A cost in the rise of electricity is inevitable for Cyprus beginning in early February, due to the country’s reliance on electricity production from diesel, energy expert Charles Ellinas said.
Speaking on CyBC radio on Tuesday morning, Ellinas explained that the EU decision to ban importation of Russian oil products from December 5, will likely result in a shortage of diesel which will significantly drive up its price.
“It is very hard to import diesel from elsewhere,” Ellinas continued, “and diesel supply issues will affect us seriously.”
The cost of non-diesel petrol at the pump will also hit Cypriot drivers as, despite the EU’s recent $60/barrel price cap on Russian oil, the picture will change drastically once China re-enters the economy within the next months, Ellinas said.
Demand from China the world’s biggest importer and consumer of oil has been artificially low in recent years, due to its Covid response Ellinas detailed. Once China’s economy is back in full swing, competition for fuel will drive up prices and it is already starting to do so.
Asked about the prospect of Cyprus having access to natural gas resources by 2023, and the possibility of gaining from the Ukarine war-imposed energy shortages and attendant price increases, Ellinas reiterated past statements that due to market insecurity, caused by the EU’s strategic goal of 40 per cent renewable energy by 2030, big producers are unwilling to risk the 20-year investment required for this to materialise.
The EU may need to revisit its 2030 goal for increased reliance on renewable energy, Ellinas added, since climate change is causing problems for the supply of wind and hydro power, with reduced winds and periods of drought disabling effective use of these technologies.
Hopes pinned on the latest high tech energy solutions to save the day, such as green hydrogen and fusion energy, are misplaced, as these energies will require a long time to perfect, upwards of ten years at their current rate of development, Ellinas said.
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