Regarding the present price of electricity, and specifically, comparisons with the corresponding price for the same period one year ago, EAC wishes to inform consumers about the following:
- Due to the outbreak of the pandemic around the world, last year was a very special case. The prevailing conditions in the energy sector were entirely different and not comparable with any other year.
- During 2020, and particularly in March-May, the price of fuel was at an unprecedented low level internationally. This was due to extremely limited demand as the pandemic caused global industrial, business and economic activity to shrink.
- Since summer 2020, with the gradual return to some kind of normality in international economic activity and societies reopening, a steady but gradual increase in the price of liquid fuels has been observed. Indicatively, it is noted that the price of fuel today (September 2021) is significantly higher than the unprecedent low of 2020 and slightly higher than the corresponding price in 2018 and 2019.
- The price of electricity this year returned to 2018 and 2019 levels and, for the next two-month period, it will be around 2% lower than the previous one.
- Another contributing factor to the increase in electricity consumption and, consequently, to higher demand and additional generation in Cyprus, has been this year's extended heatwave, which has led to a greater use of airconditioning units than during previous summers.
- The final price of electricity also depends to a great extent on the cost of greenhouse gas emissions allowances, specifically for carbon dioxide, in accordance with the policy affecting all EU member states, including Cyprus. Based on the amounts of fuel consumed, CO2 emissions are estimated and measured in tons of CO2. Allowances are traded on a dedicated platform. Indicatively, the per allowance price is currently around €55 (every ton of CO2 represents one allowance), which is more than double what it was last year and it continues to rise. It should be stressed that CO2 emissions are expected to decrease by around 25%-30% once natural gas is used for electricity generation, while a further reduction will be gained through the increased role of Renewable Energy Sources (RES) in the electricity production process.
Comparing the price of electricity in Cyprus with that of other countries, without taking into consideration the specifics and the cost of power generation in each one, is misguided. Cyprus today has a small, isolated electricity system with no links to any other power grid. As a consequence, constant investment in infrastructure is essential if the country is to be in a position to respond to the growing demand for electricity supply.
The common goal of EAC and other competent authorities is the further use and development of RES projects and the use of natural gas to generate electricity. For EAC, this is a key strategic choice, which is confirmed through action:
a. Photovoltaic Installations, where EAC is not involved in the licensing process
b. Implementation of the necessary infrastructure in the generation units at Vasilikos Power Station enabling the use of natural gas once it becomes available
c. Shareholding in the Natural Gas Infrastructure Company (ETYFA), which owns the infrastructure for the regasification of LNG at Vasilikos, and support for the competent body responsible for bringing natural gas to Cyprus.
We completely understand consumers' concerns about the price of a utility of such vital importance as electricity. The shared intention of all of us is for electricity generation to gradually become independent of liquid fuels, so that the effect of their cost on the price of electricity will be as small as possible.
Press Office: 2 September 2021