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Cyprus: EIRO CAR on the Changing Business Landscape in the Electricity sector and Industrial Relations in Europe”

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Despite the termination of the monopoly of the Electricity Authority of Cyprus and the opening up of the market to competition, the de facto non-existent market liberalisation has rendered EAC solely responsible for ensuring the country’s energy adequacy (i.e. EAC meets 98% of Cyprus’s total needs for electrical energy). In this context, industrial relations, especially with regard to questions of representation and collective bargaining, are synonymous with the environment of EAC. With regard to the very small number of private enterprises active in the area of RES, the terms and conditions of employment are not set through collective bargaining but in individual contracts entered into between each company and each employee separately.

1. General background information on the energy policy in your country and employment trends

1.1. Please explain briefly the main governmental strategies/action in relation to the electricity production and energy source mix. In your answer, please include information on the following aspects, where possible:

  • Is there an outspoken policy or plan in your country for any kind of change towards an increase or decrease of electricity production with any of the different sources (coal, oil, gas, hydro, eolic, sun, etc.)?
  • Which is the targeted energy mix for the future (see material provided)? How, in which subsequent steps, such targets are expected to be met?

During the years preceding 2003, electricity was produced only by the Electricity Authority of Cyprus (EAC), a semi-public corporate body, that was established in Cyprus under the Electricity Development Law of 1952 and remains until these days one of the largest employers in Cyprus. The only source of electricity was mainly heavy fuel oil (HFO) and to a lesser extent Gasoil.

In 2003, the Law for the Electricity Market Liberalisation came in force and the Cyprus Energy Regulatory Authority (CERA) was established. Since then, the market is gradually opening with regard to certain consumer classes being able to select their supplier. According to this Act, each Supplier is obliged to own generation at least equal to the total demand of its customers.

Producers employing Renewable Energy Sources (RES) are not participating in the market, with the EAC being obliged to purchase at a CERA approved price their total production. Since then, a small number of producers employing RES have an established presence. There is no producer other than EAC with production based on any type of fossil fuel. More recently the energy mix was based on 92% HFO and the remaining 8% being diesel. Before, the 11th of July 2011 there was one combined cycle 220MW generating system in operation and by the end of 2011 a similar second system was to be commissioned. On 11 July 2011 however, a large-scale accident at the military basis in Mari caused an extensive damage to these units that are not expected to be operational before mid-2012. It is noted that these units were located in Vassilikos power station that was the largest and most technologically advanced power station in Cyprus. The combined cycle systems will use gasoil as fuel for their first few years of operation until the arrival of natural gas in Cyprus, which is not expected to be available on the island before 2014.

The governmental strategy regarding the energy source mix is based on the European Union relevant Directives, providing generous incentive schemes for encouraging the introduction of RES comprising mainly by photovoltaic, wind and biomass/biogas. CERA has prepared the plan defining the country’s approved National Plan until 2020.

Evidently, the financial incentive schemes introduced by the Government have managed to trigger noticeable activity in terms of electricity generation from RES. Specifically, wind energy projects have largely benefited from these schemes and are therefore currently spearheading the penetration of RES electricity (RES-E) generation in the island, since the majority of licenses granted by the CERA concern the implementation of large wind parks. By the end of year 2011, two wind parks with a total combined capacity of 113,5MWe will be fully operational, while total wind power capacity is expected to increase to 165MWe by 2013. In the last few years, photovoltaic (PV) and biomass systems have, also, been consistently introduced in Cyprus, in a smaller scale than wind parks, with total capacities reaching today 3MWe and 4,5MWe respectively. However, other forms of renewable electricity generation that utilise solar energy, such as the concentrated solar thermal power (CSP) technologies, have not yet been fully investigated and therefore their capabilities as a significant means for reduction of CO2 emissions have so far remained downgraded in Cyprus. In view of the expanding RES generation in Cyprus and having in mind the national RES energy target for 2020 (13% share of RES energy), the National Plan integrates the necessary mixture of RES-E technologies (wind, photovoltaic, CSP, biomass) in its existing and future generation system up to the year 2020. More recently and as a consequence of the disruption at Vassilikos Power Station, CERA is conducting an update of the National Plan study, aiming at bringing forward the deployment of Photovoltaic installations in an effort to reduce the overall generation production costs.

