CyTA cleared to enter renewables market amid competition fears

The Cyprus Telecommunications Authority (CyTA) got the green light on Thursday to operate in the energy sector, though it remained an open question whether the semi-governmental organisation will compete or collude with the Electricity Authority which up until now dominated the space.

By a majority vote, the House approved a bill allowing CyTA to expand its activities into the energy sector – specifically renewables.

An amendment tabled by Disy, which also passed, makes explicit that CyTA may not engage in energy production from conventional fuels.

A number of amendments tabled by Akel, seeking to introduce safeguards, were defeated. The party voted against the legislation as a whole.

The debate prior to the vote featured intense disagreement.

MP Andreas Themistocleous argued that passage of the legislation serves to broaden the activities of semi-governmental organisations in areas where the private sector is active – calling it an adverse development.

He warned of a “distortion of competition”, noting that state-run entities should not compete with private enterprise.

Independent MP Costis Efstathiou went the other way; he noted that the energy market as it stands amounts to an oligopoly. He criticised the EAC for “abusive practices” and a general disregard of consumers.

In his own remarks, Akel’s Stefanos Stefanou said the electricity market is already competitive. The fact that the EAC has held a dominant position should not be seen as “misconduct”.

The Akel boss recalled how the EAC has been largely left out of the renewables sector. At the same time, he said, a number of renewables permits were granted to private entrepreneurs who built nothing, held onto the permits and then traded them at multiple times the initial cost.

Stefanou predicted the new state of affairs would lead to direct competition between CyTA and the EAC.

Earlier this week, EAC-affiliated unions had threatened to escalate their strike action.

The legislation allowing CyTA to gain a foothold in the renewables sector had been scheduled to go to the plenum last week, but was postponed.

According to the bill’s preface, the objective is to allow the state-run telecoms company – with an overall budget of €597 million this year – to utilise its technical know-how in the energy sector.

Given the excessive reliance on fossil fuels, actions must be taken to bring down electricity costs for consumers.

“In this environment, CyTA will be able to play a crucial role as a supplier of energy from renewables, offering affordable and sustainable solutions to Cypriot consumers,” read the preface.

The organisation’s technical savvy, it added, can be put to use in modernising the energy market. CyTA would combine telecoms technology with renewables, offering smart metres as well as other related infrastructures – 5G, Artificial Intelligence and the Internet of Things.

CyTA itself said its activities would prioritise services to households, such as rooftop solar panels.