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Cyprus

 

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Current Situation
Cyprus is almost totally dependent on oil imports for its energy supply, accounting for 91% of the primary energy supply. The burden of cost of energy imports on the economy of Cyprus is considerable, although due to the island’s location there are no imports or exports of electricity.

Almost all energy in Cyprus is produced from imported oil and diesel. The Electricity Authority of Cyprus (EAC) plans to invest in a new fossil fuel power plant, which would lead to an excess capacity for the next few years, being a major barrier for the development of renewable electricity. The government policy to promote RES-E seems not very active. Solar energy is the main renewable source in Cyprus, and it is traditionally used by hotels and households for thermal purposes. Now the government is creating a favourable environment for PV investments in the domestic sector. Wind energy is also promising; the first projects are presently being developed.

Virtually all electricity in Cyprus (around 99%) is produced from imported oil and diesel. In absolute terms there is a negligible amount of electricity generation from renewable energy in Cyprus. The only source of RES-E in Cyprus currently is solar photovoltaics. Installed capacity for PV at the end of 2005 stood at 0.63 MWp including all grid-connected and off- grid PV installations, which is 15th highest in the EU25. This is almost double the installed PV capacity at the end of 2004. Per capita, Cyprus ranks the 6th highest in the EU with 0.81 Wp per head of population.

Around 2% of the primary energy in Cyprus is provided by solar thermal. At the moment 92% of all houses and 50% of hotels have installed solar water heaters. Cyprus has more solar collectors per capita installed than any other country in the world.

Biomass heat is less important in Cyprus but has shown some growth since 1997. It contributed 9 ktoe in 2005. There is no geothermal heat production in Cyprus.

The level of biofuel production in Cyprus is low, but not insignificant given the small size of the country. A major priority of eth Cypriot Government is to decrease dependence on fossil fuel imports. In 2006 Biodiesel production capacity in Cyprus stands at 2 kt per year. There have been no capacity developments since 2005. There is no bioethanol production currently in Cyprus.

Perspectives
In Cyprus, an issue regarding policy integration has been observed as there is investment at present in a new fossil fuel power plant creating excess capacity. Until 2005, measures that proactively supported renewable energy production, such as the New Grant Scheme, were not very ambitious. Targets are not being met. In 2006, a New Enhanced Grant Scheme was agreed upon. The leading RES in Cyprus is PV and wind power offers high potential.

RES-E (Electricity production from renewable energy sources) policy in Cyprus consists of the following components:
 The New Grant Scheme, valid from 2004 until 2006, meant a tax of 0.22 €ct/kWh on every category of electricity consumption. The income generated by this tax was used for the promotion of RES.
 The New Enhanced Grant Scheme was implemented in January 2006. Financial incentives (30-55% of investments) in the form of government grants and feed-in tariffs are part of this scheme.
 Operation state aid for supporting electricity produced by biomass has been suggested, and forwarded to the Commission for approval.

In order to promote the use of biofuels, a measure was taken to exempt the biomass percentage of biodiesel from excise duty (as of 2005). The New Enhanced Grant Scheme for Energy Conservation and Promotion of the Use of RES (2006) also provides financial incentives for RES heating and cooling activities. 30-45% of investment in solar systems for central water heating systems and 40-55% of investment in space heating and cooling can be recovered in this way.

The target for renewables according to the EU is 13% (2005=2,9%). The renewables target is calculated as the share of renewable consumption to gross final energy consumption.

Key Players
Within the context of the goals and commitments of the Republic against the European Union for electricity generation from RES, reaching a 6% of the total electricity consumption up to 2010, legislation has been established so as to encourage the use of RES. More specifically, the Special Fund Schemes of the Ministry of Commerce, Industry and Tourism provide substantial incentives for investments in the sector.

The TSO supports each such interest in practice. Through the TSO and the Electricity Authority of Cyprus (EAC), the Cyprus Energy Regulatory Authority (CEΡΑ) has established rules, which put forward financial incentives for investments in the sector and provide beneficial treatment of RES during system operation and load dispatch, according to the Transmission and Distribution Rules (Chapter T16).

Up to present, a great interest from companies has emerged for construction of Wind Farm Power Stations (WFPS). Because of the interest shown and the special characteristics of the electricity system in Cyprus, but also in the context of national goals regarding electricity generation from RES, the TSO is in the process of investigating the effect that a large wind penetration may have on the system, particularly with regards to system reliability, security and stability. Due to the great interest companies have showed for constructing Wind Farm Power Stations (WFPS), the Department of Town Planning and Housing has prepared an Advisory/ Indicative Map for Developing of Wind Farm Power Stations (WFPS) in Cyprus.

Job demand
It is clear that in Cyprus the RES related jobs are increasing rapidly. There is a great interest especially from foreign enterprises (mostly German and British) in the development of photovoltaic and solar systems. This option creates immediately a great interest in young people in order to find a job and provides them the opportunity to build a stable career in the field. According to some surveys made by TSO and EAC there is going to be a great demand also for technicians in the field of wind power and biofuels.