Electricity Demand, Gas Potential, and Interconnection Prospects in South and North Cyprus
Cyprus enters 2026 with a complex and asymmetrical energy landscape marked by rising electricity demand, fuel import dependence, and the need for climate-resilient infrastructure. The Republic of Cyprus (South) continues to modernize its grid, advance EU-backed interconnection projects, and develop offshore natural gas discoveries. Meanwhile, the Turkish Republic of Northern Cyprus (TRNC/North) focuses on strengthening thermal generation capacity and expanding renewable energy uptake under significant grid constraints.
This study evaluates the 2026 outlook through four key dimensions: electricity demand, generation mix, offshore gas potential, and the strategic significance of HVDC interconnectors.
1. ELECTRICITY DEMAND: SEPARATE SYSTEMS, COMMON PRESSURES
South Cyprus: Summer Peaks Exceeding 1.1 GW
According to the Cyprus Transmission System Operator (TSOC), peak demand reached 1,122 MW in 2025. Heatwaves and high tourism activity pushed summer loads beyond the 1,070–1,080 MW range, increasing stress on thermal power plants.
Solar capacity continues to grow rapidly; however, the lack of storage means fossil-fuel units must remain online during peak hours.
System adequacy assessments indicate a required operational capacity of 1.2–1.3 GW for 2026.
North Cyprus: Demand Approaching 0.5 GW
Kıb-Tek reported a record 460 MW peak load in February 2025. With mobile units and plant upgrades, total installed capacity has reached approximately 690 MW, yet reserve margins remain very limited.
Demand in 2026 is expected to grow by 4–6%, driven by tourism recovery, population increase, and expanding commercial activity. Without a major renewable build-out or interconnection, the North will remain heavily dependent on imported fuel-oil and diesel.
2. GENERATION MIX AND THE ROLE OF RENEWABLES
South Cyprus: Rapid Growth in Solar Power
Supported by EU incentives, South Cyprus is set to reach a 20–22% share of solar in annual electricity generation by 2026.
However:
• Storage capacity is insufficient
• Curtailments occur during periods of high solar output
• Thermal units remain essential for balancing
Modernization of the Vasilikos plant and further digitalization may reduce losses, but structural improvement depends on the interconnector becoming operational.
North Cyprus: Limited Renewables, Heavy Thermal Reliance
Renewable generation in the TRNC remains modest due to:
• Grid stability constraints
• Lack of large-scale storage
• Absence of major wind projects
In 2026, rooftop solar expansion and pilot battery installations may increase, yet thermal plants will continue to carry the primary load.
3. OFFSHORE NATURAL GAS DISCOVERIES: HIGH POTENTIAL, NO PRODUCTION
In July 2025, the Republic of Cyprus announced a significant find at Pegasus-1 in Block 10, drilled by ExxonMobil and QatarEnergy. The ultra-deepwater well reached a 350-meter gas column. Including Glaucus, Cronos, and other discoveries, total potential resources are estimated at 226–255 bcm.
Yet:
• No commercial production has begun
• Export infrastructure is absent
• Power generation still relies on imported petroleum products
Thus, offshore gas discoveries have no immediate impact on the 2026 electricity market, though they remain central to long-term strategy.
In the North, offshore exploration remains politically constrained.
4. HVDC SUBSEA INTERCONNECTION: EUROASIA / GREAT SEA INTERCONNECTOR
The EuroAsia Interconnector, also known as the Great Sea Interconnector (GSI), is the most transformative infrastructure project for ending Cyprus’s long-standing electricity isolation.
Technical Specifications
• Type: HVDC subsea cable
• Route: Cyprus – Israel – Crete
• Total length: ~1,208 km
• Capacity: Up to 2,000 MW (initial phase 1,000 MW)
• Converter stations: Cyprus, Israel, Crete
Strategic Importance for 2026
If the project progresses on schedule, 2026 could become a critical construction and procurement year. Once completed, the interconnector will:
1. End the island’s electrical isolation
2. Enable imports during summer and winter peaks
3. Allow excess solar generation to be exported
4. Improve grid stability and reduce fuel-oil dependence
5. Support the integration of offshore gas into power generation
For the TRNC, no equivalent HVDC project exists. Discussions about a Turkey–TRNC HVDC link surface periodically but without an official timetable.
5. TRNC’S INITIATIVE FOR SOLAR ELECTRICITY EXPORTS TO TURKEY
The TRNC has announced efforts to leverage its 2,400 annual sunshine hours to export electricity to Turkey using a new two-way subsea cable.
The proposed plan includes:
• A new 800 MW bidirectional cable
• A portion allocated to domestic supply
• The remaining capacity dedicated to exporting surplus solar power to Turkey
If implemented, the initiative could:
• Strengthen the TRNC’s renewable energy transition
• Provide economic benefits through clean energy exports
• Enhance regional energy cooperation
This represents a promising step toward greater self-sufficiency and potential export capacity for the North.
6. THREE POSSIBLE SCENARIOS FOR 2026
1. Optimistic Scenario
• Rapid progress on the interconnector
• Better-than-expected renewable generation
• Stable international fuel prices
• LNG import feasibility advances in the South
• Strong rooftop solar uptake in the North
2. Base Scenario
• Gradual progress on the interconnector
• Continued peak demand growth
• Ongoing curtailments despite rising renewables
• Thermal generation remains central on both sides
3. Pessimistic Scenario
• Delays in HVDC construction
• High fuel price volatility
• Reserve margin stress in the North
• Postponements in offshore gas development
7. OVERALL ASSESSMENT: BETWEEN OPPORTUNITY AND FRAGILITY
Cyprus enters 2026 with significant opportunities but also considerable vulnerability.
In the South, offshore gas discoveries and the EuroAsia Interconnector offer major long-term potential, though short-term impacts on the fuel mix remain limited.
In the North, dependence on thermal generation persists, yet the emerging plan to export solar power to Turkey may open new economic prospects.
If key projects stay on track, 2026 could mark a turning point toward a more interconnected, diversified, and strategically positioned energy system in the Eastern Mediterranean.
FOOTNOTES AND SOURCES
- TSOC – Cyprus Transmission System Operator https://www.tsoc.org.cy
- European Commission – Energy Markets https://energy.ec.europa.eu
- TSOC Peak Demand Data https://www.tsoc.org.cy/en/electrical-system/daily-system-archive
- Cyprus System Adequacy Assessments https://www.tsoc.org.cy/en/publications
- Kıb-Tek – Turkish Cypriot Electricity Authority https://www.kibtek.com
- Kıb-Tek Demand and Production Data https://www.kibtek.com/duyurular
- Cyprus Renewable Energy Sources Authority (RES) https://www.res.org.cy
- Kıb-Tek Renewable Energy Briefings https://www.kibtek.com
- ExxonMobil Official Press Releases https://corporate.exxonmobil.com/news
- Cyprus Offshore Licensing Areas – Energy Ministry https://mcit.gov.cy
- Cyprus Electricity Authority – Fuel Mix https://www.eac.com.cy
- Eastern Mediterranean Energy Institute – General https://www.emi.org.cy
- EuroAsia Interconnector Official Website https://www.euroasia-interconnector.com
- EuroAsia HVDC Technical Documents https://www.euroasia-interconnector.com/technical-info
- ENTSO-E – Regional Interconnection Policies https://www.entsoe.eu
- International Energy Agency – Fuel Outlook iea.org
- Cyprus Energy Ministry – Offshore Gas https://mcit.gov.cy
- TRNC Energy Infrastructure – Kıb-Tek https://www.kibtek.com