  • Are investments in networks (new connections, upgrade) envisaged? To what extent? With which specific goals?

In implementing the aforementioned National Plan there is no need for extensive reinforcement of the transmission network, unless there is an application involving capacities above 100 MW at remote sections of the network. As regards the distribution networks, however, at medium voltage (11kV) or LV (230-400V) reinforcements or extensions may be necessary for connection purposes or even proceeding to undergrounding existing LV overhead networks.

  • What is the Government stance and what are the ongoing/envisaged action towards generation of electricity from the different broad groups of sources: nuclear /fossile /renewable energy?

Regarding the Government’s stance and action towards generation of electricity from the different broad groups of sources, it is clarified that there are no plans for deploying nuclear power stations but to adopt a generation mix based on heavy fuel oil, natural gas, gasoil/diesel and renewable energy.

  • What are the recent employment trends in the different subsectors of power generation according to the different broad groups of sources: nuclear/fossile/renewable energy? Please indicate development since 2005 with reference to generation, disribution, and sale separately.

Cyprus is an island with no indigenous hydrocarbon energy sources. This means that its power generation system operates in isolation and totally relies on imported fuels for electricity generation. In 2010 the primary imported fuel used in electricity generation is heavy fuel oil (HFO) with a contribution of 92% of the energy mix and the remaining 8% being diesel. Cyprus power generation system consists of three thermal power stations with a total installed capacity of 1.388MWe. Moni power station is located on the south coast of Cyprus, to the east of Limassol and consists of 6x30MWe steam turbines and 4x37, 5MWe gas turbines. Dhekelia power station is located on the southeast coast of Cyprus, to the east of Larnaca and consists of 6x60MWe steam turbines and a 51MWe internal combustion engines block. Finally, Vassilikos power station is the most recent power station located on the south coast between Limassol and Larnaca and consists of 3x130MWe steam turbines, a 220MWe combined cycle technology and a 38MWe gas turbine. The steam units at Vassilikos are used for base load generation, while the steam units of Dhekelia are used for base and intermediate load generation. The steam units at Moni as well as the gas turbines are mainly used during system peak loading. All stations use HFO for the steam turbine units and gasoil for the gas turbine units. In 2005 only two 130MW units and the gas-turbine were operating at Vassilikos PS and no internal combustion engines. The total gross annual production was 5.205 GWh having used 1, 21 million metric tonnes of fuel.

An explosion near Vassilikos PS on 11 July 2011 resulted in extensive damage on all units. Only the 37,5MW gas turbine has been repaired. The lost generating capacity has being temporarily been substituted by rented diesel generators and imported energy purchased by a private individual from the Turkish-Cypriot electrical utility.

1.2. Government policy for increase of the share of renewable resources according to the RES directive

  • Are any subsidies being granted for different types of RES for electricity providers? If yes, please provide briefly the details.

The subsidies provided by the Government of Cyprus include a number of financial measures in the form of governmental grants and/or subsidies. These financial measures are realized as RES Grant Schemes prepared by the Ministry of Commerce Industry and Tourism (MCIT). In the case of feed-in tariff, this consists of the RES-E purchasing price from EAC and any additional amount required will be paid from the RES National Fund. For example if the feed-in tariff is 26€c/kWh and the RES-E purchasing price from EAC at a given month is 10€c/kWh then this will be paid as 10€c/kWh from EAC and the remaining 16€c/kWh from the RES National Fund. Those applicants who are interested in receiving RES-E Grants may submit their applications during a certain call period to the RES National Fund committee, by completing an application form provided by the MCIT. The applications must be accompanied by all relevant documentation as these are defined in the relevant application forms. The successful applicants are obliged to complete the investment in a period not exceeding 18 months. In case of permanent shut down or ineffective operation of the RES-E system before a period of five years has passed from the date of the signing of the agreement, the entire amount of RES-E Grant must be returned. Details of the Grant Schemes can be obtained from the Cyprus Institute of Energy (CIE) official website.

