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Cyprus

MARKET STRUCTURE

In Cyprus, an issue regarding policy integration has been observed, since investments in a new fossil fuel power plant creating excess capacity are underway. Until 2005, measures that proactively supported renewable energy production, such as the New Grant Scheme, were not very ambitious. In Cyprus, targets are not being met. In 2006, a New Enhanced Grant Scheme was agreed upon. The leading RES in Cyprus is PV; wind power has a high potential.

KEY SUPPORT SCHEMES

RES-E policy in Cyprus is made up of the following components:

The New Grant Scheme, valid from 2004 until 2006. A tax of 0.22c€/kWh on every category of electricity consumption is in place. The income generated by this tax is used for the promotion of RES.
The New Enhanced Grant Scheme was installed in January 2006. Financial incentives (30–55 per cent of investments) in the form of government grants and FITs are part of this scheme.
Operation state aid for supporting electricity produced by biomass has been suggested, and forwarded to the Commission for approval.

Table I.4: FITs in Cyprus

Technology	Capacity restrictions	Duration	2005	2006	Note
		fixed	fixed	fixed	Note
		years	€/MWh	€/MWh
Wind	No limit	First 5 yrs	92	92	Based on mean annual wind speed
Wind	No limit	Next 10 yrs	48-92	48-92	Varies according to annual operation hours: <1750-2000 h 85-92 €/MWh 2000-2550 h 63-85 €/MWh 2550-3300 h 48-63 €/MWh
Biomass, landfill and sewage gas	No limit	15	63	63	A more generous scheme is currently being developed for biomass electricity. Up to 128 €/MWh is expected, depending on the category of investment
Small hydro	No limit	15	63	63
PV	Up to 5 kW	15	204	204
PV	Without investment subsidy	15	x	337-386	Households receive higher tariff than companies.

Note: Exchange rate 1€ = 0.58 CYP

FUTURE TARGETS

The Action Plan for the Promotion of RES determines that the contribution of RES to the total energy consumption of Cyprus should rise from 4.5 per cent in 1995 to 9 per cent in 2010. The RES-E target to be achieved in 2010 from the EU Directive is 6 per cent. In Cyprus, the RES share of total energy consumption decreased from 4.5 per cent in 1995 to 4 per cent in 2002.

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