July 22, 2011
Cyprus energy disaster: what to expect when energy crunch hits
For the majority who never heard of this story which was decently covered only by BBC for few days let us do a recap:
On the 11th of July flames from a small fire on the Evangelos Florakis Naval Base near Zygi reached 98 containers of explosives that were being stored on the base.
The resulting explosion killed 13 people, 12 of them immediately, including Captain Andreas Ioannides, the Commander of the Navy (Cyprus's most senior naval officer), and the base commander, Lambros Lambrou. Also killed were four navy personnel and six fire-fighters, while a further 62 people were injured. The explosion severely damaged hundreds of nearby buildings including the island's largest power station, responsible for supplying over 60% of Cyprus' electricity.
As a result, much of Cyprus is without power and rolling blackouts have been initiated in order to conserve supplies.
The 98 containers of Iranian high explosives where seized in 2009 and since then were sitting calmly under the scorching sun of Cyprus at the naval base right next to the power plant.
No comment on the total stupidity of leaving explosives under the sun next to a strategic energy hub with temperatures that reach 45 Celsius in summer.
The more interesting part though is the current situation with an entire country lacking electricity with rolling blackouts running wild and with remaining old power plants struggling to cope, just today the other remaining power plant suffered a failure and technicians are scrambling to avoid a disaster.
It could take up to 1 year, to rebuild the destroyed power plant supposed the government is able to find 1 billion Euro they do not have at this moment, and it will be interesting to see what damage a prolonged energy crisis can do to a country.
Cyprus is in a dire economical situation with industry and services paralysed by the lack of electricity, there are no scheduled black-outs so there is no telling when lights will be off and no planned working activity is possible, motorists are facing the greatest risk at crosslights and emergency services are in complete chaos.
Cyprus economy is in a state of emergency comparable to 1974 and is facing an imminent EU bailout.
Cyprus Central Bank governor Athanasios Orphanides warned yesterday: "To avoid the worst, including admission into (a) support mechanism and all that that entails for the economy ... further and more drastic measures must be taken immediately,"
Cyprus was already under market pressure because of its links to debt-laden Greece, and following the tragic explosion economists have warned the island could face a bill of up to €1 billion just to reinstate electricity supplies.
"Weighing all the facts, the unfavourable international environment, the difficulties in resorting to external borrowing and the additional economic impact from the recent events, I believe the economy is in a state of emergency, comparable to that of 1974," Orphanides said, referring to the Turkish invasion and its aftermath.
Cyprus is unfortunately set to become the first reality laboratory for an energy crunch crisis, worth keeping an eye on this small Mediterranean island in the following months.