  • Have subsidies for RES been cut recently? Was this a result of the crisis, of budget constraints, or the result of a policy revision (following a policy assessment, due to a disporportionate use of subsidies, etc.)? Please provide brief details.

There were no cuts since the publishing of the National Plan in June 2010. On the contrary new arrangements for encouraging the introduction of Photovoltaic are in the process of being proposed to the Government by CERA with revised feed-in-tariff levels in order to reflect the current lower cost of PVs.

  • Are there any other forms of support foreseen for promoting electricity generation of RES?

Some measures included proposals for reducing the bureaucratic procedures required as well as ensuring funds to the RES Fund after 2013 from the Emissions Trading Fund to be established.

  • Please include any other aspects you consider to be worth mentioning regarding the state of play and the future prospects of RES in your country.

The Government of Cyprus and CERA are in full support of RES, assuming of course that costs to the country are matched by the long-term expected financial, environmental and social benefits.

1.3. Are there any studies and documents assessing the employment impact of energy policies and of prospective changes in the energy mix within the electricity sector? This could include, for instance,

  • Employment effects resulting from the unbundling of activities (production from distribution)
  • Employment effects (on quantity and quality of work) resulting from the possible shifts within the electricity production sector from traditional sources to RES
  • Employment effects from investments in infrastructure (renewal of grids, introduction of smart meter technology, district heating)
  • The need for retraining of workers or provision of new qualifications linked to the sector transformations
  • Possible spatial mobility of workers as a result of more decentralised production (linked both to new activities and to restructuring of existing ones)
  • Please include any other aspects you consider to be worth mentioning regarding prospective impacts on employment and industrial relations

Currently, there are no studies in-hand, linking the deployment of RES with Employment prospects.

In the opinion of CERA, some experience gained from the operation of the first Wind Park demonstrates reduced manpower requirements per kWh produced, while new jobs in renewable energy will be less labour-intensive (e.g. maintenance and storage). At any case, athough the growth of the RES sector has been slow to date, it is expected to lead to a small increase in total employment in the sector, at least in the short term. For example, the construction of a concentrated solar power station (CSP) of 50 MW in the region of Akrotiri (Limassol) that is planned to be completed in 2016 is expected to create 50 new jobs.

As far as the future use of natural gas is concerned, it is foreseen that there will be no substantial impact on employment, since this is a process associated with the material infrastructure (i.e. turbines).

1.4 To what extent are the social partners involved or consulted concerning the governmental energy policy, notably in relation to employment impacts? Has this happened on an ad-hoc basis or on a structural, permanent basis? Is there a special tripartite social dialogue body for such consultations? Did consultation take place at national level, at sector level, or at the initiative of individual companies? Please briefly provide details.

As regards the involvement of the trade unions, according to data provided by the four unions active in the EAC environment (employer organisations are not active in the specific sector), the unions have not been involved or consulted either in relation to the government energy policy, or to its employment impacts.

2. Composition, structure and employment trends for the different resources used for electricity production

2.1 Please give an overview of the current sectoral composition of electricity production in your country, by giving for each of these seven groups of energy sources, the NAME of the three largest producing, the NUMBER OF EMPLOYEES of these companies, and the public or private STATUS of the EMPLOYMENT RELATIONSHIP with their employees.

For all companies listed, as a summary, please indicate:

  1. Total production and its distribution across different energy sources
  2. Total employment and its distribution across different energy sources
  3. Production plants and their respective energy source(s)
Electricity production

Electricity production with

TOP 3

PRODUCING COMPANIES

(the largest 3 in market share)

NUMBER OF EMPLOYEES

Reference year for the number of employees

Private/Public STATUS of WORKERS

FOSSIL FUELS

Electricity Authority of Cyprus

2,465

2010

Semi-government

       
       
NUCLEAR

none

     
       
       
HYDRO

none

     
       
       
WIND

DK WindSupply, Orites Wind Park

<10

2011

private

Rokas Aeoliki, Ayia Anna Wind Park

<10

2011

private

       
BIOMASS

Animalia Genetics Ltd

<5

2011

private

Andreas Brothers Pig Farms Ltd

<5

2011

private

Cypra Ltd

<5

2011

private

PHOTO-VOLTAIC

RES Zeus Electricity Co. Ltd

<5

2011

private

Solight Electricity Co. Ltd

<5

2011

private

Photogreen Electricity Co. Ltd

<5

2011

private

2.2 Please provide an overview of the current oganisation of electricity distribution in your country. Is there a single distributing company/body? Are there multiple companies? At national or territorial level?

