White Paper for RES and RUE and Action Plan for the Republic of Cyprus

TOWARDS A WHITE PAPER FOR RES AND RUE STRATEGY AND ACTION PLAN FOR THE REPUBLIC OF CYPRUS

Foreword Summary Glossary 6 1. INTRODUCTION 1.1 The Republic of Cyprus 1.2 Conditions for the development of RES and RUE Support for innovative energy technologies Investors interest Public attitude 1.3 Legislative framework for RES 1.4 The present work 2. THE ENERGY SYSTEM OF CYPRUS 2.1 General overview 2.2 Energy supply Total primary energy consumption Net Domestic consumption RES contribution to the nal demand 2.3 The electrical system Electricity demand Conventional electricity production 2.4. Comparison with other countries 2.5. Forecast Forecast of primary energy supply Forecast of electricity demand 2.6. RES potential Solar potential Wind potential Biomass potential Hydro potential 3. ESTABLISHMENT OF SCENARIOS 3.1 Rationale for the formulation of the Scenarios 3.2 RUE in the building sector 3.3 RES for electricity Wind farms PV Biomass – Municipal Solid wastes Small hydro Solar Hot Water Systems 3.4 RES in transport 3.5 Details of the scenarios Baseline Scenario Implementation of existing policies scenario Advanced Policies scenario 3.6 Indicators characterizing scenarios Deviations from targets Financial and Economic Environmental impacts Social impacts 4. COMPARATIVE EVALUATION 4.1 Introduction 4.2 Cost-Benet Analysis Analysis of distinct technologies Analysis of scenarios 4.3 Multi-Criteria Analysis Criteria Presentation Weight Factors Evaluation 4.4 Conclusions of the comparative evaluation 5. AN ACTION PLAN FOR CYPRUS 5.1 Design and priorities of policy measures 6. CONCLUSIONS

3

5 6 10 10 10 10 11 11 12 12 14 14 15 15 15 15 16 16 16 16 17 17 18 18 18 19 19 20 21 21 21 22 22 22 23 23 23 23 23 23 24 24 24 25 26 26 27 28 28 28 29 30 30 30 31 31 31 33 33

36

Reproduction of the Contents is Subject to Acknowledgement of the European Commission.

Neither the European Commission, nor any person acting on its behalf: (a) makes any warranty or representation, express or implied, with respect to the information contained in this publication; (b) assumes any liability with respect to the use of, or damages resulting from this information.

The views expressed in this publication do not necessary reect the views of the Commission.

Edited by The Organisations and respective teams, which contributed to the development of the Guide, are: National Technical University of Athens: Artouros Zervos, George Caralis EREC: Christine Lins, Jolanda Crettaz, Loïc Blanchard Insula-CI: Cipriano Marin Cyprus Institute of Energy: Chryssis Ioannnis, Anthi Charalambous Acknowledgements The development of this Guide was supported to a signicant extent by the ALTENER Programme of the European Commission, DG-XVII for Energy, under contract: no: 4.1030/Z/01-015/2001- WP-CYPRUS “Towards a White Paper for RES and RUE Strategy and Action Plan for the Republic of Cyprus”.

Design: Luis Mir Printed by: GAIA - TENYDEA - 6-8-2004

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TOWARDS A WHITE PAPER FOR RES AND RUE STRATEGY AND ACTION PLAN FOR THE REPUBLIC OF CYPRUS

Foreword Prof. A. Zervos

N.T.U.A.

The Republic of Cyprus, with a population

RES and RUE introduction were analysed and

reaching 793100, is one of the ten new

comparative evaluated. The optimal scenario

Member States of the European Union since

was identied and formed the basis for

May 2004. Its entrance in EU entrains the need

establishing a strategy and action plan for RES

to comply with the Union’s energy policies and

in compliance with EU policies and international

environmental commitments.

commitments.

The energy system of Cyprus is an isolated

In addition to the formulation of the Action

energy system without indigenous sources of

Plan, during the project, a series of other

energy apart from renewable potential and

actions, related to the disseminations of the

is therefore entirely dependent on imported

results has been undertaken.

fuels. The sound and fast developing economy of Cyprus is founded to a large extent on

According to the results of the project the

the sector of services and with an important

achievement of targets is realistic, feasible

contribution of tourism-related activities. The

and protable. For its realization additional

energy consumption is characterized by high

measures and policies are required. The

increase rates of energy consumption with

positive impacts from the achievement of

transport and buildings being the largest energy

the targets, the emissions reduction, and the

consuming sectors.

employment justify the required additional support cost.

Today, the contribution of RES in the energy supply is very low and it is based on the use of solar energy for water heating. The contribution of RES in the electricity sector is negligible.

The ofcial targets for the Republic of Cyprus are: • 6% RES supply in the electricity sector in 2010.

• 5.75% use of biofuels in the transportation sector in 2010.

The National Technical University of Athens in collaboration with EREC, INSULA and the Ministry of Commerece, Indystry and Tourism of Cyprus have formulated a White Paper for RES and RUE Strategy and Action Plan for the Republic of Cyprus. In the framework of an Altener project alternatives scenarios of

5

6

TOWARDS A WHITE PAPER FOR RES AND RUE STRATEGY AND ACTION PLAN FOR THE REPUBLIC OF CYPRUS

Summary The island of Cyprus is located in the North-

production, as well as forecasting of the future

eastern part of the Mediterranean Sea. It is the

consumption is carried out.

third bigger in size island in the Mediterranean,

The third chapter provides a detailed

with a population reaching 793100

presentation of the three scenarios established.

The energy system of Cyprus is an isolated

The fourth chapter deals with the comparative

energy system without indigenous sources of

evaluation of the established scenarios. Cost

energy apart from renewable potential and

Benet analysis and Multi criteria evaluation are

is therefore entirely dependent on imported

used in parallel, in order to select the optimal

fuels. The sound and fast developing economy

scenario to serve as a basis of the action plan for

of Cyprus is founded to a large extent on

RES and RUE integration in Cyprus.

the sector of services and with an important

Finally, in the chapter ve the scenario

contribution of tourism-related activities. The

selected is elaborated and the dened action

energy consumption is characterized by high

plan for the harmonization of the Republic of

increase rates of energy consumption with

Cyprus with EU energy policies is presented.

transport and buildings being the largest energy

The analysis shows that new advanced

consuming sectors.

policies should be implemented before the

The Republic of Cyprus is one of the ten new

targets are achieved. The results of the

Member States of the European Union since May

evaluation indicate that policies and measures

2004. As a member of the EU, Cyprus is obliged

for supporting the integration of RES are

to comply with the Union’s energy policies and

justied and the benets from the

environmental commitments.

implementation of RES are much higher than the

The objective of the present work is to

engaged resources.

formulate an Action Plan towards a sustainable energy path for the Republic of Cyprus, aiming at the substantial uptake of RES and RUE. The ofcial data of the Republic of Cyprus are used and the analysis is focused on the Republic of

Glossary

Cyprus.

The rst chapter presents the island of Cyprus, its energy situation and the perspectives

RES RUE PV SHWS tn CHP MSWP

of deployment of RES. The favorable legislative framework for RES is also presented.

The second chapter attempts a detailed description of the Energy System of the Republic of Cyprus. Analysis of electricity demand and

7

Renewable Energy Sources Rational Use of Energy Photovoltaic Solar Hot Water Systems tonnes Combined Heat Power Municipal solid wastes plants

1.

INTRODUCTION 1.1 The Republic of Cyprus The island of Cyprus is the eastern island in the Mediterranean Sea. The climate is typical Mediterranean, with hot, dry summers from June to September and rainy, rather variable winters from November to March, separated by short autumn and spring seasons of rapid change. The maximum altitude is 1952 m at Mount Olympus.

The economy of Cyprus is characterized by an open character, rapid growth and overall healthy indicators. The Cyprus economy was transformed from an exporter of minerals in the 60’s and early 70’s to an international tourist and services centre in the 80’s and 90’s.

