Press Releases

It is my great pleasure to address the esteemed participants of this very timely “Energy Storage and Hydrogen Solutions Conference,” extending, at the outset, my sincere appreciation and congratulations to Ideopsis Ltd for organising this event and to the British High Commission for their generous support.

As we gather for this important discussion on energy solutions, we find ourselves at a crucial juncture regarding our green transition efforts. On the one hand, climate change is having a profound effect on all our lives, and, on the other hand, the whole world, but especially Europe, is looking for ways to urgently diversify its energy routes and suppliers, as a result of the energy crisis caused by the war in Ukraine and the current situation in the Middle East. Consequently, all countries, including Cyprus, are dynamically reshaping their energy strategies to reflect new geopolitical realities, secure their energy supply, and address the need for affordable energy.

Within this global context, Cyprus, with its isolated energy system, faces its own unique set of energy challenges, which require tailored solutions. We stand at a pivotal moment in the evolution of Cyprus’ energy landscape. Our high dependence on imported fossil fuels, combined with the lack of interconnections with continental Europe or neighbouring countries, has historically resulted in elevated energy costs and significant vulnerability to price fluctuations and supply disruptions.

And yet, despite these challenges, Cyprus has made remarkable progress in renewable energy deployment. To address them systematically, we have developed comprehensive policy frameworks that chart our path forward. Aiming to strengthen our country’s security of energy supply, enhance its energy self-sufficiency, and shield its geostrategic role, we have been hard at work on formulating and applying our strategy to accelerate the deployment of renewables on the island.

Cyprus’ revised National Energy and Climate Plan for 2030 calls for at least 33% Renewable Energy Sources (RES) share on the gross final energy consumption, around 38% RES contribution in the electricity sector, 54% of RES in the heating and cooling sector, and 17% RES in the transport sector. To this end, solar energy is playing, and will continue to play, a vital role in Cyprus’ energy mix, since it contributes to the enhancement of the country’s security of energy supply, it is cheap, and it can be vastly utilised.

However, as we increase the penetration of renewables in our isolated system, we face a fundamental challenge: the intermittent nature of RES requires adequate guarantees of system stability. This fundamental challenge is precisely where energy storage systems and hydrogen solutions become indispensable.

Dear friends,

Energy storage represents not just a technical solution, but a strategic asset in our energy security framework. Our approach to integrating storage solutions across our energy system consists of three key pillars:

Firstly, we have established a robust policy framework. In July 2023, the Ministry of Energy published the General Policy Framework for Energy Storage Systems, providing clear guidelines for implementation and integration.

Secondly, we have initiated significant regulatory reforms. The Cyprus Energy Regulatory Authority (CERA) has instructed our system operators to amend their rules, allowing the participation of energy storage facilities in our electricity market since November 2024.

And thirdly, we have allocated substantial financial resources to support storage deployment. From our Recovery and Resilience Plan funds and the Cohesion Policy Programme “Thalia 2021-2027,” we have secured financing of 40 million euro for a Support Scheme promoting hybrid storage systems combined with renewable energy projects. The Scheme is in operation since the 14^th of February and aims to support approximately 150 MW of power capacity and 350 MWh of total storage capacity.

The results of these efforts are already becoming visible. To date, CERA has issued licenses for standalone storage systems with a total installed capacity of 482 MW and 1,600 MWh, and for hybrid storage systems combined with RES projects of 790 MW.

In addition, technical assistance, which is co-funded by the European Commission, regarding the promotion of pumped storage is in progress. The technical assistance examines, among other things, the economic and technical feasibility of developing pumped storage systems in existing dams or in new dams that will be created for this purpose, and will help create an indicative roadmap for the development of such projects in Cyprus. Moreover, taking also into account good practices in other countries that have developed such technology, the technical assistance will suggest an appropriate legal and regulatory framework for the promotion of pumped storage, based on the existing framework, as well as any gaps or obstacles that exist.

Certainly, while advancing on energy storage, we are also simultaneously exploring our hydrogen capabilities as a complementary solution. I am pleased to announce that on 28^th February 2025, we launched a public consultation on Cyprus’ National Hydrogen Strategy, which will remain open until 31^st March 2025. The draft strategy is available on the e-Consultation platform and on the Energy Service website.

So far, through technical assistance funded by the European Commission under the REPowerEU initiative, our analysis has yielded several pivotal findings that fundamentally guide our national hydrogen strategy.

Notably, direct electrification represents the most suitable option for Cyprus, particularly considering our island’s renewable energy potential, since electrification in passenger road transport is more energy and cost-efficient than hydrogen use in this sector. In addition, small islands are suitable for the implementation of electric mobility due to the short distances, since the required autonomy is already compatible with the autonomy of current electric vehicles.

Moreover, the gradual introduction of hydrogen in the transport sector by 2030, as the optimal and most cost-effective way to include hydrogen in our country’s energy mix, has been identified. According to our National Energy and Climate Plan estimates, we anticipate the gradual introduction of truck and bus hydrogen fuelled vehicles by 2030.

In addition, to create and develop a renewable hydrogen market and to facilitate its use in the transport sector, we recognise the need for a comprehensive regulatory framework, which we aim to complete by 2027.

Despite its potential, we must realistically acknowledge the significant challenges, specific to developing the hydrogen sector in Cyprus:

   (i) Water scarcity is a critical concern, as the production of green hydrogen through electrolysis requires substantial amounts of clean water (9 to 15 kg of water per 1 kg of green hydrogen).

  (ii) The absence of natural gas infrastructure means there is no existing pipeline network or storage facilities that could be used or modified for hydrogen management, necessitating larger infrastructure investments.

 (iii)  While hydrogen holds promise as a medium for storing excess renewable energy or utilising curtailed electricity, the technology faces economic challenges. The intermittent nature of curtailed energy alone provides insufficient operating hours for electrolysers, resulting in hydrogen production volumes too low to justify their substantial capital expenditure. Without sufficient utilisation rates, the economics of electrolysis for energy storage remain challenging despite hydrogen’s technical potential.

Ladies and Gentlemen,

With these strategies and challenges in mind, I now turn to our collective role in advancing these solutions. As senior decision and policy makers from both the public and private sectors, alongside academics and experts, we have a unique opportunity today to shape the future energy landscape of Cyprus. Energy storage and hydrogen solutions align perfectly with our regional ambitions, as we promote the Mediterranean as a green corridor for energy transmission between European Union (EU) and non-EU countries. Innovative storage solutions will be critical to our success.

Of course, beyond regional integration, we also need to ensure the security of our supply and adequate energy access throughout the whole transition period, by making certain that while we are diversifying our energy mixes, we do not neglect the social aspect of this process. Carbon neutrality should be reached through optimal cost coupling between supply and demand, whilst minimising decarbonisation costs for society.

Alongside these security considerations is the need to overcome supply chain vulnerabilities, which pose challenges to energy security and energy transition. Critical minerals required for many new energy technologies, such as renewables, energy storage and electric vehicles, are concentrated in only a few countries. While western countries have access to the technologies (manufacturing facilities, expertise), southern countries own the access to critical minerals, and one country controls a significant portion of these rare elements.

In closing, I want to emphasise that energy storage technologies will play a primary role in our immediate transition efforts, with hydrogen gradually taking its place in specific sectors and uses, where it offers the greatest value.

Thank you all for your attention, and I look forward to the valuable discussions and insights that will emerge from this conference, as we work together to build a sustainable and secure energy future for Cyprus.

(GA/NZ/GS)