As the Cyprus electricity market enters a critical phase of transition, the President of the newly established Cyprus Electricity Suppliers' Representatives Association (C.E.S.R.A.), George Theodotou, has talked about the market's challenges and opportunities, as well as the interventions required for the country to achieve the transition to a modern, competitive and fair energy environment.
At the same time, in an interview with InBusinessNews, Theodotou analyses the reasons that led to the Association's establishment, the role it anticipates playing in the electricity market, as well as its basic positions.
Regarding the competitive electricity market (CEM), Theodotou emphasises that it needs improvements, noting - among other things - that neutrality in the operation of the market requires strengthening along with a substantial upgrade of critical systems, greater transparency in the management and distribution of data, and a clear allocation of costs and risks, so that participants - and especially suppliers - are not exposed to risk due to systemic problems beyond their control and so that the entry of new participants is not discouraged.
What led you to establish the Association and what is its mission?
The establishment of C.E.S.R.A. was a mature development for the electricity market, as it was deemed necessary to have a body that exclusively and specifically represents Electricity Suppliers.
Our goal is not to replace or challenge other market players, but to function complementary to the institutional ecosystem, bringing to the fore the perspective and needs of Procurement.
The mission of the Association is to ensure equal conditions of participation, enhance transparency and promote the adoption of good practices that contribute to the functionality and reliability of the market.
At the same time, we seek to be an institutionally responsible ally of the State and all stakeholders.
What role does the Association anticipate playing and what actions are you planning?
C.E.S.R.A. operates as an institutional interlocutor on behalf of suppliers, with the aim of enhancing the smooth and efficient operation of the electricity market. Our interventions focus on the documented submission of recommendations to the Cyprus Energy Regulatory Authority (CERA), the Ministry of Energy, Cyprus Transmission System Operator (TSOC), Distribution System Operator Unit and the Market Operator, always in a spirit of cooperation.
We invest in analytical tools, data and technical structures that enhance the ability of our members to make informed decisions. At the same time, we shape codes of conduct and information initiatives that strengthen trust in the market and empower the consumer.
What are the Association's main positions?
Our basic positions are summarised in three principles,
- equal access,
- transparency,
- neutrality.
Our positions aim at a market that operates without distortions and privileges. We believe in the value of equal access to infrastructure and information for all participants. The neutrality of administrators and full transparency in market mechanisms are the basic conditions for the formation of a healthy and competitive framework.
We promote an environment in which all participants can operate with clear rules and without information or privilege asymmetries. We support the energy transition and actively participate in promoting solutions such as dynamic pricing, decentralized generation and smart energy systems.
At the same time, the Association consistently supports the energy transition. Suppliers can be protagonists in innovative solutions such as dynamic pricing, VPPs (Virtual Power Plants) and intelligent energy platforms.
The electricity market must evolve, be digitalised and be aligned with European trends.
For us, competition without real choice for the consumer is not competition.
How many members does the Association currently consist of and who can become a member?
Today, C.E.S.R.A. brings together a significant portion of the country's licensed electricity suppliers, a fact that confirms its institutional role and strategic value.
Any entity that carries out electricity supply activities may become a member, in compliance with the legal requirements.
The membership process is clear and requires approval from the Board of Directors, so that the Association maintains a common strategic orientation.
How do you assess the progress of the competitive electricity market to date?
The competitive electricity market is still in its early stages and in a transitional phase, something that is entirely expected for such a complex system.
Its importance for the country is decisive, while initial data shows that there is interest and mobility, with increased interest from suppliers, room for the development of new products and services, and the gradual emergence of competitive brands.
At the same time, there are challenges that need to be addressed: high balancing costs, technical and operational limitations, information asymmetries, as well as the need to enhance neutrality and transparency.
These issues are not criticisms of individuals or institutions; they are the normal "teething problems" of any newly established market that evolves and matures.
The strategic objective is not only to identify the positive elements, but also to recognise the challenges in a timely manner and to proceed with appropriate regulatory interventions.
With a coherent strategy, Cyprus can obtain a modern, competitive, fair and reliable electricity market framework.
Does the CEM require corrections? If so, which ones do you consider necessary?
Yes, the Competitive Electricity Market needs improvements and this is completely normal for a new market.
The crucial thing, however, is that the recent phenomena of delays in clearing, deficiencies or failures in measurement data, and general operational uncertainty show that interventions cannot be piecemeal.
The crucial thing is that interventions be systematic and not fragmentary, integrated into a coherent plan.
Strengthening neutrality in the functioning of the market is required, (as well as) a substantial upgrade of critical systems, greater transparency in the management and distribution of data, and a clear allocation of costs and risks, so that participants – and especially suppliers – are not exposed to risk due to systemic problems beyond their control and the entry of new participants is not discouraged.
Our position is clear: changes must serve the functionality of the market and protect consumers and suppliers from risks beyond their control.
Our strategic position is that corrections must be part of a comprehensive plan that will enhance the sustainability and credibility of the market.
C.E.S.R.A. will contribute in a documented, responsible and constructive manner, always in a spirit of cooperation, so that the Competitive Electricity Market can evolve into a market that reflects the needs of the economy, technological developments and – above all – consumers.
(Source: InBusinessNews)
