Audit Exposé: The Real Cost of Favoring Private Energy Developers

An audit report released on Thursday examines the development of Cyprus’ renewable energy market and raises concerns about regulatory decisions that favored private operators over the state-run Electricity Authority of Cyprus (AHK). According to the report, the Regulatory Authority for Energy in Cyprus (RAEK) granted licenses and operational advantages to five major private companies, particularly in photovoltaic projects, shaping the structure of the renewable energy sector over recent years.

Private Gains At Public Expense

The audit argues that most renewable energy capacity was allocated to private developers, while consumers did not see corresponding reductions in electricity costs despite lower production prices associated with solar energy. Between 2020 and 2024, a period marked by the rapid expansion of commercial photovoltaic systems, consumers continued to face high electricity costs, including expenses related to emission allowances estimated at nearly €1 billion over five years.

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Missed Opportunities For Reduced Consumer Costs

Auditors stated that consumer electricity costs could have been reduced if a larger share of renewable capacity had been developed under AHK. Instead, regulatory decisions strengthened private-sector participation, limiting the state utility’s role in renewable generation. The report also points to delays within previous AHK administrations in expanding renewable capacity, contributing to the current imbalance.

An Imbalanced Renewable Energy Landscape

Private companies currently operate about 420 MW of photovoltaic and wind capacity, compared with roughly 20 MW managed by AHK. The report notes that much of the land suitable for photovoltaic development is now controlled by private entities, restricting the authority’s ability to expand projects. In some cases, developers who secured land and licenses but did not proceed with construction are reportedly seeking significant payments to transfer licenses to AHK.

Calls for Regulatory Overhaul

The audit recommends that RAEK review or revoke inactive licenses and consider reallocating them to AHK or other qualified operators. Auditors argue that delays in integrating renewable energy into AHK’s production mix allowed rapid private-sector expansion without delivering measurable benefits to consumers. The report also links this development to grid saturation and reduced availability of strategic land for future projects.

Key Audit Findings

The report highlights several findings:

• AHK’s operational photovoltaic capacity stood at 20 MW across four parks as of September 2025, compared with about 420 MW installed on the national distribution network, excluding rooftop systems.

• Fuel and emission allowance costs reached €955 million between 2020 and 2024, representing about 70% of AHK’s operating expenses.

• Between 2022 and 2024, 384,702 customer service calls reportedly went unanswered at AHK’s call center.

• Electricity valued at an estimated €276 million generated in uncontrolled areas between 1964 and 2022 was not billed.

• Around 56.1% of tenders above €10,000 between 2018 and 2023 were awarded through negotiation procedures rather than open competition.

Industry Implications And The Road Ahead

General Auditor Andreas Papakostas said the liberalization of the electricity market was intended to strengthen competition while protecting consumers through lower prices and transparency. The audit argues that the current regulatory framework has primarily supported private-sector expansion, while slower renewable integration within AHK has left consumers exposed to higher fuel and emission-related costs.

Conclusion

The findings raise broader questions about how Cyprus’ renewable energy market has been structured and regulated. While private investment expanded rapidly, the report suggests that expected benefits for consumers have been limited, prompting calls for regulatory review and a reassessment of long-term energy strategy.