The private electricity industry on Tuesday censured the energy minister for remarks which, in its opinion, undermine confidence in the coming opening up of the electricity market.

The Electricity Market Association (EMA) was responding to earlier remarks by Energy Minister George Papanastasiou, who said the government would monitor the opening of the market to competition – slated for October 1 – and that it “reserves the right to intervene” in the event that electricity prices trend upward.

The EMA called these comments “very concerning” and suggested the minister was going off script.

It said that, less than four months before the launch of the competitive electricity market, Papanastasiou “chooses to bring back in public his personal preference for a different model (that of a single buyer), in this way essentially questioning the strategic decision of the government and of the energy regulator which was based on documented scientific studies and deliberations with EU institutions”.

The EMA complained that whereas industry has invested hundreds of millions of euro in related infrastructure, such commentary “not only does not enhance confidence, but rather fosters insecurity for investors, causing needless uncertainty with a possible serious impact on the electricity market, and by extension, on the economy”.

According to the association, the success or failure of the competitive electricity market does not hinge on the date on which it will go live; rather it will be judged by a range of factors in combination. These include proper implementation of new regulations, the advent of natural gas, upgrades to the grid, as well as the rollout of energy storage projects.

“We stress that only then can one objectively assess the real contribution of the competitive electricity market to the gradual reduction in electricity prices”.

The EMA, whose stated mission is to drive down prices for consumers, consists of renewables producers, producers of conventional energy, and suppliers. Its list of members can be found here.

Separately on Tuesday, journalists took the energy minister to task over the government’s apparent backtracking on the issue of higher electricity bills.

The context was President Nikos Christodoulides’ earlier remarks that he had “strongly urged” the Electricity Authority of Cyprus not to raise its tariffs. However, the state-run power utility subsequently asked for a 3 per cent hike in rates – down from the 7.5 per cent it had initially sought.

The presidential intervention was seen as irregular by some, given that it is the energy regulator – an independent authority – which has the final say on the EAC’s tariff policy.

Responding to the criticism of apparent government flip-flopping, Papanastasiou said only that, regardless of any comments made by the president or anyone else, it is up to the energy regulator to decide.

The minister also advised the public not to hyper-focus on the negative, but to also consider the positive. One such positive development, he argued, is that the EAC has cut its basic fuel rate on electricity bills – due to the decline in global oil prices.

He praised the EAC for entering into futures contracts – purchasing fuel at lower prices.

This, he said, should offset any small increase in the EAC’s tariff that the regulator may approve.