2020 Cyprus Country Report

Renewables have
the potential to
create between
11,000 and
22,000 jobs
in Cyprus by 2030
The Cyprus Institute’s PROTEAS Facility in Pentkomo
Cyprus has the highest potential for solar
power of any European Union country, and the
island is already one of the highest users per capita
in the world of solar water heaters in households,
with over 90% of households equipped with solar
water heaters and over 50% of hotels using large
systems of this kind.
Cyprus submitted its final National Energy
and Climate Plan (NECP) for the period 2021-
2030 to the European Commission in January
2020. Among other things, its 10-year roadmap
and 2030 targets focus on for example the implementation
of a more sustainable transport sector
through electric cars and on further promoting
the use of RES in electricity production. It also
proposes a 23% share of energy from renewable
sources in gross final consumption of energy in
2030. According to the €1.3 billion roadmap,
Cyprus plans to reduce greenhouse gases by an
ambitious 24%.
Energy is one of Cyprus’
most promising sectors,
with a number of
investment opportunities
in new and existing
projects. Regarding
renewables and electricity
production, we are
focusing our efforts on
the operation of a fully
competitive electricity
market by the end of
2021, whilst also making
concrete steps to end
our country’s energy
isolation and moving
towards green energy
and storage installations.
The Ministry also plans to
create a One-Stop Centre
for commercial renewable
energy projects, as
well as to facilitate the
construction of the
projects proposed in the
framework of our last two
funding schemes – 222
commercial RES projects
in total. In addition, we
are funding households
and businesses for
energy efficiency and
the installation of
photovoltaics and other
RES systems for netmetering,
net-billing
and self-consumption.
Natasa Pilides
Minister of Energy,
Commerce and Industry
SUPPORTING RES SYSTEMS
Cyprus currently operates a scheme for the production
of electricity from RES for own use,
which includes installations of net-metering
photovoltaic (PV) systems with capacity up to 10
kW for all consumers, net-billing RES systems
(mainly PV and Biomass) with a capacity up to
10 ΜW for commercial and industrial consumers,
and off-grid RES systems with no limit in
total capacity. For the installation of net-metering
PVs in households, the government is offering
subsidies intended to encourage further RES installations
by reducing the recuperation period of
their investments.
In addition, two successful support schemes
for the installation of RES systems that will
operate in the competitive electricity market
have been implemented in the period 2017-
2019. In the first scheme 114.5 MW PV systems,
2.3 MW Biomass systems and 12.5 MW from
a wind park have been approved, and in the
second scheme 259 MW from PV parks. The
RES systems that enter these schemes are expected
to be operational before the end of 2021.
Cyprus’ energy policy has created financial
support for RES projects, and a special fund
was created aiming to support RES and energy
saving investments in Cyprus, with revenue
derived from consumers paying a ‘green tax’
levied on electricity bills (currently at €0.005
per kWh and €0.0025 per kWh for vulnerable
groups).
The country’s national grid system needs
upgrading as it has certain intrinsic and technical
limitations affecting RES penetration and
reliability. However, studies by the International
Renewables Agency (IRENA) concluded that
using the existing system, renewable energy
and mostly solar, could provide 25% to 40% of
Cyprus’ total electricity supply in 2030 and bring
costs down significantly. This can be increased
further by implementing RES installations with
storage capability through competitive bidding.
The country is also exploring ways to introduce
smart grids in the national network and is
on the look-out for projects that could facilitate
energy storage, and ventures that have production
on a 24-hour basis. In addition, the prospective
EuroAsia and EuroAfrica Interconnectors
could bring more solutions down the pipeline.
FOSSIL FUEL RELIANCE
A key challenge for Cyprus is its high dependency
on fossil fuels for energy – with the biggest
share within the EU. This makes it crucial for
the country to develop both its natural gas, the
cleanest of the fossil fuels, and renewable energy
Sector Profile
Country Report CYPRUS 2020 85