[PIO] Address by the Minister of Energy, Trade and Industry Mr. George Papanastasiou at the Presentation of AHK's Performance for 2022

It is with great pleasure that I accepted your invitation to attend today's Presentation of AHK's 2022 Results. A milestone year for AHK, having completed 70 years of service to our country, but also an admittedly difficult one, as the challenges we faced in energy matters were unprecedented.

The reasons are well known: the sharp reboot of the economy in 2021 and, subsequently, Russia's invasion of Ukraine in 2022, caused an unprecedented disruption in the supply and demand balance for natural gas.

This disruption was, as expected, transferred to the supply of other key products, such as coal and crude oil, which are used in power plants. The result was additional increases and volatility in electricity prices.

Unfortunately, as long as Cyprus remains energy isolated from the rest of the world and as long as its energy mix remains heavily dependent on the import of fossil fuels, its economy and, by extension, the well-being of its citizens, will be at the mercy of unpredictable international developments that cause disruptions in the energy supply chain.

To shield society from the energy crisis, we are taking a number of measures. In total, according to the latest figures, the cost of these measures exceeded €440 million, of which 45% was allocated for the immediate relief of households and businesses.

Our effort is to turn the crisis into an opportunity by accelerating and intensifying the transition to a green economy, with medium-term measures aimed at promoting self-generation from renewable energy sources, large-scale renovation of existing energy-intensive housing, energy upgrading of businesses and promotion of green energy in agricultural activities such as irrigation.

In addition, we have redefined our energy policy to both reduce the impact of energy import costs on the economy and accelerate the alignment of our energy and climate objectives with the wider European Fit-for-55 policy. The objectives, targets, aspirations, policies and measures being pursued in the period 2023-2030 are detailed in the National Energy and Climate Plan, which is in the final stage of revision.

Friends,

Let me briefly set the tone for our energy strategy, which revolves around three main pillars.

1. The first pillar puts the development of renewable energy at the centre, in a sustainable and cost-effective manner.
2. The second is about strengthening energy security over all time horizons, from the need for long-term electricity generation sufficiency to ensuring that grid operators are able to successfully respond to the day-to-day challenges they face, including the increase in unregulated renewable generation.

This pillar provides for the creation of necessary and critical infrastructure, such as smart grids, energy interconnections, and modernisation systems based on the latest developments in information and telecommunications technology. It should be understood, so let me insist on this, that without the necessary supporting infrastructure we cannot talk about further penetration of renewables and achieving ambitious targets for renewable energy development.

In the context of enhancing energy security, the Republic of Cyprus is also considering, alongside the LNG import infrastructure under construction at Vasilikos, the possibility of importing natural gas by pipeline from the Eastern Mediterranean, which can cover part of the needs for electricity generation. To this end, some preliminary contacts have recently taken place both at national level and with interested companies, which are expected to continue.

1. Finally, the third pillar is about supporting our vulnerable citizens, as well as providing appropriate incentives to households, businesses and public bodies to enable them to reap the benefits of renewable energy self-production and participation in energy communities, where they will be able to share their energy.[/P]
   1. Finally, the third pillar is about supporting our vulnerable citizens, as well as providing appropriate incentives to households, businesses and public bodies to enable them to reap the benefits of renewable energy self-production and participation in energy communities, where they will be able to share their energy.

   A significant part of the funding for the above-mentioned projects will come from European funds. The Cyprus Electricity Authority will receive a large proportion of these funds - around €120 million - to proceed rapidly with the implementation of the very critical infrastructure needed for our country's energy transition.

   In addition to this, the Government is actively supporting the work of the EAC through the following actions:

   1. Submitted to RAEK the plan for the installation of renewable energy systems, as prepared by AHK,
   2. Supported AHK's requests for financing works for grid upgrades and automation of €83.3 million from the Fair Transition Fund, as well as for the Recovery and Resilience Mechanism to cover the costs that consumers would incur for the installation of smart meters, of EUR 35 million,
   3. supported the request of AHK to the European Commission to grant a derogation for the continued operation of the Dhekelia power plant until the end of 2029,
   4. supported the request of the Cyprus Transmission System Operator and AHK to the European Commission, to be granted a derogation to allow them to own and operate energy storage facilities, with the possibility for these facilities to receive funding from the Fair Transition Fund, as well as from the revenues of the Republic of Cyprus from the auctioning of pollutants,
   5. promoted most of the requested jobs, especially for specific sectors where immediate staffing is required,
   6. requested the Board of Directors of AHK to submit to the Ministry a comprehensive plan for the upgrading of the electricity supply system,
   7. requested the Board of Directors of AHK to submit to the Ministry a comprehensive plan for the upgrading of the electricity supply system,
   8. requested the Board of Directors of AHK to submit to the Ministry a comprehensive plan for the upgrading of the electricity supply system,
   9. requested the Board of Directors of AHK to submit to the Ministry a comprehensive plan for the upgrading of the electricity supply system.

   I am sure that the dear President will report in detail on the achievements of the Agency in 2022, as well as on the projects currently underway. I will therefore conclude my address with our vision for the Agency, which I will not stop repeating at every opportunity.

   We envision an EAC that is a pioneer in electricity, operating as an Agency that reduces the cost of electricity in Cyprus. But at the same time, we also want an AEC that is a model centre of innovation and technology, which is a benchmark for all electricity companies operating in the South-Eastern Mediterranean region.

   Thank you for your attention

   GA

   
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