10% reduction in electricity costs

After discussions with the Ministry Finance, the Cyprus Energy Regulatory Authority (CERA) and the Cyprus Electricity Authority (EAC), the Minister of Energy, Trade and Industry, Ms. Natasa Pileidou, today announced a series of measures designed to ease the skyrocketing costs of electricity in households and business.

The proposed measures will allow an immediate long-term benefit for electricity consumers and the still preserve the solvency and viability of the EAC in the midst of a competitive electricity market.

A meeting was held with President Anastasiades last Tuesday to discuss the proposed measures before the announcement to the public.
In the announcement, the Minister of Energy explained that the phenomenon of increasing electricity prices was a result of an increase in the international price of oil and gas and other charges.

"The demand for fuel, as well as the rising price of greenhouse gas emissions, have pushed prices to extremely high levels, resulting in record prices across Europe. It is noted that Cyprus, along with Poland and Bulgaria, had the smallest increases. In addition, despite the increases in oil prices and emission costs, but also the abolition of the 10% discount on electricity bills that had been implemented due to the pandemic, the price of electricity in our country today is at the same levels as in 2018 and 2019, according to CERA data.

“However, realizing the difficult situation that households and businesses are in due to the consequences of the pandemic crisis, the Government has prepared these proposals to mitigate the effects of price increases on energy costs.”

The measures decided are the following:

1) Absorption by the EAC of part of the basic pricing of electricity network charges and reduction of 10% in consumer tariffs, for the two months November - December 2021 and January - February 2022.

2) Differentiation of the Sponsorship Plan in the installation of photovoltaic systems on the roofs of buildings or on the ground to offset electricity consumption, including virtual net-metering, for home consumers with limited technical constraints and/or limited space.

3) The existing Plan to Encourage the use of Renewable Energy Sources and Energy Saving in homes (for thermal insulation of ceilings, installation of photovoltaics or a combination of the two), which expires on December 20, 2021, will be re-implemented immediately with the approval of the budget and will have retroactive effect from the end of this year's announcement.

4) Immediate preparation of a Sponsorship Plan, which will provide sponsorship to vulnerable consumers for the replacement of energy-intensive appliances and, in particular, air conditioners and refrigerators, with new efficient high-energy class products. In addition, the replacement of old type bulbs with LED bulbs will be subsidized, for vulnerable household consumers.

5) Announcement of a special Support Plan, in collaboration with the Ministries of Energy and Agriculture, Rural Development and Environment, for the use of RES in the agricultural sector. The main goal of the Plan is to reduce the cost of pumping irrigation water. The Plan will be announced in the coming months.

6) Announcement of Sponsorship Plan and tender for new commercial RES systems and for energy storage, which can help reduce the price of electricity due to the lower operating cost of electricity generation than the corresponding production with conventional fuels. The Plan is scheduled to become operational in 2022, subject to approval by the EU.

7) Conduct an information campaign to promote an energy-saving culture.

Moreover, in order to implement further long-term measures, it has been agreed with the EAC to study the possible purchase of pollutant rights at the beginning of the year, which are cheaper and, in case of an excess, to be able to sell them at the end of the year when prices are higher. Similar best practices will be studied for the supply of liquid fuels, while additional suggestions for measures are expected from the EAC.