In Cyprus, only one distribution company operates, the Electricity Authority of Cyprus. The Authority has been granted an exception from the relevant Directive and it is appointed as the Distribution System Operator.

2.3 Please indicate the NAME of the three largest distributing companies, the NUMBER OF EMPLOYEES of these companies, and the public or private STATUS of the EMPLOYMENT RELATIONSHIP with their employees.

Distribution companies
 

TOP 3

DISTRIBUTING COMPANIES

(the largest 3 in market share)

NUMBER OF EMPLOYEES

Reference year for the number of employees

Private/Public STATUS of WORKERS

Distribution GRID

Electricity Authority of Cyprus

2,465

2010

Semi-government

       
       

2.4. Where there any significant developments/changes since 2008 for a specific company or source of electricity production in numbers of employees or in their public/private status? Was this due to the current economic crisis? Were there any instances of unbundling or mergers? With what consequences in terms of employment and industrial relations?

No significant changes occurred.

3. Industrial relations in the electricity sector: Actors

Important introductory note: Based on the present situation (see units 1 and 2 above), it is obvious that despite the termination of the monopoly of the Electricity Authority of Cyprus (EAC) and the opening up of the market to competition, the de facto non-existent market liberalisation (absence of any real competitors in a position to contribute to a real increase of installed power over time, small number of private operators in the sector of renewable energy sources with a licence for low-power units, along with significant uncertainty over the ultimate extent of utilisation of the licences that have been issued for the generation of electricity from renewable energy sources or RES) has rendered EAC solely responsible for ensuring the country’s energy adequacy: EAC meets 98% of Cyprus’s total needs for electrical energy. In this context, industrial relations, especially with regard to questions of representation and collective bargaining, are synonymous with the environment of EAC. With regard to the small number of private enterprises active in the area of RES, there is no information on working conditions and industrial relations in the sector. According to data provided by CERA (see table of power generation companies above) these are small companies with a small number of paid employees. The General Secretary of the Free Pancyprian Organisation of EAC Personnel (EPOPAI), the biggest trade union in EAC, notes that employees in private generation companies, who in their majority are highly skilled, are not organised in unions but are all employed under individual contracts.

3.1 Please provide details on the membership in the electricity sector and membership of the top 3 producing and distributing companies in employer’s organisation (see questions 2.1-2.3 above). Please provide information on the name of the trade unions organising in this subsector and the level of their membership, or otherwise provide overall data but please include indications on differences in membership densities across subsectors.

Trade union representation and Membership to employers’ organisation
FOSSIL FUELS

Electricity Authority of Cyprus

There is in effect no employers’ organisation in the electricity. Although EAC is a member of both the Cyprus Chamber of Commerce and Industry (CCCI) and the Cyprus Employers and Industrialists Federation (OEB), it consults directly with the trade unions and the government on the enterprise level.

Free Pancyprian Organisation of EAC Personnel (EPOAI), a member of the Cyprus Workers' Confederation (SEK). Total number of members 1,569.

Union of EAC Scientific Personnel (SEPAIK), member of the Pancyprian Federation of Independent Trade Unions (POAS). Total number of members 210.

Local Authority Workers' and Employees' Trade Union (SIDIKEK), member of the Pancyprian Federation of Labour (PEO). Total number of members 496.

Union of EAC Shift Workers (SYVAIK), member of the Pancyprian Federation of Independent Trade Unions (POAS). Total number of members 135.

   
   
NUCLEAR

The sector of nuclear energy has not been developed at all in Cyprus.

