Private companies were handed the lion’s share of Cyprus’s renewable energy capacity while consumers paid nearly €1 billion in carbon charges and saw no reduction in their electricity bills, the Audit Office has found.
A special report on the Electricity Authority of Cyprus (EAC), published Thursday, found that the Cyprus Energy Regulatory Authority (CERA) gave preferential treatment to five large private firms in licensing solar energy projects, allowing them to reap enormous profits from generation costs that had fallen sharply — savings that were never passed on to consumers.
Between 2020 and 2024, as commercial solar installations surged across the island, consumers not only saw no drop in their bills but were also charged for carbon emission rights totalling nearly €1 billion — a cost the EAC passed directly to customers.
Auditor General Andreas Papakonstantinou said the only way to have cut electricity costs for consumers would have been to allocate substantial solar capacity to the EAC. That did not happen.
The report places primary blame on CERA, which instead expanded private companies’ capacity and promoted their competition with the EAC, which held a dominant market position. Previous EAC boards were also criticised for failing to respond effectively or in time.
420 MW to private firms. 20 MW to EAC.
The numbers tell the story. Private operators now control around 420 megawatts of solar and wind capacity — excluding rooftop installations — against just 20 megawatts held by the EAC across four parks, as of September 2025.
Most of the land suitable for solar development has passed into private hands, leaving the EAC unable to find sites for its own installations.
Some private firms that secured land and CERA licences never developed them. They are now demanding millions from the EAC to transfer those permits — licences that originally cost them only tens of thousands of euros.
The Audit Office has called on CERA to cancel these licences and reissue them to the EAC or other interested parties.
How the EAC was sidelined
According to an EAC letter cited in the report, CERA intervened between 2019 and 2022 to require the EAC to halt its renewable energy development activities while it reviewed the legal framework. In 2022, CERA also published a draft regulatory decision signalling its intention to grant the EAC no further licences.
CERA disputed that account. It said the delays occurred because the EAC took actions that contradicted what was being discussed for establishing a renewables development programme — one CERA said was necessary to create competitive market conditions.
CERA also said it had never refused to receive, examine, or assess any licence application from the EAC.
In a statement quoted in the report, CERA said it was obliged under national legislation and EU directives to take preventive measures to foster effective competition in Cyprus’s wholesale electricity market, “including regulating the manner and/or permitted limit of installed capacity in which the EAC may participate in the electricity market, so as to preventively avert potential abuse of its dominant position.”
“Competition is not an end in itself”
Papakonstantinou was unconvinced. Even accepting CERA’s concerns about unchecked EAC renewables expansion, he said, the practical outcome was that consumers lost any potential benefit entirely.
The prolonged breakdown in cooperation between the EAC and CERA over renewable energy development, he added, had worked in favour of private interests and against the end consumer.
In the report, Papakonstantinou wrote directly that “the opening and operation of the electricity market and competition are not ends in themselves, but are pursued to achieve the substantive purpose of legislation, which is the protection of consumers and ensuring affordable, transparent energy prices.”
All electricity companies, including the EAC, should operate without discrimination, he said. The EAC’s difficulties integrating renewables had prevented it from cutting production costs — with fuel and carbon rights accounting for 70% of its total operating expenses.
The global cost of generating electricity from large-scale solar had fallen 90% between 2010 and 2024, from $0.417 per kilowatt-hour to $0.043, according to the International Renewable Energy Agency report cited in the audit. Cyprus consumers saw none of that saving.
Other findings
The report also flagged that €955 million in carbon emission rights costs were passed to consumers between 2020 and 2024; 384,702 customer service calls went unanswered between 2022 and 2024; €276 million in electricity in areas not controlled by the Republic went unbilled between 1964 and 2022; and 56.1% of EAC tenders valued above €10,000 between 2018 and 2023 were awarded by negotiation without open competition.