Although, geographically Cyprus is part of Asia, its people have a high standard of living and live like southern Europeans.

The tourist sector is very important to the economy of Cyprus, as revenue from tourism is accounted for half of the total foreign exchange earnings from the exports of goods and services. Additionally, 40500 persons are directly employed in the tourist industry.

The transport sector in Cyprus is the country’s largest and more rapidly growing nal energy consumer. Road transport still dominates over the whole sector with private cars be the prevailing transport means in the country.

In the building sector most of the energy is consumed during the summer period (May to October) when air-conditioning is needed.

There is of course a denite heating period (late November to March), however the ambient

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TOWARDS A WHITE PAPER FOR RES AND RUE STRATEGY AND ACTION PLAN FOR THE REPUBLIC OF CYPRUS

temperature in winter rarely falls below 10oC in

Ministry of Commerce, Industry and Tourism.

the seaside towns and at daytime it is at 20oC

The Institute of Energy was established in

or above with plenty of sunshine and little or no

2000. Its main aim is the development and

need for heating.

promotion of renewable energy sources and

Most of the households are equipped with

the dissemination of nancially viable energy

Central hot water systems (diesel boilers). Split

technologies in Cyprus. It closely collaborates

type air-conditioning units operating in heating

with the Energy Service of the Ministry of

mode are also used as heater in wintertime.

Commerce Industry and Tourism. However it

LPG heaters are used for space heating in many

has greater exibility in collaborating with other

households especially in rural areas and only few

local and international organizations, being an

households still utilize kerosene.

organization not depending directly from the state.

Electricity is mainly used in the electrical appliances rather than for space heating,

Solar industry is comprised of about 35

whereas solar is used for water heating.

small and medium sized companies, with a gross output at approximately 7 million

1.2 Conditions for the development of RES and RUE

euros[40]. Around 400 people are employed

Support for innovative energy technologies

of Standards (CYS), has established the

in Solar industry. The Cyprus Organization testing and certication standards for collectors

Development of Renewable Energy Sources (RES) was a priority of the Cyprus energy policy

and systems (CYS259/92, CYS263/92 and

during the last years and to that end a number

CYS209/91), which are compatible with

of supportive measures have been taken such as

European Standards[44], showing the high level

the establishment of the Applied Energy Centre

of know-how in this eld.

and of the Institute of Energy. Additionally, the existence of a strong solar industry is considered as an advantage in the topic of further RES development.

The Applied Energy Centre was established in 1986 to serve as the focal point for all renewable effort in the country. It oversees the implementation of the national renewable energy program, the main aim of which is to bring viable renewable energy technologies to a level of wide scale acceptance. The Centre has its own building with a workshop, ofces, a laboratory, an outdoor solar panel testing rig and library facilities. This is a governmental department under the Energy Service of the

Figure 1. The island of Cyprus

9

Investors interest

According to the existing policies a grants scheme for the promotion of the Renewable Energy Sources was established during the period 2002 - 2010. The scheme provides nancial incentives in the form of government grants for the promotion of investments in the eld of energy saving and energy production from renewable energy sources. Due to the recently ofcial announcement for the commencement of the NEW Grants Scheme for the promotion of RES and Energy Conservation, a lot of foreign investors have expressed interest in RES investments. On the other hand Cypriots wish to get the nancial incentives provided by the government in order to invest for energy production for their own uses. The utilization of RES seems to develop rapidly as a consequence of the formulation of the Grant Scheme.

Currently, in Cyprus due to favorable climate conditions the solar energy is extensively used especially for the production of sanitary hot water. The present image of Solar Water Heating Systems is excellent in Cyprus among individual users: • In individual houses – people are satised with their SWHS’s and would buy a new one if they had to replace their old one.

• In ats – people would like to “switch to solar”.

• In hotels and apartments – SWHS is a “must” for any new hotel builder.

However, the solar industry managers seem to be more sceptical and the problems faced by the Cypriot Industry, at present, are: • Non-expanding domestic market, so it appears as necessity to promote export sales; • To disengage from the highly saturated market of individual SWHS´s in favour of collective

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TOWARDS A WHITE PAPER FOR RES AND RUE STRATEGY AND ACTION PLAN FOR THE REPUBLIC OF CYPRUS

• The contribution that such an activity will

housing systems, tourism and health facilities,

have to local development.

and industrial hot water processes.

• The new legislative framework giving policy

• New solar application should be investigated

instruments for the penetration of RES which

i.e. space heating and cooling.

has been established recently in Cyprus.

Public attitude

In general people react favorably to any new

1.3 Legislative framework for RES

development that adds value and improves

A rapidly growing interest in investments

their living standards. Predictably, they oppose any new development that puts those

concerning RES exists in Cyprus, since the

standards in jeopardy. Consumer motivation

favorable legislative framework and tariff for

is not necessary in Cyprus market as

RES was enacted, motivating the private sector.

the SHWS have already penetrated in

A support fund has been created aiming at

the market and each customer considers

the support of RES in Cyprus. The revenues of

these systems necessary for households. The

this fund are coming from the consumers paying

electricity prices in Cyprus are relatively

an additional tax in the kWh’s price (+0.13C£

high in comparison with other Mediterranean

cents1/kWh).

The objective of this fund is to provide

Countries and therefore house owners prefer to “switch to solar”. Cypriot consumers utilize

support of the price of electricity produced by

SHWS as the payback period is short; they

Renewables. According to the new legislative

are trouble free, long life and simple during

framework, AEC is obliged to buy in priority

installation. Furthermore, it is considered that

the RES electricity produced by independent

they improve the quality of life.

producers in a xed price (3.7C£ cents /kWh).

Problems have been arising related to

For the wind farms the additional support during

wind farms as the citizens do not wish the

the rst ve years of operation, is +1.7C£ cents/

development of wind farms in the nearby eld

kWh, then it is dened given the recorded mean

creating the “not in my back yard syndrome”.

wind speed.

For the Photovoltaics the additional support is

A good example is the case of the Electricity Authority of Cyprus intending to invest in

+8.3C£ cents/kWh and the subsidy is 40-50%

a wind farm in Limassol and the licensing

(maximum amount of grant £7,000- £9,500).

procedure was stopped due to the citizens’

For the hydro plants, there is no additional

opposition. These phenomena occurred due

support, thus the xed price is 3.7C£ cents /kWh

to the ignorance of RES applications, their

and the subsidy is 20%-30% (maximum amount

advantages and disadvantages.

of grant 30,000).

Finally, a subsidy of the order of 30-40%

Furthermore, the prospects of exploiting RES today on the island are very encouraging

of the total investment cost is provided for

given:

biomass units and for the production of biofuels

• The maturity of several RES technologies.

(maximum amount of grant £400,000).

Cents of Cyprus pound (Exchange rate: 1£=1,7€).

11

1.4 The present work In the present work the main results of the project “Towards a White Paper for RES and RUE Strategy and Action Plan for the Republic of Cyprus”, supported by the Altener programme are presented. The aim of this project was to dene a strategy and action plan for RES and RUE in Cyprus This outcome is going to assist the competent authorities of Cyprus Republic to establish their strategy for the full harmonization of Cyprus with EU’s policy framework and targets in the energy sector. In formulating this action plan, a detailed analysis of the energy system of Cyprus was carried out.

The main issues connected with the formulation and realisation of plans aiming at optimally integrating RES and RUE in large autonomous energy systems were analysed.

Three alternative scenarios according to the degree of RES/RUE penetration were established.

The rst scenario named “Baseline Scenario” is an attempt to estimate the RES penetration in the energy system of Cyprus as expected until 2010 without any special policies implemented.

The second one, named “implementation of existing policies scenario” as its name indicates, estimates the expected RES penetration if the existing policies will be implemented. The last scenario named “Advanced policies scenario”, investigates the possibility of increase the RES penetration by the implementation of new advanced policies in order to achieve the established targets.

