With its special report on the EAC, which was released on Thursday morning, the Audit Office establishes and confirms the preferential treatment received by the State and in particular the Cyprus Energy Regulatory Authority (CERA) by the private sector and in particular by five large companies in the sector, during the licensing and operation of projects for the utilization of renewable energy sources and in particular photovoltaics.
The report confirms that the vast majority of electricity from renewable energy sources was granted to private individuals, allowing them to make huge profits, without electricity consumers benefiting from significantly lower electricity production costs.
At the same time that the installation of commercial photovoltaic systems skyrocketed, i.e. from 2020 to 2024, consumers not only did not see reductions in their bills, but were also burdened with the additional costs for the purchase of emission rights, which during this five years reached one billion euros!
The Audit Office points out at several points in the special report that the only way to reduce the cost of electricity for all consumers was to provide significant electrical power from photovoltaic systems to the EAC. However, this did not happen, with CERA's main responsibility, which wanted to increase the available power of private companies and strengthen their competition with the EAC, which held a dominant position in the market.
However, the Audit Office also blames previous boards of directors of the organization, which did not react in a timely and effective manner, for the EAC's very low penetration into RES.
Today, about 420 megawatts of photovoltaic and wind farms (not counting rooftop photovoltaics) are exploited by private individuals, compared to only 20 megawatts maintained by the EAC. In addition, most of the available land suitable for the installation of photovoltaics has come into the possession of private individuals, with the result that the EAC cannot find land for the installation of its own photovoltaics. Private individuals who secured such land and licenses from CERA for photovoltaic parks, did not implement the permits and are now asking the EAC for millions to transfer the licenses, even though they cost them only a few tens of thousands of euros.
The Audit Office requests CERA to cancel these licenses and grant them either to the EAC or to other interested parties.
What the Auditor indicates
Among many other observations and observations, the Auditor General emphasizes in the special report the following:
-The significant delay in the inclusion of RES projects in the EAC's production capacity has given priority to private companies to develop large photovoltaic projects or to secure relevant permits, but without the consumer benefiting to date from the entry of these companies into the market and has contributed to the saturation of the network and the draining of the market from available land suitable for the development of photovoltaic projects.
-It is also noted that, despite the drastic reduction in the global Levelized Cost of Energy (LCOE 2) from large-scale photovoltaics, in Cyprus it has not been possible to take advantage of this reduction in a way that will bring tangible and measurable benefit to the final electricity consumer.
-It is reported that, according to the report entitled "Renewable Power Generation Costs in 2024", issued by the international organization IRENA (International Renewable Energy Agency) in July 20253, the cost of electricity production from photovoltaics has decreased significantly over time. According to the above report, between 2010 and 2024, the global Weighted Energy Cost of large-scale photovoltaic systems decreased by 90%, from 0.417 USD/kWh to 0.043 USD/kWh.
-The delay in the inclusion of RES projects by the EAC is attributed, according to a letter from the EAC in October 2025, to the fact that CERA, with its interventions in the period 2019 – 2022, had demanded from the EAC to stop the actions for the development of RES projects, until an examination on the legal framework was completed and it was satisfied with the way RES projects were integrated into its production capacity. Also, as mentioned, in 2022 CERA published a draft Regulatory Decision, with its intention not to grant further licenses to the EAC.
-For its part, CERA argues that the delay that occurred (in the creation of RES parks by the EAC) is attributed to the fact that the EAC, in the midst of the dialogue between them, was taking actions that were contrary to what was being discussed for the establishment of a development program for RES electricity production systems, which was necessary in the context of creating conditions of competition in the market. As also stated in the letter of CERA, it has never refused to receive, examine and evaluate any application of the EAC to obtain relevant permits.
-CERA also states that "CERA, based on the provisions of national legislation, the relevant European Directives and European Regulations, must take preventive measures in order to provide a fertile ground for achieving the creation of conditions of effective competition in the wholesale electricity market of Cyprus, including the regulation of the manner and/or the permissible limit of installed capacity that the EAC will be able to participate in the electricity market, in order to preventively prevent possible abuse of its position of power and to ensure effective competition in the competitive electricity market".
They protected competition, not the consumer
The Auditor General Andreas Papaconstantinou also emphasizes the following in the special report:
-Even if the risks invoked by CERA from a possible unlimited development of RES by the EAC during the period in question are true, in practice, the insufficient presence of RES in the EAC's production mix resulted in the final consumer losing any potential benefits.
-The prolonged lack of substantive dialogue and the necessary cooperation between EAC and CERA for the development of RES projects by EAC for the benefit of consumers, worked to the benefit of private interests active in the development of RES projects and to the detriment of the end consumer.
It is also worth emphasizing, writes Mr. Papakonstantinou, that "the opening/operation of the electricity market and competition is not an end in itself, but is done to achieve the essential purpose of the legislation, which is to protect consumers and ensure affordable, transparent prices and energy costs for consumers. This must also be done by ensuring that all electricity undertakings, including the EAC, are active in the energy market, without any discrimination in terms of their rights or obligations. The difficulties that the EAC has faced and continues to face in integrating RES into production did not allow it to achieve a reduction in production costs. In this regard, it is stated that the cost of purchasing fuel and emission allowances constitute 70% of the total operating costs of the Authority".
Key Takeaways from the Report
- 20 MW is just the total capacity of EAC photovoltaics in operation until September 2025 (4 parks), compared to 420 MW of pan-Cypriot installed capacity in the distribution network (excluding net[1]metering, net-billing and self-generation photovoltaic projects)...
- 70% of EAC's total operating costs concern fuels and emission allowances of €955 million. (2020-2024) expenditure on greenhouse gas emission allowances, costs passed on to the consumer.
- A total of 384,702 calls (2022–2024) remained unanswered at the EAC Customer Teleservice Center.
- Amount €276 million. is the unbilled electricity in areas not controlled by the Republic (cumulatively 1964–2022)
- 56.1% of tenders with an estimated value of more than €10,000 (2018–2023) were conducted by negotiation, without a call for tenders (risk of restriction of competition).
