucial element, not only for its progress but for the reinforcement of its role as the most reliable energy provider in the country.

Functional and Accounting Unbundling 

To facilitate the opening up of the electricity market in Cyprus, by implementing an EU Directive and the relevant decision of CERA, EAC has undergone functional and accounting unbundling, resulting in its separation into four Core Regulated Activities, a Non-Regulated Activities Unit and Common Services. Each Core Regulated Activity organises its departments independently in order to respond effectively to the new needs of the Market. 

The Organisation was certified by CERA for its Functional and Accounting Unbundling in December 2019. 

EAC has successfully complied with the provisions of CERA's regulatory decision regarding the Functional and Accounting Unbundling of its Activities and its compliance with all requirements is monitored continuously. For this reason, a consultant was hired recently to provide services to the Board and Management of the Organisation to ensure that it deals effectively with all the challenges arising from its Functional and Accounting Unbundling. 

EAC is ready to support the opening up of the Electricity Market on the basis of transparency and equal treatment.

Significant Financial Data 

Significant Financial Data for 2022, based on the audited Financial Statements 

EAC's total revenue for 2022, after the deduction of the special discount granted due to the COVID-19 pandemic, amounted to €1,327.1 million. The special discount granted to all EAC customers was approximately €7.8 million. Total expenses were €1,305.2 million, resulting in an operating profit of some €21.8 million (compared with a loss of €41.2 million in 2021). Profit for 2022 amounted to €12.9 million. 

The improvement in results compared to the previous year was due to the restart of the economy, following the recession caused by the spread of the pandemic, the stabilization of oil prices to a degree, after they soared as a consequence of the conflict between Russia and Ukraine, but mainly due to the introduction of new tariffs in July 2022 and the strict management of the Organisation's finances. Despite the improved results, operating profit for 2022 was still below the permitted level. 

Operating profit for the year ending 31 December 2022 and changes compared with the previous year. 

The increase of €481 million in total revenue is mainly a result of increased sales revenue. Revenue for the year from sales of electricity before the discount was €1,266 million and rose by €469 million or 59%. The significant increase in sales revenue was mainly due to the higher sale price, resulting from the automatic adjustment because of the rise in oil prices, as well as from the introduction of new tariffs in July 2022. 

Total operating expenditure amounted to €1,305 million, an increase of some €417 million or 47%, mainly due to the rise in fuel costs and the purchase of carbon offset credits.

Analysis of Operating Expenditure in 2022 

Fuel costs increased by €286 million to €671 million as a result of greater electricity generation and higher oil prices. 

The price of electricity from third parties increased by 63% to €104 million, mainly due to higher oil prices. Purchased units fell by 2.4%. 

The cost of carbon offset credits rose by €83 million to €248 million. This increase is attributed mainly to the higher purchase price of credits. The average per credit price in 2022 was €80.02 compared to €53.68 the previous year. The number of credits purchased during the year was 0.7% higher than that of the previous year. 

It is noted that around 78% of total expenditure was down to the cost of fuel, the purchase of electricity and the purchase of carbon offset credits.  

Expected results for 2023 

Based on provisional data, we anticipate that the results for 2023 will be substantially better than those for 2022. 

Cash reserves as at 31^st December 2023 stood at approximately €300 million.

Discount on Bills 

A 10% discount was applied to electricity bills for the 4-month period from November 2021 to February 2022. The total amount of the discount was €22 million.

Development and Implementation of RES Projects 

Our vision is of a green energy future. The goal of the Organisation is to reduce dependence on liquid fuels and increase the use of Renewable Energy Sources (RES).  

The first phase of the 12MW capacity Photovoltaic Park at Akrotiri was recently brought into operation at a cost of €5.0/kWh, which is incorporated into the EAC electricity generation mix. 

In the framework of the joint venture between EAC and the Holy Archbishopric of Cyprus for the development of large-scale Photovoltaic Parks in the Achera area, the first phase of the 8MW capacity project is currently under way and is due for completion around May 2024. The second phase, with a capacity of 34MW, will follow as soon as the issue of its connection to the EAC grid is resolved. At present, planning permission is pending. 

The installed capacity of the Core Regulated Activity (CRA) of Generation from photovoltaics today is 12MW, raising total capacity to 15MW. Licences have already been secured for the construction of photovoltaics of approximately 155MW capacity. 

