The Cyprus electricity market will open to competition from 1 October, allowing consumers to select their electricity provider with a simple application.
Speaking on Protoselido, George Chrysochos, president of the Electricity Market Association, outlined the changes:
“We were all customers of Cyta, then competition arrived, and everyone could choose their telecom provider. Exactly the same will now happen with electricity. Anyone can, with a simple application- either online, by phone call, or in person- change their electricity provider within minutes.”
Chrysochos explained that electricity has unique characteristics compared to telecommunications. While telecoms combine services such as television, internet, mobile and landline, electricity is a single good. “It does not matter about quality, only the price. Electricity is the same for everyone. The EAC remains the owner of the networks, so all faults, connections, and technical issues will still be handled by EAC. Consumers must still call EAC. The electricity provider is simply a trader.”
When asked if this applies to both businesses and households, he confirmed: “It concerns everyone. The difference is there are currently some restrictions, which will gradually be lifted. Success will be judged both from the first day of operation and over time. Just like with telecoms, not everyone changed provider immediately. It took time. At present, the only production outside EAC is from photovoltaics. Independent producers therefore have limited scope to reach households, so they usually target businesses. But we now see the market opening.”
He noted that because EAC has been separated into production, supply and networks, it will be able to sell production to independent suppliers. “They can then sell to the final consumer. Prices will be lower, since independent suppliers have lower operating costs. Another margin for price reduction exists because independent suppliers will be flexible in their tariffs- for example, offering lower rates during the day when electricity is produced, and higher at night. Consumers will therefore be encouraged to use appliances such as washing machines and ovens during midday, when electricity is cheaper, and reduce usage at night. In this way, overall electricity costs may be reduced. These are the benefits of the new electricity market.”
On disconnections, he clarified: “Disconnections occur for technical reasons. Unfortunately, this is a network issue. It remains a monopoly. The network operator is the one cutting off photovoltaics. So there is no change here. But households with solar panels can still change provider and will continue to benefit from net metering. Disconnections are mainly about networks, which are being reviewed with batteries and storage capacity.”
On whether EAC can also lower its prices, Chrysochos stressed: “EAC is regulated. Its prices are set by CERA, since it remains a monopoly. EAC’s market share must fall below a certain threshold for it not to be considered a monopoly and thus unregulated. So EAC cannot just reduce its prices one day. It must submit justification to CERA for approval.”
Concluding, he added: “The success of the Cyprus electricity market will be seen over time. What consumers should expect is the appearance of suppliers- if they appear and who they will be, especially for households. I imagine they will also approach consumers directly.”
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