Energy storage projects will contribute significantly to improving the management of electricity generation from renewable energy sources, reduce curtailments of renewable energy, and enhance system stability, said on Tuesday the Minister of Energy, Trade and Industry, Michalis Diamianos, following the signing of a contract between the Cyprus Transmission System Operator and CYTA for the supply and installation of the first large-scale energy storage systems in the country’s power grid.

In his remarks following the signing of the contract, Mr. Damianos said that this is a project of great importance, marking a decisive step toward upgrading and modernizing the country’s energy system.

“With its implementation, we are entering a new phase aimed at strengthening the resilience and reliability of our country’s power grid. Energy storage projects will contribute significantly to improving the management of electricity generation from renewable energy sources, reducing curtailment of renewable energy, and enhancing system stability,” he continued.

He added that the energy transition is a complex process, with successive implementation stages and technical challenges that require time, consistency, and close cooperation among all stakeholders, noting that, in this context, the project being signed today represents a significant step in the overall energy storage strategy.

Congratulating the CERA for designing and promoting this project, as well as CYTA for undertaking the implementation of this important Agreement, the Minister noted that “Cooperation among public organizations is the foundation for the successful implementation of projects that promote the public interest and the achievement of our national energy and climate goals.”

“I would like to assure you that we are moving forward with the implementation of our plans not only for energy storage, but also, more broadly, for the green transition, which will contribute significantly to further increasing the penetration of renewable energy sources and creating a more efficient, reliable, and less polluting electricity system,” he concluded.

For his part, Stavros Stavrinos, Executive Director of the Cyprus Transmission System Operator, said that this project stems from Decision 217/2025 of the Cyprus Energy Regulatory Authority, issued on June 18, 2025, which directs the operator to implement energy storage systems at three different existing transmission substations.

He added that funding for the storage systems is expected to be provided by the European Cohesion Policy Program Thalia 2021–2027 and, to this end, the operator is in constant contact and collaboration with the Audit Directorate of the Ministry of Transport, Communications, and Public Works, which acts as an intermediary body.

As part of the project, Mr. Stavrinos continued, a 40 MW, 80 MWh energy storage system will be installed at the Athalassa substations in the Nicosia district, along with two energy storage systems with a capacity of 40 MW and 160 MWh at the Anatoliko and Free Industrial Zone substations, in the districts of Paphos and Larnaca, respectively.

“These three locations have been selected to maximize the benefits of operating these storage systems. Specifically, the selected substations to which these systems will be connected allow us to connect them directly to the transmission grid, which, in addition to the significant benefits of energy storage, allows for the seamless provision of the necessary reserves to the power system without restrictions, to the benefit of the entire system,” he further explained.

He added that the system effectively contributes to improving energy flows in the power grid, mitigating congestion problems that might arise during peak hours, while at the same time not affecting existing renewable energy projects, for which planning remains on schedule; the interconnection projects have already been included and registered in the ten-year transmission system development plan, and their construction is underway.

He also noted that the penetration of electricity from renewable energy sources during periods of high demand is currently over 60% for several hours, and on a half-hourly basis, it even reaches 70% during certain periods of the year. “This means that today we are enabling the grid operator to meet 70% of Cyprus’s final demand during certain hours—which I believe is an achievement we should acknowledge—and 60% of the demand for many hours of the year,” he noted.

According to Mr. Stavrinos, the installation of storage systems owned by the operator will help manage the power system more effectively and increase its resilience to sudden and unpredictable fluctuations in renewable energy generation, while also reducing curtailments of renewable energy generation.

“Installed photovoltaic capacity has now exceeded 1,040 MW, while Cyprus’s average demand stands at 650 MW; this management requires flexibility resources, just like previous systems. Additionally, storage systems serve as an additional tool for the grid operator to ensure the systems’ ability to meet reasonable demand, which is the operator’s exclusive responsibility under the law,”, he pointed out.

He also described as very important the fact that one of these systems will feature specialized grid-forming technology, which, as he said, also marks the introduction of advanced technologies into Cyprus’s power system, noting that “this technology was developed to assist isolated systems, such as ours, and still poses a major challenge for our organization.”

He also said that with this project, the operator is not hindering the development of similar systems by private investors; on the contrary, the development of autonomous systems by private investors is being promoted in parallel, and some of these projects are already underway, with the operator having issued connection terms for standalone systems with a total capacity of 60 MW and energy output of 190 MWh, and these applications being at a fairly advanced stage.

“Our conclusion is that all storage projects are welcome and necessary to achieve European and national targets for renewable energy penetration, and at the same time they will significantly reducegreen energy curtailments and, by extension, emissions. “Certainly, the expected outcome will be a benefit to citizens in the form of lower costs per kilowatt-hour, along with improved system performance indicators,” he concluded.

He added that implementation of the project is set to begin immediately, noting that an eight-month period is anticipated before the systems go live.

CYTA Board Chair Maria Tsiakka, in turn, noted that through an open and transparent process, she is undertaking a significant technological project that will bring substantial benefits to citizens, for the country’s technological reform and sustainable development.

“It also reaffirms the credibility our organization has earned in managing complex and multifaceted projects and undertaking critical infrastructure for our country. Our participation also reflects CYTA’s active role in initiatives that create real value for the economy,” he added.

“I, too, would like to assure you that, with consistency, expertise, and close cooperation with all stakeholders, we will work to meet the timelines for the successful completion of the project, which will meet the needs of Cypriot households,” Ms. Tsiakka concluded.