CYPRUS DOMESTIC ENERGY
A MULTIFACETED ISSUE
The high energy prices in Cyprus are a multifaceted issue influenced by reliance on imports, infrastructural challenges, market dynamics, and geopolitical tensions. Addressing these challenges requires strategic investments in renewable energy and infrastructure modernisation at a governmental level. Although crucial steps toward achieving energy independence and cost stability in the future have been taken, progress towards this is slow and faces numerous challenges. Recent high energy prices have become a significant concern for both consumers and businesses. This has created several worrying factors that are contributing to the situation warranting a closer examination.
A HEAVY RELIANCE ON IMPORTED FOSSIL FUELS
Cyprus has limited domestic energy resources and it relies heavily on imported fossil fuels. The absence of substantial natural gas reserves necessitates the importation of these essential commodities, subjecting the economy to global price fluctuations. As international energy prices soar, so too do the costs for Cyprus consumers.
A VOLATILE ENERGY MARKET
The energy infrastructure in Cyprus presents several challenges. The electricity generation sector on the island still predominantly relies on oil and gas, which are subject to volatile market conditions. Efforts to diversify energy sources and integrate renewable energy technologies have been slow to materialise, meaning that Cyprus remains vulnerable to external shocks.
LIMITED DOMESTIC COMPETITION
Regulatory and market structures also play a crucial role in this sector and despite recent reforms, aimed at liberalising the energy market, competition remains limited. This lack of competition has created a monopoly, leading to higher prices, as consumers do not have the benefit of switching to and from multiple suppliers.
ENERGY SECURITY & PRICING
Geopolitical factors and the regional dynamics in the Eastern Mediterranean still affect energy security and pricing. Tensions between neighbouring countries can disrupt supply chains and impact energy availability, further driving up costs.
CHEAPER ELECTRICITY FOR CYPRUS
A REDUCTION ON VAT FOR ELECTRICITY
The government has announced a 10% reduction in VAT on electricity for all households. This is part of the ongoing government initiatives to make domestic energy more affordable across the island. This announcement comes alongside several other ongoing tax reform proposals and key measures, focusing on sustainability and cost reduction in the energy sector.
A SERIES OF GRANT PROGRAMS
The single service dedicated to managing renewable energy projects is pursuing efforts to modernise energy infrastructure on the island. Grant programs to support the installation of storage systems alongside renewable energy projects are also becoming readily available. These follow other financial incentives already in place aimed at enhancing energy efficiency for large businesses. A new regulatory framework is also being introduced for energy communities, along with the pilot launch of the Green Community project in Kato Pyrgos Tillyria. The service is also overseeing the start of smart meter installations, which will improve the electrical grid and boost energy efficiency.
REDUCING ENERGY COSTS
ENERGY EFFICIENCY
In an era marked by rising energy prices and heightened environmental consciousness, reducing energy costs has become a priority for both homeowners and businesses. Implementing cost-effective strategies not only contributes to financial savings but also promotes sustainability. Reducing energy costs requires a multifaceted approach that combines technological investment, behavioural changes, and ongoing evaluation. By adopting certain strategies, all can achieve greater energy efficiency, leading to significant financial and environmental benefits. Reducing energy costs can have a significant impact on the monthly monetary budget and implementing a few simple adjustments can lead to noticeable savings on energy bills.
PRACTICAL TIPS TO HELP SAVE ENERGY & REDUCE MONTHLY COSTS
Energy Audit: A thorough energy audit can identify areas where energy is wasted and improvements in areas of insulation or more efficient appliances, which can significantly reduce energy consumption, should be considered.
Temperature: Setting the thermostat a few degrees lower in winter and slightly higher in summer can make all of the difference to the overall annual cost of energy.
Appliances: Investing in energy Star-certified appliances can lead to substantial savings over time. Appliances that have good ratings use less energy while maintaining performance. This ultimately lowers monthly utility bills saving money in the long term.
Adopt Smart Technology: Smart thermostats and energy management systems allow for precise control over energy use. They will also enable the accurate scheduling of both heating and cooling systems based on occupancy patterns. These new technologies can lead to significant reductions in energy expenditure.
Renewable Energy Sources: Exploring options for solar panels or wind turbines can provide a long-term solution for reducing dependency on traditional energy sources. While initial costs may be high, available incentives and the potential for reduced utility costs make renewable energy an attractive option.
Insulation: Check for drafts around windows and doors and use weather stripping or caulking to seal any gaps. Effective insulation and sealing of windows and doors will prevent heat loss in winter and heat gain in summer. This will ensure that heating and cooling systems will operate more efficiently, whilst significantly reducing energy usage.
Energy Conservation: Teach family members about energy conservation practices to encourage everyone to contribute to saving energy. Simple changes in daily behaviour can have a profound impact on energy consumption. Taking advantage of natural light during the day and turning off lights when leaving a room, unplugging unused devices, are just a few things that can contribute to reducing energy costs.
Light Bulbs: LED light bulbs are initially more expensive, but they use significantly less energy and last much longer than conventional light bulbs creating notable savings in the long term.
Phantom Energy: Electronics tend to consume energy even when turned off. Power strips will easily turn off multiple devices.
Smart Meters: If available, smart meters will track energy consumption, which can help identify energy patterns and areas for improvement.
Regular Maintenance: Keeping heating and cooling systems well maintained with regular checks, filter changes, and servicing will improve energy efficiency.
Ventilation: Use fans instead of air conditioning when possible.
Timing: Using appliances such as washing machines and dryers during off-peak hours will save on energy costs.