   
   
   
HYDRO

The sector of hydroelectric energy has not been developed at all in Cyprus.

   
   
   
WIND

DK WindSupply, Orites Wind Park

There is no employers’ organisation.

There is no union.

Rokas Aeoliki, Ayia Anna Wind Park

There is no employers’ organisation.

   
BIOMASS

Animalia Genetics Ltd

There is no employers’ organisation.

There is no union.

Andreas Brothers Pig Farms Ltd

There is no employers’ organisation.

Cypra Ltd

There is no employers’ organisation.

PHOTO-VOLTAIC

RES Zeus Electricity Co. Ltd

There is no employers’ organisation.

There is no union.

Solight Electricity Co. Ltd

There is no employers’ organisation.

Photogreen Electricity Co. Ltd

There is no employers’ organisation.

And in the distributing companies

Distribution GRID

companies

Electricity Authority of Cyprus

There is no employers’ organisation (see table above of producing companies).

EPOPAI, SEPAIK and SIDIKEK (see table above of producing companies).

   
   

3.2 To what extent are employees in the different subsectors (fossil/nuclear/RES) covered by trade union representation? Has there been any impact of the crisis on trade union representation?

As also mentioned above, union representation of employees is restricted exclusively to the sector of electrical energy generation from fossil fuels (e.g. liquid petroleum), which is covered exclusively by EAC. In the opinion of the four unions active in EAC, although the financial crisis has significantly affected the bargaining power of the unions as regards demands for pay rises, there have been no impacts on the level of union density and representation. It is noted that the rate of union density at EAC is around 98%, and the rate of coverage by collective bargaining is 100%.

3.3 Have there been major reorganisations/splits/mergers of trade unions or employers organisations in the sector during the last five years?

No instances of reorganisation have been noted during the last five years. The most important case of reorganisation in the EAC environment regarded the withdrawal of some workers from EPOPAI in 1979 and the subsequent establishment of SYVAIK in 1980. According to the president of SYVAIK, the decision to establish a union solely for shift workers was the result of EPOPAI’s inability to meet the needs and standing demands of that specific category of employees (e.g. shift allowance, Sunday compensation). In 2011, SEPAIK changed its statutes so that employees whose employment relationship changed from a fixed-term contract to an open-ended one but still did not have the status of permanent employees could join the union.

3.4. Have new actors (trade unions or employers organisations) been founded in recent years, especially in the newly evolving RES industries? Or is the industry covered by established actors?

There are no new social partners in the electrical energy sector. The sector of renewable energy sources remains essentially uncovered, and in the sector of electrical energy generation from fossil fuels, in which only EAC has been active to date, no changes have been noted in comparison with the past. It should be noted that EPOPAI and SIDIKEK both cover all occupational categories and levels, whereas SEPAIK’s members all belong to the occupational category of scientific staff (e.g. engineers, legal practitioners, business professionals), and SYVAIK’s members are all technical personnel working on a shift basis.

3.5. Have the established sectoral actors (both trade unions and employer organisations) started any initiative to extend their representation to the new emerging parts of the sector? Please describe such initiatives and their results so far.

To date there have been no initiatives by the existing unions to extend to the RES sub-sector. Since the existing unions are active solely in the environment of EAC, in the view of the two largest enterprise-level sectoral unions, EPOPAI and SIDIKEK, the decision on whether they would expand to the new part of market or not is indissolubly tied to the respective decision of EAC to extend its activity to the RES sector. Extending their activity outside of EAC, does not appear to be among their immediate priorities, the main reason being the extremely small size of the market. It is noted that EPOPAI and SIDIKEK are members respectively of SEK and PEO, the two largest confederations in the private and the semi-public sectors in Cyprus.

4. Role of collective bargaining and social dialogue

4.1 Please provide information on the structure of collective bargaining in the electricity sector. Please, briefly mention the main characteristics of collective bargaining:

  • At what level are collective agreements within the subsectors of the electricity sector (traditional providers, newly emerging providers) concluded (company, sectoral level and/or inter-sectoral level)? Is there a difference between the producers and the distributors?

