Newsroom
Plans to upgrade the Dhekelia power station have been pushed back again, with the Electricity Authority of Cyprus (EAC) now saying the three new generation units intended for the site are unlikely to arrive before 2030.
Speaking to the House of Representatives Finance Committee during discussions on the EAC’s budget, EAC Chairman Giorgos Petrou said the latest delay was triggered by a recent update from Siemens, the manufacturer, which extended the delivery schedule by another 18 months. The change means the overall delivery timeline has effectively stretched from the originally expected 2.5 years to roughly four years.
Petrou explained that the EAC had approved a contract worth €140 million and had planned to offer incentives for earlier delivery. However, the supplier’s revised timeframe has altered the cost and planning assumptions, with the Authority now reconsidering the entire project, including the possibility of cancelling the purchase altogether.
According to Petrou, the main reason for the delay is global pressure on industrial production capacity, driven in part by large-scale demand from data centres, particularly in the United States.
The issue has already been escalated politically, and a meeting with the responsible minister has been arranged. Petrou described the development as unexpected and warned it could create a serious supply gap, since some fuel-oil units are expected to be withdrawn from service in 2029. If replacement units are not available by then, electricity generation capacity could be reduced, unless Cyprus has already transitioned to natural gas by that point, something he said he still hopes will happen.
Budget projects €349 million cash deficit
During the same committee session, Petrou presented the EAC’s financial outlook, outlining projected spending of €2.555 billion against expected revenue of €1.956 billion. The figures point to a forecast cash deficit of €349 million, which the Authority plans to cover through borrowing and internal funds.
Capital spending is set at €456.679 million, higher than in 2025, reflecting upgrades and infrastructure projects linked to expanding the grid’s ability to absorb renewable energy.
The budget also includes a €250 million contingency provision for costs that may fluctuate sharply, including fuel purchases, electricity imports, and expenses tied to the Market Operator. The EAC stated that if these costs materialize, they would be recovered through tariff adjustments and charges.
MPs raise concerns over uncertainty, emissions costs, and social impact
Several MPs questioned the reliability of the budget, highlighting the scale of unknown variables. Finance Committee acting chair and DIKO MP Chryssis Pantelides said the EAC’s projections carry significant uncertainty and pressed for clearer breakdowns of spending and stronger forecasting where possible.
DISY MP Onoufrios Koullas focused on emissions costs, asking how much CO₂ output the EAC expects in 2026 and what carbon price assumptions were used. He also requested estimates of how much electricity costs could fall if generation relied entirely on natural gas. DISY MP Savvia Orfanidou raised concerns about affordability and asked where Cyprus currently ranks among EU countries for electricity prices, as well as what measures exist to protect vulnerable consumers.
AKEL MP Andreas Kavkalias called for clear planning on key strategic issues, including the Vasilikos gas terminal, electricity interconnection, and energy storage. He also questioned whether the EAC’s planning depends on natural gas arriving by the end of 2026 and what the consequences would be if that timeline slips again.
EDEK MP Marinos Sizopoulos questioned taxation on fuel and emissions-related charges and asked for clarification on fuel procurement procedures. He also expressed doubts about whether it makes sense to invest in diesel-based generation units if Cyprus is meant to be moving toward natural gas. Sizopoulos further raised concerns about high-voltage pylons located near residential areas.
DIPA MP Alekos Tryfonides stressed that the EAC’s investment programme must translate into measurable benefits for consumers and strengthen the Authority’s competitiveness. He also asked for assurances that Cyprus will have sufficient generation capacity during peak summer demand. After the meeting, he criticized the practice of charging VAT on emissions and penalties in electricity bills, and noted that although around 62,000 people qualify for the special “Tariff 08,” only about 30,000 fully benefit from it.
Cyprus among the EU’s most expensive electricity markets
EAC General Director Adonis Iasemis told MPs that Cyprus currently ranks 10th in the EU in terms of electricity price levels, and rises to 8th when taxes are included. He also referred to targeted support programmes for vulnerable consumers, including initiatives aimed at reducing consumption through energy-efficiency upgrades such as replacing older air-conditioning units.
Addressing the large contingency budget line, the EAC said it serves as a safeguard against volatility in fuel prices, unexpected increases in demand, and shifts in how electricity is purchased through the Market Operator. The Authority argued that higher purchasing volumes could also lead to higher revenue, without necessarily changing overall profitability.
On the issue of summer supply, Petrou said adequacy planning depends on unit availability and risk management, but acknowledged that serious failures in ageing infrastructure remain a constant threat.
Storage systems delayed until 2027
Petrou also updated MPs on electricity storage infrastructure, saying a €40 million contract was awarded to Cyta, but delivery delays mean the storage systems are now expected to become operational in August 2027.
Regarding the Vasilikos natural gas terminal, Petrou said the EAC could assist through its role as a shareholder in ETYFA and may deploy its engineers to help speed up procedures, with a decision expected within days.
On the issue of high-voltage pylons, an EAC official said the Authority historically avoided routing pylons through residential areas, but urban expansion has brought housing closer over time. In cases where safety concerns arise, the EAC said it requests independent measurements from universities and operates under EU regulatory limits.
