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Cyprus Energy Market

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The Cyprus energy market, general terms and figures. Updated version with data from 2010 via ministry of Commerce.

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Cyprus Energy Market

  1. 1. Introduction to the energy market in Cyprus Energy Service Ministry of Commerce, Industry & Tourism
  2. 2. Small and Isolated Energy System No electricity, oil or gas pipelines interconnections with other countries All the energy needs are covered by inland production ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  3. 3. Cyprus Energy System – The Challenges Small and isolated energy system High increase rates of energy consumption Almost entirely dependent on imported fuels  (Diesel, HFO – mainly used for power generation in the oil-fired power plants, LFO, LPG, marine fuels, lubricants, gasoline, kerosene and jet fuel).  The remaining system is balanced by imports of pet-coke and coal used by the cement industry and by renewable forms of energy (mostly solar energy). High cost of energy supply Seasonality on energy demand Environmental constrains ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  4. 4. High Increase Rates of Energy DemandDuring the decade 2000-2010  Final Energy consumption increased by 1.7% at an average annual basis  Electricity consumption increased by 6.0% at an average annual basis  GDP increased by 3.2% at an average annual basis ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  5. 5. High Cost of Energy Supply In 2010, the energy imports cost raised to €1.27 billion, representing 19.7% of the countrys total import cost or 6% of GDP. In 2010, the energy imports cost was equivalent to 111% of the value of the countrys total exports Cost of Energy Imports Thus, the Current Account deficit for 2010 was 7,8% compared to a deficit of 1,8% in the no- oil import scenario A 10 dollar increase on the oil price is expected to have an increase of 0.6 percentage units on Cyprus inflation ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  6. 6. High Oil Prices The average selling price (prior taxation) of diesel and petrol is systematically higher than the corresponding EU27 prices. ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  7. 7. Special Problems – Seasonality on EnergyDemand Due to seasonality on energy demand, the maximum capacity of wind energy installations is calculated to be maximum 30% of the total capacity in order to have system stability, ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  8. 8. 2010 Energy Balance Primary Energy Consumption Final Energy Consumption Solid Electricit Fuels y Solid RES 3,9% 21,8% Fuels 3,7% 5,6% Oil Product Oil RES s Products 5,4% 67,2% 92,4% Final Energy Consumption per Sector Commerce & Services 11% Agriculture Transport 2% (Road) Household 39% 16% Industry Transport 15% (Air) 15% ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  9. 9. OVERVIEW OF THE POWER GENERATION SECTOR ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  10. 10. Power Generation Sector Power generation and supply have been liberalised since the accession of Cyprus to the European Union (May 2004). Since 1st of January 2009 the electricity market has been liberalised for all non-domestic customers. Independent Power Producers (IPPs) need to obtain a relevant licence from the Cyprus energy regulating Authority (CERA) in order to be allowed to produce and supply electricity. IPPs may also connect to the National Transmission System by applying to the Transmission System Operator (TSO). EAC is the main provider of electricity both for industrial and commercial purposes (the Vasilikos Cement Company produces electricity for its own needs). EAC is also the owner of the National Transmission System. ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  11. 11. Key Players in the Cyprus Electricity Market Energy Service - Ministry of Commerce, Industry and Tourism Cyprus Energy Regulatory Authority (CERA) - Responsible for the regulation and the oversight of the energy market in Cyprus Electricity Authority of Cyprus (EAC) - A publicly-owned utility currently dominates the Cypriot electricity market - Owns the transmission and distribution assets - Remains the sole active supplier Transmission System Operator (TSO) - Responsible for the operation of the national transmission system and the objective management of electricity trading - Authorized body for issuing quarantines of origin ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  12. 