Given the shortage of natural gas and the lack of storage options for electricity from renewable energies, electricity prices are unlikely to fall in the next two years, the head of the state-owned energy supplier said on Monday.

Giorgos Petrou, Chairman of the Electricity Authority of Cyprus (EAC), made these remarks at the House of Representatives Finance Committee, which reviewed the organization’s budget for fiscal year 2025.

Without further penetration of the energy mix by renewable energy sources, the creation of storage capacities or the introduction of natural gas, prices for end consumers – households and companies – would not fall.

Petrou appeared to repeat similar remarks made by the Energy Minister at the end of January.

"To offset the fluctuations in fuel costs, the EAC is in contact with expert advisers to develop a strategy that uses instruments to hedge risks ... arising from the exchange rate between the euro and the dollar," the official noted.

Regarding natural gas in particular, Petrou said that infrastructure still needs to be improved to be able to burn the gas to generate electricity . This work is expected to take about a year.

The government had previously stated that it expected the liquefied natural gas (LNG) terminal in Vasiliko to be completed by the end of 2025. The plant will convert imported LNG back into gas and transport it via a pipeline to the nearby Vasiliko power plant to drive the turbines.

The regasification would take place on board the ship “Prometheas”, which is currently being repaired and upgraded in Malaysia.

On the ship, Petrou informed MPs that two necessary pieces of equipment had been purchased .

As for EAC's efforts to expand into renewable energy, the organization has secured permits for solar parks but is facing "serious problems" in finding land.

Petrou said that there would soon be tenders for the storage of electricity from renewable energies.

In other remarks, Petrou mentioned that the EAC will conduct its own study on the impact of the Great Sea Interconnector – the mooted submarine power cable that would connect Cyprus to Crete.

A budget of around 350,000 euros is planned for the study, which will examine the possible financial impact of the interconnector on the EAC itself.

During the discussion on the EAC budget, MEPs learned that the organisation will spend €564 million on purchasing fuel alone this year.

The EAC's overall balance sheet shows expenditure of EUR 1.9 billion and revenues estimated at EUR 1.4 billion .

Petrou said the organization's liquidity deficit was 245 million euros, which would be covered by loans and the use of its own equity.

Personnel expenses will amount to 162 million euros in 2025. Operating expenses will amount to 108 million euros and investments to 357 million euros.

According to the official, the number of people employed at the EAC this year will be two less than in 2024.

Capital costs now include expenditure on new turbines and storage units at the ageing Dhekelia power plant. They also include investments in low-emission technologies and various upgrades at the flagship power plant in Vasiliko.

On the revenue side, the EAC estimates that 1.2 billion euros will come from electricity sales. Added to this are another 210 million euros from fees to the market operator and charges for network use and ancillary services.

The EAC expects to generate revenue of 24 million euros from the sale of desalinated water.

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Source: CyprusMail.com

Author: Elias Hazou