Cyprus-Forum.com

[Tim Drayton]

Leaving aside the question of whether it is a good idea to gift a core part of the country's infrastructure such as the electricity grid as a monopoly to a multinational energy giant in the belief that they will run the grid on a philanthropical basis, I take it that we are in for power cuts again today. This is the last of the three days of action, so this will be the last day, won't it? I don't know about other places, but for the past two days we have had a morning outage of about 45-50 minutes' duration, but the expected afternoon cuts have not materialised. I presume we can expect the same again today.

[Tim Drayton]

By the way, it seems that the power generation and distribution industries were liberalised in Cyprus in 2003, and since then no private companies have entered the market in competition to the EAC (Electricity Authority of Cyprus).

[CBBB]

By the way, it seems that the power generation and distribution industries were liberalised in Cyprus in 2003, and since then no private companies have entered the market in competition to the EAC (Electricity Authority of Cyprus).

The ditribution infrastructure will be a separate entity to the power generating part of EAC. So when appropriate fuel (gas) is available, the market will be of interest to other players who can install more modern equipment than the patched up stuff EAC has, so they should be able to reduce the generation costs.

[Medousa]

EAC and every other authority in Cyprus has long time now proved that they are nor efficient nor service oriented , people react instantaneously in phases of panic as they do now and obviously the state has no vision. Consequently the state accepts what is served to us either from Cyprus or abroad... the only way to guarantee our rights is to reach out to lawyers who thank God are countless in Cyprus. But do they deal with Cyprus citizens? They seem keener to promote themselves abroad; if you’ll have a look at one of the many legal portals and you will understand what I mean. So if we don’t have any cash to pay, I think we should forget about any rights, unfortunately our adorable state has again not been precautious to facilitate the procedure and provide easily free legal assistance. So as I see it, if something radical does not happen, this corrupted mentality will condemn us to a rotten future…. forever and ever.

[Oceanside50]

The following from a random webpage on natural monopolies: http://cs.stanford.edu/people/eroberts/cs181/projects/corporate-monopolies/benefits_natural.html

A natural monopoly exists when average costs continuously fall as the firm gets larger. An electric company is a classic example of a natural monopoly. Once the gargantuan fixed costs involved with power generation and power lines is payed, each additional unit of electricity costs very little; the more units sold, the more the fixed costs can be spread, creating a reasonable price for the consumer. Having two electric companies split electricity production, each with their own power source and power lines would lead to a near doubling of price. Clearly, competition, the flagship of the American economy, is not always the answer.

and another random webpage: http://www.progress.org/tpr/natural-monopoly-2/

A “natural monopoly” is defined in economics as an industry where the fixed cost of the capital goods is so high that it is not profitable for a second firm to enter and compete. There is a “natural” reason for this industry being a monopoly, namely that the economies of scale require one, rather than several, firms. Small-scale ownership would be less efficient.

A natural monopoly is basically an oxymoron, they don't exist. Government regulations create these so called "natural monopolies" in these utility companies. When competition is held out of the market place and governments regulate these companies then ultimately consumers will pay higher and get bad service. A company that is mass producing a commodity would have to become very innovative to keep its costs down and services high. If you take the Cypriot electric company which is highly regulated by the government you get results of very expensive electricity and bad service. When you allow the market place to function with very vigorous competition even at high commodity outputs then naturally the price would go down and services upgraded. As for duplication (roads,wire/electric lines). Government owned (socialistic)roads and electric wires are government owned. The fact remains that in order to use these socialist roads and wires, the government needs to give its permission. Government ownership of these socialist roads/wires is a permanent act of economic intervention, which in the long run discourages any innovative private corp. investment. There have been numerous instances where bidding by private companies(water, electric, road maintenance) have proven that a private company can maintain these public utilities at a cheaper price therefore giving the consumer better prices and better service. Instead of knocking innovation and progress, knock on the heads of your politicians who want to maintain these enterprises with their inefficient controls.

Re:
If you take the Cypriot electric company which is highly regulated by the government you get results of very expensive electricity and bad service.

Can you please elaborate on what you mean by bad service? I have given precise examples above of some of the excellent service that I have received in the years that I have lived in Cyprus from the state electricity board, and another good example must be the speed with which things returned to normal following the Mari explosion; experiences that I have not have with the so-called competing privatised electricity companies in the UK when in fact the grid is a monopoly run by one company, Centrica.