The three established scenarios were comparatively evaluated by terms of Cost-Benet Analysis and Multi-Criteria Analysis, in order to select the optimal one to serve as the basis of an action plan for RES and RUE integration in Cyprus.

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TOWARDS A WHITE PAPER FOR RES AND RUE STRATEGY AND ACTION PLAN FOR THE REPUBLIC OF CYPRUS

2. THE ENERGY SYSTEM OF CYPRUS 2.1 General overview

imports. The sector of solid fuels is of no

The energy system of Cyprus is an isolated

signicant importance to Cyprus and this

energy system without indigenous sources of

situation is not expected to change in the near

energy apart from renewable potential and is

future.

Cyprus has no gas sector. Various feasibility

therefore almost entirely dependent on imported fuels. Imported crude oil and nal oil products

studies have examined the possibility of

cover 97% of the country’s primary energy

introduction of the natural gas to the energy

supply needs.

system of Cyprus (piping gas from Syria). Even though there is no gas sector at present, the

Energy consumption has increased by 7% per

legislation to harmonise with EU requirements is

year in recent years.

prepared.

The contribution of renewable energy sources to the country’s energy needs is about 2% by terms of primary energy, mainly from solar energy. Solar energy is used for water heating and heating of swimming pools at hotels. No other uses have been developed.

This situation is in clear contradiction to the government’s commitment to the United Nation’s Kyoto Protocol to cut down its CO2 emissions and work towards a sustainable energy sector. The potential of Renewable Gasoline and Kerosene (Jet Fuels) are almost

energy is signicant and capable of meeting

entirely used in the transport sector. Diesel oil

an important share of energy supply, especially

is used in all demand sectors with the transport

if combined with investments on RUE

sector absorbing 50%. LPG is used in the

technologies.

domestic and services sector (mainly hotels

Although wind energy has not yet been

and restaurants). Coal and fuel oil (light and

exploited in the country, the Cyprus Wind Atlas

heavy) are used only in the Industrial demand

shows a few locations in the eastern part and

side. Heavy fuel oil is the predominant fuel for

southern coastal areas and in the adjacent

electricity generation.

inland areas that may be considered favorable

Cyprus has no coal mining industry. Some

for the production of wind energy.

small quantities are imported and used for

Biomass appears to be promising but few

cement production by two privately owned

activities have been reported in this area.

enterprises. There are no restrictions on coal

Biogas exploitation from Municipal Solid Waste

13

(MSW) disposed of in landlls has been reviewed for Nicosia, Pafos, Limassol and Larnaca. The expected landll gas production or the burn of solid wastes may justify in the future the installation of small co-generation units.

The hydro potential is expected to be very limited especially after the last year’s water shortages. However, on an experimental basis, there is a small hydro plant at Asprokremos Dam with a nomimal power of 500kW although it has been out of operation in recent years due to water shortages.

2.2. Energy supply The ofcial data of the European Commission presented in the “European Energy and transport trends to 2030” [13] are used as a basis for the analysis of the energy situation in Cyprus.

Total primary energy consumption

By terms of primary energy supply, the energy supply in Cyprus is based almost entirely to the oil (97%). The energy supply is completed by a small contribution of RES (2%) for water heating, and solids (1%) for industrial applications.

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TOWARDS A WHITE PAPER FOR RES AND RUE STRATEGY AND ACTION PLAN FOR THE REPUBLIC OF CYPRUS

water heating in the residential and commercial

Figure 2.1 Total primary energy supply in 2000 (Total: 2.43Mtoe)

and tourist sectors, is a specicity of Cypriot economy.

Figure 2.3 Net domestic Consumption per fuel Total: 1.66Mtoe (year 2000)

Source: European Energy and transport trends to 2030, EuropeanCommission

Net Domestic consumption

Source: “European Energy and transport trends to 2030”, European Commission

In gure 2.2 the net domestic consumption per

RES contribution to the nal demand

sector is presented. The transport sector is the

In Cyprus, renewable energy sources constitute

largest energy consumer in Cyprus accounting for

the only indigenous source of energy. Their

52% of nal consumption. The industrial sector

contribution to meeting the energy needs of the

accounts for 27%, the Residential for 13% and

country is limited (approximately 2% by terms of

the Tertiary Sector accounts for about 8%.

primary energy), mainly from solar energy used for water heating and biomass used for domestic

Figure 2.2 Net domestic Consumption per sector -Total: 1.66Mtoe (year 2000)

heating in individual woodstoves. Cyprus is one of the leading countries in the use of solar water heating systems. About 90% of individual houses, 80% of apartments, and 50% of hotels are equipped with solar water heating systems.

2.3. The electrical system The electrical system of the island of Cyprus is an autonomous system, which depends almost

Source: European Energy and transport trends to 2030, European Commission

entirely on energy imports given the fact that the island has no indigenous primary energy

Looking at the net domestic consumption per fuel (gure 2.3), oil products contribution is

resources. The island’s grid presents limited

very high (80%), mainly through transportation.

prospects of interconnection to the European

Electricity (16%), other (solar) (2%) and solids

Union networks. Therefore the Electricity

(coal) (2%) provides a lower contribution.

Production relies entirely on imported fuels,

The high share of solar energy, used for

mainly heavy fuel oil.

15

Electricity demand

Conventional electricity production

The total electricity consumption in 2002 reached 3401GWh [6].

Three power stations with a total installed

About 40% was consumed in the

capacity of 988 MW are under operation (mainly

Commercial sector (Tourism and public sector are

steam and gas turbines). The Dhekelia Power

included), 34% in the domestic sector and 21%

Station is located on the south east coast of the

in the industry. By the analysis of the whole data

island adjacent to Dhekelia Old Power Station

during the period 1995-2002 is shown that the

(build in 1952 and now decommissioned). The

average annual growth rate is 6.5%.

Moni Power Station and the new Vasilikos Power Station are located at the east of Limassol on

Figure 2.5 Electricity Consumption per sector in 2002 (Total: 3401GWh)

the south coast of Cyprus. The electrical grid of Cyprus is a centralized system characterized by high transportation losses.

2.4. Comparison with other countries The economic and energy status of Cyprus in comparison with European average and Greece are presented in the following (gures 2.7, 2.8, 2.9 and 2.10).

The indexes which were selected are: The conventional installed capacity (thermal

• Primary energy consumption per capita

units) was 988MW in the end of 2002. The peak

• Energy consumption per unit of GDP

load demand was 775MW in 2002 and 689MW

• CO2 emissions per capita

in 2001, represented an annual increase of 12%,

• CO2 emissions per unit of GDP

while the average annual growth is 6.6% during the period 1990-2001.

Figure 2.6 Conventional electricity production

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TOWARDS A WHITE PAPER FOR RES AND RUE STRATEGY AND ACTION PLAN FOR THE REPUBLIC OF CYPRUS

Figure 2.25 CO2 emissions per unit of GDP

Figure 2.7. Primary energy consumption per capita

Cyprus has steadily the highest CO2 emissions

Cyprus has the highest rate of increase in

per unit of GDP (about double of the EU

primary energy consumption per capita.

average).

Figure 2.8. Energy consumption per unit of GDP

Cyprus has the highest energy consumption per unit of GDP and the highest rate of increase, while the European average shows a decrease, and in Greece seems to be steady.

Figure 2.9. CO2 emissions per capita

Although Cyprus had the lowest CO2 emissions per inhabitant in 1990, it has the highest in 2000, with the highest rate of increase. Today, the CO2 emissions per capita are 9 tonnes, one of the highest rates world-wide.

17

2.5. Forecast

Figure 2.13 Final energy demand by fuel and forecast

Forecast of primary energy supply

The following forecasts (Figures 2.11, 2.12, 2.13) are based on ACE and PRIMES model [13], which takes into consideration macroeconomic, demographic and sectoral activity projections, covering the major energy consuming sectors in industry, households, agriculture, tertiary sector and transportation up to 2020.

