Cyprus needs balanced long-term strategy for energy security, expert warns

Cyprus must adopt a balanced and long-term energy strategy combining conventional power generation, renewable energy, storage, electricity interconnection and demand management, energy systems expert and former Cyprus Energy Regulatory Authority (CERA) chairman Andreas Poullikkas has warned. In an analysis on energy security, Poullikkas said there are no simple solutions to complex energy challenges, arguing that Cyprus’ electricity system requires a comprehensive approach rather than reliance on individual technologies. “Electricity adequacy is one of the most important conditions for economic stability, social cohesion and quality of life in Cyprus,” Poullikkas said. He said the experience of recent years had clearly demonstrated that the island’s electricity system faces growing challenges, particularly during periods of high demand and extreme temperatures. According to Poullikkas, Cyprus’ position as a small and electrically isolated island means that security of supply cannot depend on one-dimensional choices. “The security of supply of a small and electrically isolated island country cannot be based on one-dimensional options, but requires a balanced mix,” he said. He explained that this mix must include conventional generating units, renewable energy sources, energy storage, electricity interconnection with neighbouring systems and demand-side management. Poullikkas stressed that the reliability of the electricity system is not only a technical issue but also a key factor in attracting investment, maintaining competitiveness and protecting consumer welfare. He said conventional power stations will continue to have an important role, particularly during peak demand periods and when renewable energy production is reduced. While Cyprus has made significant progress in renewable energy deployment, Poullikkas said solar and wind generation remain variable by nature and cannot currently guarantee uninterrupted electricity supply on their own. “Conventional units remain a necessary element of the system, not as competitors to the green transition, but as supporters of a safe and smooth transition,” he said. A key part of this transition, he added, is the long-awaited introduction of natural gas for electricity generation. Poullikkas said natural gas could lower fuel costs compared with liquid fuels, improve environmental performance and provide greater flexibility to the electricity system. He warned that the failure to activate the necessary infrastructure has prevented Cyprus from fully benefiting from power stations designed to use natural gas. “The completion of the necessary natural gas infrastructure is critical, not only for technical and environmental reasons, but also because it could provide a direct economic benefit to consumers,” he said. He added that lower production costs could eventually translate into reduced electricity bills for households and businesses. Poullikkas also highlighted the importance of large-scale energy storage, saying batteries can play a crucial role in integrating more renewable energy into the electricity system. “Energy storage can contribute substantially to reducing renewable energy curtailment, smoothing load fluctuations and improving grid stability,” he said. He explained that storage allows electricity generated during periods of strong solar production or low demand to be used during peak consumption hours. However, he cautioned that storage should not be viewed as a standalone solution. “Storage alone cannot cover all adequacy needs, particularly during prolonged periods of low renewable energy production,” Poullikkas said. He argued that storage must operate alongside other infrastructure, including electricity interconnection. According to Poullikkas, connecting Cyprus with neighbouring electricity systems would allow the island to import power when demand is high and export surplus production when possible. “Ending energy isolation is not simply a technical matter. It is a prerequisite for Cyprus’ participation in European energy markets on equal terms,” he said. He added that interconnection would improve resilience, support cost containment and create a more competitive electricity environment for consumers. Poullikkas also pointed to demand-side management as an increasingly important part of electricity security. He said smart meters, dynamic tariffs and demand response programmes would allow consumers to adjust consumption patterns, reducing pressure during peak periods and limiting the need for expensive reserve capacity. “Demand must adapt better to available generation,” he said, adding that greater consumer flexibility would strengthen system stability and reduce costs. The expert also underlined the importance of a properly functioning competitive electricity market. He said stronger competition would encourage investment in new generation capacity, storage and innovative flexibility services while improving efficiency. Conversely, he warned that limited competition could discourage investment, increase electricity generation costs and slow the development of a modern energy system. Poullikkas said Cyprus should avoid viewing energy technologies as competing alternatives and instead focus on combining their strengths. “Energy adequacy is not secured through confrontation between technologies, but through the correct combination and complementary role of each one,” he said. He argued that Cyprus needs conventional units for reliability and reserve capacity, renewable energy for decarbonisation, storage for better use of clean electricity, interconnection for flexibility and demand management to reduce peak consumption. Such an approach, he said, would directly benefit consumers by reducing the risk of shortages and interruptions, limiting reliance on costly emergency measures and supporting more stable electricity prices. Poullikkas further stated that energy planning is a matter of strategic importance rather than simply a technical exercise. “The creation of this energy mix is not simply a technical choice; it is a choice of national responsibility and strategic importance,” he said. He warned that Cyprus’ biggest challenge may not be a shortage of available solutions but the tendency to underestimate the complexity of the electricity system. “Perhaps the biggest problem we face today is not the lack of available solutions, but the tendency to address an extremely complex sector with oversimplified approaches,” Poullikkas said. “Cyprus needs an energy strategy based on knowledge, technical documentation and long-term planning, away from simplistic approaches and fragmented solutions,” he concluded.