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Cyprus is gearing up for a major shake-up in its electricity market by 2025, but concerns are growing over how this will impact investments in renewable energy.
Recent figures show that Cyprus is expected to cut back on renewable energy production by about 28% in 2025. Just this past April, those cuts soared to a staggering 70%. In comparison, Greece, which relies more heavily on renewable energy, manages to keep its cuts to just a few percent.
Tasos Parasyris from the Cyprus Electrical Contractors Association (CECA) called the situation "unacceptable," noting that these cuts began back in 2021 and no effective action has been taken to fix the problem. With Cyprus’s energy market dominated by traditional power plants, renewable energy prices are much higher than in Europe, masking the real impact of these cuts.
As the market opens up, renewable energy prices are expected to drop, exposing the sector to even more challenges. To address this, Cyprus is considering a major project to connect its electricity grid with Europe. This connection could help reduce the necessary cuts to just 5-8% by 2040, making it easier for Cyprus to export excess energy and support local renewable energy investments.
In contrast, relying on battery storage alone would still result in higher cuts, around 18-20%.
The Cyprus Federation of Employers and Industrialists supports the grid connection project, arguing it’s crucial for reducing energy costs and integrating Cyprus more effectively with the EU. They’ve urged the government to act quickly to make the most of this opportunity.
As Cyprus heads towards this major market overhaul, how it handles these challenges will be key to the future of its renewable energy sector.
