The Green Pivot: Cyprus and the regional market

Cyprus is an island with no current interconnection with other countries, dealing with high electricity prices and heavily relying on fossil fuels.

Alma Economics, commissioned by the Peace Research Institute Oslo (PRIO) and under the auspices of the Mediterranean Growth Initiative (MGI), reviewed the existing state of play in Cyprus and set an indicative pathway for the future of the Cypriot green energy market and interconnectivity in the region. The Nordic model was also examined aiming at identifying key differences between the Norwegian and Cypriot power markets, as well as any lessons learnt from the Norwegian power market that could be applied in Cyprus.

Alma Economics summarised current plans and further arrangements required for Cyprus to move to a green interconnected market-based energy model, and discussed the challenges as well as benefits expected to arise from such a transition. Apart from a thorough evidence review, the research team also conducted interviews with sector experts from Cyprus and Norway to better understand the current and future state of play in both countries.

Among key findings of the study was that moving toward a green interconnected market-based model will generate benefits for Cyprus, including lower CO2 emissions, security of energy supply and lower electricity costs. Under a set of reasonable assumptions, Alma Economics estimated that such a transition would result in each electricity consumer saving €200 per year through lower energy bills.