Source: ”European Energy and transport trends to 2030”, European Commission

Figure 2.11. Total primary energy supply and forecasts (mtoe)

Forecast of electricity demand

In gure 2.14 the electricity forecast is presented. Two ofcial forecasts are presented; the rst one is the ofcial forecast until 2010

by EAC [6] and the second one presented in the document of the EC “European Energy and transport trends to 2030” achieved by the European Commission [13]. As it can be seen there is high deviation of the two curves.

Figure 2.14 Forecast of electricity demand Source: ”European Energy and transport trends to 2030”, European Commission

Figure 2.12. Final energy demand by sector and forecast

Source: ”European Energy and transport trends to 2030”, European Commission

EAC aiming at high safety and reliability standards in the provision of power supplies has made a generous forecast. On the other hand, the second forecast based on a macroeconomic approach [3], seems to underestimate the electricity demand in the near future.

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TOWARDS A WHITE PAPER FOR RES AND RUE STRATEGY AND ACTION PLAN FOR THE REPUBLIC OF CYPRUS

The mean daily sunshine, i.e. the time interval

The proposal of the NTUA is to follow the existent rate of increase as recorded during

from sunrise to sunset, for Cyprus varies from 9.8

the last years, and achieve the same electricity

hours in December to 14.5 hours in June [42].

demand as the one dened by the EC’s model

Figure 2.15. Solar potential

in 2020.

2.6. RES potential In Cyprus, renewable energy sources constitute the only indigenous source of energy. In this task the main renewable sources in the island are presented by terms of: • Availability of RES • Natural and technical restrictions to their exploitation • Geographical and seasonal distribution of the Wind potential

exploitable potential

The wind in Cyprus is affected by the following factors: • From anticyclones moved from west to east, from the Siberian anticyclone during the winter and from the low pressure created in the area of India and expanded until the area of Cyprus during the summer.

• Sea breezes generated in coastal areas as a result of the different heat capacities of sea and land, which give rise to different rates of heating and cooling.

• Mountain-valley winds created when cool Solar potential

mountain air warms up in the morning and

The Meteorologic service of Cyprus has classied

begins to rise – while cool air from the valley

Cyprus into 14 zones from climatic point of view.

moves to replace it. During the night the ow

However, from the considerations, affecting the

reverses.

use of solar energy, the classication may be

In Cyprus there is available wind potential,

broadened to 3 zones: Coastal, Central plains and Mountains

[41].

which can be exploited. In the following gure

The collection of sunshine duration

the mean wind velocity in a height of 10 meters

data at a number of meteorological stations

above the ground are presented. There are

started in 1959. Statistical analysis shows that

some areas with mean wind velocity 5-6m/sec,

all parts of Cyprus enjoy a very sunny climate.

while there are few areas with 7m/sec.

19

In the above map, the available potential

In addition to the biomass prospects, there

is presented. Additional restrictions should be

is signicant biogas potential. Referring to

taken into consideration, in order to discover the

electrical energy produced by the exploitation of

exploitable wind energy potential:

landll biogas from the waste disposal plant.

The biomass potential can be summarized as:

• Subregions dedicated to special activities

• Exploitation of agricultural residues

must be excluded

• Energy crops (Problem of water availability)

• Subregions of less than 5m/s are of no

• Three big waste disposal plant:

interest at least for the current level of

•

technology and the legislative framework.

Nicosia: 100,000tn wastes/y, capacity:

• Subregions of very high altitudes or slope.

1.1MWe (1.5MWth), 7.5GWh/y

Figure 2.16 Wind potential (annual mean wind velocity)

•

Lemessos: 150,000tn wastes/y,

capacity: 1.75MWe (2.5MWth), 15.6GWh/y •

Larnaka: 45,000tn wastes/y, capacity:

0.45MWe (0.7MWth), 2.7GWh/y •

Total: 295.000 tn wastes/y, capacity:

3.3 MWe (4.7MWth), 25.8GWh/y • Exploitation of landll gas from the waste disposal plant • Burning of solid wastes Dr. Ioaniis P. Glecas

• Biofuels

Biomass potential

Hydro potential

The theoretical potential is always estimated

In Cyprus the potential for small hydro plants

from data for the cultivated areas for each

is limited, especially after the last years water

crop and the residue yield. Then the available

shortages. Although a comprehensive study for

potential can be evaluated with the assumption

Cyprus hydro potential has not been conducted,

that only a portion of the theoretical potential

the suitable sites are estimated adequate for

is available for energy exploitation, since

about 1MW installed capacity.

there are other uses for most agricultural residues. Current biomass exploitation refers to a signicant amount of agricultural residues in connection to the traditional wood stoves and the prospects for the development of energy crops, even though, further analysis and on site investigation, in order to clarify the attitude of the local agricultural associations and dene possible difculties on harvesting of agricultural by-products for bio-electricity production.

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TOWARDS A WHITE PAPER FOR RES AND RUE STRATEGY AND ACTION PLAN FOR THE REPUBLIC OF CYPRUS

3. ESTABLISHMENT OF SCENARIOS The third scenario named “Advanced

3.1. Rationale for the formulation of the Scenarios

Policies scenario”, investigates the possibility of increase the RES penetration by the

The establishment of the scenarios was

implementation of new advanced policies, in

formulated on the basis of the analysis of

order to achieve the established targets. It

energy demand, the available RES potential, the

should be noted that this scenario has been

analysed technical issues and the non-technical

formulated on a basis: “Which should be the

and legislative issues. Moreover, the investor’s

RES and RUE integration in the energy system

interest, the maturity and cost-effectiveness of

and which additional advanced policies should be

the technologies and the public attitude have

established in order to achieve the established

been also considered.

targets?”

The rst scenario named “Baseline Scenario” is an attempt to estimate the RES

3.2. RUE in the building sector

penetration in the energy system of Cyprus

Oil and electricity are the major energy sources

as expected until 2010 without any special

in the residential/tertiary sector.

policies implemented. This means that very low

The potential of reducing energy demand

implementation of RES and RUE is expected.

in the building stock of the tertiary sector

This scenario is to be used as a point of

is assessed. In the frame of the current

reference in the evaluation procedure.

assessment two building uses are dealt with, a) the residential because it is the largest sector and so any small reduction at a unit level -the residence- entails a large overall reduction at the building stock level and, b) the tourist accommodation due to the important place it has in the economy of the island and the very large energy demand in electricity.

The current report outlines the assessment on the potential of energy reduction. Three potential scenarios of demand reduction are formulated, associated with the level of energy

The second scenario named

demand reduction intensity.

“Implementation of existing policies

The rst one is the so-called business as usual

scenario”, as its name indicates, estimates the expected RES penetration if the existing policies

which, in this report is called ‘baseline scenario’.

will be fully implemented. The approved funds

It estimates the reduction if no measure is

have been also taken into consideration.

applied. It is noted that a small reduction is

21

anticipated due to the fact a) energy equipment

• The current legislation on efciency of boilers/

such as heating systems burner/boiler, light-bulbs

burners

etc. available on the market today have a better efciency and so they can potentially save energy.

The third scenario will result in a high reduction

Furthermore, due to the age of the building stock

and includes both the above scenarios and

there will be a need for building refurbishment

specic initiatives such as nancial support for

such as replacement of glazing etc. Similarly

the nal users or for the market actors.

double glazing will replace single glazing since the

3.3. RES for electricity

latter is gradually taken away from the market.

Taken into account this reasoning the following

Wind farms

measures are considered for this scenario:

Wind energy is to be exploited during the

Residential

next years in Cyprus, since it is the most

• burner/boiler system on the central heating

techno-economically viable source for electricity

plants and the replacement of individual oil

production. Although the wind potential can

heaters

not be characterized as abundant, there is an

• single glazing with double (reduction of

interest for implementation of wind plants in the

inltration is also taken into account)

best sites.

