Targeting for Cyprus’s energy transition

"Supplying adequate and affordable energy services is an essential element of sustainable development. Currently the challenge is to develop those energy services that best support development and improve the quality of life while simultaneously minimizing health and environmental impacts of anthropogenic activities. Clean technological solutions are the cornerstone to effectively address global risks, opportunities and challenges such as climate change, energy and water security, natural resource depletion and building sustainable communities.

The European Union has drawn up a sustainable energy strategy in order to face climate change and increase energy security. The strategy sets out several ambitious objectives for the reduction of greenhouse gas emissions and the use of renewable energy sources. To achieve this strategy, the European Union needs to increase the use of renewable energy sources including storage technologies as well as hydrogen, the energy efficiency, the completion of the internal electricity market and to increase the capacity of electricity interconnections between Member States. Consequently, the electricity sector is undergoing significant changes. Globally, electricity markets are becoming deregulated and as a result they are becoming more and more competitive, demanding lower system costs and higher system efficiencies. At the same time, environmental issues and concerns have driven the increasing penetration of renewable energy sources in electricity power generation as well as the wider use of distributed generation resources. Electricity networks are becoming increasingly complex and harder to predict and manage. The use of intermittent renewable technologies for electricity generation, such as wind or photovoltaics, coupled with storage capabilities including hydrogen and located in geographically dispersed locations provide added challenges for the security of supply, system reliability and power quality. In addition, there is now an even greater need for more electricity interconnections, accurate power system planning, operation and control.

Cyprus is a country with many particularities. For instance, it is isolated from the rest of Europe and its economy is mainly based on tourism. Cyprus’s economy is dependent on oil and is often affected by severe water shortages. At the same time however, Cyprus has high potential regarding renewable energy sources. Cyprus can easily exploit solar energy and also possesses potential reserves of natural gas. The implementation of the Cyprus energy transition will require significant energy investments over the next 30-40 years. Investment levels are expected to triple or quadruple compared to current levels. To achieve this transformation of the energy sector, an ambitious, long-term integrated energy strategy is required in order to set clear goals and create the appropriate reliable and coherent regulatory framework. For example, Cyprus could draw up its energy transition strategy in such a way as to become a centre for the development of a low carbon dioxide emissions economy and a hydrogen economy.

Cyprus could set a long-term goal to become climate neutral or for 100% reduction of greenhouse gas emissions by 2050. Indicative targets for achieving a 100% reduction of greenhouse gas emissions by 2050 with intermediate targets for the use of renewable energy sources and electricity interconnections of Cyprus with the European Union internal electricity market are tabulated in the Table. The optimistic targets set for the years 2030 and 2040 can be achieved with proper planning and proper monitoring with the implementation of inter-party energy strategy agreements in Cyprus.

Table: Target-setting for Cyprus’ energy transition

With a proper strategy, Cyprus could be transformed into a green country model by 2050. The final goal is the transition of Cyprus from the current carbon economy to a more sustainable economy such as hydrogen economy by the year 2050. By the year 2050, Cyprus' energy system will become smart and digitised, flexible, decentralised, electrically interconnected, and interconnected with pipelines and/or virtual natural gas and/or hydrogen pipelines, where the use of hydrogen in all energy sectors, renewable energy sources, storage energy systems, and electric mobility, will take place. Cyprus, with the right planning, can make the most of its energy potential, by being transformed into a producer-state. It can export electricity using appropriate electricity interconnections so as to remove Cyprus's energy isolation. At the same time, Cyprus can become a hub for electricity transfer to and from the European Union and to and from Middle East and Africa, while increasing our energy security. In addition, the countries of the Southeast Mediterranean region can become pioneers towards hydrogen economy and become exporters of sustainable energy to the European Union. In short, with a proper sustainable energy strategy, Cyprus could be transformed into a carbon neutral green country model by 2050.

*Dr. Andreas Poullikkas is Chairman of the Cyprus Energy Regulatory Authority

Disclaimer: "The contents of this article are the author's sole responsibility. They do not necessarily represent the views of the Hellenic Association for Energy Economics or any of its Members".