The Electricity Authority of Cyprus (EAC) may be forced to buy electricity during peak hours next summer from Vouros Power, a private operator who has promised to supply up to 49.9 megawatts (MW) through a new power plant to be built in the Larnaca Free Trade zone.
The suggestion is being hotly challenged by EAC Management and staff who see this as another move to allow guaranteed profits to a private operator for a problem that the EAC says it is capable of solving following its commitment to increase its output by 130 MW no later than May 1, 2008.
The high demand for electricity meanwhile continued, with the EAC insisting that no problems were forecast. Monday’s total capacity was 1056 MW, with demand peaking at a record 1042 MW by 1.15pm.
Nevertheless, widespread power cuts were reported, with some hotels in the Famagusta district reporting blackouts lasting up to four hours. Similar problems were also affecting Paphos and Nicosia last night.
Commerce Minister Antonis Michaelides said that depending on Transmission System Operator (TSO) readings of electricity needs over the next few days, he might still decide to go to third parties to satisfy the island’s demand despite assurances from the EAC that it will be in a position to meet demand.
The Ministry’s advisors, the TSO and the Cyprus Energy Regulatory Authority (CERA) nevertheless insist that a problem could arise and despite the EAC’s assurances that by May 1, 2008 it will produce an additional 130MW, they argue that under certain circumstances this additional production will not cover the generation reserve, which should ideally be around 20 percent over the actual need.
“Based on estimates, the additional 130MW guaranteed by the EAC gives us a reserve of 8 percent,†Michaelides added. The reserve is the margin of power between the maximum demand and available power.
He said both the TSO and CERA had serious misgivings that 130MW would suffice under similar heat wave conditions or a worsening of weather conditions next year, as this 8 percent reserve was unsatisfactory.
EAC officials said the installation of a fourth unit at the Vasiliko power station was going ahead within the planned timeframe. The first phase would see the unit producing 130MW by May next year, followed by an additional 90MW in December, making it fully operational.
EAC has predicted that even with a 5 percent increase in demand in 2008, as well as similar heat wave conditions, the additional unit would generate sufficient energy to cover the island’s needs.
Vouros Power Industries meanwhile, which has a permit to construct and operate a private power plant since 2005 has another 12 months before its license expires. Vouros has pledged to have its plant with a capacity of 49MW ready in place to supply the EAC in case of emergency and if and when the need arises. For this, it wants a guaranteed return on investment.
The EAC says such a proposal is unacceptable, and while they welcome the liberalisation of the market and the arrival of new electricity producers, but they argue that the new private units should produce and then find their own customers and not dump their output on the EAC at a guaranteed return.
“This is not free enterprise but the piling up of a burden on the public,†said an EAC spokeman.
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