• Roof insulation

The electricity contribution of these units is

• Replacement of solar collectors

depended on the mean wind velocity of the

Tourist Accommodation

site. Given the wind potential (Figure 2.23) the

• burner/boiler system on the central heating

capacity factor of the wind farms varies between

plants and the replacement of individual oil

26% in the most suitable sites and 18% in the

heaters

worst. In the table 3.1 the expected efciency

• single glazing with double (reduction of

(capacity factor) of the wind farms is presented.

inltration is also taken into account) Table 3.1. Capacity factor of wind farms

• Roof insulation • Efcient lighting • Replacement of solar collectors The second is an intermediate one that includes

Wind farms

Capacity factors

Mean wind velocity

First 50MW Next 100MW Last 100MW

26% 23% 18%

6.5 6 5.5

Annual electricity production (GWh /MW installed) 2.28 2.01 1.58

legislative measures for energy efciency.

These measures are the:

In the “Baseline scenario” the wind farms will

• TIR (Thermal Insulation Regulation). It has

not exceed 50MW in 2010 and 150MW in 2020. In

been proposed but not yet enforced. Its

the “Implementation of existing policies scenario”

enforcement is foreseen for the end of year

about 80MW are expected in 2010 and 200MW in

2005 or early 2006.

2020. Finally in the “Advanced Policies scenario”

• The new Directive on Energy Efciency of the

the target is for 110MW in 2010 and 250MW in

Commission

2020.

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In the “Baseline scenario” the MSW plants will

PV

The use of photovoltaic solar energy in Cyprus

not exceed 3.3MW in 2010 and 4.3MW in 2020. In

is still in its infancy. Photovoltaics have

the “Implementation of existing policies scenario”

been used by the Cyprus Telecommunication

about 3.3MW are expected in 2010 and 5MW in

Authority (CYTA) for the telephone kiosks

2020. Finally in the “Advanced Policies scenario”

and transmitters. The Cyprus Radio-Telephone

the target is for 5.5MW in 2010 and 8.5MW in

Authority has also used photovoltaics for

2020.

transmitters. The nowadays installed capacity of photovoltaics (remote systems) is estimated

Small hydro

at 0.2MW [43].

In Cyprus the potential for small hydro plants

Given the solar potential in Cyprus the PV

is strictly dened. The suitable sites are

plants are expected to have a capacity factor

adequate for about 1MW installed capacity.

17%. In all scenarios the installed capacity

Although the electricity production is strongly

of PV’s is limited due to the high required

site dependent, an estimation of an average

installation cost.

capacity factor is 68%.

In the “Baseline scenario” the small hydro capacity will reach 1MW in 2020. In the “Implementation of existing policies scenario” the same installed capacity is expected in 2010, while in the “Advanced Policies scenario” in 2007.

Solar Hot Water Systems

Although the degree of SHWS penetration in the domestic sector is very high (About 90% of individual houses and 80% of apartments), there are prospects for utilization of solar thermal applications in the hotel industry, In the “Baseline scenario” the PV’s will not

the commercial-public and industrial sectors.

exceed 1MW in 2010 and 2.5MW in 2020. In the

Additionally, the utilization of solar thermal

“Implementation of existing policies scenario”

energy for other applications (i.e. space heating

about 2MW are expected in 2010 and 5MW in

and space cooling) can give further prospects

2020. Finally in the “Advanced Policies scenario”

after 2010.

the target is for 3MW in 2010 and 8MW in 2020.

In the “Baseline scenario” the rate of new installations is about 5000m2 per year. In the

Biomass - Municipal Solid waste

“Implementation of existing policies scenario” the

The most promising perspective is the

expected rate is about 7500m2 per year, and in

exploitation of municipal solid waste for

the “Advanced Policies scenario” the target is for

co-generation of electricity and heat.

10000m2 per year.

23

3.4. RES in transport

Table 3.5. Development of RES (Implementation of existing policies scenario)

Concerning RES penetration in transport, the

Implementation of existing policies scenario 2002 2005 2010 Wind (MW) 0 20 80 PV (MW) 0 0,2 2 Biomass-MSW (MWe)-(MWth) 0 0,45-0,7 3,3-4,7 Small hydro (MW) 0 0,4 1 SHWS (1000*m2) 655 675 712,5 Biofuels (1000*tn) 0 18,3 60

proposed solution is to produce and mix biofuels with diesel. In the “baseline scenario” the kickoff of the production of biofuels is expected not earlier than 2010, when this process will be more mature and cost-effective.

In the “Implementation of existing policies

Table 3.6. RES supply in electricity (Implementation of existing policies scenario)

scenario” about 32000 tn biofuels will be

2002 wind (GWh) 0 pv (GWh) 0 Biomass (GWh) 0 Small hydro (GWh) 0 RES electricity production (GWh) 0 Electricity Generated before RUE (GWh) 3785 Electricity Generated after RUE(GWh) 3785 RES supply in electricity demand(%) 0%

produced in 2007, while they are needed 509000 tn in 2010 (“Advanced Policies scenario”) in order to achieve the target of RES supply in transport sector (5,75% in 2010).

3.5. Details of the scenarios

2005 46 0,3 3,0 2,4 51 4340 4297 1%

2010 174 3,0 21,7 6 205 4950 4777 4%

2015 315 5,3 28,3 6 355 5440 5114 7%

2020 394 7,6 32,9 6 441 5850 5353 8%

Table 3.7. RES supply in heat and transport (Implementation of existing policies scenario)

Baseline Scenario Table 3.2. Development of RES (Baseline scenario)

Wind (MW) PV (MW) Biomass-MSW (MWe)-(MWth) Small hydro (MW) SHWS (1000*m2) Biofuels (1000*tn)

2015 2020 150 200 3,5 5 4,3-6 5-7 1 1 750 787,5 110 160

2002 2005 2010 0 10 50 0 0,2 1 0 0,45-0,7 3,3-4,7 0 0,2 0,5 655 670 695 0 0 5

2015 100 1,6 4,3-6 0,75 720 30

Biomass heat (ktoe) SHWS (ktoe) RES heat (ktoe) Heat demand (ktoe) Heat demand with RUE measures (ktoe) RES supply in heat demand (%) Transport demand (ktoe) RES in transport (ktoe) RES supply in earth transportation (%)

2020 150 2,5 4,3-6 1 745 80

Table 3.3. RES supply in electricity (Baseline Scenario)

2002 wind (GWh) 0 pv (GWh) 0 Biomass (GWh) 0 Small hydro (GWh) 0 RES electricity production (GWh) 0 Electricity Generated before RUE (GWh) 3785 Electricity Generated after RUE(GWh) 3785 RES supply in electricity demand(%) 0%

2005 23 0,3 3,0 1,2 27 4340 4297 1%

2010 114 1,5 21,7 3 140 4950 4777 3%

2015 215 2,4 28,3 4,5 250 5440 5114 5%

2020 315 3,8 28,3 6 353 5850 5353 7%

2005 0,4 33,3 33,7 875 867 3,9% 650 0 0,0%

2005 0,4 33,5 33,9 875 867 3,9% 650 1,48 0,2%

2010 2015 2020 2,655 3,39 3,954 35,41 37,27 39,14 38,07 40,66 43,09 897,2 1015 1124 865,8 953,9 1029 4,4% 4,3% 4,2% 717 740 760 4,86 8,91 12,96 0,7% 1,2% 1,7%

Table 3.8. Development of RES (Advanced policies scenario)

Advanced Policies scenario Wind (MW) PV (MW) Biomass-MSW (MWe)-(MWth) Small hydro (MW) SHWS (1000*m2) Biofuels (1000*tn)

Table 3.4. RES supply in heat and transport (Baseline scenario)

2002 Biomass heat (ktoe) 0 SHWS (ktoe) 32,6 RES heat (ktoe) 32,6 Heat demand (ktoe) 867 Heat demand with RUE measures (ktoe) 867 RES supply in heat demand (%) 3,8% Transport demand (ktoe) 620 RES in transport (ktoe) 0 RES supply in earth transportation (%) 0,0%

