The 3 pillars of government energy policy and enterprises’ demands to reduce costs

“Low energy costs can make Cyprus more competitive and lead to substantial growth,” stated Minister of Energy, Commerce, and Industry George Papanastasiou, as he opened the discussion on the future of Cyprus’ energy strategy at the 15th Nicosia Economic Congress.

The discussion focused on the progress of renewable energy (RES) projects, the urgent need for energy storage solutions, the arrival of natural gas, and the opening of the electricity market. It highlighted both the challenges and new opportunities facing the business sector.

The Minister outlined the government’s strategy through three main pillars:

1. Fuel switching and emissions reduction,
2. Strengthening the share of renewables in the energy mix, and
3. Electric interconnections for energy export.

He stressed that an isolated country like Cyprus, with no heavy industry, cannot fully utilise its productive capacity without being interconnected with external grids. Achieving a competitive electricity market is key, he noted, so that energy production can be efficiently used even beyond peak hours.

Angela Andreou, Energy Supervisor at EKO Cyprus, emphasised the need to accelerate grid upgrades, noting that without improved infrastructure, more renewable energy projects cannot be integrated.

She highlighted the importance of energy storage, pointing to growing private sector interest in such investments. She also called for the simplification of licensing procedures to encourage faster development.

Additionally, she proposed offering incentives to consumers to adopt energy storage solutions and pushed for the opening of the electricity market within 2025, as currently scheduled.

Florentia Zorba, Business Development Manager at Zorbas Group, noted that a competitive energy market will bring progress across all sectors. She referred to the group’s successful investment in renewable energy sources (RES), explaining that energy costs previously represented a significant portion of the company’s expenses.

She said that maximising the share of RES will substantially reduce costs for all consumers and described the introduction of natural gas as a positive development, both environmentally and economically.

Alexandros Charalambides, Associate Professor at the Cyprus University of Technology (TEPAK), placed strong emphasis on the need for realism and effective use of technology.

He reminded the audience that technical solutions already exist, such as grid interconnection and the use of natural gas, and suggested that Cyprus could take inspiration from countries like Malta, which has successfully developed low-cost, innovative desalination technologies.

Charalambides explained during the discussion that needs vary between large organisations and vulnerable consumers, and that technological adaptation is both essential and feasible. This perspective underscored the importance of tailoring energy solutions based on consumer profiles.

In response to the comments made by his fellow panelists, Minister Papanastasiou agreed on the need for realism and a phased implementation of reforms. He acknowledged that a competitive electricity market won’t reduce costs immediately, and in fact, there may initially be a slight increase in prices before the system stabilises and efficiencies emerge.

He said that opening up the market is necessary, and that in this new environment, “only the best will survive”, indicating a shift toward performance-based market dynamics.

The Minister also highlighted the strategic role of data centers in driving future growth and stressed the importance of upgrading local energy distribution networks to support broader energy goals.

Concluding the discussion, Papanastasiou announced upcoming government actions aimed at supporting photovoltaic parks, including time extensions for procedural deadlines related to their development.

The session was moderated by Dr Chryso Sotiriou, Supervisor at ideopsis ltd.