Cyprus Policy on Renewable Energy & Energy Conservation Solon Kassinis Director of Energy Service Ministry of Commerce, Industry & Tourism Republic of Cyprus The Cyprus Institute Nicosia – June 23, 2010

Cyprus Energy System: Main Indicators Primary Energy Consumption – 2009 Final Energy Consumption – 2009 Final Energy Consumption by Sector – Primary Energy Consumption: 2 803ktoe Final Energy Consumption: 1 924ktoe Gross Final Energy Consumption: 1 964ktoe RES Production: 95 ktoe

Cyprus Energy System: Main Indicators Final Energy Consumption (2.2% mean annual increase) Final Electricity Consumption (6.8% mean annual increase) Cost of Oil Products Import ktoe GWhr 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 Adequate Energy Secure Energy Cost Effective Energy 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 % RES in the Gross Final Energy Consumption Solar : 2.96 % Biomass : 0.95 % Biofuels : 0.77 % Electricity (PV, biomass) : 0.13 % Indicative Trajectory

RES Evolution Solar Thermal – Energy Production Installed PV Systems (Cumulative) Electricity Production- PV Systems 58ktoe 3.5MW

RES Evolution Biomass – Energy Production Electricity Production- Biogas (Cumulative) Electricity Production- Biogas 18.6ktoe 6MW 2 new biogas plants (total capacity of 1.25MW) are expected to operate in the 2010

RES Evolution Wind Energy First Wind Farm 82MW Online: end 2010 Second Wind Park 31.5MW Online: end MW 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 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) Current Status

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 Grid Electricity Consumers RES Power Producers Special Fund Electricity levy subsidy (feed in tariff) Electricity Cash Flow Local Authorities 2% of Gross Income (wind, biomass, CSP)

Grant Scheme for RES Total number of submitted applications ( ): 20,559 Total amount granted ( ): 20.5 million Euros 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 with the possibility of implementing the projects by 2015 By the end of June the Action Plan (2009/28/EC Directive) will be submitted to the European Commission RES Roadmap Wind : 165MW Solar Thermal: 25MW PV : 14MW Biomass : 4MW Biogas : 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 Electricity Consumers Energy Saving Investments Special Fund levy grant Financial incentives (capital aid) in the promotion of Energy Saving

Grant Scheme for Energy Saving Total number of submitted applications ( ): 29,813 Total amount granted ( ): 29.8 million Euros 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 ( )

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

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