Cyprus Policy on Renewable Energy & Energy Conservation Solon Kassinis Director of Energy Service Ministry of Commerce, Industry & Tourism Republic of.

Cyprus Policy onRenewable Energy & Energy Conservation

Solon KassinisDirector of Energy Service

Ministry of Commerce, Industry & TourismRepublic of Cyprus

The Cyprus InstituteNicosia – June 23, 2010

Cyprus Energy System: Main Indicators

Oil Products96.1%

Solid Fuels0.5%

RES3.4%

Oil Products73.4%

RES4.9%

Solid Fuels0.7%

ElectricityHFO&Diesel

20.2%

Primary Energy Consumption – 2009 Final Energy Consumption – 2009

Transport (Aviation)

14%

Household16%

Commerce & Services

11% Agriculture2%

Industry15%

Transport (Road)39%

Final Energy Consumption by Sector – 20092009Primary Energy Consumption: 2 803ktoeFinal Energy Consumption: 1 924ktoeGross Final Energy Consumption: 1 964ktoeRES Production: 95 ktoe

Cyprus Energy System: Main Indicators

1,500

1,575

1,650

1,725

1,800

1,875

1,950

2,025

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Final Energy Consumption (2.2% mean annual increase)

2,800

3,050

3,300

3,550

3,800

4,050

4,300

4,550

4,800

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Final Electricity Consumption(6.8% mean annual increase)

Cost of Oil Products Import

kto

e

GW

hr

0

150

300

450

600

750

900

1050

1200

1350

1500

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009

Mill. Euros

Cost of Oil Products Import – 2009:•€970 million•17% of the country's total imports •6.3% of the country's GDP

Cyprus Energy Policy

Security of energy supply Contribution of the energy sector to the productivity and

competitiveness of the national economy Environmental protection and sustainable development

Clean Energy

AdequateEnergy

Secure Energy

Cost EffectiveEnergy

Main Objectives

Cyprus Energy Policy – RES & Energy Saving

Maximizing the efficient use of domestic resources of renewable energy

Saving energy both in primary form and in energy end-use Promote RES in electricity and heat generation Replace oil in the area of transportation with biofuels Promote efficient electricity and heat co-generation in industries Adopt investments in RES based on the criterion of the overall net

benefit Making efficient use of energy by putting into place mechanisms that

give incentives to users Efficiently develop RES stations based on physical planning Limit bureaucracy and simplify all licensing procedures Growth “energy awareness”

Main Priorities

RES Potential

• The average wind speed in some areas, which is suitable for the installation of wind farms, is about 5-6 m/s

Wind Energy

Limitations Limited potential for wind energy generation Land planning problems (Cyprus, developed

tourism country) Oppositions of local communities Conflict with real estate (touristic) development

Overall annual solar irradiation received by a solar collector

RES Potential

• Cyprus enjoys more than 300days with 75% of sunshine

• Cyprus holds the unofficial “World Record” in solar water heating with almost every household having a system installed (more that 750,000m2 of solar collectors installed)

Solar Energy

RES Potential

• More that 3.5MW of PV systems have been installed

• Per capita, Cyprus ranks the 6th highest in the EU with 2Wp per head of population

Solar Energy

Limitations Low efficiency High capital investment (very high initial cost) Need very high subsidies in order to be viable R&D

RES Potential

• Significant amount of agricultural residues• Significant biogas potential (exploitation of agricultural

residues, waste disposal plants, exploitation of landfill gas from the waste disposal plants)

Biomass

Limitations/Obstacles Limited suitable agricultural land Water Scarcity High dependence on imports to satisfy the targets

(indicative and mandatory targets) High cost of imports

Biofuels

RES Evolution

2.6 2.73.4

4.4 4.84.95.9

7.4

9.5

13.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2011

/12

2013

/14

2015

/16

2017

/18

2019

/20

% RES in the Gross Final Energy Consumption

Solar : 2.96 %Biomass : 0.95 %Biofuels : 0.77 %Electricity (PV, biomass) : 0.13 %

SolarBiomass

Biofuels

Electricity (PV &

Biogass)

Indicative Trajectory

RES Evolution

05

1015202530354045505560

ktoe

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Solar Thermal – Energy Production

0

500

1000

1500

2000

2500

3000

3500

kW

2005 2006 2007 2008 2009

On Grid Off Grid Total

Installed PV Systems (Cumulative)

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

GWh/yr

2005 2006 2007 2008 2009

On Grid Off Grid Total

Electricity Production- PV Systems

58ktoe

3.5MW

0

2

4

6

8

10

12

14

16

18

20

ktoe

2000200120022003200420052006200720082009

0500

100015002000250030003500400045005000550060006500

kW

2007 2008 2009

On Grid Off Grid Total

RES Evolution

Biomass – Energy Production

Electricity Production- Biogas (Cumulative)

Electricity Production- Biogas

18.6ktoe

6MW

0

5

10

15

20

25

GWh/yr

2007 2008 2009

On Grid Off Grid Total

2 new biogas plants (total capacity of 1.25MW) are expected to operate in the 2010

RES Evolution

Wind Energy

• First Wind Farm 82MWOnline: end 2010

• Second Wind Park 31.5MWOnline: end 2011

• 20MW wind farm under evaluation

Biofuels

• One company has been registered for the production of biofuels (7,460 tn for the year 2008)

