It is well known that the Cypriot electricity system operates with significant technical limitations. The isolated nature of the grid, combined with the ongoing deployment of photovoltaics, has led to structural imbalances between energy supply and demand. The solution that is usually invoked is battery-powered storage. In this article we explain why batteries, as necessary as they are, are not enough on their own and why storing energy in thermal media may prove valuable within the next decade.
Due to its electrical isolation, Cyprus relies entirely on domestic production to meet demand. The integration of photovoltaics connected to the grid through electronic inverters has reduced the mechanical rotational inertia traditionally offered by thermal power plant generators. This inertia ensures that, when a production unit is suddenly lost, the rotating masses hold the frequency for the critical seconds it takes until the reserves are activated. Without it, the grid becomes vulnerable to sudden frequency changes and load interruptions and is one of the constant concerns of the Transmission System Operator.
In order to maintain this inertia, the Operator is obliged to keep a minimum number of conventional units in operation, even when it does not need them for energy. During the spring and autumn months, when demand is moderate, production from renewable sources is massively cut. In 2025, 22% of the country's available RES capacity was cut (Figure 1). This limits the use of renewables, reduces investment incentives and maintains our expensive dependence on imported fossil fuels.
How much do these restrictions cost? At the Cyprus Institute (CY) we developed a detailed model of the Cypriot electricity system – every substation, every generating unit, all 8,760 hours of the year – calibrated to replicate the actual operation of 2025. In this model, the minimum operating obligation of conventional units and the requirement to maintain minimum inactivity together cost €51 million per year in 2030, of which around half is dedicated to inactivity. In other words, it is not a technical detail, but one of the biggest costs of the system.
Batteries cope excellently with the first part of the problem: they move energy through the day, from noon to afternoon, with high efficiency and rapid response. But they do not face the latter. Because they are connected via inverters, they do not add rotating mass to the system. We can therefore install multiple batteries and continue to be obliged to keep the conventional units on, so we can continue to cut RES.
There are other issues with batteries: their cost, relatively short lifespan and management (fire safety, dismantling and end-of-life environmental management, among others). Also, their supply chain – lithium, graphite and the manufacture of batteries themselves – is highly dependent on China, and efforts are being made at European level to reduce this dependence.
The stability factor
But the crucial point remains stability. As the percentage of electricity generated by photovoltaics, wind and batteries increases, the fewer rotating machines are left in the system. And because Cyprus has no zero-emission base units (nuclear or hydroelectric plants), and is very unlikely to have one in the future, it has nowhere else to derive that stability.
One would object that the problem can be solved with electrical interconnections. But not in terms of stability. The interconnections of Cyprus with Greece and Israel are planned as direct current connections (HVDC), because this is the only way to cover such submarine distances. An HVDC connector transfers power through electronic inverters, just like photovoltaics and batteries: the two systems remain asynchronous with each other and the rotational inertia of continental Europe does not "pass" to Cyprus. Synchronous transducers can simulate part of the response, but within the limits of the equipment and by agreement with the respective operator.
There is even the reverse aspect. A high-power interconnection becomes the biggest potential loss of the system itself: if it is abruptly shut down, Cyprus instantly loses many times more power than it loses today by shutting down its largest unit. Connectivity doesn't just increase the need for inertia, it multiplies it. In this respect, thermal storage does not compete with interconnection, but makes it more usable.
Of course, there are other ways to meet this need. Batteries with grid-forming inverters are now available, and some of those that will be installed in Cyprus in the coming years include this feature. There are also synchronous condensers – generators that turn without producing energy – and even old units can be converted into such. But neither solution produces electricity at the same time. The advantage of thermal storage is exactly what it does all three: it stores energy, offers real inertia, and potentially leverages infrastructure that already exists.
What exactly is thermal storage?
The energy is stored in large containers of simple construction, containing suitable low-cost salt. Salt is heated to high temperatures, hundreds of degrees Celsius, either by collecting solar radiation through mirrors, or by utilizing the electricity that is left over from RES and is currently discarded.
The hot salt then feeds a conventional steam turbine – exactly the same process as today, except that the heat does not come from fuels but from renewables. And this is where the special opportunity for Cyprus lies: the Dhekelia steam turbines are due to be withdrawn in 2029 for environmental reasons. Instead of being dismantled, they can continue to run on heat from renewables. The turbine remains a modern machine; In other words, it continues to offer the network exactly the inertia that it would lose with its withdrawal.
With the electric model of the IKy we simulated the system a) as it is today, b) only with batteries, c) only with thermal storage and d) with a combination of the two. The results were clear: in 2030, thermal storage reduces the annual cost of the system by €11.1 million, compared to only €2.3 mil for batteries. At the same time, it reduces RES cuts from 17% to 3% of available capacity.
By 2035, because new conventional units are introduced and the cost of batteries continues to fall, the two storage technologies are equalized and, most importantly, become complementary: together they reduce the cost of the system by €6.9 million, more than each technology separately. The optimal solution for 2035 is not one or the other technology, but their combination. Batteries undertake rapid intraday changes and thermal storage stability and stable power supply.
We must emphasize that the great value of thermal storage comes from the stability service it offers to the system. This has an immediate practical consequence: a storage competition that evaluates only megawatt hours and reduced cuts will always select batteries, even when the alternative yields five times the benefit to the system. If we want to make use of the contribution to stability, we must explicitly price it, and establish clear conditions for its participation in the electricity market.
Other serious advantages
The cost of thermal storage facilities does not increase linearly with their capacity, which favours larger units while their lifespan is long. The supply chain is based on abundant and geopolitically secure materials (steel, glass, cement and industrial salts) and a significant part of the expenditure can remain in the domestic economy through local manufacturing, which is not the same case for the import of ready-made battery systems. Internationally, the combination of solar thermal energy with thermal storage is already being implemented in Spain, Morocco, Chile and China, while autonomous thermal storage systems for electricity generation are in a pilot phase in the USA, Germany and Denmark.
Most of these countries, of course, have modern AC interconnections with neighbouring zero-emission systems and base units; Cyprus is not going to have one or the other.
In conclusion
Thermal energy storage – preferably in combination with solar thermal technology – offers a combination of high value: storage, grid stability, utilization of existing infrastructure and security of supply. The time limit is not unlimited. Its advantage is greater around 2030, while the steam turbines of Dhekelia are retired in 2029. Decisions need to be made now.
And it's not the only option. There are other long-term storage technologies worth considering, such as compressed air storage – a pilot unit is being built at the Cyprus Institute's experimental facilities in Pentakomo – or even small-scale pumped storage systems. In any case, the "monoculture" of batteries in the Cypriot electricity system, without technologies that offer both energy and stability, is not the optimal solution neither economically, nor in terms of energy, nor environmentally.
* Research Centre for Energy, Environment and Water Resources, Cyprus Institute
