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The head of Regulatory Energy Cyprus (CERA), Andreas Poulikkas, briefed the Parliament's Finance Committee on the latest proposals submitted by the Electricity Authority of Cyprus (EAC) for review. Poulikkas noted a considerable reduction in the proposed increases compared to last year's figures.
In the previous year, the EAC had suggested a hefty 25% hike in kilowatt-hour prices, a proposal rejected by CERA. Poulikkas highlighted that the current tariff proposals for 2024 are notably lower than those of the previous year. He cautioned that if the EAC successfully appeals against CERA's rejection from last year, consumers might bear the brunt of the 25% increase in kilowatt-hour costs.
Discussing the impact of greenhouse gases on electricity prices, Poulikkas mentioned the current estimate ranges from 70 to 90 euros per tonne. However, he emphasized that these costs will continue to rise until 2030, in line with investments in green energy. Poulikkas warned of projections indicating the possibility of costs reaching as high as 200 euros per tonne. He stressed the necessity of investing in green energy to mitigate these costs.
During the parliamentary session, Poulikkas supported the taxation of windfall profits resulting from energy price hikes, provided they are not reinvested in green initiatives.
CERA is actively developing a regulatory framework for the hydrogen market, in line with its efforts in natural gas and electrical interconnections. However, Poulikkas clarified that specific strategies in each domain are the responsibility of the state.
Poulikkas underscored the importance of storage systems for renewable energy sources (RES) to enhance reliability. CERA has already licensed storage systems for approximately 200 MW of RES and anticipates further progress in this area.
The Committee also deliberated on a bill endorsed by the Cabinet on May 31, proposing tax deductions on capital expenditures for companies investing in energy upgrades and savings from 2023 to 2025. The bill includes increased capital discounts for energy-efficient building upgrades and investments in RES-related machinery and equipment.
Moreover, expenditures on energy upgrade studies and energy savings certificates are deductible from taxable income. These incentives, coupled with government plans, aim to significantly reduce business operating costs and align with Cyprus' green energy targets.
Parliamentarians expressed concerns about reducing electricity costs, emphasizing the importance of renewable energy penetration and implementing solutions to alleviate the burden of pollutants on households and businesses.
In response to the government's initiatives, members suggested extending incentives for electric vehicles to private saloon cars under certain conditions. They also advocated for further dialogue with relevant ministries to refine and enhance proposed measures.
[With information sourced from CNA]