The addition of RES projects to the EAC generation mix has multiple benefits for the country and all consumers, by reducing our dependence on imported fuels and maintaining electricity prices at low levels. 

Goals, Next Steps and Challenges 

The plan for EAC's participation in RES projects has been approved by the Ministry of Energy, Commerce & Industry, following long negotiations between EAC, the Ministry and CERA. The agreement allows for the gradual development of photovoltaic parks with a total capacity of 600MW by 2032. 

The plan was adopted by CERA in a draft of regulatory decision 353/2023, dated 10 October 2023. CERA has yet to publish its final decision due to issues raised by the EU.

EAC participation in the NGIC 

In 2020, EAC had decided to participate in the share capital of the Natural Gas Infrastructure Company (NGIC) with a 30% share and deposited €43 million for this purpose.  

Following a decision by the Board of Directors to have a study carried out by external consultants for a detailed evaluation of the terms of the Shareholder Agreement signed by EAC and the NGIC, in October 2023 in a letter addressed to the Minister of Energy, Commerce & Industry, EAC decided to request its withdrawal from the NGIC and the return of its share capital.

Dismantling of Moni Power Station 

In 2022, after the publication of an international tender, the contract was awarded to an external contractor and work began on the dismantling of the six (6) Steam Generation Units at Moni Power Station. Work is still ongoing and is due to be completed in 2024. In the context of its development plan, EAC intends to exploit the site for green development.

Generation Development 

Over the last decade, every 3-4 years, EAC Generation has undertaken a review of its Development Plan with the help of specialist consultants. The last such review was completed in August 2023 and its most significant conclusion (due to previous decisions by the relevant authorities) concerned the exclusive supply of electricity from Vasilikos Power Station. Various scenarios were examined in connection with the date of natural gas availability, the activities of a private competitor and the implementation of Cyprus' interconnection with Europe via the Great Sea Interconnector. 

Subsequently, due to technical limitations of the electricity system and the need to secure the country's safe supply, the review was adopted, taking into consideration the need to develop the site of Dhekelia Power Station for conventional generation. 

Based on the results of the review, EAC is negotiating with the Ministry of Energy, Commerce & Industry and CERA to determine its next steps as regards development at Dhekelia Power Station.

Construction of new No. 6^th Generation Unit at Vasilikos Power Station 

EAC has signed a contract for the design, manufacture, supply, installation and commissioning of a new 160MW Combined Cycle Gas Turbine (CCGT 6) at Vasilikos Power Station. The unit will be capable of using natural gas as its main fuel and diesel as an alternative fuel with limited operations (500 hours per year). 

Work on the project started on 1 February 2022 and is due for completion in August 2024.

Use of Natural Gas in Generation Units 

In coordination with the NGIC project at Vasilikos, EAC proceeded to take the necessary steps to ensure that its generation units are completely ready to burn natural gas as soon as it is made available as a fuel for electricity generation. 

Today, the primary aim of EAC Generation is to secure natural gas at a low price on satisfactory terms for use in all its Generation Units, which have been made ready for burning natural gas. To this end, EAC Generation must proceed with the essential coordination with construction firms for final work/modifications to the Generation Units and for the testing and monitoring of the Generation Units, once the final date of the availability of natural gas is determined by the competent bodies. 

At the same time, with the assistance of consultants, EAC has prepared itself for the submission of comments on the documents which will be made available by the Natural Gas Public Company (DEFA/CyGas) for a Public Consultation on the terms of the natural gas supply contract.

Competitive Electricity Market 

Since 1 September 2017, CERA has operated the Electricity Market Transitional Arrangement. Based on the rules governing this Transitional Arrangement, EAC Generation and EAC Supply are not allowed to participate in it. 

After two trial periods of the TSOC market software, with the successful participation of EAC's Core Regulated Activities of Generation and Supply, the operation of the Competitive Electricity Market is due to begin in 2025. 

EAC Generation and EAC Supply are preparing for a successful participation and operation in the Competitive Electricity Market, with the completion of the installation of the participation software of the two Core Activities and the required training of their staff.