As also mentioned above, collective bargaining in the area of electrical energy only covers the sector of electrical energy generation from fossil fuels, which on the practical level remains the sole responsibility of EAC.

At EAC, as in the case of all the semi-governmental organisations, determination of the basic terms and conditions of employment, mainly pay increases, is the result of a framework agreement entered into by the state and PEO and SEK, the two most representative trade union organisations in the area of the broader public sector. Each agreement constitutes the guiding framework for the EAC Board of Directors regarding renewal of the enterprise-level collective labour agreement. In this context, collective bargaining to determine the terms and conditions of employment (e.g. fringe benefits, working conditions, etc.) takes place bilaterally between representatives of the four unions active within EAC and representatives of company management. It is worth noting that until recently SEPAIK and SYVAIK signed separate collective agreements with EAC management, and EPOPAI and SIDIKEK signed a joint collective labour agreement. Following the first enterprise-level collective labour agreement signed by all four unions in 1986 for the two years 1986-1988, the second joint collective labour agreement was signed ten years later and referred to the two years 1998-2000. Since then, all the ensuing collective agreements have been the result of consensus among all four unions.

Since EAC is the only company in Cyprus active in the area of distribution, there is no differentiation in the structure of collective bargaining between generation and distribution.

  • Estimate the coverage rate of collective bargaining in terms of companies and employees: are there any differences in coverage across different subsectors of electricity production?

Coverage of collective bargaining in the EAC environment is estimated by the social partners to be 100%. It should be noted that apart from a very small number of workers employed in the upper levels of the work hierarchy (e.g. executive directors, managers), all EAC employees belong to one of the four unions. As the General Secretary of EPOPAI has noted, it is a standard tactic of the two largest unions to encourage new employees to join one of the four unions, no matter which one, and even in the event that an employee does not choose to join a union, he or she will be covered by the enterprise-level collective labour agreement on the basis of EAC’s by-laws.

The terms and conditions of employment in the private companies doing business in the RES sector are not set through collective bargaining but in individual contracts entered into between each company and each employee separately.

4.2 Please comment on the most recent collective agreements reached at sector level and at company level. Please address the following topics:

  • Pay and working time: level and trends relative to the national average and significant differences across subsectors of the electricity industry.

As regards working time, the working week at EAC has been set at 37.5 hours, the same as the working week in public administration, the banking sector and all the other semi-governmental organisations (broader public sector).

It should be noted that the current average collectively agreed normal weekly working time for 2009 and 2010 remained at 38 hours.

In contrast to the past two years, in which the average collectively agreed basic pay increase, in line with unions’ pay demands, exceeded the productivity rate, in 2010 pay bargaining reflected unions’ decision to adopt a moderate wage policy. This decision was deemed necessary under the specific conditions created by the global financial crisis and more particularly the high unemployment rate, the reduced rate of economic growth, the sudden reduction in state revenues and the higher fiscal deficit and public debt. Against this background, important sectoral agreements provide either for low increases or for no increases at all. As far as EAC is concerned, although not signed into law or collective agreement, but rather an informal agreement between the government and the trade unions, a pay freeze will apply to the public and the semi-public sector that will be in effect until the end of 2011.

4.3. Cooperation between the social partners and government

  • Have the government started any social dialogue or social concentration in the electricity sector since 2008? Please illustrate the features and results of any such initiatives.

No

  • Have bipartite and/or tripartite bodies dealing with specific issues of the electricity industry been created since 2008?

No

  • Have there been since 2008 any joint initiatives of cooperation between social partners to influence or steer the energy policy developed by the government in your country? Or have such initiatives been taken separately by certain social partner organisations?

On the tripartite level, although there are no statutory bodies of social dialogue in the area of electrical energy, union representatives participate as the case may be in the competent parliamentary committees and also in the framework of ad hoc meetings at the competent ministries. The EAC unions were involved, albeit unofficially, in the whole process of creating the statutory framework for the purposes of harmonisation with European legislation, and their participation in the public dialogue on bringing natural gas to Cyprus was of decisive importance (dialogue which lasted almost a whole year from 2007-2008). According to a study in this regard by the Institute of Labour of Cyprus (INEK) on the liberalisation of the electricity market and the general interest (2008), the doubts expressed by both EAC management and the unions on the feasibility of the initial choice of the Ministry of Commerce, Industry and Tourism to transport natural gas to Cyprus by sea laid the basis for stepping up the processes of constructing an inland terminal.

