Call for independent audit of Cyprus electricity costs

Nicosia, Cyprus. MEP Fidias Panayiotou’s proposal to reduce electricity prices by 20 per cent has prompted public debate, with government officials, professional bodies and market stakeholders disputing elements of his calculations, including photovoltaic park revenues.

The discussion has also renewed calls for a comprehensive, independent regulatory and financial audit of Cyprus’ electricity value chain.

Call for transparency

The proposal includes points requiring correction and further documentation, but the wider issue is why Cyprus continues to record some of Europe’s highest electricity prices despite abundant solar resources and growing renewable energy generation.

A full breakdown of household and business electricity bills has been proposed to establish how payments are distributed among generation, fuel, CO₂ emission allowances, renewables, networks, balancing, suppliers, regulated charges, taxes and investor returns.

Such an assessment would need to identify the unavoidable cost in each category, reasonable commercial returns, and costs linked to distortions, inefficiencies or excessive returns.

Conventional generation costs

Conventional oil-fired generation remains Cyprus’ main electricity source. Any review would need to examine fuel costs, the efficiency of individual units, CO₂ costs, operation and maintenance expenses, outages, availability and the cost of maintaining continuous operation for system security.

Data cited in the public debate indicates that must-run units accounted for about 34 per cent of traded energy and cost approximately €264 million during the period examined.

These units remain necessary for system stability, but the debate has raised questions over how much of the cost could have been avoided through earlier investment in energy storage, more flexible generation, natural gas, demand-side management and grid modernisation.