Energy strategy gaps leave Cyprus without long term direction, says expert

Cyprus lacks a coherent long term energy strategy despite growing pressures from costs, climate targets and geopolitics, according to energy expert and former chief of the Cyprus Energy Regulatory Authority (CERA) Andreas Poullikkas. “Energy is one of the most complex issues of our time,” he said in a recently published piece of analysis, stressing that it extends far beyond production and consumption. He added that energy is tied simultaneously to security of supply, household costs, infrastructure investment, climate commitments and geopolitical stability, which pulls policy in multiple directions at once. “Some look at the bill at the end of the month, others focus on new generation units, others worry about emissions and others about strategic autonomy,” he said. He described complexity not as a detail but as the core of the problem in energy policy design. In Cyprus, he argued, this complexity is amplified because the system is an island grid without interconnections for the time being and relies heavily on imported fuels. At the same time, he noted, the country faces decarbonisation obligations while also debating potential hydrocarbon development in the Eastern Mediterranean. “Cyprus has not yet shaped a truly integrated and long term energy strategy that answers a fundamental question,” he said, adding that the key issue is who will take binding decisions for decades ahead and on what basis. He used a triangle analogy to describe energy at the centre of competing forces, where households, the economy and global power dynamics all intersect. Within this model, he said, each corner pulls policy in a different direction, and imbalances lead to systems that serve narrow interests rather than citizens. To illustrate the issue further, he introduced what he described as three analytical triangles that together form a single framework for understanding energy governance. The first is the triangle of power, where consumers, politicians and investors operate with conflicting time horizons and incentives. “The consumer looks at the electricity bill at the end of the month, the politician looks at the next elections, while also facing climate commitments for 2030 and 2050, and the investor looks at returns over twenty years,” he said. He warned that when these forces fall out of balance, outcomes can be damaging for markets and society. He pointed to European cases where companies exploited weak competition to keep prices high and burden consumers. He also referred to countries where governments froze tariffs, saying this provided temporary relief but weakened investment and created long term underinvestment in infrastructure. These distortions, he said, explain why the European Union developed market oversight mechanisms such as ACER and regulatory frameworks like REMIT. The objective, he added, is to ensure energy remains accessible, reliable and fairly priced. The second triangle, he explained, is the sustainable development triangle, which focuses not on decision makers but on values. Its corners are economy, society and environment, reflecting the language of the United Nations Sustainable Development Goals and the European Green Deal. “The objective is clear, we need energy policy that is economically efficient, socially fair and environmentally sustainable,” he said. However, he warned that implementation is far more difficult than theory suggests. He said recent experience shows that aggressive decarbonisation policies, when poorly designed, can increase costs for lower income households. He added that so called green inequality is not theoretical, pointing out that renewable integration in parts of Europe has raised electricity prices and disproportionately affected vulnerable groups without targeted support measures. At the same time, he cautioned that protecting industrial competitiveness must not become a reason to slow decarbonisation, as this shifts climate costs onto future generations. The third triangle, he said, is the technical framework used by engineers, regulators and market analysts. This is the energy trilemma of reliability, cost and emissions, widely recognised by the World Energy Council. He explained that renewable energy reduces emissions but introduces intermittency challenges due to dependence on weather conditions. “Wind and solar do not produce when there is no wind or sun, which creates risks for grid reliability,” he said. He added that solutions such as smart grids, backup generation and storage systems improve stability but increase overall system cost, reinforcing the trade offs embedded in energy planning. He said the three triangles are interconnected and cannot be treated separately because decisions in one layer directly affect the others. This interaction becomes visible, he argued, in price crises, renewable disputes and national climate plans that trigger political tension. He suggested that the three frameworks ultimately converge into a single structure defined by energy security, justice and sustainability. “When electricity or fuel prices increase, the public debate focuses only on cost, but behind the scenes there are investments in reliability, funding for renewables and decisions on how costs are distributed,” he said. He warned that reducing the debate to price alone risks policy responses such as tariff freezes, which may worsen underlying structural problems. He also noted that investors who ignore future carbon pricing risks may make fundamentally flawed long term decisions. Energy, he stressed, is not a normal commodity but the foundation of economic and social systems, supporting hospitals, schools, industry and digital services. He said failures in energy governance therefore become social and political problems as much as economic ones. For Cyprus, he argued, the absence of a coherent framework leaves the system exposed to imbalances that persist across political cycles. “A serious answer to who designs Cyprus energy strategy must be clear, it should be independent experts with technical competence and institutional memory,” he said. He added that strategy should not shift with changing political alliances but instead be based on cross party scientific consensus and long term planning. He called for a structured process led by specialists capable of assessing all three dimensions of the energy system simultaneously, from governance structures to value trade offs and technical constraints. “The role of political leadership is not to replace technical judgement but to commit to implementing expert recommendations in a stable long term plan,” he said. He warned that without such an approach, Cyprus risks remaining trapped in what he described as an uneven and unstable energy triangle.