Cyprus being part of the European needs to produce at least 23% of its electricity from renewable energy by the yea 2030. At the moment (2022) Cyprus is producing 16% of its electricity from renewable energy and this is currently being delivered through Photovoltaic (PV) parks which is the preferred means to achieving the figure.

The Regulatory Authority:

The Energy Regulatory Authority (hereinafter referred to as “CERA”) is the national independent Energy Regulatory Authority of the Republic of Cyprus which is in line with the regulatory control of the proper functioning of the internal electricity and gas market which are in line with the EU Directives. CERA is independent from any other public body of the Republic of Cyprus and makes its own decision away from any other political organizations.

The Law:

The Law of 2013 was recently replaced by the Promotion and Encouragement of the Use of Renewable Energy Sources Law of 2022 (L. 107 (I)/2022) for the purpose of partial harmonization with the European Directive 2018/2001 of the European Parliament and the Council of 11 December 2018.

The below common framework was established under the above mentioned Law for the promotion of renewable energy.

  • A binding union target for the overall share of energy from renewable sources in the gross final energy consumption of the European Union in the year 2030.
  • Rules for financial support of electricity produced by renewable sources, for self consumption of similar electricity, for use of energy from renewable sources in the heating, cooling and transport sectors, for regional cooperation between the Republic of Cyprus and the EU member states and between Cyprus and third countries, for the guarantees of origin, for the administrative procedures and for information and training.

Procedure for setting up a PV Park in Cyprus:

A. Finding suitable land:

Finding suitable land is the first step that needs to be considered for PV parks. The following matters must be taken into consideration when looking for the appropriate land to be used for PV parks.

The Environment Department suspended the assessment of Photovoltaic Parks in February 2021 onward, until a strategic environmental impact assessment had been carried out. In February 2022 the Environment Department has decided that big solar and wind parks are forbitten from Natura 2000 sites.  Solar parks and wind parks according to the Environment Department are also banned in mountainous areas, areas with special landscape characteristics and in plots with big inclines where considerable earthworks would have been taken place. Further archeological sites and ancient mountains are also protected within the Natura 2000 sites.

In addition to the above, projects which are also located to close distance to Natura 2000 site will also have to undergo the relevant assessment to evaluate the impact they could have on projected elements of these sites.  (,on%20land%20and%20at%20sea)

Another matter that needs to be considered when looking for suitable land is the trees that are planted within the land as there are some trees that are protected. A recent example where the Department of Town Planning has rejected an application to build a new photovoltaic park was because the company violated the terms of the project to preserve dozens of carob trees on the site.

And even when all the above are satisfied caution should be taken in relation to acceptance by nearby committees since they reserve the right to object to such establishment as it may effect there everyday standard of living and culture of communities.

B. CERA and Environmental License:

Following the founding of the suitable land and taking into consideration that all above criteria have been met, the interested party must submit an application to CERA for the obtaining of the relevant license.  The application must include the proposed design of the PV park.

Once CERA approves the application for the license, an environmental an environmental study must be undertaken which will have to include the points mentioned above including proximity to rivers, lakes etc.

C. Connection to the Grid:

The final stage prion to having a PV park that is Ready to Built is to get grid connection terms from the Transmission System Operators of Cyprus. In order to receive a grid connection the below are the most important criteria that need to be met:

  • Have a CERA and Environmental license as mentioned above
  • The local electricity sub-station to have MW capacity. This is monitored by the Distribution System Operator and a hosting capacity map for each sub station.
  • Distribution network to have the ability to sustain more power.

Current Situation in Cyprus:

As the current energy infrastructure of Cyprus is nearing its full capacity and most sub-station have zero or very limited capacity to have new PV parks connected to them the government of the Republic of Cyprus has recently announced that the distribution network and sub- station will be upgraded within the next 3-5 years and will also give subsidies for storage PV park technology. The above mentioned are posing a threat to current PV parks in the form of production curtailments and future PV parks to be rejected at the grid connection stage.

Future Goals

According to Article 4 of Directive 2009/28/EC it requires each Member State to Impose a national renewable energy action plan. These Action Plans define Member  States’ national targets for the share of energy from renewable sources to be consumed in transport, power generation and heating and cooling in the year 2020, taking into account the impact of other energy efficiency policy measures on the final Energy consumption, as well as the appropriate measures to achieve these national overall targets.

Under the targets of the European Union, the Republic of Cyprus was required to increase its total energy consumption from renewable energy sources to 13% by 2020 however, Cyprus has only managed to achieve 13.8% by the end of 2018. Cyprus is now required to increase the number to 23% by 2030.

The Transmission System Operator has recently announced that the platform for the competitive electricity market (CEM) which will include the Energy Exchange will be ready by the fourth quarter of 2022.

It was further mentioned by Mr. Stavrinos, the Director of the Transmission System Operator that the competitive electricity market was based on the EU net pool market model and would regulate all transactions of purchase and sale of electricity at a wholesale market level. In addition it was stated that the CEM will include financial markets of the stock market type which are the futures market and the day-ahead market, but also other types of markets, such as the real-time balancing market, which will ensure the energy balance between production and demand.

Finally, the Transmission System Operator (CSE) has signed a contract with the Cyprus Stock exchange for the provision by the CSE of the services of the Clearing House, when CEM starts to operate.

In the meantime the Electricity Authority of Cyprus sells approximately 27-28 cents per kW whereas the Contractor sells 23-24 cents per kW with the returning to the investor approximately 18cent per kW.

Competitive Electricity Market

It has been the commitment of the Cyprus government to open the electricity market to private competition since 2004, with is accession to the EU. Initially all PV parks had a PPA (Purchase Power Agreement) with  the Electricity Authority of Cyprus at fixed tariff for 20 years.

From 2016 until 2019, all PV parks had a PPA agreement with the Electricity Authority of Cyprus at a variable tariff of production. The plans to create o a competitive electricity market have been planned by DSO and TSOC for some time now.

Following the establishment of the CEM, only licensed energy suppliers will be able to participate in the market. The energy suppliers will be buying electricity from PV parks and other energy procedures and sell to end consumers. The will also be able to trade in the stock exchange.

Currently, the “Transitional Energy Market” is in operation, where energy producers can sell energy through a licensed energy supplier directly to end consumers. No exchange is in operation during the Transitional Market and reports are shared with the DSO by the energy suppliers ahead of every month to state the electricity they will buy and sell. Finally, any PV park that is currently completed, needs to participate in the Transitional Energy Market by entering into a PPA with a licensed supplier.

Cyprus Corporate Services Simplified

At MariCorp we target to simplify Corporate Services as a whole and offer our clients a straightforward and simple solution.

Katerina Rossou

Senior Corporate Manager

Contact us

Where to find us:

81, Griva Digeni Avenue, MARINOS Court, 2nd floor, office 203

P.O. BOx  42656, P.C. 6501, 6043

Larnaca – Cyprus

Tel: +357 24663402 , Fax: +357 24663409