Plans for large-scale battery energy storage in Cyprus are progressing, with the first projects expected to launch in 2026. The initiative aims to capture surplus renewable energy, which is currently lost due to low demand and grid limitations.

According to Energy Minister George Papanastasiou, the updated national energy plan envisions 160 MW of battery storage capacity by 2030, capable of storing green energy for two to four hours. This effort is designed to stabilize the power grid, support renewable energy expansion, and lower electricity costs for consumers.

A key aspect of the government's plan is a legislative amendment to the Electricity Market Regulation Law, which would allow the Transmission System Operator to own, develop, and operate battery storage systems under specific conditions.

Minister Papanastasiou highlighted that centralized storage systems will help reduce renewable energy curtailment, ensuring that excess solar and wind power is stored instead of wasted. The urgency stems from Cyprus' growing renewable energy production surpassing demand at certain times, making energy storage essential for grid efficiency.

Beyond government-led storage projects, the Ministry of Energy has launched grant programs to encourage private-sector investments in battery storage. These initiatives include:

• "Exoikonomo-Anavathmizo" – A program targeting residential and commercial battery installations.

• A specialized plan for electric vehicle (EV) charging using renewable energy-powered storage.

The government has allocated €35 million from the "THALEIA 2021-2027" program and the Just Transition Fund to support the development of 150 MW of battery storage systems, with a total energy capacity of approximately 350 MWh. Officials have also suggested future incentives for home-based storage solutions.

Despite the potential benefits, private sector representatives have raised concerns over the current grant schemes, arguing that they favor the Electricity Authority of Cyprus (EAC) and could create a monopoly-like market structure. Independent energy developers warn that regulatory barriers may limit competition in battery storage investments.

Consumer groups have also emphasized the need to prevent additional financial burdens on end-users, ensuring that the transition to energy storage does not increase electricity costs.

Meanwhile, industry stakeholders from the biogas and hydrogen sectors advocate for broadening the scope of energy storage incentives beyond lithium-ion batteries, highlighting the long-term potential of alternative technologies.