Transmission Network 

Expansion, upgrading and maintenance programmes continued to be implemented apace on the Transmission Network. Indicatively, these are some of the completed projects: 

• Installation of an overhead 132 kV double circuit Rubus Twin power line linking the Vasilikos-Mari-Kophinou substations.
• Undergrounding of a section of the Anatoliko-Hadjipaschalis overhead power line.
• Relocation of a section of the underground 132 kV Costas Petrou-Lakatamia double circuit connection.
• Transformation of the 66kV Pyrgos substation into a 22-11 kV primary substation.
• Upgrading of the Medium Voltage Panels at the Yermasoyia substation from 11 kV 22-11 kV.
• Upgrading of the Medium Voltage Panels at the Protaras substation from 11 kV 22-11 kV.
• Upgrading of the T2 Transformer in the 40 MVA 132/22-11 kV Protaras substation.
• Replacement of the underground connection cable at Transmission Substation NO. 1 at Vasilikos Power Station and connecting it to the  South Vasilikos substation.
• Installation of the new 2x40 ΜVA 132/22-11 kV GIS Zakaki substation in Limassol and connecting it with the Polemidia substation via a double circuit underground cable.
• Installation of a 60 MVAr Inductor at the 132 kV GIS Moni substation.
• Disconnection of the Dhekelia-Ayia Napa and Ayia Napa-Sotira overhead transmission circuits and connecting them to the Dhekelia GIS substation.
• Upgrading of the 132 kV Automation System in the Aphrodite substation.
• Installation of 11/22 kV Power Transformers in various transmission substations for connections to photovoltaic parks. 

At the same time, the following projects are under way: 

• Upgrading of the Ypsonas substation to 2x40 MVA 132/22-11 kV GIS.
• Overhead transmission line connecting Dhekelia – Alambra Athalassa (no. 2) substations, bypassing Alambra substation.
• Replacement of GIS 132 kV equipment and upgrading of transformers to 3x40 MVA 132/22-11 kV in the Strovolos substation.
• Upgrading of the 132 kV Automation System in the Renos Prentzas substation.
• Upgrading of the Orounda substation to 3x40 MVA 132/22-11 kV.
• Expansion of the Medium Voltage (22/11 kV) Panel Array in the Athienou substation.
• Upgrading of the Mari substation to 2x40 MVA 132/22-11 kV GIS.

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SCADA/DMS & Smart Networks 

The Distribution Network is the platform that will enable the energy transition, connecting the large numbers of RES that constitute a goal on both a European and national level. The high penetration of RES and the mass electrification of energy are major challenges to which the CRA Distribution responds with the strategic plan to transform and develop the networks and central systems so that, as Distribution System, it can support and serve the energy transition and new electricity markets in a techno-economic capacity.

The strategic plan of the CRA Distribution has been implemented since 2021, with many projects and actions across the entire network and central systems. These projects increase the connections of RES systems, through greater real-time observability, controllability and flexibility of the system, while at the same time deploying emerging technologies. The targeted conventional development of the network continued for new user connections. At the same time, the design of the Distribution System is evolving with a short- and medium-term horizon so as to respond in a timely and effective manner to Regulatory Decisions and policies regarding the penetration of RES and emerging technologies. 

Below are references to the most significant projects implemented over the past three years:

National Distribution Control Centre (NDCC), SCADA/ADMS 

The NDCC was equipped and brought into operation on a 24-hour basis. The main functions of the Advanced Distribution Management System have been installed and its advanced functions are being implemented, which, together with the updating of the network infrastructure, will provide the desired observability and controllability and will enable the desired real-time functionality. The contract for the development of a new IT infrastructure for the NDCC has been approved and it is now on course to be implemented.  

Advanced Metering Infrastructure System (AMI) 

The ΑΜΙ system is a fundamental project that will enable the provision of information and better service to end users. 

Despite the difficulties observed during the tendering process, the CRA Distribution continues its intensive efforts to implement the project. The new tender is at the final evaluation stage. 

The project is co-funded by the European Commission's Recovery and Resilience Facility.

Metering Data Management System (MDMS) 

The Metering Data Management System has been completed and constitutes the foundation of reliability and transparency for the smooth operation of the Competitive Electricity Market.

Fibre Optic Telecommunications Network 

The Fibre Optic Network has been brought into operation and it will constitute the backbone telecommunications network for the transmission of large volumes of Distribution data. It will provide the much-needed fast, reliable and secure solution that will enable the energy transition from the telecommunications standpoint, enabling the transformation of the network from a passive system into a modern smart one. 

Already under way are the gradual design of the Fibre Optic Network, the preparation of specifications for the 1^st phase of the passive network and the implementation of pilot projects in Nicosia and Larnaca.

