Cyprus faces €40M setback in smart meter implementation

By Andreas Karamitas

A €40 million allocation from the Recovery and Resilience Fund, earmarked for the purchase and installation of smart meters, is in jeopardy due to tight timetables. The cancellation of an order for 400,000 meters by the Electricity Authority of Cyprus (EAC) has created obstacles, increasing pressure and the risk of time running out. In a recent communication between K and major companies, including Bioland, urgent attention to the smart meter issue at all levels, be it residential or business, was underscored. The Regulatory Authority for Energy (RAEK) also advocates swift action, emphasizing that smart meter installation is crucial for shaping the metering process, enabling smart energy management, and enhancing the integration of Renewable Energy Sources (RES) into the grid.

Energy poverty and regulatory challenges

Since joining the EU in 2004, Cyprus committed to establishing a competitive electricity market, adopting the Union's target model. Despite this commitment, the failure to implement rules enabling companies and suppliers to provide services hinders price reduction, exacerbating energy poverty. Issues persist with state agencies responsible for market structure, particularly regarding the Cyprus transmission system operator's independence, understaffing, and staff secondment by the EAC. Market regulation, a key demand of the private sector, is deemed imperative to address continuous electricity price increases, environmental impacts, and the closure of avenues for private investment.

Licensing challenges and investment landscape

Several licenses for electricity generation granted to private companies seem inactive, leaving consumers without services. According to RAEK data, there are currently eight approved licenses for renewable energy storage, with four pending. Of the 478 general electricity generation licenses granted, 278 are for photovoltaic systems on existing buildings. Licensing for power plant construction is widespread, and 33 companies have been granted supply licenses, with one application pending. Investors interested in operating in the electricity industry must adhere to RAEK procedures, meet grid connection conditions, and obtain planning permission and building permits.

Investing in renewable energy

The emerging market for electricity from RES plays a crucial role in global energy development. The EU, aligning with its green transition and clean fuel energy goals, supports Member States, allocating €457 million under the Ministry of Energy's plan by the end of 2027. Investors aiming to operate in Cyprus' electricity industry must apply to RAEK, with eligibility currently extending to producers with thermal and RES plants and retail suppliers.

Call for government action

Urgent government action is needed to address market uncertainties, inform stakeholders, and mitigate energy wastage from transmission network limitations. Despite industry challenges, Cyprus remains an attractive destination for renewable energy investments. Strategic state planning and innovative approaches can unlock the market's potential, contributing to the island's transition to a sustainable energy sector.

[This article was translated from its Greek original and may have been edited for brevity and clarity]