With an investment of approximately €95 million and co-financing from the European Union under the Cohesion Policy Program “THALIA 2021–2027,” Cyprus is moving forward with projects to upgrade critical sections of the electricity grid with the aim of laying the groundwork for its transformation to support the energy transition.
The actions, which are expected to be completed in December 2029, involve the modernization and reinforcement of critical sections of the existing, conventional power grid so that it can meet the growing demands created by the energy transition and the ever-increasing penetration of Renewable Energy Sources (RES).
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These involve targeted upgrades to existing infrastructure and facilities, as well as the installation of new, advanced infrastructure and systems that enhance the grid’s capabilities and flexibility. These initiatives represent a significant step forward and create the necessary conditions for the gradual transformation of the electricity grid and the further utilization of RES. While they do not, on their own, constitute a comprehensive response to the challenges of the energy transition, they lay important foundations upon which other initiatives and investments should be built in the coming years.
Infrastructure Modernization
A central pillar is the upgrade of the Electric Power Transmission System, by modernizing existing transmission substations and installing new primary substations in areas of high energy demand. Specifically, plans call for the upgrade of the transmission substations in Strovolos, Orounta, Akoursos, Papakosta, Ypsona, and Mari, as well as the Laniteio Primary Substation. In addition, plans call for the construction of a new Primary Transmission Substation at the New Port of Limassol. The work includes the installation of new power transformers, high- and medium-voltage switchgear, and modern protection and remote control systems. These upgrades are expected to increase the capacity of the Transmission Grid, reduce congestion points, and enhance the reliability and security of the power system’s supply.
At the same time, the digital transformation of the Transmission Grid is being advanced through the installation of modern digital equipment and the implementation of smart grid technologies.
Of particular importance is also the automation of the Medium-Voltage Distribution Network through the installation of advanced SCADA/ADMS systems, the creation of a National Distribution Control Center, and the modernization of distribution substations with remote monitoring and control capabilities. These systems will enable continuous monitoring of network operations, faster fault detection, remote equipment management, and the immediate implementation of corrective measures where necessary.
In the same context, the installation of a fiber-optic network for the Distribution System is being co-funded, which will enable the reliable transmission of the large volume of data involved in the digitization and automation of the Distribution Network. This includes, among other things, data to and from smart meters and remotely monitored and controlled distribution substations.
Overall, these interventions are expected to contribute to more efficient management of the Distribution System in near real time, enhancing the reliability and quality of electricity supply.
The co-funded actions also include the development of a modern Geographic Information System (GIS) environment, to support the digital transformation of transmission and distribution networks and the energy transition.
Benefits
The implementation of these actions is expected to enhance the reliability, efficiency, and capacity of Cyprus’s electricity grid. The replacement of existing equipment and the installation of modern control, protection, and remote control systems will improve grid management and help reduce the likelihood of failures or power outages.
At the same time, increasing capacity will create better conditions for the further integration of renewable energy sources and energy storage systems, gradually helping to mitigate the conditions that currently lead to curtailments of renewable energy generation. This will enhance the potential for greater utilization of energy produced from renewable sources.
These measures are also expected to help reduce electricity transmission losses and improve the system’s overall energy efficiency, while creating the necessary infrastructure for the further development of electric mobility, smart grids, energy storage, and other new energy technologies.
The economic benefit for consumers is also significant, as European co-financing covers a substantial portion of the investment cost that would otherwise would be passed on to electricity bills.
The role of these projects in limiting cuts to renewable energy
One of the key issues that the co-funded interventions are expected to address is the reduction of curtailments in production from Renewable Energy Sources, particularly from photovoltaic systems. Currently, when the power grid is unable to absorb all the energy generated, part of the green energy production is curtailed for reasons of grid security and stability.
By upgrading substations and increasing grid capacity, better conditions are created for absorbing a greater amount of energy from renewable sources and, consequently, to limit the instances in which such curtailments are required. However, these measures alone cannot completely eliminate the problem.
Further reduction in curtailments will also depend on the development of energy storage systems, the implementation of additional infrastructure and measures, as well as the overall transformation of the electricity system in the coming years.
Promoting Green Energy
One of the most significant benefits of these actions is that they create the conditions for greater participation of renewable energy sources in the country’s energy mix.
The increase in grid capacity is expected to contribute to better utilization of the electricity generated by photovoltaic and wind power systems and, gradually, reduce the need for electricity generation from conventional fossil-fuel-based power plants.
At the same time, grid upgrades create more favorable conditions for the integration of energy storage systems, which play a critical role in the energy transition, as they can store surplus green energy and allow it to be utilized at a later time.
A foundation for keeping energy costs in check in the future
Despite the great importance of these measures, their implementation does not result in an immediate or automatic reduction in electricity bills. The interventions primarily involve upgrading the electricity system’s infrastructure rather than directly altering the cost of electricity generation.
There is, however, a direct benefit in terms of investment costs: approximately 70% of the cost of the measures, estimated at around €67 million, will be covered by European funds through the Just Transition Fund and, as a result, will not be passed on to consumers through their electricity bills.
Further benefits for consumers are expected to materialize gradually. Combined with greater use of renewable energy sources and the further development of energy storage, reducing technical losses and ensuring more efficient grid operation can contribute, over the long term, to keeping energy costs in check and to the gradual improvement of the efficiency and operation of the electric power system.
Infrastructure for the Future
With a completion target of 2029, the initiatives for the “Evolution of the Electric Grid to Support the Energy Transition” represent significant investments in the country’s energy infrastructure.
These initiatives do not, on their own, provide a comprehensive solution to all the challenges facing the electric grid. However, with the support of the European Union, they lay a strong foundation for the grid’s transformation, creating the conditions for greater utilization of green energy, further development of storage systems, and the gradual adaptation of the power system to the needs of the energy transition.