Network Infrastructure Updating 

The updating and automation of the Medium and Low Voltage networks is currently under way. Specifically: 

1. The gradual replacement of existing (in a number of cases obsolete) Medium Voltage equipment with new remotely operated equipment.
2. The updating and modification of existing Medium Voltage equipment with telemetered equipment.
3. The mass replacement of existing Air Break Isolators (ABIs) with new remotely operated isolators.
4. The installation of additional remotely operated Automatic Circuit Reclosers (ACRs), Overhead Circuit Breakers and Fault Indicators on the overhead Medium Voltage network.

Telematics, Tracking and Fleet Management 

The Authority's state-of-the-art Telematics, Tracking and Fleet Management application has been developed within the GIS system, which integrates the Electricity Network, EAC vehicles and real-time maintenance crew monitoring in a single geographical area. The application generates comprehensive reports, including the geographical location of vehicles, drivers/maintenance crews and events. As part of the GIS system, it facilitates and greatly improves the way faults are identified and corrected and reduces staff response time.

Network User Service Upgrade 

The Network User service is being constantly upgraded and updated. We are in the process of automating procedures for the benefit of users, with the aim of providing online service. This will enable the fast and easy submission of Applications for Inspections of on-premise Electrical Installations on our website. 

At the same time, we are implementing new, up-to-date systems related to the online management of Connection Applications. Customers will be able to submit new Connection Applications, track the progress of an existing Application, accept Terms and Conditions and make payments without the need to present themselves at one of our Organisation's Customer Service centres.

EAC Mobile App Upgrade 

The EAC Mobile App for mobile phones and tablets has been upgraded, in accordance with EAC's Functional unbundling. The aim is to offer customers more and better information as well as new features. 

EAC Supply customers will be able to calculate, among others, the electricity consumption of various devices, view account details such as their consumption history and opt to receive their bills by e-mail.  

Information on network faults and scheduled power cuts – a particularly useful feature – will be presented in a new, more user-friendly way. 

The updated EAC Mobile App is due to be available in February 2024.

Collaboration between EAC and Cyprus Post 

The Electricity Authority's main aim is to improve its customer service. To this end, EAC and Cyprus Post have designed a new service for the payment of electricity bills at post offices on behalf of EAC Supply. Our goal is to provide yet another way of serving customers, particularly the elderly, living in remote areas where there is no EAC Customer Service Centre. 

The agreement, which is currently being processed by the Law Office of the Republic, is expected to be implemented soon.

Technology Upgrades 

EAC continues to invest in new projects and technologies to meet existing and future IT needs. The Authority's digital infrastructure – networks, storage systems, recovery systems – is being upgraded at all levels.

Street Lighting Upgrades 

Agreements have been made with all 373 of the island's Communities and Municipalities (with the single exception of one Municipality) for the replacement of energy-consuming streetlights with new technology LEDs. This is the biggest project of its kind to be carried out in Cyprus. 

Their replacement leads to electricity savings of around 60%, resulting in a significant reduction of operating expenses as well as maintenance costs, since LED lights last longer. Significant financial and environmental benefits are achieved in the long run.

Smart Lighting and Smart Poles 

An additional option concerns smart lighting and smart poles (these have been installed in the Municipality of Paphos), which are part of the smart city, since they can be controlled by centralized management platform software and each streetlight is controlled separately. Smart poles contain features such as weather stations, large LED information screens and wi-fi. They can thus provide information, advertising material, announcements and free internet access to the Municipality's residents and visitors. 

Smart lighting systems have been installed in the Municipalities of Nicosia, Limassol, Paphos and Ayia Napa, with EAC being responsible for their management via a platform on which it can monitor the consumption of every streetlight, increase or reduce their intensity, and identify faults.

e-charge Service 

Given the global trend for environmentally friendly transport fuels, EAC is contributing to efforts aimed at reinforcing electromobility in Cyprus. It introduced the e-charge service in 2014, providing electric vehicle owners with access to reliable and safe charging stations in public areas.  

The e-charge service has installed and operates 32 charging stations across Cyprus (with 64 charging points), of which 30 offer semi-fast charging (22kW AC) and 2 fast charging (50kW DC).  

At the same time, by accessing myeac.etrel.com on their mobile phone or computer, electric vehicle owners can identify the locations of charging points, their status and availability, the duration and consumption of each charge and other useful information.

Installation of Photovoltaic Systems in Cypriot Schools 

In the context of the Authority's Corporate Social Responsibility and the country's transition to green energy, EAC completed the installation of photovoltaic systems in 405 school buildings across Cyprus.  

