Cyprus

Overall assessment

Updated November 2023

The Law 130(I)/2021 for the Regulation of the Electricity Market has been published transposing the provisions of the Electricity Directive 2019/944. This Law includes a definition for CECs and RECs and lays down the responsibilities of the Cyprus Energy Regulatory Authority (CERA), among which is to draft an enabling framework for CECs at a later stage with regulatory decisions, so that they are able to participate in the market without discrimination (see article 123). The Renewables Directive (RED II) has been partly transposed with the Law 107(I)/2022 on the Promotion and Encouragement of the Use of Renewable Energy Sources. This Law includes the definition of RECs and a reference that CERA should draft regulations setting an enabling framework for RECs. CERA is also mentioned in the law as the responsible body to conduct the assessment for barriers and potential for RECs in Cyprus, and it should also take the specificities of RECs into account when developing support schemes. Following such legal requirements, CERA published a tender titled 'Provision of advisory services for the determination of guidelines regarding the promotion of active customers and self-consumers from renewable sources, the facilitation of the establishment of Citizen Energy Communities and Renewable Energy Communities, Demand Response through Cumulative Representation, as well as recommendations for the establishment of respective regulatory frameworks’. The deadline for the submission of bids was 2 May 2023.

Most of the provisions for energy communities in the Cyprus legislation are a copy paste from the EU Directives without further elaboration of what some terms mean in the context of Cyprus. What is also missing is proper regulatory oversight from a designated authority that will check whether the legislation on energy communities is complied by the community energy initiatives.

Detailed assessment

Criteria of EU definition reflected in national definition

The definition of CECs and RECs in the Electricity Law and the Renewables Law are a copy paste from the Directives. This means that there is reference to the open and voluntary membership, autonomy and requirement of proximity for RECs, but no details on what these terms mean. Members of a REC can be natural persons, SMEs or local authorities, including municipalities. For CECs there is reference to open and voluntary membership and effective control and members can be natural persons, local authorities, including municipalities, or small businesses.

Level of detail in the elaboration of principles contained in EU criteria

There is no detail provided with regards to what these terms mean.

Clearly defined purpose

Copy-paste of the Directive.

ICA cooperative governance principles reflected

As the law copy pastes the Directives, the ICA principles are reflected in the same way that they are reflected there.

Legal entities allowed

Not specified.

Activities

For RECs:

The law mentions that CERA will issue a regulatory decision to make sure that a REC has the right to:

  • produce, consume, store and sell renewable energy, including through PPAs;
  • share, within the REC, the energy from renewable sources produced by community-owned renewable generation units, subject to the other requirements of the law and the safeguarding of the rights and obligations of members of the REC as end consumers;
  • have access to all appropriate energy markets both directly and through aggregation in a non-discriminatory manner.

Such regulatory decision has not been issued yet.

For CECs:

The law states that they may be active in production, including production from renewable sources, in distribution and supply of electricity, services of consumption, cumulative representation, energy storage, energy efficiency services, in electric vehicles charging services, or providing other energy services to its partners or members. No further regulations are in place.

Citizen participation is ensured

The national definition does not ensure that citizens always need to be a member of a REC. There is no minimum number of members that can set up a REC.

Designated authority to oversee

Under the Law on the regulation of the Electricity Market, CERA should specify with a regulatory decision the enabling framework for CECs. The Law on the Promotion and Encouragement of the Use of RES specifies that for the purpose of the provisions that touch upon the enabling framework and the assessment of barriers and potential, the issues that have to do with the development of electricity generation projects from renewable sources from RECs will be regulated by the CERA. CERA should also take the specificities of RECs into account when developing support schemes. However it is not specified if CERA is the responsible authority to check whether RECs/CECs comply with the national legislation. Overall, CERA shoulders much of the responsibility for the implementation of RECs and CECs at national level. Proper resources must be ensured so that CERA can fulfill all the duties it has been given.

Number of definitions

2 – CECs/RECs.

Coherency between both definitions

The 2 definitions follow exactly the EU definitions, as they are a copy paste. The only connection made between them is the reference that their enabling framework will be regulated by CERA.