ECB’s Consultation On Internal Governance: A Strategic Shift In Banking Regulation

The European Central Bank (ECB) has launched a public consultation on a new internal governance and risk culture framework for banks, reflecting the institution’s supervisory priorities under the Single Supervisory Mechanism (SSM). This initiative underscores the ECB’s commitment to ensuring robust management practices within European banks, aiming to mitigate the systemic risks highlighted by the global financial crisis and subsequent bank failures.

Enhanced Governance Standards

The proposed framework replaces the 2016 SSM supervisory statement, providing a comprehensive roadmap for banks to establish more effective internal governance structures and risk cultures. It delineates supervisory expectations regarding the composition and function of banks’ management bodies and committees, the roles and responsibilities of internal control functions, and the significance of a strong risk culture.

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This update incorporates the latest standards from the European Banking Authority (EBA) and showcases best practices identified by the ECB over the years. By setting clear guidelines, the ECB aims to standardise governance practices across the banking sector, fostering stability and resilience.

Addressing Governance Shortcomings

Historical shortcomings in governance and risk culture have often led to significant difficulties for banks, as evidenced during financial crises. Poor decision-making processes can result in imbalances between risk-taking and risk control, posing capital risks and undermining banks’ operational resilience. The ECB’s new guide seeks to address these issues by promoting balanced and well-informed decision-making frameworks within banks.

Ongoing Monitoring and Enforcement

Despite notable progress, the ECB stresses that banks must continue enhancing their governance standards. The central bank will intensify its supervisory scrutiny and employ all available tools to ensure compliance with the new guidelines. This proactive stance is crucial for preempting potential governance failures and maintaining the stability of the European banking sector.

Public Consultation and Stakeholder Engagement

The consultation period, which concludes on 16 October 2024, invites feedback from various stakeholders, including experts from supervised institutions. A stakeholder meeting scheduled for 26 September 2024 will facilitate direct dialogue between the ECB and banking professionals, ensuring the final framework reflects a comprehensive understanding of industry perspectives.

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Cyprus Moves To Unlock More Solar Power With First Large-Scale Battery Storage Contracts

by THEFUTURE.TEAM

June 23, 2026

Cyprus is preparing to sign the first contracts for large-scale electricity storage batteries on Tuesday, a project expected to improve the grid’s ability to manage growing renewable energy production and reduce the curtailment of solar power.

A Long-Awaited Grid Fix

Energy Minister Michalis Damianos said the agreements will cover 120MW of centralised storage capacity that will be managed by the transmission system operator. The project, valued at €50 million, is expected to deliver the batteries in January 2027, with installation scheduled to take place over the following two to three months.

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According to Damianos, the system should become operational by the summer of 2027, a period when both electricity demand and solar generation typically peak. He said the storage facilities will allow energy currently lost due to a lack of storage capacity to be retained and used when needed.

Why Storage Has Become Essential

The batteries are designed to absorb excess renewable electricity during periods of overproduction and release it back into the system when demand increases. Their introduction is expected to reduce the curtailments currently affecting solar generators and improve the use of renewable energy already being produced across the island.

Former Energy Minister George Papanastasiou told Sigma that planning for the project began in 2023 in cooperation with the European Commission. The objective was to address growing losses from renewable energy generation that the electricity network cannot currently absorb.

By the end of May 2026, approximately 160,000 megawatt hours of renewable energy had been lost through curtailments affecting residential photovoltaic systems, commercial solar parks, and wind installations. According to Papanastasiou, renewable electricity production exceeds demand during several hours of the day, leaving part of the output unable to be utilised.

The Cost Of Growing Faster Than The Grid

The challenge has become more pronounced as renewable generation capacity has expanded faster than the infrastructure required to manage surplus electricity. Data from the distribution system operator show that around 306 gigawatt hours of renewable energy were curtailed in 2025, compared with approximately 167 gigawatt hours a year earlier.

Papanastasiou acknowledged criticism that storage deployment has not kept pace with the growth of renewable energy projects, although he noted that regulatory and financing challenges slowed implementation. He added that the development of storage and generation capacity needs to progress in parallel, a challenge faced by many energy markets.

Private Capital Is Also Entering The Market

The state-backed battery installation forms part of a broader expansion of energy storage capacity across Cyprus. Alongside the project managed by the transmission system operator, the Electricity Authority of Cyprus (EAC) and private developers are advancing their own investments.

Current figures show 36 applications for battery storage projects with a combined requested capacity of approximately 925MW. The EAC has submitted applications for storage facilities in Dhekelia and Moni with a combined capacity of 180MW, while private-sector projects exceeding 150MW have progressed through various stages of the approval process.

Grid Stability Comes First

According to Papanastasiou, the state-owned battery system will primarily serve grid stability and energy security objectives rather than operate as a commercial trading asset. The facilities will store electricity during periods of surplus generation and release it when demand rises or when supply pressures emerge.

Privately operated storage projects could also contribute to the market by storing lower-cost renewable electricity and dispatching it later when demand and prices are higher.

As renewable energy continues to account for a larger share of Cyprus’ electricity mix, storage infrastructure is expected to play an increasingly important role in balancing supply and demand, reducing curtailments, and improving the overall efficiency of the power system.

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