A BILL is being prepared to deregulate the electricity industry in Cyprus, Commerce Minister Nicos Rolandis announced yesterday.
Speaking at the economist conference in Rolandis said his ministry, in preparation for accession into the European Union has set in motion the entire process of change, modernisation and liberalisation of the Cyprus energy system, over the last few years.
Under the current legislation, the Electricity Authority of Cyprus (EAC), a public utility under the supervision of the Ministry of Commerce, Industry and Tourism, has a monopoly over the production, transmission, distribution and supply of electricity.
“The small and isolated nature of our electricity system has been a guiding factor in our strategy for liberalisation,” said Rolandis, The EU directive itself provides for derogations from some basic requirements for small isolated systems.
Cyprus initially expressed to the commission a desire to explore the possibility of securing such a derogation.
“While eventually we agreed to implement the existing directive without any derogations, we do not intend, for the time being to move further towards any liberalisation than the directive prescribes,” said Rolandis. The ministry has prepared a legislation that is to be submitted to the House of Representatives in the very near future for the abolition of the monopoly of the electricity authority in the production and supply of electricity, and for setting up the necessary structures and mechanisms required by the directive.
The new legislation provides for an independent regulator who will be responsible for safeguarding competition in the electricity and natural gas markets, issuing licenses for the various activities, monitoring the compliance of license holders with their obligations, approving tariffs and charges, protecting the consumers and the environment and settling disputes.
The new legislation also has provisions for the opening up of the market by granting to eligible consumers the right to choose their own suppliers. The ministry intends to restrict, initially, the extent of the market opening to the minimum level required by the EU – i.e. 33 per cent of the market. Domestic consumers, as well as the smaller industrial and commercial consumers, will continue to be supplied with electricity by the EAC. “we feel that any new further liberalisation should be considered only after the new system is implemented and enough experience is gained, bearing, of course, in mind any new developments with respect to EU requirements,” said Rolandis.
The liberalisation of the electricity market will hopefully create conditions for increased competition, better services and lower prices to consumers. The full implementation of the new legislation will take place on the date of accession.
The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.