12. Power Stations At present EAC operates three power stations with a total installed capacity of 3 x 130 MW 1118 MW. Vasilikos Steam Turbine 390MW Power Units According to EAC´s development plan, a Station 1 x 38 MW number of new CCGT units running on 38MW Gas Turbine Unit natural gas are scheduled for future operation. Dhekelia 6 x 60 MW Steam Power 360MW Turbine Units Station Apart from establishing a number of new gas turbine generators, EAC also plans to 6 x 30 MW Steam gradually convert the existing oil-fired 180MW Moni Turbine Units thermal power units to run on natural gas. Power Station 4 x 37.5 MW 150MW A new CCGT unit (220MW) is currently Gas Turbine Units being installed at the Vasilikos Power Station (the unit has already operated in open cycle and currently works are being Total Installed Power 1118MW carried out to allow for combined cycle operation). The unit will be able to run either on diesel or natural gas. ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  13. 13. VASILIKOS ENERGY CENTRE ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  14. 14. Vasilikos Energy Centre The Energy Centre will include:  Facilities for the importation, storage and distribution of all oil products traded in Cyprus, including biofuels.  The storage facilities will provide for Cyprus’ operational and strategic petroleum products requirements.  The main philosophy of the oil terminal is to operate as a hub for circulation of oil products in the Eastern Mediterranean area, allowing petroleum products trading companies (both existing and new) to utilise the terminal facilities for the storage and distribution of their products both locally and regionally.  Facilities for the importation, storage and regasification of Liquefied Natural Gas (LNG).  These facilities will be such as to accommodate the current and readily foreseeable future requirements of Cyprus in natural gas.  At the initial stage natural gas will be used for power generation in combined cycle gas turbines (CCGTs). The Energy Centre will be situated at the Vasilikos area on the south coast of Cyprus, next to the Vasilikos Power Station which is owned and operated by the Electricity Authority of Cyprus (EAC). ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  15. 15. Vasilikos Energy Centre – SiteMap Highway Nicosia-Limassol Energy CentreVasilikos Power Plant Hellenic Chemical Industries (Demolished) ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  16. 16. Vasilikos Energy Centre – Layout ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  17. 17. RENEWABLE ENERGYSOURCES AND ENERGY CONSERVATION ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  18. 18. Legislative - Financing Framework for RES& Energy Saving Legislative Framework for RES was enacted in 2003: A Special Fund has been created aiming at support of RES and Energy Saving investments in Cyprus. The revenues (almost €22M) of this fund are Coming from the consumers paying an additional tax of 0.44 eurocents/kWh Implementation of the Energy Performance Buildings Directive: Regulations for minimum energy efficiency requirements for new buildings have been enforced since 21/12/07 Promotion of Biofuels for transport Law [66(I)/2005 & 58(I)/2007) Promotion of Combined Heat and Power Law (2006) Eco Design for Energy Using Product Law (2007) Energy End-Use Efficiency and Energy Services Law (2009) Procedures for licensing and interconnecting wind and photovoltaic installations to the national grid have been specified Integrated land planning policy for large RES developments ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  19. 19. Support Schemes SCOPE To provide financial incentives for the promotion of investments in the field of Energy Conservation and Renewable Energy Sources ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  20. 20. RES & Econ - Support SchemesMain RES Categories: Solar Thermal Systems (space heating/cooling & Water heating) Photovoltaic Systems (stand-alone & grid Connected) Wind Systems (electricity production & water pumping) Concentrated Solar Plants (electricity production) Biomass and Biogas utilization (space heating/cooling & electricity production) Geothermal Heat-Pumps (space heating/cooling) Small Hydroelectric systems (electricity production) Desalination using RES ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  21. 