2020 Cyprus Country Report

Energy: Renewables
Sector Profile
sources. The potential of the latter is enormous,
both in terms of clean energy and low electricity
prices.
Cyprus is reliant on heavy fuel oil and diesel
imports for its electricity needs and spends over
8% of its GDP to cover the costs. However, the
country has embarked on a plan to import LNG
for power generation by 2022 over a 20 to 30-year
period so that it can reduce carbon emissions in
line with EU targets, and until it can exploit its
own gas reserves. The EU agreed in January 2018
to partially fund the cost to build infrastructure at
Vassilikos for this purpose to the tune of €101.5
million, constituting about 40% of the eligible
amount.
The Natural Gas Public Company (DEFA), as
the sole importer and distributor of natural gas
on the island, announced tenders in 2018 for the
construction of the required infrastructure at
Vassilikos. This was successful and in December
2019 DEFA signed a landmark deal with a
Chinese-led consortium to build a €290 million
LNG import terminal at Vassilikos. Construction
started in July 2020, and has been followed by a
separate tender for the procurement of LNG with
23 companies expressing interest to participate.
Tenders are under evaluation. Progressively, the
project will include the introduction and use of
natural gas by the transport, industry and energy
sectors in Cyprus.
HARNESSING THE SUN
Solar energy is increasingly becoming a boom
segment for Cyprus. The European Bank for
Reconstruction and Development (EBRD) alone
has financed five solar parks across the island
with an investment of €10.85 million in a bid to
increase photovoltaic capacity in Cyprus by 12%.
Scandinavian Solar Parks, a Cyprus company
with Swedish investors, has established nine solar
power generation parks with a capacity of around
1,300 KW of energy. Local Cyfield runs a 3 MW
PV park in Ayios Ioannis, while the Electricity
Authority of Cyprus (EAC) operates its own PV
park in Tseri with a nominal capacity of 3 MWp,
generating some 5,000 MWh per year and avoiding
3,600 tonnes of carbon dioxide emissions per
year. The state power company also has an ambitious
project planned to self-finance and operate
a 20 MW photovoltaic (PV) power station inside
the Sovereign Base Area (SBA) of Akrotiri. In
addition, PROTEAS, a solar field on the island’s
southern coast in Pentakomo aims not only to
generate electricity but to provide fresh water by
powering energy intensive desalination plants.
The research facility is a result of a partnership
between the Commonwealth Scientific and
Industrial Research Organisation (CSIRO) and
the Cyprus Institute (CyI), which is pioneering
research in renewable energy systems.
In addition, the EAC forged a deal with the
country’s Archbishopric in July 2018 to develop
two photovoltaic parks in Nicosia, producing
around 66 MW. The project is set to be the largest
PV system in Cyprus, contributing to the island’s
national renewable energy sources targets.
These are all positive developments, but there
continues to be untapped potential in terms of
renewable energy production, and international
interest in developing the sector in Cyprus is expected
to increase considerably in the coming
years. This investment is also crucial in order for
Cyprus to achieve its targets – and further open
up the field for companies with expertise in renewables.
Cyprus’ largest PV park, an 8 MW facility,
started subsidy-free operations in February
2020. This was developed by the Vassiliko
Cement Works Company Ltd to supply around
10% of the annual electricity needs of its cement
factory. Under subsidy-free rules, the power will
be bought by the EAC at a ‘cost-avoidance rate’,
based on the average price it would have paid if
the electricity had come from fossil fuels.
STORING POWER
A limitation in realising the full solar power potential
of the island is lack of electricity storage.
There is a drive to increase use of battery
systems, to store excess energy and create a
‘powerbank’. The first energy storage system,
30 kW/50 kWh, was connected to the electricity
system in Nicosia in 2018. Cyprus became
the testing ground for an innovative community
project delivered by a German electric utility
company Autarsys, where 30 kW/50 kWh was
connected to a conventional distribution substation
in Nicosia. The project provided the opportunity
to interact with real battery systems and
gather knowledge about their operation, branding
the efforts as a success. State-of-the-art highvoltage
lithium-ion batteries were used, and the
battery system provided services to the distribution
network, such as power balancing, network
and frequency support, as well as services that
stabilise and protect the seamless operation of
the network and are considered essential for
modern power networks. The project received
funding from the European Union’s Interreg
Mediterranean research and innovation programme
under the project StoRES.
An innovative EU project, also under the
StoRES project, involving Cyprus, Greece, Italy,
Spain and Portugal is supporting the development
of optimal policy for the effective integration
of energy storage systems. It aims to boost
Cyprus needs
to invest in
drawing up
a longterm
consolidated
sustainable energy strategy.
Now is the time to invest in
new sustainable technologies,
to manage our energy resources
and needs in an optimal
way, to reduce the impact on
the environment and to ensure
our future energy security. We
need to start working right now
for a more sustainable Cyprus
by 2050. We need to accelerate
the country’s transition
towards a hydrogen economy.
Andreas Poullikkas
Chairman
Cyprus Energy Regulatory
Authority (CERA)
A key aim is to
make Cyprus
a hub for solar
innovation,
technology
transfer, industry
start-ups and job
creation where
ideas can grow
and achieve their
full potential
86 Country Report CYPRUS 2020