energy challenges — The energy challenge in Cyprus is set to intensify as 2026 approaches, with experts warning of persistent high electricity prices and power cuts if unresolved issues from previous years linger. According to the Cyprus Mail, the energy sector in Cyprus has unresolved challenges that will likely roll into 2026, necessitating urgent policy decisions.
- “It was and remains urgent to switch to natural gas,” Ellinas stressed, highlighting the importance of diversifying energy sources.
Energy challenges: Expert Insights on Energy Issues
“Many challenges will need to be addressed during 2026,” said Constantinos Hadjistassou, a professor at the University of Nicosia who specialises in energy. He emphasised that the margin for error is critically low, indicating that decision-makers must enhance coordination to navigate the complexities ahead.
Charles Ellinas, an energy expert and councilor at the Atlantic Council, echoed these concerns. He noted that while there were some successes and failures in 2025, tangible results remain scarce. “The energy sector continues to remain one of the most problematic in Cyprus,” he stated.
High Electricity Prices and Low Renewable Energy Adoption
The persistent high price of electricity is a pressing issue that requires immediate attention in early 2026. The ongoing transition to a competitive electricity market has not yet yielded a decrease in prices, a trend that seems unlikely to change soon. Cyprus has also been noted for leading Europe in per capita carbon dioxide emissions, primarily due to its low adoption of renewable energy sources and continued reliance on diesel and heavy fuel oil for electricity generation.
“It was and remains urgent to switch to natural gas,” Ellinas stressed, highlighting the importance of diversifying energy sources.
Challenges with LNG Import Project
One of the significant hurdles facing Cyprus is the troubled LNG import project at Vasiliko. Ellinas pointed out that although the remaining construction of the pier is relatively simple from an engineering standpoint, the lack of a clear plan and timetable for completion continues to be an obstacle. Once operational, the project could allow Cyprus to benefit from lower LNG prices expected in 2026 due to increased market availability.
Energean has also proposed bringing natural gas via submarine pipeline from its fields in Israel, but this requires the opening of the natural gas market in Cyprus. “The longer the transition from diesel/HFO to natural gas for electricity generation is delayed, the more Cypriots will be burdened by unjustified and outrageously high prices,” Hadjistassou warned.
Future Prospects for Gas Fields
As for offshore gas exploration, Ellinas anticipates that the development of the Kronos gas field will proceed rapidly in 2026, with exports to Egypt expected by early 2028. However, he cautioned that Cyprus should not expect significant profits from this venture until after 2030, estimating it would contribute less than 0.7 per cent of the annual budget.
The Aphrodite gas field presents a more uncertain future. Despite a resolution of disputes with Israel expected soon, Chevron must decide whether to invest in the project in 2026. The estimated cost of $4 billion for Aphrodite poses challenges, particularly given Chevron’s focus on high-yield projects with limited capital expenditure.
Concerns Over Electricity Supply and Storage
Looking ahead, Hadjistassou forecasted that power cuts are likely to become more pronounced in 2026, especially during periods of low demand that coincide with increased renewable energy production. “Power cuts are poised to grow to around 10 per cent of the total generation,” he cautioned, adding that a lack of battery storage integration could lead to significant energy losses.
To address the growing concern over electricity supply, the Electricity Authority of Cyprus (EAC) has plans to install two gas turbines at Dhekelia, although these will not be operational until 2028. Meanwhile, a 160MWh battery bank at Dhekelia is expected to be operational in summer 2026, which could help alleviate power cut issues.
The Great Sea Interconnector Project
The Great Sea Interconnector, a proposed subsea cable linking Cyprus and Greece, faces its own set of challenges. Ellinas noted that for the interconnector to be operational by 2030-2031, decisive action must be taken before mid-2026. He expressed concern over the Cypriot government’s ongoing indecision, which could lead to more confusion and delays.
Support from the European Commission and Greece, along with the potential inclusion of Israel in the project, may help move things forward. Israeli Prime Minister Benjamin Netanyahu highlighted the importance of the interconnector during a recent trilateral meeting, emphasising its role in enhancing energy connectivity between Asia and Europe.
Integrated Renewable Energy Solutions
On the domestic front, integrating renewable energy sources into the grid remains a key challenge. Hadjistassou reiterated the importance of using surplus energy for practical applications, such as desalination, to mitigate water scarcity. “The challenge here is to source the excess electricity to desalination plants,” he noted.
As Cyprus approaches 2026, the focus will remain on ensuring a sufficient and stable electricity supply amid pressing energy challenges. The actions taken in the coming months could determine whether the island can overcome its energy hurdles and transition towards a more sustainable future.
