Newsroom
Cyprus faces a severe electricity deficit by 2030 unless the delayed natural gas terminal at Vassilikos is completed, Energy Minister Michalis Damianos told MPs on Tuesday.
Speaking before the House Energy Committee, Damianos stated that finalizing the Vassilikos project represents the island’s only viable path toward long-term energy security. He rejected alternative interim solutions, arguing that launching new public tender processes would involve lengthy legal appeals and construction timelines that the country cannot afford.
The warning comes at a critical juncture for the Cypriot energy sector, which is bound by European Union commitments to decommission older, polluting generation units at the Dhekelia power station by the end of 2029.
The race against the 2030 decommissioning deadline
The Electricity Authority of Cyprus (EAC) has already ordered smaller, lower-emission replacement generators. Two units are scheduled to arrive in 2028, followed by a third in 2029. However, Damianos clarified that these new generators possess a lower capacity than the infrastructure they are replacing.
According to the minister, this smaller capacity means that the full replacement of these generators by the EAC can only happen with the arrival of natural gas at the Vassilikos project. He added that electricity adequacy and the Vassilikos poject, along with the replacement of the generators in Dhekelia, are completely interconnected.
An independent assessment by engineering firm Technip at the end of 2025 revealed the Vassilikos project is roughly half-finished. Damianos declined to provide a specific completion date, stating the report focused solely on remaining technical requirements rather than timelines. The government intends to finalize new tender terms this month, aiming to award a contract by early 2027.
Battery storage and the Great Sea Interconnector
To address immediate grid vulnerabilities, the Transmission System Operator (TSO) has secured a contract for 120 megawatts of battery storage, expected to go live before the summer of 2027. This initiative aims to reduce the forced curtailment of solar energy, particularly from residential rooftop photovoltaics.
While the state anticipates total public and private storage capacity to reach 450 megawatts by 2027, the Energy Minister cautioned that batteries cannot sustain the grid during prolonged periods without sunlight, preserving the necessity for natural gas.
The parliamentary session also addressed the Great Sea Interconnector (GSI), a subsea cable project designed to connect the electricity grids of Cyprus, Greece, and Israel. The project carries an estimated cost of €1.9 billion, supported by €658 million in EU funding. The remaining balance is slated to be recovered directly from Cypriot and Greek consumers over a 30-year period via an 8.2% interest rate levy on electricity bills.
Damianos confirmed that an independent evaluation by the European Investment Bank (EIB) is due by the end of the year to determine actual projected costs. He stated that the Republic of Cyprus currently does not plan to take an equity stake in the project. Addressing regional reports, the minister noted that EU funds earmarked for the Cyprus-Crete link cannot legally be diverted to finance a connection between Cyprus and Israel.
Opposition criticizes government action
The government's briefing met with sharp criticism from opposition lawmakers, who voiced skepticism regarding consumer costs and project management.
Committee Chairman Nikos Georgiou accused the administration of lacking a coherent strategy, stating that businesses and households face the direct threat of rolling blackouts if the 2030 targets are missed. Georgiou called for a unified government position on the GSI and demanded immediate intervention to resolve ongoing labor disputes within the EAC that threaten grid stability.
AKEL MP Andreas Pasiourtidis expressed frustration over the lack of a clear roadmap, noting that public discourse has shifted from lowering electricity rates to whether the island will have functional power after 2029. Pasiourtidis also criticized an upcoming European harmonization bill targeting motor fuel emissions, warning it could drive fuel prices up by 15% and negatively impact local tourism.
ELAM lawmaker Linos Papagiannis stated that the administration failed to answer critical questions regarding when consumers would see relief on their utility bills.
In contrast, DIKO MP Chrysis Pantelidis affirmed his party's support for the Ministry's initiatives, promising constructive legislative cooperation during the upcoming parliamentary session to resolve the island's pressing energy bottlenecks.
