Support for floating photovoltaics, energy storage and offshore renewable energy in Cyprus (HYDRO-RES)
German Federal Ministry for Economic Affairs and Climate Action(BMWK)
Cyprus,GIZ in the EU member states
Sustainable infrastructure: water, energy and transport
Cyprus is among the EU member states with the lowest share of renewable energy in its electricity mix, accounting for only around 15 per cent in 2021. The rest of the electricity supply in Cyprus is based exclusively on heavy fuel oil and diesel power plants, which are harmful to the environment and climate. There is also very limited space available to install photovoltaic and wind power plants.
As there are about 110 reservoirs in Cyprus, floating photovoltaic plants are a possible solution to this problem. Some of these reservoirs could also serve as pumped-storage plants, making it possible to store renewable energy. Cyprus has significant potential to harness green energy at sea - for example, offshore wind energy, meaning through wind power plants at sea, or ocean energy. However, projects using these technologies have not yet been implemented in Cyprus.
The conditions for using floating photovoltaic plants, energy storage and renewable offshore energy in Cyprus have improved.
The project examines the feasibility and potential of floating photovoltaic plants in Cyprus. It also advises the Cyprus Government on developing national strategies for pumped-storage plants and renewable offshore energy. To this end, the project is drafting contract templates and technical specifications in order to implement corresponding projects. In addition, it is supporting the development of a legal framework and appropriate funding instruments.
The project communicates knowledge and relevant experience from other countries with Cyprus, including through training courses. With its Cypriot partners, it identifies obstacles and drafts recommendations for developing floating photovoltaics, pumped-storage plants and offshore renewable energy. In this way, it contributes to protecting the climate and expanding green energy in Cyprus.
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Cyprus has prioritised work for both the reduction of energy costs and the further exploitation of the national potential of renewable energy and energy efficiency. In this context, based on the ambitious EU reform packages REPowerEU and Fit-for-55, the government has intensified its efforts to revise its National Energy and Climate Plan (NECP) for the period 2021-2030, the final version of which is due to be submitted to the European Commission by the end of June 2024. The revised plan will aim to provide a detailed map of the country''s transition to a more competitive, lower greenhouse gas emissions energy system, by establishing adequate policies and measures to enable Cyprus to successfully meet its new, more ambitious energy objectives for 2030.
According to the €1.3 billion roadmap, Cyprus plans to reduce greenhouse gases by an ambitious 32%. Cyprus'' Energy Minister George Papanastasiou has confirmed that as much as 45% of the €1.23 billion investments of the Recovery and Resilience Plan (RRP), approved by the European Commission, will be devoted to measures to support Cyprus'' transition to a green economy.
The government is placing more focus on subsidising green initiatives and international companies have been investing in RES installations. The country''s top-tier universities and research institutes are doing their part by creating a more sustainable energy mix through innovation in smart tech and ways to battle climate change. Cyprus'' EU 2030 Renewable Energy goal has been updated to achieve 31%-34%% of its energy consumption coming from renewables.
In a bid to introduce more flexibility to its power system, the country aims to introduce new and disruptive smart grid technologies, as well as state-of-the-art control and storage methods to be used in parallel with new electricity market approaches. With 340 days of sunshine a year, Cyprus has one of the highest potentials 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.
Recovery and Resilience Plan
Recovery and Resilience Plan (RRP) funds are being allocated to promote the transition to green energy through RES, charging points for electric and plug-in hybrid vehicles, smart metres and energy efficiency measures in households, rooftop solar for all, Small and Medium Sized Enterprises (SMEs) and governmental and municipal buildings.
The majority of the remaining funds will go towards promoting greener entrepreneurship, through for example targeted programmes for transitioning to a circular economy, the digital upgrade of enterprises, the creation of business clusters and the enhancement of the competitiveness of SMEs in the manufacturing sector. Moreover, a dedicated business support centre, as well as a one-stop centre for licensing commercial RES projects, is being set up with completion expected by the end of 2024. A separate funding application is also planned for large energy storage projects.
Subsidising RES Projects
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 of up to 10 kW for all consumers, net-billing RES systems (mainly PV and Biomass) with a capacity of 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 were 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.
Cyprus'' energy policy is providing financial support to 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. However, with inflation and the rise in fuel prices the implementation of the ''green tax'' has been delayed until early 2024.
A key hurdle for Cyprus to overcome is its high dependency on fossil fuels for energy – with one of the biggest shares within the EU. This makes it crucial for the country to develop both its renewable energy sources and natural gas, the cleanest of the fossil fuels, as a transitional fuel.Plans are afoot to achieve that.
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 is implementing a well-advanced plan to import LNG for power generation by end of 2024 over a 20-year period so that it can reduce carbon emissions in response to 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 Vasilikos for this purpose to the tune of €101.5 million, constituting about 40% of the eligible amount. The rest of the financing comes from the European Investment Bank and the European Bank for Reconstruction and Development.
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