Cyprus’ energy sector is on the verge of radical changes with the construction of the island’s first private power plant as entrepreneurs promise to deliver cheaper and cleaner energy to households and businesses.
One such newcomer is Power Energy Cyprus (PEC) Ltd. It has laid the foundation stone on Friday for its EUR 200 mln power plant, the first private venture for producing energy with conventional fuel, in the presence of President Nicos Anastasiades.
PEC plans to produce about a quarter of the island’s present capacity, slightly more than what renewable sources (solar parks and wind farms) already contribute to the energy mix. It will bring the cost of energy down as the combined circle power station is to run primarily on natural gas.
The company’s pledge to consumers and businesses was backed by President Anastasiades who stated that the new power plant to be built in Vassiliko (Limassol) will help to reduce the price of electricity.
Talking at the foundation stone ceremony he stressed that the new station will contribute to a significant reduction in the price of electricity across the economy, whether for industry, tourism or, of course, domestic consumption.
“It is with great pleasure and satisfaction that I witness the start of such a project, which I must point out, is also of particular importance for the fact that it was designed, funded and implemented exclusively by private initiative and private capital,” said Anastasiades.
The first private conventional thermal power plant is to be ready in 2021 with owners PEC, part of the Cyfield Group of developers and contractors, aiming to become the first privateer to dynamically enter the energy sector, offering an alternative to consumers and breaking into the monopoly of the Electricity Authority of Cyprus.
Cyfield is already leaving its mark in the construction market, having survived the economic crisis of the past decade, with some major infrastructure projects, high-rise developments such as the landmark 360 high-rise in Nicosia and the Arc-Ship tower in Limassol, projects in Greece and Egypt, and the Ayios Ioannis photovoltaic park, near Nicosia, producing about 3MW of solar energy since 2016.
Talking to the Financial Mirror, George Chrysochos, PEC’s CEO, said that the company’s aim is to be an attractive alternative to EAC as they will be in a position to provide cheaper energy to consumers.
“We aim to complete works on the power plant by 2021. We deliberately planned the completion of works on that date so as to coincide with the arrival of natural gas in Cyprus,” said Chrysochos.
He said that the project, acquired by Cyfield from its previous Russian owners in 2018, will produce electricity primarily using natural gas and if necessary, with liquid fuel.
“Considering that on the one hand natural gas is cheaper and on the other hand our state-of-the-art equipment will secure minimum losses as our production units will be more efficient than those of EAC, then we can say with certainty that we will be offering consumers cheaper electricity.”
Chrysochos added that while more efficient methods of production mean cleaner energy, the power station will also install emission filters which will capture pollutants which otherwise would be released into the atmosphere.
The power plant to be built in the area of the Vassiliko energy hub will have the capacity to produce 260 megawatts (MW) of electricity, which corresponds to a fourth of energy being produced today in Cyprus, as the country has an average capacity of 1100 MW.
Chrysochos said the project is to cost some EUR 200 mln, which is to be covered entirely by PEC funds and financing.
Meanwhile, the President said that the government is continuing its efforts to open up the energy market.
“We are proceeding with the necessary functional separation of the EAC to enhance transparency and regulatory control while promoting the modernization of transmission and distribution systems to support the state's objectives in managing the renewable energy sources in the country's energy mix,” said Anastasiades.
The Cyprus Energy Regulatory Authority has issued 10 licenses to new suppliers, while two more have filed their applications.
Anastasiades said the government is following a holistic approach on energy as it proceeds with the necessary procedures to create the infrastructure to import natural gas for use in power generation.
“The cost of these investments is particularly high and for this reason, I consider that it is a significant success for our country that we have obtained funding of EUR 101 mln for the creation of the necessary infrastructure.”
Welcoming the newcomers, energy regulator Andreas Poullikkas stated the primary obligation is to provide electricity to the final consumer at the lowest possible cost, which is expected to be achieved through the opening up of the market and the competition to follow.
“PEC’s power plant is to have the highest performance of all units in operation, and because it will use natural gas it will also be the most economical unit in our electricity system,” said Poullikkas.
