Cyprus will request exemption from EU measures on a mandatory 5% reduction of energy demand during peak hours and a cap on the additional profits of companies that produce energy using lower-cost sources.
European Union countries meet on Friday to approve emergency levies on energy firms’ windfall profits and launch talks on their next move to tackle Europe’s energy crunch – possibly, a gas price cap.
Energy ministers from the 27 EU member countries are negotiating measures proposed by Brussels last week to contain an energy price surge that is stoking record-high inflation and threatening a recession.
Government sources said Cyprus is asking that provisions concerning the mandatory reduction of energy demand are implemented voluntarily and the imposition of a cap on profits of companies that produce electricity using inframarginal technologies.
In other words, the Electricity Authority of Cyprus (EAC) should be exempted when producing electricity from oil but not exempted when it comes to profits from electricity produced from renewables.
The Cypriot position on mandatory reduction of energy demand during peak hours is that the country does not yet have a competitive electricity market, and the mean with which peak hours can be determined has not been installed.
Therefore, Cyprus requests that it be allowed to apply this measure when possible.
Regarding the measure of capping excess profits of companies that produce energy using inframarginal technologies (from sources with lower costs than natural gas, which include renewable energy sources, nuclear, lignite and oil), Cyprus seeks assurances it will only be called on to implement it for energy production from renewables.
Nicosia argues that compromising energy production from oil would endanger the viability of the EAC.