A report by the Audit Office has raised concerns about possible profiteering in the resale of renewable energy licences in Cyprus. The issue was discussed extensively on Thursday at the House Audit Committee during a session attended by Auditor General Andreas Papakonstantinou. The report relates to the audit carried out at the Electricity Authority of Cyprus in 2023.
Audit findings on renewable energy licences
Auditor General Andreas Papakonstantinou said the audit identified administrative weaknesses as well as issues relating to renewable energy development and the participation of the Electricity Authority of Cyprus in photovoltaic projects.
He noted that the organisation remains a major player in the conventional energy sector but has lagged behind in renewables. According to the figures presented, the Authority currently operates 20 megawatts (MW) of renewable capacity out of approximately 420 MW installed across Cyprus.
Papakonstantinou said the Audit Office identified indications of excessive profit margins from private entities attempting to sell renewable energy licences to the Electricity Authority of Cyprus.
“Although a competitive market was created, we observed a model that was not oriented towards benefiting the consumer. In no case was the benefit transferred to the consumer,” he said.
He added that the situation raises concerns given delays in the arrival of natural gas, the absence of energy storage and delays in flexible generation units. According to him, this reflects a lack of strategic planning regarding the future of the Electricity Authority of Cyprus and contributes to higher electricity costs.
Position of the Electricity Authority of Cyprus
Chairman of the board of the Electricity Authority of Cyprus Giorgos Petrou said the audit report refers to previous administrations rather than the current board.
“Where weaknesses are identified we proceed with targeted corrective actions,” he said.
Petrou stated that measures are being taken to reduce overtime and noted that approximately 5 per cent of purchases are made from specific suppliers, while the Authority proceeds with tenders for other procurement procedures.
Regarding customer debts exceeding 60 days, he said outstanding amounts are approximately €5 million, while total collections reach around €1.2 billion.
Petrou also said the installation of smart electricity meters is progressing rapidly, with approximately half a million meters expected to be installed by the end of 2027.
On renewable energy projects, he said the Authority is seeking to secure licences following calls for tenders and expects decisions from the Cyprus Energy Regulatory Authority. Currently, the organisation operates 20 renewable projects and expects another 25 to become operational in early 2027 if plans proceed as expected.
Statements by members of parliament
Chairman of the House Audit Committee and DIKO MP Zacharias Koulias said that developments related to photovoltaic parks were intended to benefit the Cypriot public but the outcome appears to favour private profits while electricity prices continue to increase.
He stated that some individuals obtain licences and later resell them to the detriment of Cypriot consumers.
DISY MP Rita Theodorou Superman said thousands of households invested in photovoltaic systems but are now seeing their production curtailed because the network cannot absorb the energy. She added that electricity bills remain among the highest in Europe and stressed the need for investments in energy storage, infrastructure and greater transparency in the energy market.
AKEL MP Costas Costa said high electricity costs are linked in part to carbon emission charges, estimated at approximately €300 million annually.
He also referred to the lack of network upgrades and energy storage capacity.
AKEL MP Christos Christofides said the Audit Office report reflects broader concerns in the energy sector, noting that some renewable energy licences remain unused despite being issued for significant capacity.
DIKO MP Alekos Tryfonides said that only 23 MW of the more than 160 MW of renewable projects licensed to the Electricity Authority of Cyprus are currently in operation.
Independent MP Alexandra Attalides said delays in investments in clean energy have increased costs for citizens and stressed the importance of strategic planning and energy storage infrastructure.
Regulatory framework and licensing procedures
Polyvios Lemonaris, chairman of the Cyprus Energy Regulatory Authority, said the regulator has never refused to receive or evaluate applications submitted by the Electricity Authority of Cyprus.
He clarified that the authority does not participate in the transfer of photovoltaic park licences.
According to Lemonaris, construction licences are issued first and operating licences are granted once the project is connected to the electricity network. He added that licence holders may transfer their construction permits at any stage after they have been issued.
He said the Electricity Authority of Cyprus holds construction licences for photovoltaic parks with a total capacity of 167 MW, of which only 23 MW currently have operating licences.
According to the data presented, the Authority’s share in renewable energy production stands at 5.5 per cent, while 94.5 per cent of renewable energy capacity is distributed among companies and individuals.
Additional audit observations
Michalis Vasileiou, director of the health sector at the Audit Office, said the audit identified responsibilities linked to previous administrations of the Electricity Authority of Cyprus. He also referred to the financial burden caused by the purchase of carbon emission allowances following delays in introducing natural gas.
Vasileiou also described a case of embezzlement involving a former employee of the organisation who misappropriated €30,000 from consumer application payments related to photovoltaic connections. The amount was returned after the case was detected through an internal audit and criminal proceedings remain pending.
During the discussion, Petrou stated that the cost of issuing a renewable energy licence is approximately €4,000 per megawatt, while licences have reportedly been offered for resale at between €250,000 and €300,000 per megawatt.
Audit Office data also indicate that unused renewable energy licences exceed 1,000 MW.
Source: CNA