Under Centrica Brits enjoy the cheapest energy in Europe. Competition has created products/services and innovations that would not be possible under a public domain utility company. Investments are needed in Britain, where power plants will be reaching the end of their line by 2016. Investment in new plants and sources of energy are needed to keep up with demand and future challenges. Who better to tackle these challenges other then a private enterprise, free from government intervention. Investments and innovation can only come from private companies who are willing to invest in nuclear plants, wind and other renewables. Clarity and non government intervention will greatly help in investments. Cyprus' electric enterprise is run by bureaucrats and is drowning in inefficiency,while Cypriots pay the highest electric bill in Europe-pre Mari). These companies aren't in business to be philanthropist, they are in business to be efficient and to make a profit. In a competitive market they have to be efficient and survive or someone else will take over.

[tsukoui]

Under Centrica Brits enjoy the cheapest energy in Europe. Competition has created products/services and innovations that would not be possible under a public domain utility company. Investments are needed in Britain, where power plants will be reaching the end of their line by 2016. Investment in new plants and sources of energy are needed to keep up with demand and future challenges. Who better to tackle these challenges other then a private enterprise, free from government intervention. Investments and innovation can only come from private companies who are willing to invest in nuclear plants, wind and other renewables. Clarity and non government intervention will greatly help in investments. Cyprus' electric enterprise is run by bureaucrats and is drowning in inefficiency,while Cypriots pay the highest electric bill in Europe-pre Mari). These companies aren't in business to be philanthropist, they are in business to be efficient and to make a profit. In a competitive market they have to be efficient and survive or someone else will take over.

Britain is not really the cheapest, though it's true they pay somewhere below average. But this is irrelevant because the most expensive, Germany, is also privately owned.



Energy bills: Who pays the most in Europe?
http://www.bbc.co.uk/news/business-25200808

[repulsewarrior]

...i am curious, but do Paris, Rome and Amsterdam have electricity, sold/generated privately?

...similarly, Lisbon, Bucharest, Madrid?

[GreekIslandGirl]

Under Centrica Brits enjoy the cheapest energy in Europe. Competition has created products/services and innovations that would not be possible under a public domain utility company. Investments are needed in Britain, where power plants will be reaching the end of their line by 2016. Investment in new plants and sources of energy are needed to keep up with demand and future challenges. Who better to tackle these challenges other then a private enterprise, free from government intervention. Investments and innovation can only come from private companies who are willing to invest in nuclear plants, wind and other renewables. Clarity and non government intervention will greatly help in investments. Cyprus' electric enterprise is run by bureaucrats and is drowning in inefficiency,while Cypriots pay the highest electric bill in Europe-pre Mari). These companies aren't in business to be philanthropist, they are in business to be efficient and to make a profit. In a competitive market they have to be efficient and survive or someone else will take over.

Britain is not really the cheapest, though it's true they pay somewhere below average. But this is irrelevant because the most expensive, Germany, is also privately owned.



Energy bills: Who pays the most in Europe?
http://www.bbc.co.uk/news/business-25200808

You have to factor in the matter that the UK uses nearly 35% more energy per capita than the usage in Cyprus, for example. The companies make money simply because they sell more energy to the UK market

[Paphitis]

Under Centrica Brits enjoy the cheapest energy in Europe. Competition has created products/services and innovations that would not be possible under a public domain utility company. Investments are needed in Britain, where power plants will be reaching the end of their line by 2016. Investment in new plants and sources of energy are needed to keep up with demand and future challenges. Who better to tackle these challenges other then a private enterprise, free from government intervention. Investments and innovation can only come from private companies who are willing to invest in nuclear plants, wind and other renewables. Clarity and non government intervention will greatly help in investments. Cyprus' electric enterprise is run by bureaucrats and is drowning in inefficiency,while Cypriots pay the highest electric bill in Europe-pre Mari). These companies aren't in business to be philanthropist, they are in business to be efficient and to make a profit. In a competitive market they have to be efficient and survive or someone else will take over.

Britain is not really the cheapest, though it's true they pay somewhere below average. But this is irrelevant because the most expensive, Germany, is also privately owned.



Energy bills: Who pays the most in Europe?
http://www.bbc.co.uk/news/business-25200808

Germany is a world leader in renewable energy - wind and solar.

They have the biggest uptake in renewables - hence higher prices.

When Cyprus goes private, there should be more investment in renewables also.

[Paphitis]

Cyprus is too small for more than 1 Electric Company. They could just allow competition from private companies... maybe they done it already as there are many small companies that do Wind / Sun power generation... but the truth is that nobody will invest the money required to build an EAC competitor. What they want is to buy EAC for cheap and then get the massive profits. A monopoly is a bad thing but a private monopoly is worst than a public monopoly... and this is what we will end up having if they sell EAC.

What will happen is that a big company will the over the EAC, and another company will buy the grid. This is what has been happening all the over the world.

Then, you might get 1 or 2 smaller retailers of electricity. There might be a company specializing in renewables since they will invest in Wind and Solar Farms and sell what they will call "Green Energy" to the market.