On the bilateral level, the dialogue between the unions and the company is well established, although again unofficially. For example, the unions took part in the recent dialogue within EAC on changes in EAC’S organisational structure. To date, however, the demand of EPOPAI, SEPAIK and SIDIKEK on worker participation on the EAC Board of Directors has borne no fruit.

  • Have the social partners been involved in the making of the national action plan to reach the 2020 target, or in issues aiming to secure the supply of enough electricity?

As regards the role of the unions, according to data provided by the four unions active in the EAC environment, the unions have not been involved in the making of the national action plan on the country’s energy policy up to 2020.

With regard only to the role of EAC, albeit not on the level of planning, EAC has traditionally played an important role in implementing the national energy policy; this assessment is also confirmed by EAC’s strategic and developmental choices. For example, the government’s decision to diversify the energy mix in Cyprus led EAC to implement an ambitious development plan including the construction of a series of combined-cycle units, with the objective of using natural gas as the basic fuel, contributing in this way to the immediate diversification of the energy mix in Cyprus, as well as to a drastic reduction of the increased levels of pollutants caused by the use of heavy crude oil. In parallel, the increased cost-effectiveness of the new combined-cycle plants is expected in the medium term to help lower electricity prices.

4.4. Please provide information about the views of the trade unions and employer organisations on the main changes regarding employment and working conditions affecting the sector since 2008 and especially on the impact of the current crisis (for instance on employment trends, quality of jobs, working hours, wages, fixed-term employment, part-time, temporary agency work, participation in training, outsourcing, subcontracting etc.).

As the statistics show, the electrical energy sector does not appear to have been affected by the financial crisis, and no serious fluctuations in the level of employment have been noted over the last five years. Undoubtedly the structure of the market and the leading presence of EAC as regards the country’s energy adequacy have contributed to the stable picture of employment.

In the framework however of a relevant circular from the Ministry of Finance on the need to cut jobs in the economy as a whole but mainly in the public and broader public sector, employment in EAC is also certain to be affected.

Solely as regards employment at EAC, due to the great destruction suffered by the Vassilikos power station on 11 July 2011, staff cuts due to the complete termination of operation of the Moni power station (the Moni station has been in operation since 1967) have been delayed until at least summer 2013 when the Vassilikos station is expected to resume full operation.

According to information from the four unions active in the electrical energy sector, in the context of the broader pressure to reduce and cut state spending EAC management has alluded to possible job cuts at EAC as well, and as early as 2009 there was discussion about whether there is an immediate need to assess the number of jobs in the framework of rationalisation of the organisational structure of EAC.

Although the growth of the RES sector has been slow to date, it is expected to lead to a small increase in total employment in the sector, at least in the short term.

5. Commentary

Undoubtedly the structure of the market and the leading presence of EAC as regards the country’s energy adequacy have shaped both industrial relations and employment in the sector. Specifically, as EAC retains its leading position in the domestic energy system at all levels, generation, transmission/distribution and sale of electricity, it remains the main employer in the sector, as well as one of the largest employers in Cyprus. In this context, although the electricity sector does not appear to have been affected by the financial crisis, under the pressure to reduce and cut state spending, possible job cuts are expected to influence also EAC. As far as industrial relations are concerned, representation and collective bargaining refer exclusively to EAC, while in the very small number of private enterprises active in the area of RES, the terms and conditions of employment are not set through collective bargaining but in individual contracts entered into between each company and each employee separately.

Eva Soumeli, INEK/PEO

Page last updated: 15 November, 2012
About this document
  • ID: CY1202029Q
  • Author: Eva Soumeli
  • Institution: INEK/PEO
  • Country: Cyprus
  • Language: EN
  • Publication date: 15-11-2012