The arrival of three new electricity generation units at Dhekelia has been postponed to 2030, the Electricity Authority of Cyprus told MPs during budget discussions. The delay follows a revised delivery timeline from the manufacturer and comes as the Authority presents a budget forecasting a €349 million cash deficit.
Revised timeline for Dhekelia units
The President of the Electricity Authority of Cyprus, George Petrou, told the House Finance Committee on Monday that the expected delivery of the three new power generation units at Dhekelia has been shifted to 2030.
The update followed a letter received two weeks ago from Siemens, extending the delivery time by a further 18 months. The Authority had awarded a €140 million contract with an original delivery horizon of 2.5 years. Mr Petrou said incentives had been planned for earlier delivery, but the revised timeline now stands at four years, citing strong international demand and the absorption of production capacity by data centres in the United States.
Political handling and reassessment of the project
Mr Petrou described the development as sudden and said the issue has already been raised at the political level, with a meeting scheduled with the competent minister. He noted that the new timeline alters the cost time balance and said the entire project would be reassessed, including the possibility that the purchase of the units may not proceed.
He explained that some fuel oil units are due to be decommissioned in 2029 and warned that if the new units are not delivered by then, a capacity gap could emerge. He expressed hope, however, that natural gas would be available by that time.
Budget overview and projected deficit
Presenting the Authority’s budget, Mr Petrou said it provides for total expenditure of €2.555 billion and total revenues of €1.956 billion, resulting in a projected cash deficit of €349 million.
Capital expenditure is set at €456.679 million, higher than in 2025, reflecting projects and upgrades linked to increased absorption of renewable energy into the grid.
Unforeseen costs and financing
The budget includes a €250 million provision for unforeseen expenses, including fuel costs, electricity purchases and Market Operator charges. If incurred, these costs are expected to be recovered through price adjustments and or charges to the Market Operator.
The projected cash deficit of €349 million is to be covered through borrowing and own funds.
Concerns raised by MPs
The Chair of the House Committee on Finance, Chrysis Pantelides, referred to the significant uncertainties embedded in the Authority’s budget, including the provision for unforeseen expenses. He requested detailed explanations for specific expenditure lines and asked whether more accurate forecasting is possible for key cost drivers affecting electricity prices.
From DISY, MP Onoufrios Koulas focused on emissions costs, asking for clarification on the estimated volume of emissions for 2026 and the assumed price. He also queried potential cost reductions if electricity generation were based entirely on natural gas, and sought details on the fuel, emissions and exchange rate assumptions used in the budget.
DISY MP Savvia Orfanidou addressed the social dimension of electricity tariffs, asking how Cyprus ranks compared to other European countries and what additional measures are in place to support vulnerable groups.
Energy planning and infrastructure issues
AKEL MP Andreas Kafkalias identified Vasilikos, electricity interconnection and energy storage as critical issues, requesting clear guidance on what the country should expect in the near term. He also questioned whether the budget assumes the arrival of natural gas by the end of 2026 and what the implications would be if this does not materialise.
EDEK MP Marinos Sizopoulos raised concerns about taxation applied to fuel and emissions charges and sought explanations regarding fuel procurement procedures. He also expressed reservations about the potential delivery of new diesel-powered units within four years, given the country’s transition towards natural gas, and raised concerns about the siting of high-voltage pylons near residential areas.
Tariffs, adequacy and storage
DIPA MP Alekos Tryfonides stressed the need for the Authority’s development programme to deliver measurable benefits in tariffs and competitiveness, while seeking assurances regarding electricity adequacy during the summer months. Following the committee meeting, he said that the practice of imposing VAT on emissions and penalties on electricity bills must end and noted that approximately 62,000 beneficiaries are eligible for tariff 08, but only around 30,000 fully utilise the benefit.
The Authority’s Director General, Adonis Iasemiadis, presented comparative data, stating that Cyprus ranks tenth for the highest electricity prices in the EU and rises to eighth when taxes are included. He referred to targeted support measures for vulnerable consumers, including programmes to upgrade air conditioning units to reduce consumption.
Adequacy outlook and storage projects
Addressing questions on electricity adequacy for the coming summer, Mr Petrou said short-term planning is based on unit availability and risk management. He noted that unpredictable factors, such as sudden serious faults in ageing equipment, could affect outcomes, while the Dekelia units remain under reassessment due to the shift towards 2030.
Regarding energy storage infrastructure, Mr Petrou said a €40 million contract has been awarded to CyTA, with operations expected to begin in August 2027 due to delivery delays.
Natural gas and grid safety
On the role of the Authority in advancing the arrival of natural gas at the Vasilikos terminal, Mr Petrou said that as a shareholder of ETYFA, the Authority could contribute engineering support to accelerate procedures, an option to be examined in the coming days.
Responding to questions on protection from high-voltage pylons, an Authority official said routing has historically avoided residential areas, but urban expansion has brought housing closer to existing infrastructure. In cases of uncertainty, independent measurements are commissioned from universities. All planning, the official said, complies with European legislation and limits.