A substantial drop in the cost of electricity this year is “impossible,” Energy Minister George Papanastasiou said on Thursday, adding that people should manage their expectations.

The minister made the remarks during a meeting with the leadership of the SEK trade union. They discussed the state of play with energy, and how expensive electricity adversely affects the cost of living.

According to the minister, the future use of natural gas should drive electricity prices down by about 30 per cent. The full operation of the competitive electricity market would result in another 5 to 10 per cent fall.

But, he stressed, he cannot promise a significant decline in electricity costs this year, as “that is impossible.”

On the competitive electricity market, the minister said it’s currently in its trial phase – lasting from January through to July.

In a competitive market, the expectation is that prices will go down. But, he qualified, he did not expect “a miracle”.

If all the measures planned by the government go through, that will bring electricity costs down. Isolated measures would not.

The three ‘pillars’ of this policy are: natural gas imports for electricity generation, increasing renewables in the energy mix, and the interconnector.

During the meeting, Papanastasiou announced the coming launch – as of the coming Monday – of a government scheme for ‘hybrid’ solar parks.

He said other schemes would be rolled out thereafter, “so that we have storage in sub-stations, storage and dispersal within the grid, so that we can store as much power from renewables as possible”.

Explaining the ‘hybrid’ solar parks, the minister said that currently parks generate electricity and disseminate it into the transmission grid.

Going ‘hybrid’ means that “in between production and the grid, you install a battery so that it’s charged” and “in this way you have stored electrical energy whenever the grid needs it and the park is not producing”.

On the question of why energy from renewables is ‘discarded’, Papanastasiou explained that’s due to the fact that production often exceeds demand.

“In this grid that was designed a long time ago, we’re dispersing production, in other words we’ve got production on home rooftops, in solar parks and in businesses.

“And we expect this grid, such as it is, to cope with production from so many sources.”

What’s needed is to turn the grid into a ‘smart’ one, plus new cabling installed at selected points.

Asked who would bear the cost for making the grid ‘smart’, Papanastasiou said the Electricity Authority of Cyprus. However, “most of the funding comes from Europe”.

The state-run power utility plans to install 50,000 smart meters by June, while the target for the end of the year is to have 150,000 premises installed with these devices.