*Press Release: Electricity Market Association
A single measure is not enough to reduce electricity costs. A comprehensive, long-term strategy is needed, aimed at creating an efficient, flexible, and competitive electricity system.
ΣΧΕΤΙΚΑ ΑΡΘΡΑ
Adequacy “walks a tightrope”
Harnessing Green Energy
Cyprus has two significant advantages: abundant sunshine throughout the year and a substantial installed capacity of renewable energy sources. However, curtailment of renewable energy production and the reliance on conventional energy sources currently represent one of the system’s greatest weaknesses. Every kilowatt-hour of clean energy that is generated but not utilized is a missed opportunity for cheaper electricity.
Therefore, what is needed is the full utilization of the energy already being produced. Storage is the most immediate and appropriate solution. The market has demonstrated in practice that it is mature and that there is strong investor interest. What is imperative is that procedures keep pace with the needs of the system and consumers. This is because storage will play a decisive role in ensuring the system’s adequacy and flexibility. Consequently, this will strengthen energy security and the economy’s competitiveness, with tangible benefits for all of Cypriot society.
That is why priority must be given to existing wind farms. These facilities are already in operation, have been licensed, and have undergone a series of technical and environmental inspections. Precisely for this reason, the Distribution System Operator’s (DSO) to treat the addition of storage systems to existing photovoltaic parks as if they were new connection applications raises legitimate concerns. This practice is not considered acceptable, as the creation of a clear and functional framework for the development of storage systems, as well as the acceleration of licensing, connection, and implementation must be a priority for the relevant authorities. Otherwise, all we achieve is the perpetuation of a costly and polluting model of electricity generation.
Grid Modernization
Another long-standing and critical issue is the urgent need to modernize the grids. No energy plan can function without the appropriate grids. The transition to an electric system with more renewable energy, energy storage, and decentralized generation requires grids with greater capacity, flexibility, and digitalization.
Investments in the grids are not merely a technical upgrade. It is a prerequisite for connecting new generation units, utilizing more green energy, and limiting curtailments. Therefore, long-term planning, specific timelines, and the acceleration of necessary projects are needed.
Increasing Available Capacity
An efficient electrical system requires sufficient capacity. The recent rolling blackouts have demonstrated just how vulnerable our country’s system is, how limited the safety margins are, and how real the risk of a widespread blackout is. At the same time, Cyprus’s first private power plant remains out of operation despite its readiness to provide significant generating capacity and cover approximately one-third of the country’s energy needs.
This particular issue highlights a long-standing and significant contradiction. As a state, we cannot seek lower prices while simultaneously keeping our generation capacity limited. Competition has been proven to create the necessary conditions for lower prices. The more producers and the more available units there are on the market, the more choices consumers have at their disposal. That is why we must ensure that any investments, particularly in the crucial energy sector, do not remain merely on paper. The private sector can make a decisive contribution through its investments and expertise. At the same time, the public sector must ensure that investments that strengthen the country’s productive base are integrated into the energy system in a timely and effective manner.
The Arrival of Natural Gas
Although the initial timeline has been repeatedly postponed, its arrival as soon as possible and its immediate utilization are necessary to reduce dependence on conventional fuels, which are subject to international price fluctuations. Its use will result in lower pollution compared to other fossil fuels, serve as an energy bridge to renewable sources, and will help reduce electricity costs by 20–25% once it is integrated into power generation. It is clear that the delay in its utilization is not merely an energy issue. It is directly linked to the impact on electricity generation costs and, by extension, on the domestic economy.
Effective Operation of the Competitive Electricity Market
Despite the launch of the Competitive Electricity Market in October 2025 and the fact that it represents the first significant step toward reducing energy costs, its success will nevertheless be determined by the stability of the rules and the prompt resolution of significant issues that distort competitive conditions.
For months, the market was allowed to operate without monthly financial settlements and complete metering data, while incorrect charges were recorded for Mandatorily Enrolled Units (MEU).This situation created uncertainty among market participants and affected market stability.
For this reason, it is vital to ensure a level playing field and to strengthen the market’s proper functioning, with the aim of ensuring the long-term sustainability of the energy sector for the benefit of consumers, who, thanks to the AAH, have more choices, better services, and more competitive prices.
Coordination and Speed Are Essential
All these changes share a common characteristic: they cannot proceed in isolation. Energy storage requires grids. New renewable energy sources require available capacity. A competitive market requires sufficient generation. Sufficient generation requires new plants and infrastructure. And all of these together require a stable and effective regulatory framework.
Coordination among the government, regulatory authorities, operators, producers, suppliers, and investors is non-negotiable. A specific timeline, measurable goals, and, above all, speed in implementation are also needed.
Cyprus has neither the leeway nor the luxury to afford further delays. The energy transition requires projects, consistency, and determination. Only in this way will the common goal be achieved: a flexible system that makes the most of its available resources and provides cheaper electricity for households and businesses.
