Cyprus Climate Conference

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Presentation transcript:

Cyprus Climate Conference “Cyprus' Current Energy Policy & The Possibilities for Renewable Energies” Solon Kassinis Director of Energy Service Ministry of Commerce, Industry & Tourism Republic of Cyprus November, 27 2009 – Goethe Centre Nicosia

Presentation Outline Cyprus Energy System – Main Indicators Cyprus Energy Policy – RES & Energy Saving Legislation – RES & Energy Saving RES Potential RES Evolution RES Targets Development of RES – Measures & Tools Energy Saving – Measures & Tools

Cyprus Energy System: Main Indicators Primary Energy Consumption – 2008 Final Energy Consumption – 2008 Cost of Oil Products Import (19% of the country's total imports - 2008) Final Energy Consumption by Sector – 2008

Cyprus Energy System: Main Indicators Final Energy Consumption (2.6% mean annual increase) Final Electricity Consumption (6.8% mean annual increase) Seasonal Fluctuation in Electricity Demand

Energy System in Cyprus: Key Characteristics Isolated energy system High degree of dependence on imported oil High increase rates of energy consumption High cost of energy supply Electricity generation is almost 100% oil fired and absorbs on average, 42% of the total primary energy consumption Limited oil storage capacity Energy intensiveness of the economy, particularly in the passenger transport sector Seasonality on energy demand Environmental constrains High potential of rational use of energy and energy conservation Significant potential of renewable sources

Cyprus Energy Policy Security of energy supply Main Objectives Security of energy supply Contribution of the energy sector to the productivity and competitiveness of the national economy Environmental protection and sustainable development

Cyprus Energy Policy – RES & Energy Saving Main Priorities 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”

Legislative Framework for RES & Energy Saving Promotion of Energy Conservation and the Encouragement of the Use of Renewable Energy Sources Law (2003) Procedures for licensing and interconnecting wind and photovoltaic installations to the national grid Integrated land planning policy for large RES developments Energy Performance of Building Law (2006 & 2009) Energy End-Use Efficiency and Energy Services Law (2009) Promotion of Biofuels for Transport Law (2005 & 2006) Promotion of Combined Heat and Power Law (2006) Eco Design for Energy Using Product Law (2007)

RES Potential Wind Energy The average wind speed in some areas, which is suitable for the installation of wind farms, is about 5-6 m/s Limitations Limited potential for wind energy generation Land planning problems (Cyprus, developed tourism country) Oppositions of local communities Conflict with real estate (touristic) development

RES Potential Cyprus enjoys more than 300days with 75% of sunshine Solar Energy Overall annual solar irradiation received by a solar collector 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)

RES Potential More that 3.2MW of PV systems have been installed Solar Energy More that 3.2MW of PV systems have been installed Per capita, Cyprus ranks the 6th highest in the EU with 2Wp per head of population 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 Biomass Significant amount of agricultural residues Significant biogas potential (exploitation of agricultural residues, waste disposal plants, exploitation of landfill gas from the waste disposal plants) Biofuels Limitations/Obstacles Limited suitable agricultural land Water Scarcity High dependence on imports to satisfy the targets (indicative and mandatory targets) High cost of imports

% RES in the Final Energy Consumption RES Evolution % RES in the Final Energy Consumption Solar : 2.84 % Biomass : 0.88 % Biofuels : 0.72 % Electricity (PV, biomass) : 0.06 %

RES Evolution Solar Thermal – Energy Production 56ktoe Electricity Production- PV Systems Installed PV Systems (Cumulative) 3.2MW

RES Evolution Biomass – Energy Production 17.4ktoe Electricity Production- Biogas Electricity Production- Biogas (Cumulative) 4.4MW 2 new biogas plants (total capacity of 1MW) are expected to operate at the beginning of 2010

RES Evolution Biofuels One company has been registered for the production of biofuels (7,460 tn for the year 2008) 200 tn/yr for own use 2% (in the energy content) annual mandatory substitution of transport fuels with biofuels Substitution of diesel up to 4-5% v/v with biodiesel. No substitution of petrol with bioethanol Wind Energy First Wind Farm 82MW Online: end 2010 It will contribute to electricity production by 2-3%

RES – Targets Current Status RES contribution to the primary energy consumption (indicative target) Electricity production from RES (indicative target) RES contribution to the final energy consumption (compulsory target) Biofuels in overall transport petrol and diesel production (indicative target) RES share in the overall transport petrol and diesel consumption (compulsory 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 (almost €10M) of this fund are coming from the consumers paying an additional tax of 0.22 eurocents/kWh 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 0.22cent/kWh subsidy (feed in tariff) Cash Flow Local Authorities 2% of Gross Income (wind, biomass, CSP)