2002 0 32,6 32,6 867 867 3,8% 620 0 0,0%

2002 0 0 0 0 655 0

2005 2010 2015 2020 20 110 200 250 0,5 3 5,5 8 0,45-0,7 5,5-7,7 7,5-10,5 8,5-12,1 0,5 1 1 1 680 730 780 830 100 509 555 600

Table 3.9. RES supply in electricity (Advanced policies scenario)

2010 2015 2020 2,655 3,39 3,39 34,54 35,78 37,03 37,2 39,17 40,42 897,2 1015 1124 865,8 953,9 1029 4,3% 4,1% 3,9% 717 740 760 0,405 2,43 6,48 0,1% 0,3% 0,9%

2002 wind (GWh) 0 pv (GWh) 0 Biomass (GWh) 0 Small hydro (GWh) 0 RES electricity production (GWh) 0 Electricity Generated before RUE (GWh) 3785 Electricity Generated after RUE(GWh) 3785 RES supply in electricity demand(%) 0%

24

2005 46 0,76 3,0 3 52 4340 4297 1%

2010 235 4,5 36,1 6 281 4950 4703 6%

2015 394 8,3 49,3 6 458 5440 5005 9%

2020 473 12,1 55,8 6 547 5850 5236 10%

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policies scenario the rate of RES supply is about

Table 3.10. RES supply in heat and transport (Advanced policies scenario) 2002 2005 2010 2015 2020 Biomass heat (ktoe) 0 0,4 4,35 5,932 6,836 SHWS (ktoe) 32,6 33,8 36,28 38,77 41,25 RES heat (ktoe) 32,6 34,2 40,63 44,7 48,09 Heat demand (ktoe) 867 875 897,2 1015 1124 Heat demand with RUE measures (ktoe) 867 867 852,4 933,6 1006 RES supply in heat demand (%) 3,8% 3,9% 4,8% 4,8% 4,8% Transport demand (ktoe) 620 650 717 740 760 RES in transport (ktoe) 0 8,1 41,23 44,96 48,6 RES supply in earth transportation (%) 0,0% 1,2% 5,8% 6,1% 6,4%

2.5% in 2010. Even in the advanced policies scenario the rate of RES remains less than the target.

Figure 3.1. RES supply in primary energy consumption

3.6. Indicators characterizing the scenarios.

In the following a comparative presentation of the three scenarios was formulated in terms of: • Deviations from targets • Financial and Economic (Comparison of the

The ofcial target of 6% RES contribution to

required nancial resources like investment

electricity supply in 2010 can be achieved by

cost, subsidies – support cost)

the advanced policies scenario. Figure 3.2 shows

• Environmental impacts (Avoided emissions of

that the contribution of RES to electricity supply

CO2, SO2, NOx and PM10).

in 2010 could vary between 2.9% (baseline

• Social impacts (Employment created)

scenario) and 6% (advanced policies scenario).

By the full implementation of current policies the RES contribution will reach 4.3% in 2010.

Figure 3.2. RES supply in electricity consumption

Deviations from targets

In the heating sector, the situation seems to

IIn the following comparative chart (gure 3.1)

be xed. The RES contribution is already near

the RES supply in primary energy consumption

4% thanks to the high penetration of solar hot

is presented. The unofcial target for 6% RES

water systems in the domestic sector. For the

contribution to primary energy in 2010 seems to

new apartments a solar hot water system is

be very difcult to be achieved. In the current

considered as standard equipment, as well as

25

the replacement of the existing systems with similar after the end of their lifetime. Some small ups and downs in the rate of RES supply in heat are justied by the introduction of medium scale CHP Municipal solid waste plants.

Figure 3.3. RES supply in heat

Finally, the most difcult target of introduction of RES in the transport sector (5.75% in 2010) seems to be unattainable, since by the current policies the expected rate is less than 1%.

Figure 3.4. RES supply in transportation

Financial and Economic

The required investment costs for the implementation of the scenarios are presented in the gure 3.5. By terms of present value the investment cost is presented in the table 3.10.

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Figure 3.7. Yearly avoided CO2 emissions (2003-2020)

Figure 3.5. Annual Investment costs of the alternatives scenarios 2003-2010 (1000€)

Social impacts

Table 3.11. Present Value of the Investment cost (1000€)

Advanced policies Full implementation of current policies Baseline scenario

2003-2010 229916 102899 58383

The created employment is presented in tables

2003-2020 344864 197702 129416

3.13 and 3.14 in man-years.

Table 3.13. Created Employment due to the alternatives scenarios (2003-2010)

2003-2010 During (man-years) Construction Advanced policies 272 Full implementation of current policies 193 Baseline scenario 124

According to the existing legislation (subsidies approved and support in the electricity market price), the required cost for the support of RES is presented in the gure 3.6, while in the table

Table 3.14. Created Employment due to the alternatives scenarios (2003-2020)

3.11 the present value of the required resources

2003-2020 During (man-years) Construction Advanced policies 602 Full implementation of current policies 455 Baseline scenario 331

is shown.

Figure 3.6. Annual Required Subsidy and support cost of the alternatives scenarios (1000€) 2003-2010

Table 3.12. Present Value of the Required Subsidy and Support cost (1000€)

Advanced policies Full implementation of current policies Baseline scenario

2003-2010 63924 21433 10835

During Total O&M employment 917 1189 634 826 396 520

2003-2020 125247 70994 44904

Environmental impacts

The avoided CO2 emission due to the alternatives scenarios is presented in gure 3.7.

27

During Total O&M employment 5322 5924 3793 4248 2575 2906

4. COMPARATIVE EVALUATION 4.1. Introduction The established scenarios were comparatively evaluated in order to select the optimal one to serve as the basis of an action plan for RES and RUE integration in Cyprus. Two different methodologies were used: a) CostBenet Analysis, and b) Multi-Criteria Analysis, offering an objective and subjective evaluation perspective, respectively.

Firstly a Cost-Benet Analysis was carried out.

The positive and negative impacts associated with each scenario were taken into account in order to remove existing market distortions by translating impacts on environmental and social goods in monetary units and by correcting market values through shadow pricing. The analysis indicates the action plan presenting the higher Benet-Cost ratio and point on the deviation between private and social interests, which may be removed through policy measures (e.g. subsidies).

In sequence, the same positive and negative impacts, in the form of quantitative or qualitative indicators formed the criteria of a multi-criteria problem. Solving this problem aims at ranking the alternative scenarios and determining the one ranked in the rst place.

The impacts – criteria were weighted and counterbalanced through questionnaires by local actors. Trade-offs between priority impacts and conicting views were revealed in order to arrive at the most preferred action plan.

It should be noted that four additional to the three main scenarios were evaluated. Using the “advanced policies” and the “current policies”

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scenarios as a basis, two new scenarios were

• Wind farm (10 MW)

examined one with more wind penetration

• Photovoltaic (200kW)

and one with less wind penetration. In

• Small hydro units (200 kW)

all three scenarios of the same group (i.e

• Biomass CHP (1 MWe)

“advanced policies”, “advanced policies more

• Solar hot water systems (3m2)

wind”, “advanced policies less wind”) the same

• Biofuels production (10000tn)

target is achieved, but with different mix of RES

Table 4.2 presents the Benet-Cost ratios

implementation.

characterizing typical RES units, which are assumed to contribute to the proposed

Table 4.1. Additional scenarios used for the comparative evaluation

A B C A1 A2 B1 B2

Scenario A Scenario B Scenario C Scenario A1 Scenario A2 Scenario B1 Scenario B2

scenarios. The indices reect the evaluation

- Advanced policies - Full implementation of current Policies - Baseline scenario - Advanced policies (more wind) - Advanced policies (less wind) - Current policies (more wind) - Current policies (less wind)

perspective of a private investor (B/CF), of the national economy (B/CE) and of the society as whole (B/CE,S).

