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IRENA Cyprus Roadmap Report 2015

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IRENA Cyprus Roadmap Report 2015 Renewable Energy Roadmap for the Republic of Cyprus Copyright (c) IRENA 2015 Unless otherwise indicated, material in this publication may be used freely, shared or reprinted, so long as IRENA is acknowledged as the source. Cover photo: An old wind pump next to Faneromeni Church, Nicosia, Cyprus (Emanuele Taibi / IRENA). About IRENA The International Renewable Energy Agency (IRENA) is an intergovernmental organisation that supports countries in their transition to a sustainable energy future, and serves as the principal platform for interna¬tional cooperation, a centre of excellence, and a repository of policy, technology, resource and financial knowl¬edge on renewable energy. IRENA promotes the widespread adoption and sustainable use of all forms of renewable energy, including bioenergy, geothermal, hydropower, ocean, solar and wind energy in the pursuit of sustainable development, energy access, energy security and low-carbon economic growth and prosperity. Acknowledgements Key components of the analysis have been developed by the Swedish Royal Institute of Technology (KTH) and the Cyprus University of Technology (CUT), respectively for electricity supply and energy demand scenarios. The report benefited from comments and guidance from Dolf Gielen, Director of IRENA Innovation and Tech¬nology Centre, along with the contributions of all members of the roadmap working team, as listed below. This report has been made possible by a voluntary contribution from the Government of the Federal Republic of Germany. This roadmap was developed by IRENA, in cooperation with the Ministry of Energy, Commerce, Industry and Tourism (MECIT) of the Republic of Cyprus. For further information or to provide feedback, please contact IRENA ([email protected]) or Emanuele Taibi, IRENA Innovation and Technology Centre ([email protected]). This report is available for free download from www.irena.org/publications Roadmap working team IRENA: Emanuele Taibi and Peter Journeay-Kaler KTH: Constantinos Taliotis, Mark Howells and Manuel Welsch CUT: Theodoros Zachariadis MECIT: Energy Service & Hydrocarbon Service: George Partasides, Iosif Spyrides Cyprus Transmission System Operator: Constantinos Varnava and Irene Zavrou Cyprus Distribution System Operator: Savvas Papadouris Electricity Authority of Cyprus: Constantinos Rouvas Other contributions Environmental Department of Cyprus Department of Labour & Works Cyprus Statistical Service Disclaimer While this publication promotes the adoption and use of renewable energy, IRENA does not endorse any particular project, product or service provider. The designations employed and the presentation of materials herein do not imply the expression of any opinion whatsoever on the part of the IRENA concerning the legal status of any region, country, territory city or area or of its authorities, or concerning their authorities or the delimitation of their frontiers or boundaries. Renewable Energy Roadmap for the Republic of Cyprus Foreword: Republic of Cyprus Cyprus has one of the highest electricity prices in Europe, due to high reliance on liquid fuel for power generation. However, a major transition is imminent for electricity supply. On one hand, indigenous natural gas discoveries are to be developed in the coming years. On the other hand, the costs of renewable power supply options have fallen dramatically. Meanwhile, concerns about greenhouse gases and local pollutants have increased, reflecting stringent European Union regulations. Renewable energy offers a way for Cyprus to reduce both the cost and the environmental impact of generating electricity. In the wake of the recent economic recession, turning to renewables can help to reduce fuel imports, strengthen the trade balance and create local jobs. The success of solar water heaters, for example, can be replicated for solar photovoltaics (PV). Cyprus has set out to attain a higher share of renewables, and this roadmap helps to assess optimal investment strategies in the power sector. Solar PV and wind power will play a major role in the roadmap to 2030. Roadmap findings will play an important role to revise existing energy policies and develop new ones. As part of the same engagement, the energy planning model used to quantify the possible pace and benefits of renewable energy deployment given different conditions has been handed over to the Government of Cyprus. The model will remain an important tool for assessing future energy policies and examining different energy pathways. It will assist in determining the optimal penetration of renewable energy for electricity supply and in identifying the technical and economic potential for further increasing electricity production from renewable