21. RES & Econ - Support SchemesMain Energy Conservation Categories : For existing local Enterprises (they must save at least 10%) Housing Sector – Thermal Insulation Transport (Vehicles : Hybrid, Electric, Dual Propulsion / Flexible Fuel and Low CO2 emissions)* *(This category is not in operation since 2010)Cogeneration of electricity and heat/cooling ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  22. 22. 2011 SUPPORT SCHEMES PARALLEL OPERATION OF 3 SCHEMES1. Grant Scheme for the promotion of Electricity Production from largecommercial wind farms, solar thermal and photovoltaic systems, the utilizationof biomass.2. Grant Scheme for the promotion of Energy Conservation and the RenewableEnergy Sources for Individuals (Natural Persons) and Organizations that dοnot exercise economic activity.3. Grant Scheme for the promotion of Energy Conservation and the RenewableEnergy Sources for Individuals and Legal Entities as well as Public SectorEntities that exercise economic activity. ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  23. 23. RES & Econ - Support Schemes2011 Incentives Grant subsidy (15 – 55% of the capital investment) Feed in tariff policy – 20 years  Wind systems: €0.166/kWh  Solar Thermal: €0.26/kWh  PV systems (upto 150KW): €0.31/kWh (limitation 2MW/year)  PV systems for housing sector (up to 7KW): €0.35/kWh (limitation 2MW/year)  Biomass exploitation systems: €0.135/kWh  Biogas exploitation systems: €0.1145/kWh 2% compensatory benefits to neighboring communities for wind systems, solar thermal, biomass & biogas exploitation ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  24. 24. Financing Tool for the Support of RES-el 2% of Income (Wind and CSP only) Local Authorities RES electricity producers Special Fund Subsidy 0.44cent/kWh Electricity EAC Grid Consumers Electricity Cash Flow ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  25. 25. Financing Tool for the Support of RES-hc Grants for RES installations Special Fund Subsidy 0.44cent/kWh Electricity EAC Grid Consumers Electricity Cash Flow ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  26. 26. Applications Submitted and Paid Application Status 2004-2010 20000 25.000,00 € 18000 16000 20.000,00 €Number of Applications 14000 Milion Euros 12000 15.000,00 € 10000 8000 10.000,00 € 6000 4000 5.000,00 € 2000 0 0,00 € 2004 2005 2006 2007 2008 2009 2010 Year Applications Submitted Payed Applications Euros Paid Total Grants/Subsidies 2004-2010 : 67.090 million euros at 44.176 applicants ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  27. 27. Applications per Category2010200920082007200620052004 0 2000 4000 6000 8000 10000 12000 14000 16000 18000 20000 Energy Consevation Thermal Insulation Thermal Insulation in mountainous areas Geothermal Heat Pump for heating and cooling Co-Generation Large Wind Systems Small Wind Sys tems up to 30KW Purchase of new Hybrid Vehicle Purchase of new Vehicle with low emissions of carbon dioxide < 120gCO2/Km Purchase of new electric vehicle Central s olar thermal systems for heating water Solar Systems for Space Heating and Cooling Solar Systems for Heating Water Solar thermal systems for water pools Biomass Utilaization for heating and cooling Photovoltaic Systems connected to the Grid Stand Alone Photovoltaic Sys tems up to 20kW Photovoltaic Systems for water pumping Windmills for water pumping Electricity Production from Biomass and Biogass Biomass for Heating and Cooling ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  28. 28. Applications to Cyprus Energy RegulatoryAuthority (CERA) CERA has accepted the following applications in RES Wind:  More than 1000MW  CSP: 270MW  Photovoltaic Systems> 20KW: 22 MW  Hydroelectric: 330 KW  Biomass:11,35 MW ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  29. 29. 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 SERVICE – MCIT REPUBLIC OF CYPRUS
  30. 30. Department of Town Planning and Housing Photovoltaic Systems (ΚΔΠ 869/2003) New legislation for supporting standard PV installations: Regulation 869/2003 Rule 2/2006. Ministerial Order 3/2008 ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  31. 31. RES Business Environment Cyprus offers an attractive, stable, secure and transparent business environment forinvestments in the field of renewable energy sources and energy saving ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS
  32. 32. Thank you for your attentionQuestions ? ENERGY SERVICE – MCIT REPUBLIC OF CYPRUS

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