**Legal Clause Activated to Ensure Electricity Supply After 2030**
The Cypriot government has taken proactive measures to address potential electricity supply challenges anticipated by 2030. On Tuesday, officials announced the activation of a special legal clause that allows for emergency measures to be implemented to ensure that electricity supply can meet future demand. This decision stems from concerns that Cyprus may face a significant supply gap in the coming years.
The head of the Cyprus Energy Regulatory Authority (CERA), Polyvios Lemonaris, informed members of parliament that the energy ministry has invoked Article 34 of the Regulating the Electricity Market Law. This article enables the establishment of a 'capacity mechanism,' which is designed to maintain adequate electricity supply during periods of high demand or low renewable energy generation.
Lemonaris explained that CERA has conducted a thorough assessment of the energy landscape, considering worst-case scenarios. One such scenario posits that by 2030, Cyprus may still lack access to natural gas for power generation and may not have established electrical interconnections with neighboring countries. In this situation, the island could face a power shortage of approximately 720 megawatts, primarily due to the mandatory decommissioning of conventional power turbines that do not meet European Union environmental standards.
The capacity mechanism, if implemented, could involve a range of technologies and methods tailored to the specific needs of the electricity system. However, the implementation of such measures would incur costs that would ultimately be passed on to consumers. Lemonaris drew parallels with Ireland, which faced similar capacity challenges and activated its capacity mechanism temporarily until permanent infrastructure could be completed.
In light of the situation, Disy MP Nikos Georgiou expressed concerns during the House energy committee session, stating that Cyprus is in a "critical" state regarding energy adequacy. He emphasized the urgency of the matter, noting that energy demand is increasing while the timeframe for decision-making is rapidly closing. Georgiou and his colleagues called for a detailed plan and timetable from the authorities to address the looming energy crisis.
A capacity mechanism is a market-based approach designed to ensure that power plants, storage facilities, and demand-response providers remain available to meet electricity needs. This system acts as a safeguard against potential blackouts during peak demand periods or when renewable energy generation is low. Typically, capacity mechanisms compensate energy resources for their available capacity through long-term contracts, which are classified as state aid and require approval from the European Commission's Directorate General for Competition.
Sources familiar with the situation indicated that the capacity mechanism is essentially a government-led initiative to secure adequate energy capacity. If necessary, authorities would conduct competitions to invite bids for additional capacity, whether from conventional power sources or renewable energy providers. The looming shortfall of 700 megawatts by 2030 is attributed to the required decommissioning of several power turbines, including six at the Dhekelia power plant and three at the Vasiliko facility.
According to Article 34 of the Regulating the Electricity Market Law, if the installed electricity capacity is deemed insufficient to meet demand, the energy minister is authorized to issue a decree published in the government gazette. This decree, which is formulated in consultation with CERA and the Transmission System Operator, will outline the bidding process, the required output in megawatts, and the terms for making this power available.
While Article 34 has been activated, the ministerial decree detailing the specific procedures has not yet been issued, as the process is still in the consultation phase. The government is expected to continue discussions with relevant stakeholders to finalize the necessary steps to ensure Cyprus's energy needs are met in the years ahead.
As Cyprus prepares for potential energy challenges, the activation of this legal clause reflects a commitment to securing a reliable electricity supply for the future. The government’s response underscores the importance of strategic planning and collaboration among various entities to address the evolving energy landscape.