energy. We would like to thank IRENA for this support and look forward to a continued close cooperation in the future. H.E. Yiorgos Lakkotrypis Minister of Energy, Commerce, Industry and Tourism Republic of Cyprus 2 Renewable Energy Roadmap for the Republic of Cyprus Foreword: IRENA The versatility, the diversity and, increasingly, the cost-competitiveness of renewable energy make such sources essential for energy security and access around the world. For islands, in particular, clean, indigenous renewable energy is inherently more attractive than costly fossil-fuel imports. Countries such as Cyprus, which depend heavily on imported petroleum products, are investing in clean energy sources to provide affordable energy, green jobs and modern supply chains, while contributing to reducing greenhouse-gas emissions in the post-2015 world. As an active participant in global efforts to ensure a sustainable energy future, the Republic of Cyprus has engaged with the International Renewable Energy Agency (IRENA) to develop a renewable energy roadmap for the country. The Ministry of Energy, Commerce, Industry and Tourism, along with a range of stakeholders, has worked closely with IRENA to examine least-cost pathways for the evolution of the power generation mix, the increasing role that renewable energy will play within it, and the impact of key decisions on energy policy that Cyprus is confronted with making today. I trust this roadmap will prove useful in the country’s pursuit of accelerated renewable energy deployment. As our world strives for a future based on clean, secure and affordable energy for all, Cyprus can be the lighthouse that helps illuminate the course for others. Adnan Z. Amin Director-General International Renewable Energy Agency Renewable Energy Roadmap for the Republic of Cyprus Renewable Energy Roadmap for the Republic of Cyprus 3 Table of Contents Foreword: Republic of Cyprus 2 Foreword: IRENA 3 List of figures 6 List of tables 8 List of infographics 9 Executive summary 10 Insights for policy makers 14 Infographics 19 1 Introduction 23 1.1 Roadmap engagement background 23 1.2 Analysis background 23 2 Cyprus energy balance and demand forecasts study 26 2.1 Energy balance of Cyprus for years 2012 and 2013 26 2.2 Estimates of final and useful energy demand in households and hotels 28 2.3 Methodology to forecast final energy demand 42 2.4 Assumptions for energy demand forecasts 46 2.5 Scenario results 49 2.6 Demand study conclusions and outlook 61 3 Electricity supply scenarios for the Republic of Cyprus 64 3.1 Methodology 64 3.2 Current energy system status and plans 67 3.3 Key assumptions for electricity supply analysis 68 3.4 Incorporating key assumptions into MESSAGE model 73 3.5 Modelling results 91 4 VRE forecasting 106 4.1 State-of-the-art in VRE forecasting 106 4.2 Value of VRE forecasting 111 4.3 VRE forecasting: Recommendation for Cyprus 113 4 Renewable Energy Roadmap for the Republic of Cyprus 4.4 Future of forecasting: Grid services and dispatchable VRE 116 4.5 VRE forecasting: Conclusions 117 5 State-of-the-art of technologies for the provision of GSS from VRE systems 118 5.1 REserviceS project: economic grid support from variable renewables 119 5.2 PV GRID Project 121 5.3 California distributed energy deployment project 123 5.4 NREL and EPRI project on wind power provision of grid support services 126 5.5 Advanced technologies for VRE grid services: Conclusions 126 6 Roadmap conclusions 128 References 129 Appendices 133 Appendix I: Final energy consumption, 1990-2010, compared to demand forecasts 133 Appendix II: Energy balances of the Republic of Cyprus for years 2012 and 2013 137 Appendix III: Detailed demand data 145 Appendix IV: Detailed power plant assumptions for future projects 147 Appendix V: Annualised cost of electricity in each scenario 149 Appendix VI: Cost of generating electricity 152 Renewable Energy Roadmap for the Republic of Cyprus Renewable Energy Roadmap for the Republic of Cyprus 5 List of figures Figure I: Policy decision tree and resulting scenarios 14 Figure II: Development of solar PV capacity under different scenarios 15 Figure 1: Historical evolution (1995-2013) and assumed future development of sectoral 48 GDP shares in Cyprus Figure 2: Forecast of aggregate final energy demand 50 Figure 3: Projected evolution of major energy indicators in Cyprus up to 2040 51 Figure 4: Evolution of final energy use by economic sector and energy form in the 54 Energy Efficiency Scenario. Figure 5: Forecast of aggregate final electricity demand 55 Figure 6: Forecast of final electricity demand by economic sector, in absolute and 56 relative terms Figure 7: Projected evolution of major electricity demand indicators in Cyprus up to 2040 57 Figure 8: Evolution of sector-specific shares of electricity in total energy demand for 58 the two
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