A recent decision to develop centralised electricity storage systems by the Cyprus Transmission System Operator (TSO), alongside private sector investment in energy storage, marks a historic step towards strengthening and modernising Cyprus' electricity system, a source at the TSO told CNA.
"These systems can be considered essential national infrastructure, just like hospitals, ports and airports, because their existence ensures the reliable operation of these critical facilities," the source said.
Commercial development
At the same time, the TSO has already issued final and preliminary grid connection terms to private investors for stand-alone battery storage projects with a combined capacity of more than 200MW and approximately 500MWh of storage. It has also issued final connection terms for private hybrid systems combining solar photovoltaic installations with battery storage, with a total capacity of 29MW and around 100MWh of storage.
"With these projects, Cyprus is entering a new era of energy security, accelerating the country's green transition while creating the infrastructure for a greener and more cost-efficient electricity system," the source said.
The source stressed that the TSO's involvement does not limit private investment but instead lays the groundwork for further commercial development, noting that "opportunities for additional investment in energy storage will continue to remain attractive."
Demand
Electricity storage, the source added, is "one of the most critical pieces of the green transition puzzle," particularly for an isolated island electricity system such as Cyprus.
Without storage capacity, renewable energy generation, which often exceeds real-time electricity demand during midday hours, is frequently curtailed, the source explained.
In addition, the electricity system remains vulnerable to fluctuations caused by weather conditions and sharp changes in electricity demand.
Referring to Decision 217/2025 by the Cyprus Energy Regulatory Authority (CERA), which approved the TSO's request to develop and operate its own electricity storage facilities directly connected to the transmission network, the source said the approval allows the operator "to develop and manage energy storage systems as a transitional solution until Cyprus' electricity system is physically interconnected with those of other countries."
System stability
As part of this initiative, the TSO recently awarded a contract for the supply and installation of three battery storage systems with a combined output of 120MW and storage capacity of 400MWh.
The source said the TSO's storage facilities will operate in the public interest, with the primary objective of safeguarding the security and reliability of the national transmission system.
The new facilities are expected to protect the grid against sudden fluctuations in renewable energy generation, such as those caused by cloud cover or changing wind conditions. They will also be capable of supplying electricity immediately in the event of an unexpected loss of generation.
During periods of excess renewable energy production—particularly from solar photovoltaic systems around midday—the batteries will store surplus electricity and then discharge it during the evening peak demand period, helping meet demand while reducing renewable energy curtailment.
The storage systems will be installed at strategically selected transmission substations across three different districts to provide optimal support to the electricity network.
The source also noted that introducing advanced utility-scale battery storage into the transmission system will enable the TSO to develop valuable operational expertise in managing such technologies, particularly in providing ancillary grid services and improving overall system stability and resilience.
Operational framework still being developed
The source said the operational framework governing the TSO's storage facilities is still being finalised, with the guiding principle being the protection of fair competition in the electricity market.
"The TSO's storage systems will operate in a way that gives priority to privately owned storage facilities participating commercially in the market," the source clarified.
Under the relevant legislation, the responsible minister will determine the process for gradually phasing out this temporary arrangement through an official notification.
The source added that the long-term plan provides for the gradual transfer of the TSO's storage facilities to third parties through an open, transparent and non-discriminatory tender process once Cyprus is electrically interconnected with other EU member states.