Submitted Applications Allocated Funds (mil. €) Grant Scheme for RES Total number of submitted applications (2004-Nov. 2009): 20,245 Total amount granted (2004-Nov. 2009): 19.2 million Euros (~ 6.46 million Euros have been allocated within the year 2009) Submitted Applications Allocated Funds (mil. €)

Grant Scheme for RES Grant subsidy 15-55% Incentives Grant subsidy 15-55% (depends on the type of subsidy, natural or legal entity) Large Scale RES Installations: Feed in tariff policy – 20 years Wind systems: €0.166/kWh Solar Thermal: €0.26/kWh PV systems (21-150KW): €0.34/kWh (limitation 2MW/year) Biomass exploitation systems: €0.135/kWh Biogas exploitation systems: €0.1145/kWh Main Categories Wind energy systems Solar thermal systems Photovoltaic systems Biomass and biogas utilization Geothermal pumps

Solar Systems Laboratory RES Projects Co-Funded by EU RES Development Solar Systems Laboratory Experimental testing of: solar collectors, solar water heating systems 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 RES Roadmap 2009-2013 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 Wind : 165MW Solar Thermal: 25MW PV : 14MW Biomass : 4MW Biogas : 3MW ------------------------------ Total : 211MW

Projection (end 2010) – Optimum Scenarios On Grid Small PV Systems from 2.5MW (today)  9.6MW at the end of 2010 (Including 1.1MW from the installation on Public Schools, Governmental Buildings and Army Camps) Biomass Systems expected 9.5MW total installations at the end of 2010 Wind Parks 82MW approved already and is expected to have installations up to 124MW at the end of 2010 2005 2006 2007 2008 2009 End 2010 Total KW PV systems 155 423 266 746 1,089 6,951 9,629 Biomass - 250 3,060 245 6,000 9,555 Wind 124,000

Electricity Production/Cost – Comparison PV-Wind Parks-Biomass (at the end of 2010) Electricity Production RES-E (2010) Estimation for Electricity Consumption by technology (end 2010) Cost Distribution per kWh Produced (PV cost was normalized to €0.35/kWh)

RES Development Program RES Development Plan Contribution in Electricity Consumption 5.8% electricity production from RES RES Contribution in Final Consumption 9% RES contribution in final energy consumption (aviation capping mechanism was taken account)

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

Barriers to the Development of RES Barriers related to permission procedures Identification of bottleneck organizations Barriers related to permission procedures Knowledge about procedures for the whole licensing chain

Barriers to the Development of RES Barriers related to grid issues Is cost estimates for grid connection provided by transmission operator transparent? Barriers related to grid issues Is cost estimates for grid connection provided by transmission operator discriminatory?

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 It will be reached by applying cost effective energy efficiency improvement measures and domestic RES Priorities are buildings, transport and industry Buildings: Implementation of the energy performance buildings directive 21.12.2007: Regulations for minimum energy efficiency requirements for new buildings 01. 01.2010: Energy Performance Certification Mandatory installation of Solar water heaters on domestic houses from 1.1.2010 Financial support scheme providing grants and subsidies for energy efficiency investments For the tertiary sector grants are given for any technology which satisfies the 10% savings criterion. Emphasis is given to efficient electricity use. CFL lamps: Cyprus Government provides 6 lamps for each household 2007: 300,000 CFL, €580,000 2008: 360,000 CFL, €695,000 2010: 1,070,000 CFL, €1,000,000

Energy Saving – Measures & Tools 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 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

Financing Tool for the Support of Energy Saving Provides financial incentives (capital aid) in the promotion of Energy Saving Electricity Consumers Energy Saving Investments Special Fund 0.22cent/kWh grant Incentives Grant subsidy 15-35% (depends on the type of subsidy, natural or legal entity) Main Categories Energy conservation: Heat insulation Hybrid, electric, dual propulsion, low emissions vehicle Cogeneration of Electricity and Heating/Cooling

Grant Scheme for Energy Saving Total number of submitted applications (2004-Nov. 2009): 27,464 Total amount granted (2004-Nov. 2009): 27.56 million Euros (~ 9.46 million Euros have been allocated within the year 2009) Submitted Applications Allocated Funds (mil. €)

Raising Public Awareness Save Energy exhibitions Public hearings and RES info days School presentations to promote “energy awareness”

Exploiting the Opportunities Offered by the CDM & European Emissions Trading Scheme (or others) Preparation of a government strategy and action plan for exploiting the opportunities offered by CDM and EU-ETS for the period 2008-2012 and 2013-2020 Up to date two wind farms and two biogas installations have been registered with the CDM mechanism and four other projects are under validation All projects are in the Renewable Energy Sector

How long is “The Road to Copenhagen”? Kyoto Protocol: Much Action – Little Effect New Approach is Needed: A carbon tax instead of emission trading mechanism A carbon tax based on production of carbon and not on consumption A policy framework promoting clean technologies with economically viable and long-term solutions R&D for new energy and other environment technologies Changing attitude

Thank you for your attention!