Table 4.2. B/C indices of typical RES units

B/C Technology E,S WIND PVs Hydro Biomass-CHP

4.2. Cost-Benet Analysis Cost benet analysis was performed in two different stages:

Solar WHS

• Typical plants for each type of technology

Biofuels

have been separately analyzed. The aim

Typical Capacity 10 MW 200 kW 200 kW 1 MWe

B/CF 1.17 0.53 1.70 1.89

B/CE 1.12 0.25 2.57 3.54

3.27 0.95 4.74 6.39

3 m2

1.13

1.37

2.84

10000tn

0.93

1.46

1.47

The following remarks can be made:

is to estimate on a comparative basis the

• Wind energy: Investments in wind energy

protability (from a nancial, economic and

exploitation are marginally attractive for

social point of view) of each particular

private investors and at the same time they

technology and to identify technical or non-

are returning to the national economy and

technical parameters inuencing protability

the society much more than the engaged

indices. Additionally, the results of this stage

resources. It should be noted that the

are used in the next stage.

attractiveness is provided thanks to the

• The scenarios were analyzed by taking into

support given by the national fund for the

account the time distribution of relevant

promotion of RES. The slight decrease in the

plants-investments. The aim is to identify

index of the national economy is explained by

the degree at which the whole scenario

the support in the kWh’s price, which from

of introduction of RES to the energy

the point of view of the private investors is

system of Cyprus, through a combination of

benet, but from the point of view of the

technologies is attractive from a nancial,

national economy is a cost.

economic and social point of view.

• Photovoltaics: It is the only renewable

Analysis of distinct technologies

technology that with the current level of costs

The following typical plants have been analysed:

and efciency is proven to be non-protable.

29

Despite the high support given to the kWh

national economy and the society, the biofuels

produced, the nancial B/C ratio remains less

are presented as more attractive.

than one (0.53). Contrary to the most of the other case studies-technologies, the economic

Analysis of scenarios

B/C ratio is worse than the nancial, since

The analysis at this stage considers the

costs refer to the whole amount of economic

whole package of actions included in the

resources engaged, while the extra benets

seven alternative scenarios in Cyprus by taking

(avoided fuel cost) brought to the national

into account the time distribution of relevant

economy are not enough to counterbalance

investments.

the support offered to private investors.

Table 4.3 B/C indices for alternative scenarios

Scenario A - Advanced policies Scenario B - Full implementation of current Policies Scenario C - Baseline scenario Scenario A1 - Advanced policies (more wind) Scenario A2 - Advanced policies (less wind) Scenario B1 - Current policies (more wind) Scenario B2 - Current policies (less wind)

• Small Hydro: All the calculated B/C ratios are positive. It should be noted that the protability is in high degree site depending.

Additionally, taking into consideration the variability of rainfalls in Cyprus, and the low

B/CF 1.1 1.1 1.1 1.1 1.0 1.1 1.1

B/CE 1.2 1.2 1.2 1.3 1.1 1.3 1.2

B/CE,S 1.9 2.0 2.0 2.1 1.8 2.1 2.0

hydro potential, it is clear that signicant risk As shown in table 4.3 most of the scenarios

exist in this kind of investments.

seem to be affordable for private investors.

• CHP Biomass (Municipal solid waste): This kind of investment is proven to be

The scenarios with the most wind penetration

attractive not only for private investors, but

seem to be more protable than those with

for the national economy and the society, as

less wind. In most of the examined scenarios

well. This was expected thanks to the multi

private B/C indices are higher than 1, indicating

purpose of these units (electricity and heat

that promoting plans for the implementation

production).

of RES is a protable business as a whole.

It furthermore shows that it is possible to

• Solar Water Heating: This technology enjoys high social acceptance and most of the houses

formulate these scenarios, by selecting the

in Cyprus use solar energy for water heating.

appropriate mix of technologies and providing

It should be noted that the protability by

support to the less protable ones, in order to

terms of private investor’s interest or even

make investments in all RES attractive for each

from the point of view of the national economy

individual private investor.

In all the examined scenarios it holds that

and society, is similar to other technologies (wind, hydro, biomass) which should be

B/CF<B/CE, B/CS. Namely, economic indices vary

developed as well.

between 1.1-1.3, showing that benets for the national economy are much higher than the

• Biofuels: The nancial analysis shows that the high cost of biofuels production is an obstacle

value of the resources engaged. On the other

for the deployment. On the other hand taking

side, social benets are almost double of the

into consideration the positive impacts for the

associated costs.

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TOWARDS A WHITE PAPER FOR RES AND RUE STRATEGY AND ACTION PLAN FOR THE REPUBLIC OF CYPRUS

These results are very positive for the

and operational.

prospects of RES and show that government and

The nal six criteria are the following:

society should strive for substantially increasing

• C1-Cost of Investment

the share of RES. It is namely shown that

• C2-Support Cost and Subsidy

such a shift is compatible with the market’s

• C3-% Deviation from EC penetration targets

major aspirations, but is also justied from

• C4- Avoided CO2 emissions

a broader perspective reecting the short and

• C5- Other avoided emissions

long term interests of the national economy

• C6-Total Employment

and of the society as a whole. The results furthermore show that these benets are

Weight Factors

large enough to fully cover any subsidies and

In order to capture the decision makers

support cost provided in order to encourage

preferences in front of the particular problem as dened in the specic decision context, a questionnaire was prepared and answered by decision makers of the Ministry of Commerce Industry and Tourism of Cyprus.

The preferences are given in the form of weights which relate performances in one criterion to the performances in all other criteria.

private investors to undertake the technical and

Two weighting methods are used and the

nancial risks associated with RES investments.

obtained weights are calculated. The average weights are shown in the Table 4.4.

These results indicate that policies and measures for supporting the large-scale

Table 4.4 Average weights of criteria

integration of RES are not only justied, but

Criteria tors C1-Cost of Investment C2-Support Cost and Subsidy C3-% Deviation from the EC penetration targets C4-CO2 Avoided C5-Other Avoided Emissions C6-Total Employment

are rather imposed for increasing the efcient allocation of resources in the framework of sustainable development.

4.3. Multi-Criteria Analysis

Weight Fac22% 19% 20% 18% 13% 9%

Criteria Presentation Evaluation

The criteria selected for the multi-criteria

The scenarios established in the previous phase

problem represent the positive and the negative

were comparatively evaluated using the Multi-

impacts associated with each scenario in the

Attribute Value Theory (MAVT) method [53] in

form of quantitative or qualitative indicators.

order to select the optimal one to serve as

The set of criteria along which these actions

the basis of the action plan for RES and RUE

had to be evaluated were chosen in a way as to

integration in Cyprus.

express all the important aspects of the problem

The solution of the Multi-Criteria problem

considered, by at the same time being concise

31

aims at ranking the alternative scenarios and determining the one(s) ranked in the rst place. The evaluation was made for the period 2003-2010, since there are no targets for the year 2020 yet.

The solution of the Multi-Criteria problem is the ranking of the alternative scenarios using their total scores.

As shown in the table below: Table 6.5. Ranking of the alternative scenarios

Scenarios Scenario A1 –Advanced Policies (more wind) Scenario A –Advanced Policies Scenario A2 –Advanced Policies (less wind) Scenario B1 – Current Policies (more wind) Scenario B – Current Policies Scenario B2 – Current Policies (less wind) Scenario C – Base Line Scenario

Ranking 1st 2nd 3rd 4th 5th 6th 7th

The outcome of the optimization procedure shows that the most preferable scenario, the one with the highest total score, is the Scenario A2-Advanced policies (more wind). The three rst scenarios are all the advanced policies scenarios.

Although this group of scenarios has the highest cost of investment, and support cost & subsidy, it is preferable, since with its implementation the targets are achieved and the highest emissions are avoided. It is graduated with the highest scores in 6 from 9 criteria.