The project included the installation of photovoltaic systems with a total capacity of 4.9MW, thermal insulation of approximately 84,000 square metres and waterproofing of all the surfaces on which the PV systems were installed. 

The total cost of the project was approved for EU funding in the framework of the Resilience and Sustainability Facility (RSF). 

This project, which was implemented and activated in summer 2023, offers significant savings on electricity in schools, by reducing overall consumption by 30%.

Agreement on the Transformation of the Meter Reading Department 

Following discussions and negotiations, agreement was reached on the transformation of the Meter Reading Department, enabling it to respond to the new reality created by the introduction of smart meters and the technical upgrading of the Distribution Network. The agreement means that the staff of the Department, following the relevant training, will take on the necessary additional responsibilities and compensated through higher salaries. The agreement was forwarded to the competent Ministries for approval.

Memoranda of Cooperation with Major Organisations 

In a spirit of cooperation and reflecting its outward-looking approach, EAC signed Memoranda of Cooperation with the Research & Innovation Foundation (RIF), the Cyprus Sports Organization (CSO), the Municipality of Limassol and other major organisations.

New Staff Evaluation System 

Following the award of the relevant tender, EAC proceeded with the purchase of Consultancy services for the design of a new, up-to-date Staff Evaluation System, capable of responding to the new needs of the Organisation and ensuring compliance with the demands of the Cyprus Energy Regulatory Authority (CERA). 

The process was completed and the Amending Regulation that will govern the staff evaluation process was forwarded via the Ministry of Energy, Commerce & Industry to the Law Office of the Republic for the required legal vetting and is now before the House of Representatives to be voted into Law.

EAC Sustainable Development Report (ESG) 

We were especially pleased to present the first EAC Sustainable Development Report, reflecting our focus on sustainability and our environmental sensitivity. 

The Board of Directors demonstrated its full commitment to reducing emissions by promoting the use of Renewable Energy Resources (RES), implementing energy-saving technologies and programmes and undertaking initiatives to improve efficiency. 

The Sustainable Development Report reveals EAC's overall effort to achieve an energy reality that is balanced, effective and compliant with the environment. At present, the Organisation is taking on further commitments to achieving higher standards of sustainability, while maintaining transparency and oversight as key principles in all its activities.

International Standards Certification 

The Organisation's Certification to three International Standards in the areas of Quality Management, Environmental Management and, for the first time, since 2022 Health & Safety Management, constitutes a significant milestone in the framework of the Organisation's continuous improvement in areas of strategic priority.

Compliance with the requirements of the Digital Security Authority  

The Organisation proceeded apace with the upgrading of the management system in the areas of Business Continuity and Recovery, as well as compliance with the requirements of the Digital Security Authority (DSA) to ensure full compliance in the area of Data Security. Furthermore, essential risk assessments were completed and penetration tests conducted, while all necessary measures were taken in the context of reducing relevant risks.  

Electrical Installation Inspections 

In May 2023, a major effort was undertaken to improve waiting times for electrical installation inspections to 3 weeks, as regards applications for PV systems and other applications. The endeavour was entirely successful and, since August 2023, waiting times at all Area Offices have continued to be less than 3 weeks.

Electronic Registry of Guarantees of Origin 

EAC Supply has registered with the Electronic Registry of Guarantees of Origin of generated electricity, maintained by the Market Operator. It is the first Supplier to obtain certified Guarantees of Origin, ensuring the green energy consumption of its customers for 2022.

Communication 

Direct and objective public information on the Organisation's activities and issues of concern was achieved through EAC's social media accounts.

Just Transition Fund  

Funding was secured from the Just Transition Fund for 70% of the cost of development projects by the CRA Distribution, amounting to €49 million, and development projects by the CRA Transmission, amounting to €70 million.

Risk Management Committee 

The Risk Management Committee played a major role in the transformation of the Organisation's risk appetite and in ensuring its compliance with its risk management strategy, policies and regulations. 

The Risk Management Committee systematically monitored EAC's risk management system, focusing on the risks pertaining to individual activities and submitting relevant proposals and/or taking decisions on corrective/preventive action. 

Additionally, following a suggestion by the Committee, the Board of Directors completed and forwarded to the Ministry of Energy, Commerce & Industry and the Ministry of Finance the relevant reports on the Organisation's overall risk management and those concerning its compliance with the new Code of Corporate Governance.   

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