Cyprus President Urges Cyprus Energy Regulation Authority to Reduce Costs

Cyprus’ President recently met with the ministers of energy and finance, Cyprus Energy Regulation Authority (CERA) and the Electricity Authority of Cyprus (EAC) to come to a consensus about reducing the cost of electricity.

Cyprus Energy Regulation Authority (CERA)

Dhekelia Power station at Cyprus. Credit: eLNuko, Wikimedia Commons, CC BY-SA 3.0

Cyprus’ President recently met with the ministers of energy and finance, Cyprus Energy Regulation Authority (CERA) and the Electricity Authority of Cyprus (EAC) to come to a consensus about reducing the cost of electricity. Prices in the country have sky-rocketed this year and, given global developments in the oil sector, are expected to increase further by the end of this year and in 2023.

According to Eurostat, during the second half of 2021, the average price of electricity for Cypriot households was 23 cents/kWh, 37% of which was an increase in taxes. Comparative numbers for Greece were 19.5 cents/kWh and 20%, and 13 cents/kWh and 5% for Malta. However, the rise in electricity prices in Cyprus last year was the third-highest in Europe, over three times the EU average.

The government is also collecting revenues from the European Emissions Trading System (ETS). With an average price of about €83/tonne CO2 so far this year, such revenues are expected to reach about €250 million by the end of 2022, and probably more if this average increases further – as expected by analysts. This is almost 250% up since 2021.

As a result, as electricity bills go up, so do state revenues from increased ETS charges. Although Cyprus budgeted a deficit of 1.3% of GDP for 2022, by May this year it was reporting a 1% surplus. This implies an annual improvement of 2.3% points of GDP or about €575 million on its 2022 budget. Most of this appears to be the result of increased tax and ETS revenues from the energy sector.

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