The rise in the first topical issues of the problem of lack of electricity adequacy, especially after 2030, provided that the efforts to import natural gas will not succeed (which seems to be the most likely condition), activated the reflexes of CERA and the Ministry of Energy.
The information of Fileleftheros states that CERA sounded the alarm in a letter to the Minister of Energy Michalis Damianos and the Ministry of Energy responded with a letter from the general manager Kyriakos Iordanou to CERA and the Transmission System Operator.
CERA warned through the letter that, without natural gas, even in 2030, Cyprus will have a serious problem of electricity sufficiency and that it is urgent to activate the emergency procedure for securing additional conventional production (diesel generators), through Article 34 of the basic law, called the "power mechanism".
The ministry responded, through the general director, in general terms give us data, come for consultation, so that the procedure for the power mechanism can be initiated as soon as possible (announcement of offers for additional power from conventional fuels).
Article 34 of the law and the (additional) power mechanism is the safety outlet for EU Member States, when the competent Authority, CERA in the case of Cyprus, finds that the country is threatened with electricity shortage, based on the existing production units and the evolution of energy demand.
Through Article 34, CERA is obliged to inform the Minister in detail about the risk lurking and the Minister, after consultation and thorough briefing, obviously in consultation with both the Directorate General for Energy of the EU and the Directorate General for Competition, issues a decree, so that new conventional power plants can be installed and operated as soon as possible.
It sounds simple, but it is not
Who will install the new units? The one who wins the bids. Either the EAC (if interested), or a private individual (if interested), from Cyprus or abroad. Where will these units be installed? Important parameter: Where CERA and the Ministry of Energy will determine.
Their installation in the Vassiliko area is not currently considered by the competent services and Authorities (Ministry, CERA, Transmission Operator, EAC) to be the most suitable location, due to the dangerous problem of short-circuit currents, which threatens the smooth operation of the electricity system when the energy production from the Vassiliko area exceeds 850 megawatts.
Under the current circumstances and given all the available information available on the matter, the new generators, if the procedure of article 34 proceeds, will be requested to be installed in an area in the eastern part of the system, i.e. in the wider area of Larnaca or free Famagusta.
However, the letter from CERA and the response of the Ministry of Energy are only the first steps of a process that is expected to be long and difficult: The activation - in practice - of Article 34, the announcement of tenders for the installation of new generators using oil (fuel oil or diesel, since the problem lies in the inability to import natural gas before 2030 and renewables cannot fill the gap, Even if the storage runs, even now, with a thousand in the next period), the decision on the procedure and the amount of compensation for the capital expenditure and the compensation of the energy that will be produced, as well as the direct impact on the operation of the competitive electricity market and the private participants in it, are issues that are considered certain to cause delay and reactions.
Especially since in order for the procedure provided for by law to proceed, there must be the consent of Brussels. Which, however, are to some extent part of the deficiency problem, as they have committed Cyprus to withdraw generators from Dhekelia and the Royal end of 2029, due to serious contamination of people in neighbouring communities and the environment in the wider region.
The problem does not lie in the (correct and perhaps belated) demand of the EU, but in the negligence of the state to impose timely compliance with the Union on those involved in the regulation, production, transmission, distribution of energy.
Fileleftheros is informed that CERA, in its letter to the Minister of Energy (May 2026), stressed, in addition to pointing out the seriousness and danger of the situation, the need to speed up decisions, as the process is expected to be very time-consuming.
And the Ministry of Energy replied to CERA that "taking into account the criticality of the timely completion of the above process", to "notify us of the above as soon as possible". And what are the "above"? The following:
"Tell us to move on"
(1) (Information from CERA on) "the necessary production, i.e. the additional production capacity required under the "No Gas Flow" scenario, in order for the LOLE and EENS indices to return within the tolerable limits (15 hours and 0.010% respectively).
(2) The date of entry into operation of the additional production capacity, as well as the duration of the measure.
(3) The type of power mechanism you (CERA) deem appropriate and the documentation of its choice, setting out the relevant assessment required under Article 21(3) of Regulation (EU) 2019/943.
(4) The estimated cost of the measure, i.e. the funding gap, as well as the type of costs that will be subsidized.
(5) A proposal on how to recover the costs resulting from the implementation of the measure and
(6) Any other requirements related to the manner and conditions of disposal of such production, such as, but not limited to, network requirements.
It is understood that the above recommendations should be in line with the provisions of Regulation (EU) 2019/943 on the internal market for electricity, including articles 21 and 22 thereof, as well as with the applicable European and national law on competition and the electricity market."
"It's a lot of money, Aris" and the role of Cyfield
It is a given that if the "power mechanism" process provided for in Article 34 of the Law on Electricity Regulation moves and results in a result, Cyprus is likely to... to cover the electricity adequacy gaps after 2029 or 2030 (although they may arise earlier).
However, it will do so at a serious financial cost, which will be passed on - and this, such as the cost for the endless terminal, the interconnection with Crete, the expensive energy from RES and the competitive market) to the household consumer and businesses.
It is impossible to make a safe prediction about the amount of cost for new units and the cost per kilowatt hour, but it is considered certain that it will be tens or even hundreds of millions. For an as yet unspecified period of operation.
It is certain that the Cyfield group and the (subsidiary) company PEC, which claims to be able to contribute to addressing the lack of adequacy, with the accelerated operation of the power plant it is building in Vasiliko, with a total capacity of 260 megawatts, will soon be involved in this dialogue, with public interventions and not only sponsored advertisements in the media. which are estimated at 200 megawatts if diesel is used.
Due to the state's inability to import natural gas on time, the operation of the PEC plant is delayed, but the company has made arrangements with Siemens to use diesel, which may put it at a disadvantage in competition with the EAC, which also uses (cheaper) fuel oil.
However, the delay of the PEC is also due to the problems of timely legal licensing of parts of the overall infrastructure of the PEC and in particular of its pumping station (for the cooling of its machines). The pumping station was installed on land that has been leased for years (and for the next 2-3 years to come) to the EAC and it seems that the agreement of the PEC for the construction of the pumping station was made with the Ministry of Defense (for €2 million as compensation, according to the private company) but not with the legal tenant, the EAC.
The PEC, as Fileleftheros wrote a few days ago, sent a new letter to the EAC, in which it claims its consent to use the pumping station, even if it is located within state and Turkish Cypriot land leased to the EAC, to cover the adequacy.
Fileleftheros is informed that on Tuesday, July 7, the EAC's board of directors decided to reject PEC's request, citing legality issues as well as technical issues regarding the operation of the PEC pumping station, at the expense of the optimal operation of similar EAC infrastructures in the same sea area.