• 300 tn/yr for own use• 2% (in the energy content) annual mandatory substitution of transport

fuels with biofuels• Substitution of diesel up to 7% v/v with biodiesel

RES – Targets

4.8

20.64 3.8 2.5

6

13

10

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

2009 2010 2020

%

RES contribution to the gross final energy consumption (indicative target)

RES contribution to the gross final energy consumption (compulsory target)

Electricity production from RES (indicative target)

RES share in the overall transport petrol and diesel consumption (compulsory target)

Biofuels in overall transport petrol and diesel production (indicative target)

CurrentStatus

Development of RES – Measures & Tools

Financing programmes for the support and implementation of RES The allocation of an explicit RES development roadmap The elimination of the administrative barriers that prevent the

development of RES Measures of raising public awareness

Financing Tool for the Support of RES

• A Special Fund has been created aiming at support of RES and Energy Saving investments in Cyprus. The revenues of this fund are coming from the consumers paying an additional tax

• Implementation of a Programme with a view to encouraging RES Utilisation

• Provides financial incentives (capital or/and operational aid) in the promotion of Renewable Energy Sources

EAC GridElectricity

Consumers

RES Power Producers Special Fund

Electricity levy

subsidy (feed in tariff)

ElectricityCash Flow

Local Authorities2% of Gross Income(wind, biomass, CSP)

Grant Scheme for RES

• Total number of submitted applications (2004-2009): 20,559• Total amount granted (2004-2009): 20.5 million Euros

0.561.05

3.68

7.477.80

0

1

2

3

4

5

6

7

8

9

2005 2006 2007 2008 2009

783

1995

3899

5512

7846

524

0

1500

3000

4500

6000

7500

9000

2004 2005 2006 2007 2008 2009

Submitted Applications Allocated Funds (mil. €)

RES Development

Experimental testing of:• solar collectors,• solar water heating systems

Solar Systems Laboratory

RES Projects Co-Funded by EU

• Installation of PV systems in Schools/Governmental Buildings/Army Camps (1.1MW, 65 installations)

• Solar Heating/Cooling Systems in Governmental Buildings (1MW)• Concentrated Solar Power station

RES Development Program

• The proposed action plan includes large scale RES projects for electricity generation for the period 2009-2013 with the possibility of implementing the projects by 2015

• By the end of June the Action Plan 2010-2020 (2009/28/EC Directive) will be submitted to the European Commission

RES Roadmap 2009-2013

0

50

100

150

200

250

MW

2010 2011 2012 2013 2014 2015

Wind PV CSP Biomass Biogas

Wind : 165MWSolar Thermal: 25MWPV : 14MWBiomass : 4MWBiogas : 3MW------------------------------Total : 211MW

Elimination of the Administrative Barriers

• The Energy Service of the Ministry of Commerce, Industry and Tourist has undertaken the role of “one stop shop” in order to:

• Expedite the procedures• Facilitate the materialization of investments for the promotion of

alternative energy sources and energy conservation technologies.

• Fair and transparent terms for connection of an electricity producer from RES to the national grid

• Existence of energy market rules which eliminate distortions

Energy Saving – Measures & Tools

• National Energy Efficiency Action Plan (in conformity with EU Directive on Energy Services) The target (above requirements) consists to 10% by 2016 Priorities are buildings, transport and industry

• Buildings: Implementation of the energy performance buildings directive Mandatory installation of Solar water heaters on domestic houses Financial support scheme providing grants and subsidies for energy

efficiency investments CFL lamps: Cyprus Government provides 6 lamps for each household

• Industry: The main tool used for energy savings is the governmental financial

support scheme. Emphasis is given to heat recovery, efficient use of electricity, CHP.

Transformation sector:• Introduction of natural gas and CCGT technology

Energy Saving – Measures & Tools

• Transport: Governmental support schemes for purchasing of hybrid, electric, FFV,

low emissions vehicles (120g CO2/km) School bus

• Public Sector: Awareness raising and education of civil servants on simple measures and

behaviour to save energy in the workplace

• Energy Label: Energy labelling for appliances is operating successfully in Cyprus and market

surveillance authorities provide data that a minimum 80% are labelled in shops

ElectricityConsumers

Energy SavingInvestments

Special Fund levy grant

• Financial incentives (capital aid) in the promotion of Energy Saving

Grant Scheme for Energy Saving

• Total number of submitted applications (2004-2009): 29,813• Total amount granted (2004-2009): 29.8 million Euros

0.311.04

6.31

10.43

11.70

0123456789

10111213

2005 2006 2007 2008 2009

169742

57366524

10384

6258

0

1500

3000

4500

6000

7500

9000

10500

12000

2004 2005 2006 2007 2008 2009

Submitted Applications Allocated Funds (mil. €)

Growth of Energy Awareness

• Save Energy Exhibitions

• Growth of Energy awareness in schools

• Informative material for the RES and Energy Saving

International Recognitions

Cyprus has been chosen by IEA (International Energy Agency) and WREN (World Renewable Energy Network) to be winner of “World Renewable Energy Congress Trophy” (2006-2008)

RES & Energy Conservation Business Environment

Cyprus offers an attractive, stable, secure and transparent business environment for investments in the field of renewable energy sources and energy saving

Thank you for your attention!