Global companies such as Tesla and Samsung have shown interest in participating in Cyprus’ battery-based electricity storage system, Energy Minister George Papanastasiou said on Tuesday.

In a presentation on the government’s strategy aimed at reducing electricity prices, the minister said “this is the only way to improve the economy’s competitiveness.”

Papanastasiou underscored there are three pillars for Cyprus’ ambition to establish it as an energy centre. The first is to create an LNG import terminal “as soon as possible” for power generation purposes, which, he said, will directly reduce pollution by 35 to 40 per cent, and consequently the cost of electricity.

He pointed out that three million tonnes of carbon dioxide are produced every year, which he said is equivalent to €300 million in emission allowances, a cost that is passed on to the electricity consumer.

Papanastasiou added that the second pillar concerns better use of renewable energy sources, primarily photovoltaics.

While 750 mega watts are being produced by photovoltaics, only 19 per cent enter the market, with most of the production being rejected.

“This is unacceptable,” he stressed.

The ministry is currently preparing a battery-based storage system involving the private sector and €40m in grants.

The first phase will entail calling for tender for 150 mega watts of storage by September.

“We already have interest from big names such as Tesla, Samsung and a few others, as 150 mega watts is quite a large quantity where the first phase is concerned,” Papanastasiou said.

He said the third pillar concerns the electricity interconnection between Cyprus and Greece.

In these cases, the flow of electricity usually goes from the cheapest to the most expensive destination, he specified.

At present, the government is waiting for the comprehensive cost-benefit study from the project’s developer to examine it with the help of a “reputable” firm so that it can take the investment decision to enter the project’s capital with €100 million, Papanastasiou said.

He reiterated that this project is European and will be carried out after receiving €657 million in funding which, he said, is the largest given by the European Commission under the Connecting Europe Facility.

Papanastasiou said that the target for opening up the competitive electricity market is July 2025, while he stressed that the objectives include the creation of a smart electricity grid that will facilitate the further penetration and exploitation of renewable energy sources.