In general, the “advanced policies” scenarios achieve higher scores than the “implementation of current policies” scenarios and are more preferable. The “Baseline scenario” has the lowest score.

4.4. Conclusions of the comparative evaluation The outcome of the optimization procedure shows that the most preferable scenario, the one with the highest total score, is the Scenario

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A1-Advanced policies (more wind). This result indicates that wind energy is the most efcient technology today. Given that the wind potential is limited, the detailed analysis of the wind potential will dene which wind penetration can be achieved exactly.

5.

AN ACTION PLAN FOR CYPRUS 5.1. Design and priorities of policy measures The energy policy must have a long-term

change in the “energy doctrine” requires the

planning period. The energy system is linked

formulation of a permanent policy framework

to all activities and represents one of the

and decision process, the impacts of which will

most important key-factors for the economic

gradually occur within a 10-20 years time.

development of Cyprus. The satisfaction of

Thus, an Action Plan for the promotion of

energy needs in a safe and reliable way

RES in Cyprus presupposes that, in the long-

forms a prerequisite for a sound evolution of

term, the penetration of RES will not continue to

productive and consumer proles. The economic

represent a marginal issue, but on the contrary

competitiveness depends to a large extent on

it will form a constitutional element of the

the proper relation between the cost and quality

Cyprus energy policy. Under this condition,

of energy inputs. Furthermore, the quality of life

the most important issues related to the

depends signicantly on the spatial distribution

energy policy of the country, together with

and the character of energy investments. Energy

issues related directly or/and indirectly with the

investments are usually capital-intensive and

efcient formulation and performance of a new

have a long life-cycle, during which their total

energy doctrine that incorporates RES to the

prot is determined. The energy sector itself

maximum possible extent are investigated.

constitutes a basic element of the development

The Action Plan presented below comprises

process and an important source of income and

4 basic guidelines: (a) bring the state and

employment.

society into action, (b) increase the reliability

Concluding, the characteristics of the energy

of RES, (c) motivate investors and investments

sector itself, together with its links to the various

and (d) reduce barriers for specic RES. Some

economic activities, determine the long-term

of the proposed measures are presented in the

character of the energy policy adopted. Any

following table.

33

POTENTIAL BARRIERS

POLICY MEASURES

Low public awareness

Organisation of of information campaigns.

Introduction of relevant courses to the educational programmes of all levels Creation of a central database on the RES potential and the experience gained from investments realised Creation and Connection of Regional Energy Ofces in a network.

Activation of the public sector in order to set the example.

Development of the “Energy Consultants” body.

Promotion of new nancial schemes (ex. Third Party Financing etc.) by means of information of Finance Houses.

Incentives for the development of domestic industry involved in renewable technologies.

“Formulation of a National Action Plan for RES.

Insufcient supply of information to investors and end-users (private agents, agricultural cooperations and local authorities) concerning the available RES potential and the possible technological solutions

Reluctance of local authorities and organisations to realise RES investments, due to high investment risk and/or lack of nancial resources

Lack of a concise programme for RES development (goals for each RES technology, time-schedule) Reluctance of end-users for realising RES investments in the nal demand level

Extension of the New Law to the nal demand level Promotion of investments for combined use (e.g. RES/desalination) Differentiation of subsidies according to geographical criteria and/or the commercial and nancial maturity of technologies Gradual shifting of subsidies from the investment cost to the price of the energy produced Submission of the supporting vouchers only to the Ministry of Commerce, Industry and Tourism (“one stop shop”) Use of certied products R&D promotion Optimal management of the electricity network by EAC Tax and Price policy, tradable permits.

Difcult penetration of renewable technologies with high investment cost Mistrust of public agents concerning the reliability of renewable technologies Bureaucracy obstacles and delays in the license procedureSimplication of the approval procedure Low reliability of RES Technical constraints in electricity generation Distortion of relevant prices

Proposed list of supportive measures by technology: Wind Energy Low protability due to low wind velocities

Higher price per kWh for the rst ve years.

Price adjustment depending on the wind potential for the next ten years.

Proper sitting of wind farms on the basis of noise and visual impact Determination of the “carrying capacity” per area

Disregard of potential environmental impacts Eventual “saturation” phenomena in some areas, because of wind farms’ overconcentration Insufcient supply of information to the investors concerning the RES potential in the various sites.

Formulation of a guide for investors containing wind velocities, topographical, land-use and technical data for the various sites.

Creation of a network for wind speed measurement in various regions / model simulation.

Differentiation of buy-back prices.

Specication of equipment quality standards.

Uniform buy-back price, regardless of the type of load covered.

Operational problems of wind turbines due to the different wind conditions in Greece.

High dependence on imported equipment Reservations of EAC concerning the effects of the installed wind systems tï the network behavior

Incentives for the development of domestic manufacture.

Software development in order to forecast wind velocities and consequently the energy and power contribution from wind farms

Proposed list of supportive measures by technology: Biomass Indifference of farmers to dispose the agricultural residues Uncertainty about the availability of biomass to supply the conversion plants Reservations of farmers tï shift towards new cultivations Potential negative environmental impacts due tï the irrational use of fertilizers and pesticides in energy plantations Atmospheric pollution during combustion

Prohibition of the on-site burning of agricultural by-products Long-term contracts with farmers for raw material provision Support of farmers by specialized agronomists

Establishment of upper limits for atmospheric pollutants generated from biomass conversion units.

Lower taxation of biofuels .

Establishment of a mandatory biofuel percentage in gasoline.

Lack of biofuels’ competitiveness compared tï conventional fuels Proposed list of support measures by technology: Solar Colectors Low level of penetration in the hotel sector

Mandatory installation of solar collectors for water heating provided by the building code in the new hotels Tax compensation Mandatory use of solar collectors in public buildings (new and existing) License from relevant authorities according tï specied rules Subsidies to photovoltaic use, especially in remote systems (e.g. Lighthouses)

Reluctance tï install solar collectors for water heating in existing buildings because of low protability Potential visual impact in case of solar collectors’ installation in traditional buildings Low competitiveness of PVs

34

TOWARDS A WHITE PAPER FOR RES AND RUE STRATEGY AND ACTION PLAN FOR THE REPUBLIC OF CYPRUS

6. CONCLUSIONS Today the energy system of Cyprus is almost

more information is needed to encourage

entirely dependent on imported fuels. There

the cultivation of non-food crops. The

is a signicant RES unexploited potential. The

competitiveness of biofuels will be heavily

entrance of Cyprus in the European Union entails

dependent upon the level of duty levied by

the need to comply with EU’s energy policy and

Government on such fuels. If duty was at the

commitments.

same rate as that levied on petrol or diesel,

The present analysis shows that the

biofuels would be far too expensive to hold a

achievement of 6% RES supply in the electricity

competitive place. By the technical point of view

demand in 2010 is difcult to be realized

biodiesel is an ideal substitute for diesel and no

with the current policies. Additional measures

signicant engine modications are required.

and policies should be implemented before

The existing legislative framework and the

the realization of the target. According to the

tariffs are favorable and encouraging for private

“Advanced Policies” scenario, the achievement of

investors. However, additional resources can be

this target is technically realistic, feasible and

provided to the support fund, so that all the

protable.

required plans can be supported.

According to the comparative evaluation the optimum scenario, which constitutes the basis for the formulation of the action plan of RES in Cyprus, is the “Advanced Policies” scenario.

The positive impacts from the achievement of the targets, the emissions reduction, and the employment created justify the required additional support cost. These benets are large enough to fully cover any subsidies and support cost provided in order to encourage private investors to undertake the technical and nancial risks associated with RES investments.

On the other hand the achievement of the target of 5.75% supply of biofuels in the transport sector in 2010 seems much more difcult to be realized. Current costs of production, combined with lack of an existing market for the product make the production of biofuels an unattractive investment. At the agricultural stage of biofuel production

35

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