The Electricity Authority of Cyprus (EAC) is facing challenges in securing land for the development of new solar parks, as the majority of suitable plots have already been acquired by private companies for similar projects.
The EAC is now considering the option of leasing state-owned land, a strategy previously employed to benefit private-sector enterprises.
During a budget discussion for the year 2024 at the House Finance Committee, George Petrou, the Chairman of the EAC’s board, highlighted the organisation’s struggles.
Despite launching a tender process for leasing plots, the EAC has not managed to secure the necessary land for its solar park initiatives, due to the pre-emption by other companies.
Petrou revealed the EAC’s intentions to seek assistance from the relevant minister for the allocation of state land for their solar projects. He lamented the inflated market for solar licenses, stating, “Some have become rich by selling solar licenses for €300,000. We also considered buying licenses, but they are too expensive.”
Petrou also expressed frustration over the past restrictions imposed by the Regulatory Energy Authority (CERA), which prevented the EAC from deploying solar technologies.
The discussion also touched upon the critical role of the Dhekelia power station in the stability of Cyprus’s power distribution and transmission network.
The EAC plans to enhance the station with the addition of two new engines, an investment estimated at €80 million. With the inclusion of battery installations, the total expenditure is projected to reach between €110 and €120 million.
Petrou underscored the urgency of shifting focus towards battery technology in the government’s future energy plans, citing the need for emission reduction.
On the topic of electricity pricing, Petrou indicated that the EAC’s board of directors will decide on a proposed 6% increase in electricity rates, following discussions with CERA.
He appealed for patience and highlighted a recent purchase of emissions at a reduced rate, which might lead to a decrease in the cost per kilowatt-hour.
Last year, the EAC’s emissions expenditure totalled €256 million, with a budget of €274 million allocated for 2024.
Petrou suggested that transitioning to natural gas could cut emissions by 30%, saving around €70 million annually.
Furthermore, Petrou discussed the future of the under-construction Unit 6 at Vasilikos, which will exclusively utilise natural gas, thus limiting its operational capacity until the LNG terminal at Vasilikos is functional.
He also hinted at the potential for the unit to be adapted for hydrogen use in the future and disclosed ongoing discussions within the EAC about the integration of hydrogen in electricity generation.